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ERP/supply chain education
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I
idle capacity- Unused production, storage or logistics
resources. Capacity may be idle due to a lack of requirements in the
current timeframe, or because of being held as a hedge against
possible future requirements.
idle
time-
The planned or actual time an operation is not engaged in run
time, or the active production of a product. Idle time is typically
scheduled, for setup, maintenance or other activities, or unscheduled
due to lack of a required resource such as material.
impact
analysis- The process of determining the organizational costs and
benefits of a proposed alternative.
implementation
approach- The variety of methods used to install a new system,
which may include a full
cutover (simultaneous implementation of all
system functions), phased cutover (implementing a series of modules or
subsystems over different periods of time),
parallel (simultaneously
running both the old and new systems to compare performance and
output), and many other variations. The approach depends on the
project goals, scope, resources and timeframe available, similarity
between old and new systems, number of sites to be implemented, degree
of functional integration and many other factors.
implementation
plan- A system installation or conversion plan that defines scope
and goals, resources required, scheduled activities, scheduled
activity durations, and actual project status. A high-level plan may
communicate only major phases and milestones, while detail plans
include specific descriptions of the individual tasks involved and the
critical path.
implementation
team- Internal or external personnel who are responsible for the
installation of a project or system. Team members include the project
leader, functional team leaders, functional team members, and
technical support and consultants as required. Team members may be
assigned on a full-time basis, on a part-time basis as required for
their area of responsibility, or on an ad-hoc basis to solve a
specific issue.
implosion-
Tracing a component and its requirements upward through successively
higher levels of a bill of material. The opposite of
exploding a
top-level item down to individual components.
imposed
date- A project task or operation date determined by an external
constraint that a given resource can not change.
inactive-
Resources or material that have not been used for a specific
period of time and may have become obsolete, or are purposely being
held in anticipation of possible future requirements.
inbound logistics- The systems and tracking methods used for
incoming materials in the process of being shipped from customers or vendors to
a manufacturing facility or distribution center.
incentive-
Financial compensation, public recognition or other benefits used
to reward higher levels of performance and/or new ideas or
contributions.
incident
tracking- The systems to report problems or questions (incidents),
locate and provide solution advice, provide escalation when necessary
and track the successful resolution or current status of each assigned
incident.
income statement- A basic financial statement that details
sales revenue, cost of goods sold and selling/administrative expenses,
income before and after taxes and the gain or loss from unusual events
or discontinued operations. It usually represents activity for a
quarterly or yearly basis, and is compared to the same previous from
the previous year.
incoming
inspection- The activity that conducts quality, quantity and
product verification measurements on newly-received material from a
vendor or other internal manufacturing site. It samples receipts based
on product and vendor parameters and categorizes them as usable for
production or as a reject to be reworked or returned to the
vendor.
Incoterms-
Trade contract terms established by the International Chamber of
Commerce (ex.-
FOB (Free on Board),
DDP (Delivered Duty
Paid)
incremental
cost- The cost added to an existing product or project status by
processing the next operation or performing an additional activity.
indented
bill of material-
A multiple-level bill of material listing the end item at the far
left side (often noted as level 0), with the immediate lower level (1)
components indented one place to the right. Items used in the level
one components (level 2) are listed under each level one item and are
indented an additional place to the right. Subsequent levels are
presented in the same way.
indented
where-used-
A multiple-level
where-used that lists bottom-level components at
the far left side, and indents the next-higher level parent of each
one place to the right. Each higher-level parent is indented one
additional place to the right until the highest-level item (level 0)
is reached.
independent demand- The portion of
demand for a given item not created by the requirement for any other
item. Whether for an end item or a component, independent demand is
created by a sales or internal distribution order for that item, and
not because it is used in an upper-level assembly.
independent variable- A
variable created as an input or predictor used in a model to generate
the outcome (the dependent variable).
indirect cost- A
cost that can not be meaningfully traced to a specific product or
production process; a group or consolidated cost that is normally
allocated to multiple items based on a calculated distribution of
overhead.
indirect labor- Production
support labor that can not be allocated to a specific item or process.
