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| A/R
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Please refer Accounts Receivable.
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| ABC Analysis
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A classification of items in an inventory according to importance defined in terms of criteria such as sales volume and purchase volume.
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| ABC Classification
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Classification of a group of items in decreasing order of annual dollar volume or other criteria. This array is then split into three classes called A, B, and C. The A group represents 10 to 20% by number of items, and 50 to 70% by projected dollar volume. The next grouping, B, represents about 20% of the items and 20% of the dollare volume. The C-class contains 60 to 70% of the items, and represents about 10 to 30% of the dollar volume.
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| ABC Costing
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Please refer Activity-Based Costing
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| ABC Inventory Control
|
|
An inventory control approach based on the ABC volume or sales revenue classification of products (A items are highest volume or revenue, C - or perhaps D - are lowest volume SKUs.)
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| ABC Model
|
|
In cost management, a representation of resource costs during a time period that are consumed through activities and traced to products, services, and customers, or to any other object that creates a demand for the activity to be performed.
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| ABC stratification
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Method used to categorize inventory into groups based upon certain activity characteristics. Examples of abc stratifications would include abc by velocity (times sold), abc by sales dollars, abc by quantity sold / consumed, abc by average inventory investment, abc by margin. Abc stratifications are used to develop inventory planning policies, set count frequencies for cycle counting, slot inventory for optimized order picking, and other inventory management activities.
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| ABC System
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In cost management, a system that maintains financial and operating data on an organization's resources, activities, drivers, objects and measures. ABC Models are created and maintained within this system.
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| ABI
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Please refer Automated Broker Interface
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| ABM
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|
Please refer Activity-Based Management.
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| Abnormal Demand
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Demand in any period that is outside the limits established by management policy. This demand may come from a new customer or from existing customers whose own demand is increasing or decreasing. Care must be taken in evaluating the nature of the demand Is it a volume change, is it a change in product mix, or is it related to the timing of the order?
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| ABP
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Please refer Activity-Based Planning.
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| Absorption Costing
|
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In cost management, an approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs.
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| Accelerated Commercial Release Operations Support System (ACROSS)
|
|
A Canada Customs system to speed the release of shipments by allowing electronic transmission of data to and from Canada Customs 24 hours a day, 7 days a week.
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| Acceptable Quality Level (AQL)
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In quality management, when a continuing series of lots is considered, AQL represents a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average.
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| Acceptable Sampling Plan
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In quality management, a specific plan that indicates the sampling sizes and the associated acceptance or non-acceptance criteria to be used.
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| Acceptance Number
|
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In quality management, 1) A number used in acceptance sampling as a cut off at which the lot will be accepted or rejected. For example, if x or more units are bad within the sample, the lot will be rejected. 2) The value of the test statistic that divides all possible values into acceptance and rejection regions.
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| Acceptance Sampling
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1) The process of sampling a portion of goods for inspection rather than examining the entire lot. The entire lot may be accepted or rejected based on the sample even though the specific units in the lot are better or worse than the sample. There are two types attributes sampling and variables sampling. In attributes sampling, the presence or absence of a characteristic is noted in each of the units inspected. In variables sampling, the numerical magnitude of a characteristic is measured and recorded for each inspected unit; this type of sampling involves reference to a continuous scale of some kind. 2) A method of measuring random samples of lots or batches of products against predetermined standards.
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| Accessibility
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|
A carrier's ability to provide service between an origin and a destination.
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| Accessorial Charges
|
|
A carrier's charge for accessorial services such as loading, unloading, pickup, and delivery, or any other charge deemed appropriate.
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| Accountability
|
|
Being answerable for, but not necessarily personally charged with, doing specific work. Accountability cannot be delegated, but it can be shared. For example, managers and executives are accountable for business performance even though they may not actually perform the work.
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| Accounts Payable (A/P)
|
|
The value of goods and services acquired for which payment has not yet been made.
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| Accounts Receivable (A/R)
|
|
The value of goods shipped or services rendered to a customer on whom payment has not been received. Usually includes an allowance for bad debts.
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| Accreditation
|
|
Certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, operational group, or individual to provide the specific service or operation needed. For example, the Registrar Accreditation Board accredits those organizations that register companies to the ISO 9000 Series Standards.
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| Accredited Standards Committee (ASC)
|
|
A committee of ANSI chartered in 1979 to develop uniform standards for the electronic interchange of business documents. The committee develops and maintains US generic standards (X12) for Electronic Data Interchange.
