Supply Chain Exam 3

Supplier Relationship Management (SRM)

The discipline of strategically planning for and managing all interactions with third-party organizations to maximize value.

Win-Win Performance

The goal of strong supplier partnerships where both the buyer and supplier achieve competitive benefits.

Strategic Perspective

A long-term approach to partnerships, moving beyond simple tactical or transactional interactions.

Trust

A fundamental key to partnerships; it is earned over time, easily lost, and almost impossible to regain.

Shared Vision

When both partners have clear, mutually agreeable objectives that align with long-term corporate success.

Personal Relationships

The human element of communication that makes strategic partnerships functional and successful.

Mutual Benefits

A "marriage-like" state where both parties have compatible needs and benefit from the alliance.

Top Management Commitment

Support that must start at the highest level for a partnership to be successful.

Information Sharing

The use of formal and informal communication lines to facilitate the free flow of data between partners.

Continuous Improvement

Making a series of small improvements over time to eliminate waste in a system.

Plan, Do, Check, Act (PDCA)

The standard four-step process used for continuous improvement in supply chains.

S.M.A.R.T. Objectives

Metrics that are Specific, Measurable, Achievable, Relevant, and Time-oriented.

Scorecard

A multi-criteria approach used to measure and evaluate supplier performance.

Total Cost of Ownership (TCO)

All costs associated with acquiring, using, and maintaining a good or service.

ISO 9000

A series of management and quality assurance standards in design, development, production, and installation.

ISO 14000

A family of international standards for environmental management.

Supplier Development

Any activity that a buyer undertakes to improve a supplier's performance and/or capabilities.

Operations Management

Managing the process of converting resources into goods and services as efficiently as possible.

Manufacturing

To make or transform raw materials and components into a finished product.

LEAN

An operating philosophy of waste reduction and value enhancement to improve supply chain flow.

Six Sigma

A disciplined, statistical-based methodology for removing causes of defects and minimizing variability.

Make-to-Stock (MTS)

Manufacturing products for stock based on demand forecasts; a push system.

Make-to-Order (MTO)

Manufacturing that starts only after a customer's order is received.

Assemble-to-Order (ATO)

A hybrid strategy where products are assembled from standardized components after an order is received.

Engineer-to-Order (ETO)

A strategy where products are designed and built to customer specifications after an order is placed.

Job Shop Production

An intermittent process that creates custom, one-off products for specific customers.

Batch Production

Manufacturing a small fixed quantity of an item in a single production run.

Line Flow Production

Standardized products move through an assembly line in high volumes.

Continuous Flow Production

Highly automated, 24-hour operations for large quantities of standardized goods.

Total Cost of Manufacturing (TCM)

The aggregate cost of manufacturing, including fixed and variable costs.

Toyota Production System (TPS)

The original system created by Taichi Ohno that served as the foundation for LEAN.

Just-in-Time (JIT)

An inventory strategy to decrease waste by receiving materials only when needed in production.

Muda

The Japanese term for waste; any activity that consumes resources but adds no value.

DOWNTIME

An acronym for the 8 wastes: Defects, Overproduction, Waiting, Non-utilized talent, Transportation, Inventory, Motion, Extra-processing.

Five S's

A workplace organization method: Sort, Straighten, Shine, Standardize, Sustain.

DMAIC

The Six Sigma methodology: Define, Measure, Analyze, Improve, Control.

5 Whys

A technique used in the Analyze phase of Six Sigma to identify the root cause of a problem.

5 Hows

A technique for drilling down into the details of a potential solution to arrive at the best fix.

Logistics

The part of SCM that plans and controls the efficient flow and storage of goods and services.

Time and Place Utility

The value provided by logistics by having the right product at the right location and time.

Warehouse

A facility used to store purchases, work-in-process (WIP), and finished goods inventory.

Public Warehouse

A facility providing short-term storage for a fee without requiring capital investment.

Contract Warehouse

A facility where services are provided on a long-term, fixed contract basis.

Private Warehouse

A storage facility owned and operated by the company that owns the goods.

Consolidation Warehouse

Receives small shipments from various suppliers and combines them into large shipments.

Break-Bulk Warehouse

Divides full truckloads from a single source into smaller quantities for multiple customers.

Cross-Docking

Moving materials directly from inbound to outbound trucks with little to no storage.

