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| S&OP
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Please refer Sales and Operations Planning.
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| SAE
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Society of Automotive Engineers
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| Safety lead time
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Safety lead time is a way to represent your safety stock as a number of days demand. Safety lead time can be beneficial when you want to “pad” your lead-time to compensate for supplier variability, transportation variability, or internal process variability. For example, if can take 2 or 3 days to get incoming materials processed through your receiving process, you may want to set your safety lead time to 2 or 3 days. This will calculate the requested dates for your purchase orders 2 or 3 days earlier than actual need. This is much cleaner than adding the 2 to 3 days to the suppliers lead time (which can be confusing when the supplier’s stated lead-time is different from what is in your system).
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| Safety stock
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Quantity of inventory used in inventory management systems to allow for deviations in demand or supply. Safety stock calculations will take into account historic deviations and use a required service level multiplier to determine the optimal safety stock level. See article on safety stock.
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| Safety Stock
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The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand.
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| Salable Goods
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A part of assembly authorized for sale to final customers through the marketing function.
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| Sales and Operations Planning (S&OP)
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A strategic planning process that reconciles conflicting business objectives and plans future supply chain actions. S&OP usually involves various business functions, such as sales, operations, and finance to agree on a single plan/forecast that can be used to drive the entire business.
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| Sales Mix
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The proportion of individual product-type sales volumes that make up the total sales volume.
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| Sales Plan
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A time-phased statement of expected customer orders anticipated to be received (incoming sales, not outgoing shipment) for each major product family or item. It represents sales and marketing management's commitment to take all reasonable steps necessary to achieve this level of actual customer orders. The sales plan is a necessary input to the production planning process (or sales and operations planning process). It is expressed in units identical to those used for the production plan (as well as in sales dollars).
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| Sales Planning
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The process of determining the overall sales plan to best support customer needs and operations capabilities, while meeting general business objectives of profitability, productivity, competitive customer lead times, and so on, as expressed in the overall business plan.
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| Sawtooth Diagram
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A quantity-versus-time graphic representation of the order point/order quantity inventory system showing inventory being received, used up, and reordered.
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| Scan
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A computer term referring to the action of scanning bar codes or RF tags.
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| Scanlon Plan
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A system of group incentives on a companywide or plantwide basis that sets up one measure that reflects the results of all efforts. The Scanlon plan originated in the 1930s by Joe Scanlon and MIT. The universal standard is the ratio of labor costs to sales value added by production. If there's an increase in production sales value with no change in labor costs, productivity has increased while unit cost has decreased.
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| SCE
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Please refer Supply Chain Execution
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| SCEM
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Please refer Supply Chain Event Management
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| Scenario Planning
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A form of planning in which likely sets of relevant circumstances are identified in advance, and used to assess the impact of alternative actions.
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| SCM
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Please refer Supply Chain Management
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| SCOR
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Supply Chain Operations Reference Model. This is the model developed by the Supply-Chain Council (SCC), and is build around six major processes plan, source, make, deliver, return, and enable. The aim of the SCOR is to provide a standardized method of measuring supply chain performance, and to use a common set of metrics to benchmark against other organizations.
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| Scorecard
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A performance measurement tool used to capture a summary of the key performance indicators (KPIs)/metrics of a company. Metrics dashboards/scorecards should be easy to read and usually have red, yellow, green indicators to flag when the company is not meeting its metrics targets. Ideally, a dashboard/scorecard should be cross functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly - at least on a monthly basis and weekly in key functions, such as manufacturing and distribution where activities are critical to the success of a company. The dashboard/scorecards philosophy can also be applied to external supply chain partners like suppliers to ensure that their objectives and practices align.
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| Screen mapping
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Software that provides the functionality to change the arrangement of data fields on a computer screen that accesses a mainframe computer program. Screen mapping is frequently used in combination with terminal emulation software to "remap" data fields from a standard mainframe program to be used on the smaller screen of a portable handheld device. . A.k.a. Screen scraping
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| Seasonality
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A repetitive pattern of demand from year to year (or other repeating time interval), with some periods considerably higher than others. Seasonality explains the fluctuation in demand for various recreational products which are used during different seasons.