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| Accumulation Bin
|
|
A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor.
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| Accuracy
|
|
In quality management, the degree of freedom from error or the degree of conformity to a standard. Accuracy is different from precision. For example, four-significant-digit numbers are less precise than six-significant-digit numbers; however, a properly computed four-significant-digit number might be more accurate than an improperly computed six-significant-digit number.
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| ACD
|
|
Please refer Automated Call Distribution.
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| Acknowledgement
|
|
A communication by a supplier to advise a purchaser that a purchase order has been received. It usually implies acceptance of the order by the supplier.
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| Acquisition Cost
|
|
In cost accounting, the cost required to obtain one or more units of an item. It is order quantity times unit cost.
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| Action Message
|
|
An alert that an MRP or DRP system generates to inform the controller of a situation requiring his or her attention.
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| Active Stock
|
|
Goods in active pick locations and ready for order filling.
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| Activity
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|
Work performed by people, equipment, technologies, or facilities. Activities are usually described by the action-verb-adjective-noun grammar convention. Activities may occur in a linked sequence and activity-to-activity assignments may exist.
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| Activity Analysis
|
|
The process of identifying and cataloging activities for detailed understanding and documentation of their characteristics. An activity analysis is accomplished by means of interviews, group sessions, questionnaires, observations, and reviews of physical records of work.
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| Activity based costing
|
|
Usually refers to costing method that breaks down overhead costs into specific activities (cost drivers) in order to more accurately distribute the costs in product costing. Has also been applied to customer and vendor management.
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| Activity Dictionary
|
|
A listing and description of activities that provides a common/standard definition of activities across the organization. An activity dictionary can include information about an activity and/or its relationships, such as activity description, business process, function source, whether value added, inputs, outputs, supplier, customer, output measures, cost drivers, attributes, tasks, and other information as desired to describe the activity.
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| Activity Driver
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The best single quantitative measure of the frequency and intensity of the demands placed on an activity by cost objects or other activities. It's used to assign activity costs to cost objects or to other activities.
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| Activity Level
|
|
A description of types of activities dependent on the functional area. Product-related activity levels may include unit, batch, and product levels. Customer-related activity levels may include customer, market, channel, and project levels.
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| Activity Ratio
|
|
A financial ratio used to determine how an organization's resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.
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| Activity-Based Budgeting (ABB)
|
|
An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of, and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization's activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals.
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| Activity-Based Costing (ABC)
|
|
A methodology that measures the cost and performance of cost objects, activities, and resources. Cost objects consume activities and activities consume resources. Resource costs are assigned to activities based on their use of those resources, and activity costs are reassigned to cost objects (outpputs) based on the cost objects proportional use of those activities. Activity-based costing incorporates causal relationships between cost objects and activities and between activities and resources.
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| Activity-Based Costing Model
|
|
In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out.
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| Activity-Based Costing System
|
|
A set of activity-based cost accounting models that collectively defines data on an organization's resources, activities, drivers, objects, and measures.
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| Activity-Based Management (ABM)
|
|
A discipline focusing on the management of activities within business processes as the route to continuously improve both the value received by customers and the profit earned in providing that value. AMB uses activity-based cost information and performance measurements to influence management action.
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| Activity-Based Planning (ABP)
|
|
Activity-based planning (ABP) is an ongoing process to determine activity and resource requirements (both financial and operational) based on the ongoing demand of products or services by specific customer needs. Resource requirements are compared to resources available and capacity issues are identified and managed. Activity-based budgeting (ABB) is based on the outputs of activity-based planning.
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| Actual cost
|
|
Inventory costing method used in manufacturing environments that uses the actual materials costs, machine costs, and labor costs reported against a specific work order to calculate the cost of the finished item.
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| Actual Cost System
|
|
A cost system that collects costs historically as they are applied to production, and allocates indirect costs to products based on the specific costs and achieved volume of the products.
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| Actual Costs
|
|
The labor, material, and associated overhead costs that are charged against a job as it moves through the production process.
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| Actual Demand
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|
Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or consumes the forecast, depending on the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence), but will net against the forecast outside this horizon based on the chosen forecast consumption rule.
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| Actual to Theoretical Cycle Time
|
|
The ratio of the measured time required to produce a given output divided by the sum of the time required to produce a given output based on the rated efficiency of the machinery and labor operations.
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| Ad Valorem Duty
|
|
A duty calculated as a percentage of the shipment value.
