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| B2B
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Please refer Business-to-Business.
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| B2C
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Please refer Business-to-Customer.
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| Back Order
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Product ordered but out of stock and promised to ship when the product becomes available.
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| Backflush
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Method for issuing (reducing on-hand quantities) materials to a manufacturing order. With backflushing, the material is issued automatically when production is posted against an operation. The backflushing program will use the quantity completed to calculate through the bill of material the quantities of the components used, and reduce on-hand balances by this amount. There are usually options during the backflush process to report scrap. In operations using backflushing it is advisable to set up specific machine locations and have materials transferred from storage locations to machine locations when they are physically picked for production. The backflush operation will then issue the material from the machine locations. Read my article on backflushing.
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| Backhaul
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The process of a transportation vehicle returning from the original destination point to the point of origin. The 1980 Motor Carrier Act deregulated interstate commercial trucking, thereby allowing carriers to contract for the return trip. The backhaul can be with a full, partial, or empty load. An empty backhaul is called deadheading.
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| Backhaul
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Transportation term that describes the activity of picking up, transporting, and delivering a new load on a return trip from delivering another load (known as the fronthaul, though the term fronthaul is not used very frequently).
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| Backsourcing
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Pulling a function back in house as an outsourcing contract expires.
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| Balance of Trade
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The surplus or deficit which results from comparing a country's exports and imports of merchandise only.
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| Balanced Scorecard
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A structured measurement system based on a mix of financial and non-financial measures of business performance. A list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions of the balanced scorecard might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements. Each dimension has goals and measurements.
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| Bale
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A large compressed, bound, and often wrapped bundle of a commodity, such as cotton or hay.
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| Bar Code
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A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.
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| Bar Code Scanner
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A device to read bar codes and communicate data to computer systems.
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| Bar Coding
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A method of encoding data for fast and accurate readability. Bar codes are a series of alternating bars and spaces printed or stamped on products, labels, or other media, representing encoded information which can be read by electronic readers called bar.
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| Barge
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The cargo-carrying vehicle which may or may not have its own propulsion mechanism for the purpose of transporting goods. Primarily used by Inland water carriers, basic barges have open tops, but there are covered barges for both dry and liquid cargoes.
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| Barrier to Entry
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Factors that prevent companies from entering into a particular market, such as high initial investment in equipment.
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| Barter
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The exchange of commodities or services for other commodities or services rather than the purchase of commodities or services with money.
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| Base Currency
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The currency whose value is "one" whenever a quote is made between two currencies.
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| Basing-Point Pricing
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A pricing system that includes a transportation cost from a particular city or town in a zone or region even though the shipment does not originate at the basing point.
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| Batch Picking
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A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed.
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| Batch picking
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Order picking method where orders are grouped into small batches, an order picker will pick all orders within the batch in one pass. Batch picking is usually associated with pickers with multi-tiered picking carts moving up and down aisles picking batches of usually 4 to 12 orders, however, batch picking is also very common when working with automated material handling equipment such as carousels. See also zone picking, wave picking. Article order picking
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| Benchmarking
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The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance.
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| Benefit-Cost Ratio
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An analytical tool used in public planning; a ratio of total measurable benefits divided by the initial capital cost.
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| Best in Class
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An organization, usually within a specific industry, recognized for excellence in a specific process area.
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| Best Practice
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A specific process or group of processes which have been recognized as the best method for conducting an action. Best practices may vary by industry or geography depending on the environment being used. Best-practices methodology may be applied with respect to resources, activities, cost object, or processes.
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| Bilateral Contract
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An agreement where-in each party makes a promise to the other party.
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| Bill of Activities
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A listing of activities required by a product, service, process output, or other cost object. Bill of activity attributes could include volume and/or cost of each activity in the listing.
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| Bill of Lading (BOL)
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A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.
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| Bill of Lading Number
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The number assigned by the carrier to identify the bill of lading.
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| Bill of Lading, Through
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A bill of lading to cover goods from point of origin to final destination when interchange or transfer from one carrier to another is necessary to complete the journey.
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| Bill of material
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Lists materials (components or ingredients) required to produce an item. Multilevel boms also show subassemblies and their components. Other information such as scrap factors may also be included in the bom for use in materials planning and costing.
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| Bill of Material (BOM)
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A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or manufactured part, whether purchased or not.
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| Bill of Material Accuracy
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Conformity of a list of specified items to administrative specifications, with all quantities correct.
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| Bill of Resources
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A listing of resources required by an activity. Resource attributes could include cost and volumes.
