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ERP/supply chain education
need to define a term that's not here? ask us
O
obsolescence-
The degradation in the value and usefulness of a resource based on
its age, replacement by newer technology, lack of demand or other
factor that may require a partial or total writeoff of its
currently-stated value.
offload-
To move a production or logistics requirement from the primary to
an alternate resource due to capacity or timing constraints. Cost
reporting systems segregate the variances caused by resource
offloading (a substitution variance) vs. the over- or under-usage of a
standard resource (an efficiency variance).
offset-
The difference in the start or release of a task or order and its
finish based on duration or lead time.
offshore-
Production and operating or technical support facilities located
in a foreign country, normally in a different continent.
off
the shelf- Systems and software programs that can be used as is,
without further development or modification.
one-touch
exchange of die (OTED)- A setup reduction goal that reduces the
process to a single step, or one touch.
on-hand
inventory- The physical or perpetual quantity of current
inventory.
online analytic processing (OLAP)- Tools and methods that extract
and perform multidimensional data analysis and enable a variety of
views, such as rotation, summarization and trend analysis.
on
order- The total quantity of material on open purchase, production
or replenishment orders- total scheduled receipts.
on-time delivery- The receipt of scheduled shipments on the
expected date, or defined as being within an allowable early/late
tolerance. Some measurements include adherence to a specified delivery
time of day due to unloading or space constraints.
open
order- A released order not yet shipped (customer order) or
received into stock (production, purchase or replenishment order).
open
period(s)- An accounting period not yet closed as a result of the
month- end process that is still available for transactions and
adjustments.
operation-
A production step or activity with a defined start and stop time that
may be composed of individual tasks but is not broken down into
smaller increments in rate and capacity calculations. Unlike
designating material used on a bill of material, a product routing has
flexibility in grouping or splitting individual operations based on
the commonality of the resources and rates involved.
operation
backflushing- The process of backflushing one or more operations
on a routing based the designation of
paypoints,
or reporting
operations. In a routing with three operations and only the last coded
as a paypoint, no production is manually reported at the first two
operations; if 100 units are reported at the third the system will
assume 100 units were also produced at the first two operations and
material and earned hour transactions are generated using the
standard. Similar to material
backflushing
in that fewer manual
transactions are required, with the tradeoff of assuming operations
were performed at standard.
operation
priority- The positioning of an operation in a queue or list based
on its status relative to meeting a due date, and its effect on later
operations.
operation
sequence- The numerical designation in a routing that indicates
the order in which operations are performed.
operation
time- The elapsed time for an operation that includes setup and
run hours, but does not include queue or move time.
operation
where-used- A list of all products processed through a given
operation. Useful in tracing impacts when the operation rate or
process changes.
opportunity
cost- The amount of income lost as a result of not choosing the
best alternative from a group of investment choices.
option-
An available choice within a feature category, as in the ten
colors of paint offered for a given car model. The combination of
options selected for a given order determine the end item
configuration and sometimes change its final price or standard cost.
Often used in
assemble-to-order
(ATO) environments.
order-
A single entry and/or document that specifies items, services,
prices, dates and quantities and has a specific identifier for
referencing or tracing.
order book- A
listing of open (unshipped) customer orders, normally time-phased and
valued at actual individual order prices, that may include margin and
profitability analysis.
order
entry and billing- The systems and functions used to accept and
validate customer orders, communicate pricing and availability, and
generate timed picking, shipping and invoicing updates and documents
as required.
ordering
cost- The total of all costs associated with the creation and
release of a purchase order and its receipt, inspection and
putaway as required. In calculating order quantities, the cost of
placing a large number of individual orders is balanced against the
cost of carrying inventory due to placing fewer orders with larger
quantities on each.
order
point- A specified inventory level used to trigger a reorder when
the total of current on-hand inventory and open scheduled receipts falls below
that level. The order point is set to cover demand expected until the
order is received, and often includes a buffer based on past
variability in the demand or the lead time.
order
point system- A reorder system that places orders when on-hand and
scheduled receipts reaches a predefined level, instead of using
requirements suggested by
MRP from a bill of material explosion. An
order point system normally is used to trigger a single order when
needed, but may also be time-phased in projecting inventory levels in
the future based on forecast demand in multiple periods and triggering
multiple orders as needed.
order
pooling- The combination of multiple orders for picking and
loading, based on destination, size, priority and other
parameters.