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| ADC
|
|
Automated data collection. See Automated Data Collection
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| Administrative Monetary Penalty System (AMPS )
|
|
A Canada Customs system of monetary penalties that will be imposed against violations of Canada Customs regulations.
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| Advance Material Request
|
|
Ordering materials before the release of the formal product design. This early release is required because of long lead times.
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| Advanced planning and scheduling
|
|
Software system designed to integrate with ERP and MRP systems to enhance the short term production planning and scheduling systems that are notoriously inadequate in MRP systems. APS systems have extensive programming logic that allows them to be more effective in dealing with rapidly changing customer demands.
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| Advanced Planning and Scheduling (APS)
|
|
Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathmatical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the official plan. The five main components of an APS system are demand planning, production planning, production scheduling, distribution planning, and transportation planning.
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| Advanced Shipment Notice (ASN)
|
|
An EDI term referring to a transaction set (ANSI 856) where the supplier sends out a notification to interested parties that a shipment is now outbound in the supply chain. This notification is list transmitted to a customer or consignor designating items shipped. The ASN may also include the expected time of arrival.
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| Advanced shipment notification
|
|
Advanced shipment notifications (asns) are used to notify a customer of a shipment. Asns will often include PO numbers, SKU numbers, lot numbers, quantity, pallet or container number, carton number. Asns may be paper-based, however, electronic notification is preferred. Advanced shipment notification systems are usually combined with bar-coded compliance labeling which allows the customer to receive the shipment into inventory through the use of bar-code scanners and automated data collection systems.
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| Advanced Shipping Notice (ASN)
|
|
Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. May also include carrier and shipment specifics, including time of shipment and expected time of arrival.
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| Aerodynamic Drag
|
|
Wind resistance
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| After-Sale Service
|
|
Services provided to the customer after products have been delivered. This can include repairs, maintenance, and/or telephone support.
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| Agency Tariff
|
|
A rate bureau publication that contains rates for many carriers.
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| Agent
|
|
An enterprise authorized to transact business for, or in the name of, another enterprise.
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| Agglomeration
|
|
A net advantage a company gains by sharing a common location with other companies.
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| Aggregate Forecast
|
|
An estimate of sales, oftentimes phased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (or for sales and operations planning) purposes.
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| Aggregate Planning
|
|
A process to develop tactical plans to support the organization's business plan. Aggregate planning usually includes the development, analysis and maintenance of plans for total sales, total production, targeted inventory, and targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist - production planning and sales and operations planning.
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| Aggregate Tender Rate
|
|
A reduced rate offered to a shipper who tenders two or more class-related shipments at one time and one place.
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| Agility
|
|
The ability to successfully manufacture and market a broad range of low-cost, high-quality products and services with short lead times and varying volumes that provide enhanced value to customers through customization. Agility merges the four distinctive competencies of cost, quality, dependability, and flexibility.
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| AIDC
|
|
Automatic identification & data collection. See Automated Data Collection
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| Air Cargo
|
|
Freight that is moved by air transportation.
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| Air Cargo Agent
|
|
An agent appointed by an airline to solicit and process international airfreight shipments.
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| Air Cargo Containers
|
|
Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories 1) air cargo pallets 2) lower deck containers 3) box type containers.
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| Air Carrier
|
|
An enterprise that offers transportation service via air.
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| Air Taxi
|
|
An exempt for-hire air carrier that will fly anywhere on demand; air taxis are restricted to a maximum payload and passenger capacity per plane.
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| Air Transport Association of America
|
|
A U.S. airline industry association.
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| Air Waybill (AWB)
|
|
A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions.
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| Airport and Airway Trust Fund
|
|
A federal fund that collects passenger ticket taxes and disburses those funds for airport facilities.
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| Alert
|
|
Please refer Action Message.
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| Algorithm
|
|
a clearly specified mathematical process for computation; a set of rules, which, if followed, produce a prescribed result.
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| All Water
|
|
Term used when the transportation is completely by water.
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|
| All-Cargo Carrier
|
|
An air carrier that transports cargo only.
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| Allocation
|
|
1) A distribution of costs using calculations that may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations, costs based on cost causal assignment are viewed as more relevant for management decision-making. 2) Allocation of available inventory to customer and production orders.