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| Seasonality
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Fluctuations in demand that repeat with the same pattern over equivalent time periods.
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| Seasonality index
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Consists of a number for each specific forecast period that describes the relationship of each period’s demand to the average demand (level) over the complete seasonal cycle. A seasonality index is used to adjust the forecast to account for these cyclical changes in demand. The average demand is represented by the number “1”. If seasonality for a period results in demand greater than the average demand, it will be represented by a number greater than 1. For example, if december’s sales were, on average, 30% greater than the average monthly sales for the year, you would have a seasonality index of 1.3 ( 1 plus .30) for december. If january’s sales were, on average, 20% less than the average monthly sales for the year, you would have a seasonality index of 0.8 (1 minus .20).
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| Secure Electronic Transaction (SET)
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In e-commerce, a system of guaranteeing the security of financial transactions conducted over the Internet.
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| Selective pallet rack
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The term selective pallet rack implies standard single-deep pallet rack configurations (and rack designs) where each pallet is immediately accessible from an aisle. In contrast to double-deep rack, drive-in or drive-thru rack, or push-back rack where some loads will be stored behind other loads. See equipment pics: racking page for examples.
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| Self Billing
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A transportation industry strategy which prescribes that a carrier will accept payment based on the tender document provided by the shipper.
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| Self Correcting
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A computer term for an online process that validates data and won't allow the data to enter the system unless all errors are corrected.
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| Selling, General, and Administrative (SG&A) Expenses
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Includes marketing, communication, customer service, sales, salaries and commissions, occupancy expenses, unallocated overhead, etc. Excludes interest on debt, domestic or foreign income taxes, depreciation and amortization, extraordinary items, equity gains or losses, gain or loss from discontinued operations and extraordinary items.
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| Serial Number
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A unique number assigned for identification to a single piece that will never be repeated for similar pieces. Serial numbers are usually applied by the manufacturer but can be applied at other points by the distributor or wholesaler. Serial numbers can be used to support traceability and warranty programs.
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| Service factor
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Factor used as a multiplier with the Standard Deviation to calculate a specific quantity to meet the specified service level. See article on safety stock for more information on service factor
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| Service Level
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A measure (usually expressed as a percentage) of satisfying demand through inventory or by the current production schedule in time to satisfy the customer's requested delivery dates and quantities.
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| Service Parts Revenue
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The sum of the value of sales made to external customers and the transfer price valuation of sales within the company of repair or replacement parts and supplies, net of all discounts, coupons, allowances, and rebates.
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| SET
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Please refer Secure Electronic Transaction.
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| SG&A
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Please refer Selling, General, and Administrative Expenses.
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| Shared Services
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Consolidation of a company's back-office processes to form a spinout (0r a separate "shared services" unit to be run like a separate business), providing services to the parent company and sometimes, to external customers. Shared services typically lower overall cost due to the consolidation, and may improve support as a result of focus.
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| Shareholder Value
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Combination of profitability (revenue and costs) and invested capital (working capital and fixed capital).
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| Shelf Life
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The amount of time an item may be held in inventory before it becomes unusable. Shelf life is a consideration for food and drugs which deteriorate over time, and for high-tech products which become obsolete quickly.
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| Shewhart Cycle
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Please refer Plan-Do-Check-Action.
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| Shingo's Seven Wastes
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Shigeo Shingo, a pioneer in the Japanese just-in-time philosophy, identified seven barriers to improving manufacturing. They are the waste of overproduction, waste of waiting, waste of transportation, waste of stocks, waste of motion, waste of making defects, and waste of the processing itself.
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| Shipper
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The party that tenders goods for transportation.
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| Shipper-Carriers
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Shipper-carriers (also called private carriers) are companies with goods to be shipped that own or manage their own vehicle fleets. Many large retailers, particularly groceries and "big box" stores, are shipper-carriers.
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| Shipping
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The function that performs the tasks for the outgoing shipment of parts, components, and products. It includes packaging, marking, weighing, and loading for shipment.
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| Shipping Lane
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A predetermined, mapped route on the ocean that commercial vessels tend to follow between ports. This helps ships avoid hazardous areas. In general transportation, the logical route between the point of shipment and the point of delivery used to analyze the volume of shipment between two points.