order
quantity- syn:
lot size.
order
quantity modifier- A rule that supersedes an originally-calculated
lot size. For example, a fixed lot size rule of 50 with a minimum
order quantity modifier of 200 would generate a suggested order of 200
even if requirements were below that level, and above the minimum
would increment 50 at a time as required (250, 300, etc.).
order
release- The time and process required to evaluate requirements,
create orders in a system and notify the source of supply.
ordinal data- Data
represented by individual values that can be ordered or assigned a
specific rank on a scale.
original
equipment manufacturer (OEM)- An organization that markets a
product composed of components and subsystems manufactured by other
companies under its own name and brand.
outbound
logistics- The processes and network used to pick, ship, track and
store if necessary items ordered by customers, distribution centers
and other supply chain partners.
out of
sequence- A production operation or project task begun before its
predecessor has been started, as in activities reported against
operation 40 on a routing when operation 20 and 30 have not been
reported (assuming that operation
backflushing is not being
used).
outlier- An observed value so far removed from the normal
distribution that it may be considered an abnormality or one-time
event, and is often not included in future calculations based on that
set of data.
output-
The result generated by a process than transforms an input.
outside
operation- A routing operation performed by a vendor instead of
using internal resources. Outside operation costs are often quoted in
terms of lots or units processed, and material used may either be
transferred from the customer facility or drop shipped from another
vendor but is owned by the customer.
outsourcing- The ongoing use of an external third party instead
of an internal resource which may include production of a single
operation, a product or an entire line, shipping and order
fulfillment, product design, network infrastructure support or many
other functions. Outsourced functions are normally outside an
organization's core competencies and are done to reduce cost, reduce
lead time, improve quality or achieve some other stated goal.
overflow
location- An inventory stock location, often assigned on a random
basis, used when the primary or dedicated location is not able to
handle seasonal or other temporary requirements.
overhead-
Business operating costs that can not be meaningfully or
economically traced to specific products or services, which include
manufacturing overhead, selling expenses, general and administrative
expenses, and others.
overhead
rate- A
percentage or fixed-dollar amount that allocates department or product
overhead expenses to production on a labor hour, machine hour, labor
dollar, material dollar or unit
basis. Higher overhead rates indicate the grouping of a greater number
of costs or pools on a general basis, and less identification of the
direct drivers of those costs. (syn:
burden rate)
overlapping
operations- Operations in which material produced by an initial
work center is begun to be processed by the next work center before
the entire batch or run is finished at the first. Done as a result of
order quantity volumes and process constraints, and to reduce total
lead time.
overlay-
To combine a new set of data with an existing database, and define
controls and verification techniques for duplicate records and missing
fields.
overrun-
Production over the desired order or schedule amount, or costs
incurred in excess of budget.
overstated-
An
MPS
or other production schedule that contains planned quantities
above what can actually be produced due to capacity or material
constraints.
P
packing
department- The area that prepares picked material for shipment by
performing the consolidation, packing, marking and documentation tasks
required. The packing department may also be responsible for locating
and picking materials for outgoing shipments.
packing
slip- The paperwork that accompanies a shipment, pallet or smaller
unit and describes its contents and quantities, and normally
references the order number or numbers involved.
paradigm
shift- A complete change in thinking or belief systems that allows
the creation of a new condition previously thought impossible or
unacceptable. (ex.- the change in thinking created by
Just-in-Time that views inventory as a liability, not an asset).
parallel-
The simultaneous performance of related activities or tasks,
normally using different resources, that enables completing those
activities faster than if they were done in a serial manner.
parallel
conversion- A project implementation technique in which an
existing system is run in parallel with the new system, with the
comparison of operations and results to verify that the new system
will properly replace the functions of the old. Parallel conversions
are often difficult due to the time, expense and viability of
operating two systems and problems in comparison and verification when
functions have changed significantly. A parallel is often not
necessary when the
conference room pilot
and issue identification and
resolution phases are done well, and adequate resources are made
available at cutover time.
parent-
An upper level item that uses a component or material (child).
