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| Obsolete Inventory
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Inventory that has had no sales or usage activity for a specific period of time. The period of time varies by company and industry and may even vary by product line within a specific company and may range from weeks to years. A.k.a . Dead inventory. See also excess inventory
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| Obsolete Inventory
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Inventory for which there is no forecast demand expected. A condition of being out of date. A loss of value occasioned by new developments that place the oldeer property at a competitive disadvantage.
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| Ocean Bill of Lading
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The bill of lading issued by the ocean carrier to its customer.
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| Ocean Carrier
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An enterprise that offers service via ocean (water) transport.
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| OEM
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Please refer Original Equipment Manufacturer.
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| Offer
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Please refer Tender.
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| Offline
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A computer term which describes work done outside of the computer system or outside of a main process within the corporate system.
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| Offshore
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Utilizing an outsourcing service provider located in a country other than where the client is located.
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| On-Demand
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Pertaining to work performed when demand is present. Typically used to describe products which are manufactured or assembled only when a customer order is placed.
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| One-Piece Flow
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Moving parts through a process in batches of one.
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| One-Way Networks
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The advantages generally lie with either the seller of buyer, but not with both. B2C web sites are one-way networks.
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| Online
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A computer term which describes activities performed using computer systems.
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| On-Line receiving
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A system in which computer terminals are available at each receiving bay and operators enter items into the system as they are unloaded.
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| Open Policy
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Please refer Marine Cargo Insurance
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| Operating Differential Subsidy (ODS)
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A payment to an American-flag carrier by the U.S. government to offset the difference in operating costs between U.S. and foreign vessels.
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| Operating Ratio
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A measure of operating efficiency defined as Operating expenses divided by the Operating revenues x 100.
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| Operation
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I use the term operation frequently in my writings with two very distinct meanings. At a general level, an operation is the overall work environment that includes the facility(s) and all activities that occur within it. When discussing MRP and related topics, an operation is a specific step that exists in the routing of a manufacturing process.
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| Optical-guided
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Guidance system that uses a special strip (taped or painted) on the floor to guide an AGV.
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| Optimization
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The process of making something as good or as effective as possible with given resources and constraints.
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| Optional replenishment
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The action of ordering or producing up to the Max in a Min-Max system even though inventory has not reached the Min. May be used to avoid down time on machines etc.
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| Order
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A type of request for goods or services.
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| Order cost
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Also known as purchase cost or set up cost, order cost is the sum of the fixed costs that are incurred each time an item is ordered. These costs are not associated with the quantity ordered but primarily with physical activities required to process the order. For purchased items, these would include the cost to enter the purchase order and/or requisition, any approval steps, the cost to process the receipt, incoming inspection, invoice processing and vendor payment, and in some cases a portion of the inbound freight may also be included in order cost. In manufacturing, the order cost would include the time to initiate the work order, time associated with picking and issuing components excluding time associated with counting and handling specific quantities, all production scheduling time, machine set up time, and inspection time. Order cost is used as part of most cost-based order quantity/lot sizing calculations. See article on eoq for more detailed info on order cost.
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| Order cycle
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Also called replenishment cycle, order cycle refers to the time between orders of a specific item. Most easily calculated by dividing the order quantity by the annual demand and multiplying by the number of days in the year.
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| Order Cycle
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The time and process involved from the placement of an order to the receipt of the order.
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| Order Cycle Time
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The time that elapses from placement of order until receipt of order. This includes time for order transmittal, processing, preparation, and shipping.
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| Order Entry and Scheduling
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The process of receiving orders from the customer and entering them into a company's order processing system. Orders can be received through phone, fax, or electronic media. Activities may include "technically" examining orders to ensure an orderable configuration and provide accurate price, checking the customer's credit and accepting payment (optionally), identifying and reserving inventory (both on hand and scheduled), and committing and scheduling a delivery date.
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| Order Fill
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A measure of the number of orders processed without stockouts, or the need to back order, expressed as a percentage of all orders processed in the distribution center or warehouse.