The labor charges for plant maintenance and other activities that are
sometimes broken into 1) indirect activities done by personnel
classified as indirect and 2) activities such as training for
personnel usually classified as direct
infinite capacity
planning- Capacity planning methods that load requirements based
on the planned or scheduled date and do not rearrange them if capacity
is not available. Infinite capacity systems show over or under
conditions based on calculated load vs. resource availability and do
not normally suggest date, quantity or work center changes when
resources are overloaded.
ingredient- A term
often used in process industries in place of component. An ingredients
list is equivalent to a bill of material.
inhouse- A
function or process using internal organization resources.
injection- In the
theory of constraints, an action or activity that leads to a desired
effect or the solution of a problem.
in-process inventory-
syn: work-in-process (WIP)
input/output (I/O) control- An
analysis method that measures planned and actual input and output for
a linked set of resources to identify the source of disruptions in
output. If the plan for a given work center calls for 100 units/day of
output and it is only achieving 80, I/O control identifies whether it
is getting required input as planned (therefore the problem is at that
work center) or is getting only enough input for 80 units, which
indicates a problem in a feeder work center.
intangible asset- An
asset whose value can only be estimated or is indeterminate. Examples
include patents, copyrights and goodwill.
integration- 1) In
business operations, the strategy of controlling the sources of supply
such as vendors and components (backward integration) or the methods
of distribution (forward integration). 2) In systems design, the
process that allows separate functions to use a common technology and
database, pass data and information without requiring translation,
reformatting or duplicate entry, and enable cross-functional views and
management.
intellectual property- An
intangible asset, considered to have value in a market, based on
unique or original human knowledge and intellect. Intellectual
property may or may not be associated with a patent or
copyright.
interactive- The
property of a system that allows two-way communications on a timely if
not real-time basis, as opposed to a system in which information flows
only one way on a batch or scheduled basis.
interchange- The
discrete transmission of the set of data sent at one time, such as
order or shipment data sent between trading partners.
intercompany- Shipments
and other activities that occur between different units of the same
organization. Depending on the accounting parameters used,
intercompany orders may be treated as sales and purchases or as
transfers at standard cost. Intercompany transactions are netted in
consolidations to avoid overstating results.
intermediate item- A
component or other material processed from its original state but not
yet transformed into a finished item.
intermittent demand- Sporadic
demand for end items that may also involve low volumes, and requires
specific forecast and safety stock or lead time techniques . More
typical of to-order than to-stock environments.
intermodal shipment- Shipment
using more than one transportation mode (rail, truck, air, etc.) where
the original shipment is containerized or otherwise kept together in
its original condition.
internal data- Data
generated by an organization's operations, such as sales and purchase
orders, inventory transactions, etc. instead of being provided from a
third party study or database.
internal rate of
return- A discounted
cash flow
method used to specify the return
rate for an investment, in which the present value of cash inflows are
balanced against the present value of outflows.
internal setup- Setup
tasks for a machine or other production resource that requires an idle
(non-producing) status, until complete. Systems that seek to reduce
lead time and enable small lot size production emphasize techniques to
reduce or eliminate internal setup tasks.
interoperable- Products
and systems from multiple vendors that can be used together without
modification or development of custom interfaces and tools.
interplant- Shipments
and transfers between manufacturing facilities of the same
organization, which are typically accounted for as transfers at cost
instead of a separate purchase and sale.
interpolation- The
projection of a value based on the position of two known values.
intransit- Goods
that have been shipped by an originating source but not yet received.
Treated as an expected receipt by planning systems, and classified as
belonging to either the shipping or receiving entity based on the
contracted freight terms for purposes of claims and inventory
status.
intrinsic forecast- A
forecast based on factors internal to an organization, such as past
shipment demand patterns, instead of external factors such as economic
indicators or projections.
inventory- Raw,
intermediate or finished items that are physically stocked by an
organization, or for which they are financially liable. Classification
methods specify the usage (for production or as
MRO), valuation
method, degree of control, timing (to order or to stock) and other
factors associated with investing company assets in inventoried items.