Pareto's
law- The law developed by an Italian economist in the 1800s based
on the principle that the vast majority of an end result (wealth,
cost, quality problems, etc.) is determined by a small percentage of a
group (the number of people, items, etc.) Often stated as the 80/20
rule, it is used in inventory counting and quality systems to
concentrate attention on the small (20%) number of sources that
account for 80% of inventory value or quality issues.
part
number- The set of characters, normally alphanumeric, that
identifies a specific manufactured or purchased item and is used in
all database, order, inventory and other functions.
part
period balancing (PPB)- A lot size technique that uses look ahead
and look back functions to consider additional periods in modifying an
initial calculation based on least total cost.
parts
list- A listing of all components used in the production of a
parent item that does not reflect its structure or intermediate
levels, and is not useful in time- phasing requirements based on lead
time offsets.
parts
per million (PPM)- A quality measure of the number of defective
items observed or projected out of a population of one million.
past
due- Line items and orders expected or promised for dates prior to
the current date. Past due orders are an integral part of evaluating
delivery performance and normally are prioritized when reviewing
exception messages.
path- A
series of connected events, nodes or resources that indicates the
links, direction of data flow, timing dependencies and positions of
those items.
pattern
detection- Elements in measurement and decision support systems
that identify recurring relationships and distributions of data in a
given set.
paypoint-
The operations in a
routing
used to report production and/or labor.
Quantities reported at paypoints are backflushed into previous non-paypoint
operations, which may be listed on a routing but are not used for
reporting due to process limitations or a condensed time frame that
does not require a real-time status update of each individual
step.
p
chart- An attribute control chart showing the fraction or percent
of nonconforming data out of a given population.
pegging-
Tracing the source of requirements in a materials plan, caused by
dependent demand from an upper-level item, independent demand from a
customer or interplant order, or to replenish a desired inventory
stock level.
percent
complete- The estimated or measured completion status of a process
or project used to analyze the probability of meeting a projected
date, or in initiating a contracted progress payment.
period
cost- A cost related to the passage of time rather than product
volumes, which may include depreciation, rent, property taxes or
insurance.
period
order quantity (POQ)- A lot size technique that orders to
cover requirements for a variable number of periods based on order and
holding costs, as opposed to a fixed period quantity that uses a
standard number of periods.
perpetual
inventory- The book inventory calculated as a result of all issue,
receipt and adjustment transactions, as opposed to verification by
physical count.
phantom-
An item with an identifying product number that is not normally
built and then stocked, but is immediately used in the next stage of
production.
MRP processing logic will blow through a phantom down to
the next level (and not generate planned orders for the phantom) but
will net against its on-hand inventory if it does occasionally exist. A
phantom bill of material is sometimes used to ease maintenance when a
set of parts consumed in production has identical usage across many
bills of material.
physical
inventory- The verification of on-hand inventory quantities by
taking an actual count. Often refers to the annual or quarterly
process of counting all items, rather than the physical verification
of selected groups of parts on a continuing basis (a
cycle
count).
pick
list- A list of all components and materials required to fill a
specific production, sales or interplant order. It often specifies the
warehouse locations to pick from, and sometimes consolidates
requirements from more than one order.
pick
list release- The process of authorizing the pick of material for
a given order, generating the paperwork and releasing to the picking
department. Many variations exist in which the pick slip may be
manually selected for a given order, is automatically generated a set
number of days before the requirement, or is held until the calculated
available inventory equals the requirement. Order processing systems
often have controls that flag or stop changes to orders when the pick
slip has already been released.
pick
to clear- A warehouse order picking scheme that selects the item
locations with the smallest quantities first.
pick
to light- A warehouse order picking scheme that uses LED readouts
for each inventory location that display the locations and quantities
to be picked based on data from the
warehouse management
or ERP
system.
piece part- A
discrete component item such as nuts, bolts or screws used in an
upper-level assembly.
piece
rate- Payment for production based on the number of units
processed, rather than the number of hours used.
pilot-
A small test run of a system or production process to verify its
acceptance and capabilities before going full-scale.
pipeline-
The backlog of unfilled orders, or of material ready to be or
already being processed.
Plackett-Burman
design- A screening technique sometimes used to examine the
effects of several variables in one experiment and avoid multiple runs
of the same basic test.
plan-do-check-action
(PDCA)- A four step quality improvement cycle, based on a process
described by Walter Shewhart, that involves continuous improvement
based on analysis, design, execution and evaluation. Sometimes
referred to as plan/do/study/act, it emphasizes the constant attention
and reaction to factors that affect quality.
planned
capacity- The capacity used in evaluating requirements for a given
material planning period, which may differ from
demonstrated capacity
due to temporary additions or downtime for scheduled maintenance,
etc.
planned
order- A suggested production, purchase or replenishment order
generated by an
MRP or other planning system to meet a projected shortage
against desired safety stock levels. The shortage date becomes the due
date, the release date is backward scheduled based on lead time, and
the quantity is based on the specified lot size. Planned orders for
upper level items create requirements for lower level components, and
MRP generations delete existing planned orders and regenerate new ones
based on changes in requirements. Planned orders must be firmed or
accepted before releasing to production or to a vendor.
planned
order receipt- A future projected receipt based on the generation
of a planned order that has not yet been firmed into a scheduled
receipt.
planned
order release- The date required to firm, or release, a planned
order based on the specified lead time until the planned receipt date.