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| Order Management
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The planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders. Regarding customer orders, order management includes order promising, order entry, order pick, pack and ship, billing, and reconciliation of the customer account. Regarding manufacturing orders, order management includes order release, routing, manufacture, monitoring, and receipt into stores or finished goods inventories. Regarding purchase orders, order management includes order placement, monitoring, receiving, acceptance, and payment of supplier.
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| Order Management Costs
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One of the elements comprising a company's total supply chain management costs. These costs consist of the following
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| Order Picking
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Assembling a customer's order from items in storage.
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| Order point
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Please refer Reorder point
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| Order Processing
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Activities associated with filling customer orders.
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| Order profile
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Data describing the characteristics of inbound, outbound, or internal orders (outbound is most common). Examples of characteristics incorporated into an order profile could include: line items per order, pieces per order, weight per order, cube per order, time of day, destination, shipment method, order type, etc. Characteristics are often broken into logical groups such as breaking line items per order into groups of 1 line item, 2-4 line items, 5-10 line items, 11- 25, 26+.
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| Order selector
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A.k.a. Order picker. Lift truck designed specifically for manual handling of less than pallet load quantities in racking. Man-up design has fixed forks attached to a platform that elevates the load and the operator to facilitate manual loading and unloading from racking. Order selectors are very-narrow-aisles vehicles that operate in aisles of less than 6' also see lift truck pics, lift truck basics, and the aisle decision for more info.
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| Ordering Cost
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The cost of placing an inventory order with a supplier.
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| Origin
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The place where a shipment begins its movement.
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| Original Equipment Manufacturer (OEM)
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A manufacturer that buys and incorporates another supplier's products into its own products. Also, products supplied to the original equipment manufacturer or sold as part of an assembly. For example, an engine may be sold to an OEM for use as that company's power source for its generator units.
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| OS&D
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Please refer Over, Short, and Damaged.
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| Outbound Logistics
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The process related to the movement and storage of products from the end of the production line to the end user.
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| Outlier
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A data point that differs significantly from other data for a similar phenomenon. For example, if the average sales for a product were ten units per month, and one month the product had sales of 500 units, this sales point might be considered an outlier.
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| Out-of-Pocket Cost
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The cost directly assignable to a particular unit of traffic and which a company would not have incurred if it had not performed the movement.
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| Outpartnering
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The process of involving the supplier in a close partnership with the firm and its operations management system. Outpartnering is characterized by close working relationships between buyers and suppliers, high levels of trust, mutual respect, and emphasis on joint problem solving and cooperation. With outpartnering, the supplier is not viewed as an alternative source of goods and services (as observed under outsourcing), but rather as a source of knowledge, expertise, and complementary core competencies. Outpartnering is typically found during the early stages of product life cycle when dealing with products that are viewed as critical to the strategic survival of the firm.
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| Outside operation
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Term describing a step in the manufacturing process that is performed by an outside vendor. System setup for outside operations can get fairly complicated and generally requires linking a purchase order for the outside processing to a specific operation in the routing. The integration of the purchase order process and the work order process to ensure accounting, production planning, and inventory management’s needs are met can be confusing and is often problematic
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| Outsource
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To utilize a third party provider to perform services previously performed in house. Examples include manufacturing of products and call center/customer support.
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| Outsourced Cost-of-Goods Sold
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Operations performed on raw material outside of the responding entity's organization that would typically be considered internal to the entity's manufacturing cycle. Outsourced cost-of-goods sold captures the value of all outsourced activities that roll up as cost-of-goods sold. Some examples of commonly outsourced areas are assembly, test, metal finishing or painting, and specialized assembly process.
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| Over, Short, and damaged (OS&D)
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This is typically a report issued at the warehouse when goods are damaged. Used to file a claim with a carrier.
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| Over-the-Road
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A motor carrier operation that reflects long-distance moves; the opposite of local operations.
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| Owner/Operator
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A truck driver who owns and operates his/her tractor/trailer.
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