Supply Chain Management Glossary

Glossary Supply Chain Management

1. Supply chain: The network of businesses, individuals, activities, and resources involved in creating and delivering a product or service to the end customer.

2. Logistics: The process of planning, implementing, and controlling the flow of goods and services from the point of origin to the point of consumption.

3. Inventory: The stock of raw materials, work in progress, and finished goods held by a company at any given point in time.

4. Lead time: The time it takes for an order to be processed, manufactured, and delivered to the customer.

5. Just-in-time (JIT): A production and inventory management system in which materials are delivered just in time for production, minimizing the need for inventory.

6. Transportation: The movement of goods and people from one location to another.

7. Carrier: A company that provides transportation services, such as a trucking company, shipping company, or airline.

8. Freight: Goods that are transported by a carrier.

9. Warehouse: A facility used for storing goods, typically used in conjunction with a distribution center.

10. Distribution center: A facility used for receiving, storing, and distributing goods to the end customer.

11. Supply chain management (SCM): The coordination and management of all activities involved in the supply chain, from raw materials sourcing to product delivery.

12. Procurement: The process of purchasing goods and services from suppliers.

13. Supplier: A company that provides goods or services to another company.

14. Demand planning: The process of forecasting demand for a product or service.

15. Forecasting: The process of predicting future demand based on historical data and other relevant factors.

16. Production planning: The process of planning and scheduling production based on demand forecasts and available resources.

17. Capacity planning: The process of determining the amount of production that can be achieved with the available resources.

18. Sourcing: The process of identifying and selecting suppliers.

19. Reverse logistics: The process of managing the return of goods from the end customer back to the manufacturer or distributor.

20. Green logistics: The practice of incorporating environmentally sustainable practices into logistics and supply chain management.

21. Bill of Materials (BOM): A document that lists all the raw materials, components, and sub-assemblies required to manufacture a product.

22. Production Order: A document that authorizes the production of a specific quantity of a product.

23. Work in Progress (WIP): Products that are partially completed but not yet finished.

24. Capacity Utilization: The percentage of available production capacity that is currently being used.

25. Cycle Time: The time it takes to complete one cycle of a particular process or activity.

26. Freight Forwarder: A company that arranges transportation of goods on behalf of another company.

27. Incoterms: A set of standardized trade terms used in international trade to determine the responsibilities of buyers and sellers for the delivery of goods.

28. Supply Chain Visibility: The ability to track the movement of goods and monitor inventory levels throughout the supply chain.

29. Demand Management: The process of aligning demand with supply in order to optimize inventory levels and meet customer demand.

30. Continuous Improvement: An ongoing effort to improve processes and increase efficiency in the supply chain.

31. Distribution Network: The physical network of warehouses, distribution centers, and transportation routes used to move goods from the manufacturer to the end customer.

32. Shipment: The physical movement of goods from one location to another.

33. Order Management: The process of managing customer orders from receipt to delivery.

34. Safety Stock: The buffer inventory held to mitigate the risk of stockouts due to unexpected increases in demand or supply chain disruptions.

35. Vendor-Managed Inventory (VMI): A system in which the supplier manages the inventory levels of the customer based on agreed-upon inventory norms.

36. Cross-Docking: A logistics strategy in which goods are transferred directly from inbound trucks to outbound trucks, without being stored in a warehouse.

37. Material Requirements Planning (MRP): A computer-based inventory management system that calculates the requirements for raw materials, components, and sub-assemblies based on the production schedule.

38. Supply Chain Network: The interconnected set of organizations, people, activities, and resources involved in the creation and delivery of a product or service.
39. Demand Forecasting: The process of estimating future demand for a product or service based on historical sales data and market trends.
40. Carriage Paid To (CPT): An Incoterm that specifies that the seller is responsible for arranging and paying for transportation of the goods to a named destination.
41. Duty Drawback: A customs program that allows importers to recover duties paid on imported goods that are later exported.
42. Electronic Data Interchange (EDI): The computer-to-computer exchange of business documents, such as purchase orders and invoices, between trading partners.
43. International Commercial Terms (Incoterms): A set of standardized terms used in international trade to clarify the rights and responsibilities of buyers and sellers.
44. Logistics Service Provider (LSP): A third-party provider of logistics services, such as transportation, warehousing, and inventory management.
45. Make-to-Order (MTO): A production strategy where products are manufactured only after an order has been received.
46. Production Planning and Control (PPC): The process of planning, scheduling, and controlling the production of goods in order to meet customer demand.
47. Vendor-Managed Inventory (VMI): A supply chain strategy where the supplier is responsible for managing inventory levels at the customer's location.
48. Total Cost of Ownership (TCO): A financial analysis that takes into account all costs associated with acquiring and owning a product or service, including purchase price, maintenance, and disposal costs.
49. Freight Forwarder: A third-party logistics provider that specializes in arranging the transportation of goods on behalf of shippers.
50. Reorder Point: The inventory level at which an order needs to be placed in order to maintain a certain level of stock.
51. Safety Stock: Additional inventory held in reserve to protect against unexpected fluctuations in demand or supply chain disruptions.
52. Third-Party Logistics (3PL): A company that provides outsourced logistics services, such as transportation, warehousing, and inventory management.
53. Delivery Performance: A measure of the percentage of orders that are delivered on time and in full.
54. Electronic Freight Management (EFM): The use of technology to manage and optimize transportation operations, including route planning, load optimization, and shipment tracking.
55. Inbound Logistics: The process of managing the transportation and storage of raw materials and supplies from suppliers to manufacturing facilities.
56. Material Requirements Planning (MRP): A computer-based system used to manage production planning and inventory control.
57. Outbound Logistics: The process of managing the transportation and storage of finished goods from manufacturing facilities to customers.