Many systems allow the selection and review of planned orders based on
specifying a release date time frame.
planner
bill- A bill of material constructed to arrange items within a
given family or group that specifies the percent of each in terms of
usage or sales. Often used to explode forecasts from a family level to
individual items.
planning
horizon- The length of time into the future planning systems
generate requirements and messages. The horizon should be at least as
far out as the single longest cumulative lead time for any item in the
system.
planning
system- The functions and processes that review requirements and
defined parameters to suggest new operating, material and capacity
plans and changes to existing plans, but are not used for the
activities that carry out (execute) those plans.
point
of sale (POS)- The simultaneous recording of a customer sale and
its effect on inventory levels, typically done in a retail environment
using automatic data collection systems. Real-time point of sales data
is sometimes used to automatically trigger replenishment orders as
required, and can be used in sales analysis to review end-customer
rather than distributor sales patterns.
point
of use- Stocking inventory in a production facility or logistics
network near the consuming point, rather than in a central location
and moving when required.
point-to-multipoint-
A communications, logistics or other network in which data travels
in a one-way direction from a central point to multiple remote
sites.
point-to-point-
A communications or network system in which two connected entities
pass data only to each other, and the data travels in both
directions.
poka
yoke: The Japanese term for failsafe.
positive
float- The period of time the start of a project task can be
delayed without delaying the entire project. Project tasks that have
positive float are not included on the critical path.
post- (v)
To update a file or database through acceptance of entered data.
post
deduct- syn:
backflush
post-implementation
audit- A review process that takes place after the installation of
a new system to determine status, level of user satisfaction,
accomplishment of stated goals and further action items
required. It is usually timed to allow the new system to operate
for a given period, such as a quarter, to concentrate on ongoing
issues rather than those generated and resolved at cutover time.
potency- The
concentration of an
active
ingredient, expressed as a percentage of a
batch or as a multiple of the standard or usual potency.
pre-deduct-
An inventory relief system in which the components of a parent are
deducted before they are physically picked or used, based on the
explosion of the parent bill of material. It often uses
the parent schedule date, as opposed to the actual reporting of parent
production as done in a post-deduct system.
predefined
query- A report writer or other query constructed at a previous
time on an ad hoc basis and saved for later use.
predecessor-
A routing operation or project task that must be partially or
completely finished before a later task can begin.
predictive-
A rule or measurement system that projects a future status before
it occurs, based on predefined trends, warning signals or the use of a
knowledge base that incorporates past behavior.
premium
freight- Additional charges paid to a transportation provider to
expedite shipments in order to meet a required date. Often used as a
partial measure of on-time shipment performance.
prerequisite
tree- A logic tree used in the
theory of constraints that
identifies and time phases obstacles associated with the intermediate
objectives that must be accomplished to achieve an overall goal.
present
value- The estimated current value of a future receipt or payment,
as calculated by the assumed interest rate between the current date
and the date the future transaction will occur.
preventive
maintenance-
Activities done to insure the operating availability of a
production resource and its ability to meet process specifications.
They are done on a pre-scheduled basis, or based on the identification
by a monitoring system of conditions that may cause future breakdowns.
pricing-
The manual or automatic process of applying prices to purchase and
sales orders, based on factors such as: a fixed amount, quantity
break, promotion or sales campaign, specific vendor quote, price
prevailing on entry, shipment or invoice date, combination of multiple
orders or lines, and many others. Automated systems require more setup
and maintenance but may prevent pricing errors.
primary
location- The default stock location used for receipts and picks
of a given item, which may be supplemented by other locations if full
or overstocked.
primary
operation- A routing operation used unless an alternate is
selected when opening production orders, and the normal basis for
MRP
processing, capacity planning and standard cost estimation.
prioritization-
The rules used to arrange jobs or orders in queue, such as FIFO,
LIFO, critical ratio, value, customer, combination with similar jobs,
etc.
probabilistic
model- A model that assigns a likelihood to events or data within
a population, as expressed by a ranked numerical value or an estimate
of best case, worst case or most likely.
problem
solving tools- Charts, diagrams and graphical displays that help
define a problem and identify and categorize alternative
solutions.
process-
1) v. To transform an input or set of inputs into a form with
different characteristics, such as value, physical attributes, etc.