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| Billing
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A carrier terminal activity that determines the proper rate and total charges for a shipment and issues a freight bill.
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| Bin Center
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A drop off facility that is smaller than a public warehouse
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| Binder
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A strip of cardboard, thin wood, burlap, or similar material placed between layers of containers to hold a stack together.
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| Blanket Order
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Please refer Blanket Purchase Order.
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| Blanket order
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A type of purchase order that commits to purchase a specific quantity over a specific period of time, but does not necessarily provide specific dates for shipments. Blanket orders are placed for the quantity of an item (or group of items) that you expect to purchase over extended period of time (3 months, 6 months, a year, etc). A blanket purchase order may provide estimated required dates for specific quantities, but actual releases to ship against the blanked order are triggered by separate requests from the customer to the supplier; the specific quantities and dates of these separate requests (releases) may or may not be similar to the estimated dates and quantities. Providing a blanket order to a supplier may reduce lead times and increase on-time shipments from the supplier and may provide a greater discount on purchases.
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| Blanket Purchase Order
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A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Oftentimes, blanket orders cover only one item with predetermined delivery dates.
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| Blanket Rate
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A rate that does not increase according to the distance a commodity is shipped.
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| Blanket Release
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The authorization to ship and/or produce against a blanket agreement or contract.
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| Blanket Wrap
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A service pioneered by the moving companies to eliminate packaging material by wrapping product in padded "blankets" to protect it during transit, usually on "air ride" vans.
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| Blanks
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Generally describes discrete units (usually uniform sized units) that are usually produced through a cutting process but are not yet finished items. For example, if a die cutting machine cuts sheets of steel into small rectangular pieces that will later be machined and painted, the unfinished rectangular pieces may be referred to as blanks. Stampings are sometimes referred to as blanks, however, all blanks are not necessarily stampings. See also stamping
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| Bleeding Edge
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An unproven process or technology so far ahead of its time that it may create a competitive disadvantage.
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| Blind counts
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Describes method used in cycle counting and physical inventories where you provide your counters with item number and location but no quantity information. See article on cycle counting, also check out my book on inventory accuracy.
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| Blow Through
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An MRP process which uses a "phantom bill of material" and permits MRP logic to drive requirements straight through the phantom item to its components. The MRP system usually retains its ability to net against any occasional inventories of the item.
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| BOL
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Please refer Bill of Lading.
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| BOM
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Please refer Bill of Material.
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| BOM
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Please refer Bill of material
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| Bonded
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Please refer Bond, In.
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| Bonded Warehouse
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A facility or a dedicated portion of a facility where imported goods are stored prior to customs duties and taxes being paid. These facilities are often used to delay the payment of import fees until the products are actually sold/shipped (when they physically leave the bonded facility). This can be particularly useful when products are received well in advance of sale or when a portion of the product received may eventually be returned or scrapped (thus preventing paying import fees on items not sold). Bonded warehouses are licensed by the government. I believe the same concept can also be applied to specially taxed domestic products such as alcohol and tobacco products.
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| Bonded Warehouse
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Warehouse approved by the Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner.
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| Bookable Leg
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Please refer Leg.
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| Booking
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The act of requesting space and equipment aboard a vessel for cargo which is to be transported.
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| Booking Number
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The number assigned to a certain space reservation by the carrier or the carrier's agent.
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| Bottleneck
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A constraint, obstacle, or planned control that limits throughput or the utilization of capacity.
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| Boxcar
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An enclosed railcar used to transport freight
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| BPM
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Please refer Business Performance Measurement.
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| BPO
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Please refer Business Process Outsourcing.
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| BPR
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Please refer Business Process Reengineering.
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| Bracing
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To secure a shipment inside a carrier's vehicle to prevent damage.
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| Bracketed Recall
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Recall from customers of suspect lot numbers, plus a specified number of lots produced before and after the suspect ones.
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| Branding
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The use of a name, term, symbol, or design, or a combination of these, to identify a product.
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| Break Bulk Cargo
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Cargo that is shipped as a unit or package (for example palletized cargo, boxed cargo, large machinery, trucks) but is not containerized.
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| Break Bulk Vessel
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A vessel designed to handle break bulk cargo.
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| Break-Bulk
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The separation of a consolidated bulk load into smaller individual shipments for delivery to the ultimate consignee. The freight may be moved intact inside the trailer, or it may be interchanged and rehandled to connecting carriers.
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| Break-Even Point
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The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves.