Warehouse Management System (WMS)

Software that tracks and controls the flow of goods from receiving to outbound shipment.

Transportation Management System (TMS)

Software used to select the best mix of transportation services and pricing.

Global Trade Management (GTM)

Systems providing documentation and visibility to comply with international trade regulations.

RFID

Radio Frequency Identification tags used to facilitate tracking of goods in a warehouse.

LTL (Less-Than-Truckload)

Shipments that do not fill an entire truck, usually moved through a terminal system.

FTL (Full Truckload)

Large shipments that fill a truck, offering a direct move from origin to destination.

Reverse Logistics

Moving goods from their final destination for the purpose of capturing value or proper disposal.

Internal Customer

A department or person within the same company who relies on the output of another.

External Customer

The final consumer or another business that purchases the finished product.

Inbound Logistics

The movement of materials and goods from suppliers into a business.

Outbound Logistics

The movement of finished products from a business to the customer.

Safety Stock

Buffer inventory held to protect against uncertainty in supply or demand.

Lead Time

The total time from when a customer places an order until they receive the product.

Economies of Scale

Cost advantages gained when the volume of production increases.

Value-Added Activity

A process step that transforms a product in a way the customer is willing to pay for.

Non-Value Added Activity

A process step that consumes resources but creates no value for the customer.

Automation

Using technology and machines to perform routine tasks without human intervention.

Predictive Maintenance

Using sensors and data to predict when machinery is likely to fail.

Augmented Reality (AR)

A technology used to provide digital overlays on physical environments for training or picking.

Blockchain

A decentralized, public ledger that provides transparent and immutable records of transactions.

Hub-and-Spoke

A warehouse network where a large central hub feeds smaller regional spoke warehouses.

Centralized Network

A network with fewer warehouses, lowering operating costs but potentially increasing delivery time.

Decentralized Network

A network with many warehouses close to customers to provide faster delivery.

Market-Positioned Strategy

Placing warehouses close to customers to maximize delivery speed and service.

Product-Positioned Strategy

Placing warehouses close to the source of supply to collect goods.

Intermediately-Positioned Strategy

Placing warehouses midway between the supply source and the customer.

Material Handling

The short-distance movement of goods within a building or between a building and a vehicle.

Green Logistics

Efforts to reduce the environmental impact of logistics and transportation activities.

Third-Party Logistics (3PL)

Outsourcing all or part of a company’s logistics operations to a specialized firm.

Common Carriers

Transportation providers that offer services to the general public at published rates.

Contract Carriers

Transportation providers that offer services to specific customers under long-term agreements.

Exempt Carriers

Carriers that are exempt from economic regulation, typically for specific commodities like produce.

Private Carrier

A company that transports its own goods using its own fleet of vehicles.

Intermodal Transportation

Using two or more different modes of transport to move a shipment.

Piggyback

A form of intermodal transport where truck trailers are carried on rail flatcars.

TEU

Twenty-foot Equivalent Unit; a standard measure of container capacity for ocean freight.

Total Quality Management (TQM)

A management approach centered on quality, based on the participation of all members.

Kaizen

A Japanese term for change for the better or continuous improvement.

Poka-Yoke

Error-proofing techniques designed to prevent human errors in a process.

Value Stream Mapping

A LEAN tool used to visualize the flow of materials and information through a process.

Takt Time

The rate at which a finished product needs to be completed to meet customer demand.

Bottleneck

Any point in a production process where capacity is less than the demand placed upon it.

Cycle Time

The total time from the beginning to the end of a specific process or step.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.

Work-in-Process (WIP)

Materials that have entered the production process but are not yet finished.

Bill of Materials (BOM)

A comprehensive list of raw materials, components, and assemblies needed to make a product.

Manufacturing Resource Planning (MRP II)

A system used for the effective planning of all resources of a manufacturing company.

Enterprise Resource Planning (ERP)

Integrated software used by organizations to manage day-to-day business activities.

Supply Chain Visibility

The ability of all partners to see the status of orders and inventory in real-time.

Bullwhip Effect

The phenomenon where small fluctuations in demand at the retail level cause larger fluctuations upstream.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

A business practice that combines the intelligence of multiple partners in the planning and fulfillment of customer demand.

Strategic Sourcing

The process of identifying the best suppliers and managing those relationships to achieve long-term goals.

Category Management

A strategic approach to purchasing where items are grouped into categories based on their function.