2) n. The environment, methods and resources used for a specific
task or activity
process
costing-
A system that accumulates all costs for the production of similar
items in a given batch, lot or time frame and creates an average unit
cost based on the volume or units produced. Costs are tracked only for
the entire batch, and not pegged to individual units.
process
manufacturing- A
manufacturing environment often characterized by a batch or continuous
transformation of a gas, liquid or powder, low product complexity and
manufacturing variations, fixed or dedicated facilities, a
flat bill
of material and relatively few transactions.
process sheet- A
set of manufacturing instructions for a specific batch, lot or run
that describe the operating parameters and settings for the equipment
and facilities used, and any associated tooling or supplies.
process time- The
elements of lead time, such as setup and run, in which a product is
undergoing transformation, and not waiting or being moved.
process view- A
diagram or flow chart that graphically represents the activities,
resources and timing of a given process.
product acceptance- The
verification that a given purchased or manufactured item meets
specifications and is usable for its intended purpose.
product data
management (PDM)- An expanded view of product definition functions
that include a bill of material and routing database, current and
historical engineering data and specifications and engineering change
order history.
product code- Synonymous
with part number, although sometimes used to represent only finished
items.
product costs- Costs
associated with the volume or number of units produced as opposed to
the passage of time.
product definition- The
description of the materials, processes and resources used in the
production of an item, as contained in the bill of material, routing
and work center records.
product family- A
set of items considered as a related group in forecasting, capacity
planning or other functions.
production activity
control (PAC)- The activities related to scheduling, releasing and
tracking production orders and schedules, and reporting the materials
and resources used and the results of the production process.
production
database- The set of records and files that provide the data
necessary to schedule and report production, such as the
bill of
material, routing,
work
center, production calendar and other
associated files.
production
line- A
linked set of manufacturing equipment or work stations that
sequentially process a standard group of products or product families;
most often used in a high-volume,
repetitive
manufacturing
environment.
production
material- Components and material directly used in the
manufacturing process, and not for support or supply purposes.
production
order- An
order that authorizes manufacture of a specific quantity of an item or
group of items, contains release and due dates, and documents
requirements for the materials and resources used. It is assigned a
separate number or identifier used in reporting material and labor
transactions.
production
planning- The cross-functional process of devising an aggregate,
family-level plan for a month or quarter based on management targets
for production, sales and inventory levels. It meets operating
requirements for fulfilling basic business profitability and market
goals, and provides the overall desired framework in developing the
master production schedule and in evaluating capacity and resource
requirements.
production schedule- A
prioritized report of released production orders for a manufacturing
facility or specific department.
productivity- An
overall measure based on a quantity of output generated by a given
quantity of input. Increased output as a result of the same amount of
input such as labor hours) indicates more efficient use of a given set
of resources due to process improvements or other achievements.
product life
cycle- The processes, costs and revenues associated with a product
from its initial creation to its abandonment, and often categorized by
the stages of introduction, growth, maturity and decline. Identifying
the product life cycle stage is a key factor in the determination of
facility and support investment, marketing efforts, and required
reporting measurements and controls.
product mix- The
number of individual products produced or sold by an organization. The
mix is defined by the industry and manufacturing environment, and
management strategies that position the company as a specialty, niche
or broad-based supplier of goods and services. Instances where the
product mix varies widely from period to period often requires more
investment in facilities and inventory, and may result in lower levels
of customer service.
product
rationalization- The process of justifying continued production or
sales of a given item, based on a variety of factors such as its usage
in single or multiple parents, use of dedicated production facilities,
margin, number of customers, complement to other products, life cycle
stage and others. It requires the capability to prioritize intangibles
and to identify true cost drivers.
product structure- syn:
bill of material.
professional services
automation (PSA)- Systems and software that support organizations
or departments that engage in consulting, legal or other skill-based
services by providing timesheet, billing, project status, knowledge
base and other associated functions.
profit- The amount
earned from an investment or operation after expenses are deducted.