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| Allocations
|
|
Allocations in inventory management refer to actual demand created by sales orders or work orders against a specific item. The terminology and the actual processing that controls allocations will vary from one software system to another. A standard allocation is an aggregate quantity of demand against a specific item in a specific facility, i have heard standard allocations referred to as normal allocations, soft allocations, soft commitments, regular allocations. Standard allocations do not specify that specific units will go to specific orders. A firm allocation is an allocation against specific units within a facility, such as an allocation against a specific location, lot, or serial number. Firm allocations are also referred to as specific allocations, frozen allocations, hard allocations, hard commitments, holds, reserved inventory. Standard allocations simply show that there is demand while firm allocations reserve or hold the inventory for the specific order designated.
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|
| American National Standards Institute (ANSI)
|
|
A non-profit organization chartered to develop, maintain, and promulgate voluntary US national standards in a number of areas, especially with regards to setting EDI standards. ANSI is the US representative to the International Standards Organization (ISO).
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|
|
| American Society for Quality (ASQ)
|
|
Founded in 1946, a not-for-profit educational organization consisting of 144,000 members who are interested in quality improvement.
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|
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| American Society of Transportation & Logistics
|
|
A professional organization in the field of logistics.
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| American Trucking Associations
|
|
A motor carrier industry association composed of sub-conferences representing various motor carrier industry sectors.
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| American Waterway Operators
|
|
A domestic water carrier industry association representing barge operators on inland waterways.
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|
| Amtrak
|
|
The National Railroad Passenger Corporation, a federally created corporation that operates most of the United States' intercity passenger rail service.
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| ANSI
|
|
Please refer American National Standards Institute
|
|
|
| Anti-Dumping Duty
|
|
An additional import duty imposed in instances where imported goods are priced at less than the ÏnormalÓ price charged in the exporterÌs domestic market and cause material injury to domestic industry in the importing country
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|
|
| Antonym
|
|
Last In First Out.
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|
| Antonym
|
|
Intranet.
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|
|
| Any-Quantity (AQ) rate
|
|
A rate that applies to any size shipment tendered to a carrier; no discount rate is available for large shipments.
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| API
|
|
American Petroleum Institute; also Application Programming Interface
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| APS
|
|
Please refer Advanced Planning and Scheduling
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| APU
|
|
APUs automatically shut down the main locomotive engine idle while maintaining all vital main engine systems at greatly reduced fuel consumption
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| AQL
|
|
Please refer Acceptable Quality Level.
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|
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| Arrival Notice
|
|
A notice from the delivering carrier to the Notify Party indicating the shipment's arrival date at a specific location (normally the destination).
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|
|
| Artificial Intelligence
|
|
A field of research seeking to understand and computerize the human thought process.
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|
|
| As a further illustration
|
|
consider a computer company that allows customers to configure a complete computer from a selection of standard components. For example, they can choose from three keyboards, three monitors, and three CPUs. Customers may also individually buy keyboards, monitors, and CPUs. If the stock were held at the configuration component level, the company would have nine SKUs. If the company stocks at the component level, the company would have 36 SKUs. (9 component SKUs + 3*3*3 configured product SKUs.) If, as part of a promotional campaign, the company also specially packaged the products, the company would have a total of 72 SKUs.
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| AS/RS
|
|
Please refer Automated Storage/Retrieval System
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| ASN
|
|
Please refer Advanced Shipment Notifications
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|
| ASP, Application service provider
|
|
A twist in software marketing in which the software licenses are owned by the ASP and reside on their system while the client rents the rights to use the software. The ASP may be the software manufacturer or a third party business. The benefits to an using an ASP are lower upfront costs, quicker implementations, and the reduction of the need for internal IS personnel and mainframe/server hardware. It is hoped that asps will allow small to midsize businesses greater access to technology than was previously available. More recently the terms saas (Software as a Service) and On-demand Software have emerged to describe this same scenario.
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| ASQ
|
|
Please refer American Society for Quality.
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| ASRS
|
|
Please refer Automated Storage a Retrieval Systems
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| Assemble to Order
|
|
A production environment where a good or service can be assembled after receipt of a customer's order. The key components (bulk, semifinished, intermediate, sub-assembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components.
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| Assembly
|
|
A group of subassemblies and/or parts that are put together and constitute a major subdivision for the final product. An assembly may be an end item or a component of a higher-level assembly.
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| Assignment
|
|
A distribution of costs using causal relationships. Because cost causal relationships are viewed as more relevant for management decision making, assignment of costs is generally preferable to allocation techniques.
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|
|
| Association of American Railroads
|
|
A railroad industry association that represents the larger U.S. railroads.
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| ATA
|
|
Actual time of arrival, or also known as the American Trucking Associations.