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| Shipping Manifest
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A document that lists the pieces in a shipment. A manifest usually covers an entire load regardless of whether the load is to be delivered to a single destination or many destinations. Manifests usually list the items, piece count, total weight, and the destination name and address for each destination in the load.
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| Shipping manifest system
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Software used to associate shipments with carrier, service, rate, etc. Shipping manifest systems will produce a report (physical or electronic) that is sent to the carrier to be used for billing purposes. Shipping systems will usually produce shipping documents such as compliance shipping labels, bill of ladings, export documents, and hazmat documentation. They may also have functionality related to rate shopping, freight policy execution, freight cost management. Also see transportation management system.
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| Shop Calendar
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Please refer Manufacturing Calendar
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| Shop Floor Production Control Systems
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The systems that assign priority to each shop order, maintaining work-in-process quantity information, providing actual output data for capacity control purposes, and providing quantity by location by shop order for work-in-process inventory and accounting purposes.
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| Short Shipment
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Piece of freight missing from shipment as stipulated by documents on hand.
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| Shrinkage
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Reductions of actual quantities of items in stock, in process, or in transit. The loss may be caused by scrap, theft, deterioration, evaporation, etc.
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| Sideshift
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A very common lift truck attachment, the sideshift device allows the fork carriage to slide left and right to allow more accurate placement of the load. Sideshifts will increase productivity and safety as well as reduce product damage by allowing the operator more flexibility in load placement.
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| Sigma
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A Greek letter commonly used to designate the standard deviation of a population.
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| Six-Sigma Quality
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A term generally used to indicate that a process is well controlled, I.e., tolerance limits are +-6 sigma (3.4 defects per million events) from the centerline in a control chart. The term is usually associated with Motorola which named one of its key operations initiatives Six-Sigma Quality.
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| Skatewheel conveyor
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Type of conveyor that uses small wheels (usually made of steel) to move materials. See conveyor pics.
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| Skid
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A portable platform designed to allow a forklift, pallet jack, or other material handling equipment lift, move, and store various loads. A skid is similar to a pallet but does not have bottom deck boards. A skid is preferred over a pallet when used with equipment that would have problems with the bottom deck boards. The down side is that a skid usually needs beefier materials (more expensive and heavier) in order to meet the strength requirements of a comparable pallet. Though not technically correct, the terms skid and pallet are often used interchangeably. Also see pallet
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| Skills Matrix
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A visible means of displaying people's skill levels in various tasks. Used in a team environment to identify the skills required by the team and which team members possess those skills.
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| SKU
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Please refer Stock-Keeping Unit
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| SKU, Stock keeping unit
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Referring to a specific item in a specific unit of measure. For xample, if you distributed thirty-weight motor oil in both quarts and gallons you would maintain the inventory as two skus even though they are both thirty-weight motor oil. Also refers to the identification# assigned to each sku.
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| Slap-and-ship
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Term used to describe an approach to complying with customer requirements for physical identification of shipped goods. Most recently, slap-an-ship has been used to describe complying with rfid requirements (such as those from wal-mart), however, it is also applicable to any compliance labeling requirement (such as compliance bar code labels). Slap-and-ship implies you are meeting the customer's requirement by applying the bar code labels or rfid tags, but are not utilizing the technology internally.
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| Slide-shoe sorter
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Type of conveyor sorting equipment that uses a series of sliding shoes to move materials off of the connveyor. The sliding shoes are part of the conveyor and travel with the materials, when the sorting point is reached, a several shoes will slide accross the conveyor, pushing the materials onto another conveyor or down a chute.
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| Slip-sheet attachment
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Lift truck attachment used where slip sheets (a sheet of cardboard, paperboard, or plastic) are used rather than pallets. The slip-sheet attachment has a push/pull mechanism that clamps onto the slip sheet and pulls the load onto a thin platform and then pushes the load off of the platform when the truck reaches the destination.
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| Slotting
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The activities associated with optimizing product placement in pick locations in a warehouse. There are software packages designed just for slotting, and many wms packages will also have slotting functionality. Slotting software will generally use item velocity (times picked), cube usage, and minimum pick face dimensions to determine best location.