The sole purpose of carrying inventory is to fill an expected future
internal or external demand; the ability to accurately predict that
demand determines the level of investment required.
inventory buffer-
Stock held to prevent a disruption of supply in the face of
uncertainty in future demand.
inventory management- Systems
and processes that identify inventory requirements, set targets, provide
replenishment techniques and report actual and projected inventory
status.
inventory revaluation-
The function of assigning a new cost valuation to on-hand
inventory, based on a standards change or other determination of a
change in its future worth.
inventory status- The
classification of inventory based on its stage in the processing
cycle. Common classifications include raw materials (materials and
components not yet transformed from their initial state),
work-in-process (partially-completed units of production that have
been altered from their original state), and finished goods (end items
that require no further processing).
inventory
turnover- An inventory
investment and activity measure that compares inventory usage (as
defined by the annual cost of goods sold) divided by the inventory
investment (as defined as the average inventory level at standard
cost). Higher values indicate a more efficient use of inventory;
absolute targets can only be set based on relevant industry figures,
as the turnover for grocery chains is vastly different than for
capital goods manufacturers.
inventory usage- The
volume of inventory consumed for a given period of time, sometimes
broken into demand from recurring requirements and from miscellaneous
adjustments not considered as normal, or repeating.
inventory
valuation- The process of assigning a financial value to on-hand
inventory, based on standard cost,
first-in, first-out
(FIFO),
last-in, first-out (LIFO), average list price or other method. The
method used is determined by a requirement to meet legal or other
standards specified by a third party, or by an operational measure
found to be useful in analyzing inventory positions.
inventory write-off- The
reduction of the currently-stated financial value of an inventory item based
on a determination that its future worth is less than its acquisition
cost due to obsolescence or market changes.
investment decision- The
strategic process of determining the long-term, future costs and
benefits of alternative courses of action, which may include a new
investment, an additional financial investment in an existing
resource, or the abandonment of an existing system or resource.
invitation for bid- Similar
to request for proposal, but may involve a more specific application
or definition.
invoice register- A
log or report of accounts payable invoices created for a specific
batch, vendor, date range or other parameter.
Ishikawa diagram- A
cause-and-effect diagram developed by Kaoru Ishikawa. Syn-
fishbone diagram.
islands of automation- Automatic
systems or technology that are functional on an independent basis but
don't provide the benefits associated with being integrated into a larger
system.
ISO 9000
Standards- A series of standards from the International Standards
Organization that specify the internal procedures and documentation
required to certify adherence to defined company processes supporting
the overall quality management system. The standards do not specify a
quality target level (99%, etc.), but stress the ability of a company
to prove via third-party audit that they are complying with their
defined procedures.
ISO 14000 Standards- The
International Standards Organization set of specifications for
environmental management systems.
issue- 1) To
deduct an item from inventory based on its usage in a production,
interplant or customer order; a transaction usually defined as demand
that is considered in future demand calculations (as opposed to an
inventory transfer between locations) 2) An identified project
situation that requires a resolution
issue log- A list
of issues, or situations requiring resolution, recorded during a
project or implementation plan. Issues are usually classified by type
(technical, procedural, etc.) and identify required timing and the
resources involved.
item master- A
part master record that lists its description, unit of measure,
dimensions, family and group classification, production or purchasing
ordering data, and other pertinent information.
item number- syn:
part number.
J
jidoka- Stopping
the production line whenever a defect is discovered.
job- A specific
run, batch, lot or other discrete group of production with an
identifiable beginning and end, and to which material usage and labor
charges can be meaningfully assigned.
job costing- The
identification of standard or actual costs with items produced on a
specific job, or run, as compared to an allocation based on department
or time.
job order- A
manufacturing or
production
order.
job shop- A
manufacturing facility that groups similar equipment into departments
or areas. Production orders are moved to successive departments as
required to complete all routing operation steps, as opposed to
grouping all production equipment required for a product or line in
one area.
job status report- A
listing of open production orders that shows current location, units
in progress, projected completion dates, and sometimes material usage
and cost data.
Just-in-Time
(JIT)- A
manufacturing and inventory management philosophy that seeks to
effectively manage resources and improve organizational effectiveness
by identifying and eliminating sources of
waste (anything that does
not add to the customer's perception of value). Among other areas, it
focuses on the reduction of lead times, small lot sizes, flexible
production facilities and workforces, elimination of quality defects,
and the reduction of inventory levels to as close to zero as possible.
Inventory is seen in the JIT philosophy as not necessarily an asset,
but as an unnecessary cost and potential liability that lengthens lead
times, increases the chance for obsolescence and hides inefficient
processes and systems. It also emphasizes group and partner
involvement in design, manufacturing and logistics.
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Glossary
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