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| ATD
|
|
Actual time of departure
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| ATFI
|
|
Automated Tariff Filing Information System
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| ATP
|
|
Please refer Available to Promise
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|
| Attributes
|
|
A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures.
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| Audit
|
|
In reference to freight bills, the term audit is used to determine the accuracy of freight bills.
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|
|
| Audit Trail
|
|
Manual or computerized tracing of the transactions affecting the contents or origin or a record.
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| Auditability
|
|
A characteristic of modern information systems gauged by the ease with which data can be substantiated by tracing it to source documents, and the extent to which auditors can rely on pre-verified and monitored control processes.
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| Auditing
|
|
Determining the correct transportation charges due the carrier; auditing involves checking the freight bill for errors, correct rate, and weight.
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|
| Autodiscrimination
|
|
The functionality of a bar-code reader to recognize the bar-code symbology being scanned, thus allowing a reader to read several different symbologies consecutively. Read my article adc basics
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|
|
| AutoID
|
|
Referring to an automated identification system. This includes technology such as bar coding and radio frequency tagging (RFID).
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|
|
| Automated Broker Interface (ABI)
|
|
The U.S. Customs program to automate the flow of customs-related information among customs brokers, importers, and carriers.
|
|
|
| Automated Call Distribution
|
|
A feature of large call center or "Customer Interaction Center" telephone switches that routes calls by rules, such as next-available employee, skill set, etc.
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| Automated data collection
|
|
Systems of hardware and software used to process transactions in warehouses and manufacturing operations. Data collection systems may consist of fixed terminals, portable terminals and computers, radio frequency (rf) terminals, and various types of bar code scanners. A.k.a. Automated data capture, aidc, automatic identification & data collection read my article adc basics.
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|
|
| Automated Guided Vehicle System (AGVS)
|
|
A computer-controlled materials handling system consisting of small vehicles (carts) that move along a guideway.
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|
|
| Automated guided vehicle system (AGVS)
|
|
Describes systems of vehicles that can be programmed to automatically drive to designated points and perform preprogrammed functions. Guidance system may consist of a wire embedded in the floor, optical system or other types of guidance. Automated guided vehicle (agv) more info on automated equipment pics page.
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|
| Automated storage and retrieval systems
|
|
A system of rows of rack, each row having a dedicated retrieval unit that moves vertically and horizontally along the rack picking and putting away loads. A.k.a. Asrs, as/rs, unit-load asrs and mini-load asrs. More info on automated equipment pics page.
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|
|
| Automated Storage/Retrieval System (AS/RS)
|
|
A high-density rack inventory storage system with unmanned vehicles automatically loading and unloading products to/from the racks.
|
|
|
| Automatic Tire Inflation System
|
|
Automatic tire inflation systems monitor and continually adjust the level of pressurized air to tires, maintaining proper tire pressure even when the truck is moving.
|
|
|
| Available
|
|
Refers to the status of inventory as it relates to its ability to be sold or consumed. Availability calculations are used to determine this status. Availability calculations vary from system to system but basically subtract any current allocations of holds on inventory from the current on-hand balance. An example of an availability calculation would be: [quantity available] = [quantity on hand] -[ quantity on hold] - [quantity allocated to sales orders] - [quantity allocated to production orders].
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|
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| Available to promise
|
|
Available to promise takes the simple availability calculation, adds time phasing and takes into account future scheduled receipts. Available to promise may be calculated for each day or broken down into larger time buckets. The first time period will take on-hand inventory and add any scheduled receipts for that period. It will then deduct any allocations scheduled prior to the next scheduled receipt (which may be several periods in the future). Subsequent periods without any scheduled receipts will have the same available to promise as the previous period. Subsequent periods with scheduled receipts will generally start with a fresh calculation, ignoring any remaining available to promise from previous periods. There are many variations on exactly how available to promise is calculated and it is also important to note that available to promise often works independently of allocation systems. This can sometimes create conflicts. See also available, allocations.
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|
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| Available to Promise (ATP)
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The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue. Three methods of calculation are used discrete ATP, cumulative ATP with look ahead, and cumulative ATP without look ahead.
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| Average
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Please refer Marine Cargo Insurance
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| Average cost
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Inventory costing method that recalculates an item's cost at each receipt by averaging the actual cost of the receipt with the cost of the current inventory.
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| Average Cost
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Total cost, fixed plus variable, divided by total output.
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| AWB
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Please refer Air Waybill
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