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| Slotting
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Warehouse slotting is defined as the placement of products within a warehouse facility. Its objective is to increase picking efficiency and reduce warehouse handling costs through optimizing product location and balancing the workload.
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| Small Group Improvement Activity
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An organizational technique for involving employees in continuous improvement activities.
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| SMART
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Please refer Specific, Measurable, Achievable, Realistic, Time Based.
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| SOP
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Standard Operating Procedure.
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| SOW
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Please refer Statement of Work
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| Spam
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A computer industry term referring to the act of sending identical and irrelevant postings to many different newsgroups or mailing lists. Usually this posting is something that has nothing to do with the particular topic of a newsgroup or of no real interest to the person on the mailing list.
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| SPC
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Please refer Statistical Process Control.
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| Specific, Measurable, Achievable, Realistic, Time Based (SMART)
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A shorthand description of a way of setting goals and targets for individuals and teams.
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| Speech-based technology
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Also known as voice technology is actually composed of two technologies: Voice directed, which converts computer data into audible commands, and Speech recognition, which allows user voice input to be converted into data. Portable voice systems consist of a headset with a microphone and a wearable computer. See article on ADC for more info, also check out My book on inventory accuracy which provides greater detail on speech-based systems.
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| Spot Demand
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Demand with a short lead time that's difficult to estimate. Usually supply for this demand is provided at a premium price. An example of spot demand would be when there's a spiked demand for building materials as a result of a hurricane.
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| Staging
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Pulling material for an order from inventory before the material is required. This action is often taken to identify shortages, but it can lead to increased problems in availability and inventory accuracy. Also see Accumulation Bin
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| Stakeholders
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People with a vested interest in a company, including manager, employees, stockholders, customers, suppliers, and others.
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| Stamping
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Generally describes an unfinished item made of metal that is produced through a process that uses pressure to form discrete units from larger raw materials. Also describes the process used to produce stampings. In some cases, stampings may also be referred to as "blanks".
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| Standard Components
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Components (parts) of a product for which there is an abundance of suppliers. Not difficult to produce. An example would be a power cord for a computer.
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| Standard cost
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Inventory costing method used in manufacturing environments that uses the materials costs in the bill of materials combined with the labor costs (based on standard labor hours and rates per operation) and machine costs in the routing to calculate the cost of the finished or semi-finished item.
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| Standard Cost Accounting System
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A cost accounting system that uses cost units determined before production for estimating the cost of an order or product. For management control purposes, the standards are compared to actual costs, and variances are computed.
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| Standard deviation
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Used to describe the spread of the distribution of numbers. Standard deviation is calculated by the following steps:
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| Standing Order
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Please refer Blanket Purchase Order.
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| Statement of Work (SOW)
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1) A description of products to be supplied under a contract. A good practice is for companies to have SOWs in place with their trading partners - especially for all top suppliers. 2) In projection management, the first project planning document that should be prepared. It describes the purpose, history, deliverables, and measurable success indicators for a project. It captures the support required from the customer and identifies contingency plans for events that could throw the project off course. Because the project must be sold to management, staff, and review groups, the statement of work should be a persuasive document.
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| Statistical Process Control (SPC)
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A visual means of measuring and plotting process and product variation. Results are used to adjust variables and maintain product quality.
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| Stickering
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Placing customer-specific stickers on boxes of product. An example would be where Wal-Mart has a request for their own product codes to be applied to retail boxes prior to shipment.
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| Stock-Keeping Unit (SKU)
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A category of unit with a unique combination of form, fit, and function (i.e., unique components held in stock).
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| Straight Truck
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Straight trucks do not have a separate tractor and trailer. The driving compartment, engine and trailer are one unit.
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| Straight truck
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Delivery trucks that do not have a separate tractor and trailer. Straight trucks (also called box vans, or box trucks) usually only have 2 axles and generally have box lengths of between 12 and 30 feet (as opposed to tractor trailers that have 5 axles and trailer lengths of 45 to 53 feet). .
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| Strategic Alliance
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Business relationship in which two or more independent organizations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives.