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| Broker
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There are 3 definitions for the term "broker"
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| Browser-based applications
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Software designed to run within a web browser (i.e. Internet explorer). This allows a user to access the application from any location that has internet access and a web browser (no additional software is needed on the computer accessing the application). Read my article on software selection for additional information.
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| Bucketed System
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An MRP, DRP, or other time-phased system in which all time-phased data are accumulated into time periods, or buckets. If the period of accumulation is one week, then the system is said to have weekly buckets.
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| Buffer
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1) A quantity of materials awaiting further processing. It can refer to raw materials, semi-finished stores, or hold points, or a work backlog that is purposely maintained behind a work center. 2) In the theory of constraints, buffers can be time or material, and support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points.
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| Buffer Management
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In the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers). By expediting this material into the buffers, the system helps avoid idleness at the constraint and missed customer due dates. In addition, the causes of items missing from the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities.
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| Buffer Stock
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A quantity of goods or articles kept in storage to safeguard against unforeseen shortages or demands.
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| Build to Inventory
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A "push" system of production and inventory management. Product is manufactured or acquired in response to sales forecasts.
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| Build to Order
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A method of reducing inventory by not manufacturing product until there is an actual order from the customer.
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| Build to Stock
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Please refer Build to Inventory.
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| Bulk
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The classic use of the term bulk (bulk materials, bulk inventory, bulk storage) in inventory management and distribution refers to raw materials such as coal, iron ore, grains, etc. That are stored or transported in large quantities. This would include rail cars, tanker trucks, or silos full of a single material. However, this term can also have a variety of other definitions based upon the specific industry or facility. For example, a small-parts picking operation may refer to a case storage area as "bulk", while a case-picking operation may refer to the full-pallet area as the "bulk area".
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| Bulk Area
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A storage area for large items which at a minimum are most efficiently handled by the palletload.
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| Bulk Cargo
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Unpacked dry cargo such as grain, iron ore or coal. Any commodity shipped in this way is said to be in bulk.
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| Bullwhip Effect
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An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being in excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. The bullwhip effect can be eliminated by synchronizing the supply chain.
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| Bundle
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A group of products that are shipped together as an unassembled unit.
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| Bundling
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An occurrence where two or more products are combined into one transaction for a single price.
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| Burn Rate
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The rate of consumption of cash in a business. Used to determine cash requirements on an on-going basis. A burn rate of 50,000 would mean the company spends 50,000 a month above any incoming cash flow to sustain its business. Entrepreneurial companies will calculate their burn rate in order to understand how much time they have before they need to raise more money, or show a positive cash flow.
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| Business Application
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Any computer program, set of programs, or package of programs created to solve a particular business problem or function.
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| Business Continuity Plan (BCP)
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A contingency plan for sustained operations during periods of high risk, such as labor unrest or natural disaster. CSCMP provides suggestions for helping companies do continuity planning in their Securing the Supply Chain research. A copy of this research is available on CSCMP's web site at www.cscmp.org.
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| Business Logistics
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The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.
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| Business Performance Measurement (BPM)
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A technique that uses a system of goals and metrics to monitor performance. Analysis of these measurements can help businesses periodically set business goals, then provide feedback to managers on progress towards those goals. A specific measure can be compared to itself over time, compared with a present target, or evaluated along with other measures.
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| Business Process Outsourcing (BPO)
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The practice of outsourcing non-core internal functions to third parties. Functions typically outsourced include logistics, accounts payable, accounts receivable, payroll, and human resources. Other areas can include IT development or complete management of the IT functions of the enterprise.
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| Business Process Reengineering (BPR)
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The fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements.
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| Business Unit
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A division or segment of an organization generally treated as a separate profit-and-loss center.
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| Business-to-Business (B2B)
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As opposed to business-to-consumer (B2C). Many companies are now focusing on this strategy, and their web sites are aimed at businesses (think wholesale) and only other businesses can access or buy products on the site. Internet analysts predict this will be the biggest sector on the web.
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| Business-to-Consumer (B2C)
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The hundreds of e-commerce web sites that sell goods directly to consumers are considered B2C. This distinction is important when comparing web sites that are B2B as the entire business model, strategy, execution, and fulfillment is different.
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| Buyer
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An enterprise that arranges for the acquisition of goods or services and agrees to payment terms for such goods or services.
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| Buyer Behavior
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The way individuals or organizations behave in a purchasing situation. The customer-oriented concept finds out the wants, needs, and desires of customers and adapts resources of the organization to deliver need-satisfying goods and services.
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