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| Structural pallet rack
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Racking system that uses bolts or other mechanical fasteners (as opposed to Boltless Pallet rack). Structural Pallet Rack is sometimes used to support the roof of the structure (Rack-supported buildings), eliminating the need for posts.
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| Subcontracting
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Sending production work outside to another manufacturer. This can involve specialized operations such as plating metals or complete functional operations.
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| Subhauler
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A subhauler drives a tractor under contract for a company. Usually a subhauler is an owner/operator or a small company.
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| Sub-Optimization
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Decisions or activities in part made at the expense of the whole. An example of sub-optimization is where a manufacturing unit schedules production to benefit its cost structure without regard to customer requirements or the effect on other business units.
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| Super bill of material
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Type of planning bill of material that is created at a very high level tying together a larger and more complex family of products than a typical planning bill. See planning bill of material
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| Supplier Certification
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Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer's requirements. Such requirements can include cost, quality, delivery, flexibility, maintenance, safety, and ISO quality and environmental standards.
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| Supplier-Owned Inventory
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A variant of Vendor-Managed Inventory and Consignment Inventory. In this case the supplier not only manages the inventory, but also owns the stock close to or at the customer location until the point of consumption or usage by the customer.
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| Supply Chain Design
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The determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of warehouse and production facilities, the products, the modes of transportation, and supporting information systems.
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| Supply Chain Event Management (SCEM)
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SCEM is an application that supports control processes for managing events within and between companies. It consists of integrated software functionality that supports five business processes monitor, notify, simulate, control, and measure supply chain activities.
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| Supply Chain Execution (SCE)
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The ability to move the product out of the warehouse door. This is a critical capacity and one that only brick-and-mortar firms bring to the B2B table. Dot coms have the technology, but that's only part of the equation. The need for SCE is what is driving the dot coms to offer equity partnerships to the wholesale distributors.
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| Supply Chain Integration (SCI)
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Likely to become a key competitive advantage of selected e-marketplaces. Similar concept to the back-end integration, but with greater emphasis on the moving of goods and services.
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| Supply Chain Inventory Visibility
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Software applications that permit monitoring events across a supply chain. These systems track and trace inventory globally on a line-item level, and notify the user of significant deviations from the plans. Companies are provided with realistic estimates of when the material will arrive.
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| Supply Chain Management (SCM) - as defined by the Council of Supply Chain Management Professionals (CSCMP)
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Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activites. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive, high-performing business model. It includes all of the logistics managment activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.
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| Supply Chain Network Design Systems
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The systems employed in optimizing the relationships among the various elements of the supply chain manufacturing plants, distribution centers, points of sale, as well as raw materials, relationships among product families, and other factors to synchronize supply chains at a strategic level.
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| Supply Chain Strategic Planning
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The process of analyzing, evaluating, and defining supply chain strategies, including network design, manufacturing and transportation strategy, and inventory policy.
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| Supply Chain-Related Finance and Planning Cost Element
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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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| Supply Chain-Related IT Costs
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Information technology (IT) costs (in US dollars) associated with major supply chain management processes as described below. These costs should include
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| Supply Planning
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The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon, and interval.
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| Supply Warehouse
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A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders.
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| Support Costs
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Costs of activities not directly associated with producing or delivering products or services. Examples are the costs of information systems, process engineering, and purchasing.
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| Surrogate [item] Driver
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In ABC costing, a substitute for the ideal cost driver, but closely correlated to the ideal driver, where [item] is Resource, Activity, or Cost Object. A surrogate driver is used to significantly reduce the cost of measurement while not significantly reducing accuracy. For example, the number of production runs is not descriptive of the material-disbursing activity, but the number of production runs may be used as an activity driver if material disbursements correlate well with the number of production runs.
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| Sustaining Activity
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An activity that benefits an organizational unit as a whole, but not any specific cost object.
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| SWOT
|
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Please refer SWOT Analysis.
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| SWOT Analysis
|
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An analysis of the strengths, weaknesses, opportunities, and threats of and to an organization. SWOT analysis is useful in developing strategy.
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| Synchronization
|
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The concept that all supply chain functions are integrated and interact in real time; when changes are made to one area, the effect is automatically reflected throughout the supply chain.
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