Gross profit, or gross income, refers to pre-tax net sales less cost
of sales. Net profit, also includes the deduction of interest, taxes,
depreciation and other expenses not associated with the cost of
sales.
profit center- A
organizational unit or department designated as a separate entity for
purposes of revenue generation and cost collection, with decision-
making capabilities to affect both processes.
program- An
ongoing, long term effort that often includes multiple projects and
significant budgeted expenditures.
program evaluation and
review technique (PERT)- A project management system that
determines the project finish date by estimating best (shortest),
worst (longest) and most likely duration times for activities on the
critical path.
programmable logic
controller (PLC)- A device using programmed, custom instructions
to provide automated monitoring and control functions by evaluating a
set of inputs. Used to automate complex functions in machining,
packaging, materials handling or other applications.
programmed production-
The use of software programs to control production and support
equipment such as CNC machines or robots.
progress payment- The
payment of a portion of a total invoice or estimated cost based on the
accomplishment of milestones, cost recovery agreement, or other
contractual method.
project- A related
set of activities and milestones with a preset goal and timeframe that
is designed as a specific event and not an ongoing process.
project calendar- The
definition of working and non-working days available for project tasks
and activities.
project costing- The
identification and reporting of all costs generated by a single
project. All production orders, purchase orders and inventoried items
are separated and pegged to the project in order to provide a total
actual cost. A method often used in capital equipment manufacturing
and systems integration or professional services
projects.
projected
balance- A future estimated inventory balance calculated by taking
the current on-hand inventory, adding scheduled receipts and
subtracting requirements or allocations. In planning systems a
projected balance is compared to the order point or safety stock level
to determine the need to reorder.
projected life- The
estimated useful period of a resource or system, based on time, number
of cycles, units processed, or other factors.
project management- The
methods and disciplines used to define goals, plan and monitor tasks
and resources, identify and resolve issues, and control costs and
budgets for a specific project.
project team- The
dedicated or part-time resources assigned to a project, which include
the project leader, functional team leaders, functional team members,
technical and consulting support. Ad hoc team members are brought in
on a temporary basis to solve specific issues.
promise
date- The
shipment date committed to by a vendor. In some industries and
contracts, the promise date is the date of delivery at the customer
site.
promotion- A set
of marketing and sales activities attached to a specific
advertisement, campaign or trade show that offers a discount or other
incentive based on a time frame or use of a designated code. Sales
revenue and discounts generated from a given promotion are tracked to
measure their effectiveness.
prospect- An
identified potential consumer of a company's goods or services,
often tracked in
CRM,
SFA
or
contact management systems.
pseudo item: syn:
phantom
.
pull system- A
system where the production or movement of inventory items is
initiated as required by the using department or location, or to
replace items removed from an authorization queue. Production and
inventory moves are not done based on a predetermined schedule, but
only when consumed or signaled by the point of usage.
purchase order- The
contractual agreement with a supplier of goods or services that
specifies payment terms, delivery dates, item identification,
quantities, freight terms and all other obligations and conditions.
The order may specify multiple items and delivery dates, but is always
generated for a single vendor.
purchase price
variance (PPV)- The variance created by the actual price paid to a
vendor for material as compared to the standard cost, sometimes
separated into the variance created by the specified purchase order
price vs. the standard, and the actual vendor invoice cost vs. the
specified purchase order price.
purchase to order
(PTO)- The method used to respond to demand in which an item is
purchased only when required by a customer order that specifies that
item, and not for processing or assembling into a different item
number.
purchase-to-pay cycle-
The total elapsed time between the creation and acceptance of a
purchase order, and payment for the items or services.
purchase to stock
(PTS)- The demand response method where an end item or service
part required as is for an expected customer order is purchased
and stocked against a forecast. The forecast represents independent
customer or interplant demand, and not usage in an upper level
item.
purchasing- The
functions, processes and department that source material and
services, negotiates terms and availability agreements, responds to
requests for material by user departments and communicates order
status and actual or potential supply disruptions.
purchasing lead
time- The total time required to place and receive purchased
items, which includes internal review and placement time (order
release), vendor transportation time, and the dock to stock activities
to receive and store.
push system- A
system where the production and movement of inventory items is
determined by a preexisting schedule that authorizes a material issue
or transfer, or the start of a production operation. The using
department or location receives material when determined by the feeder
location and not based on their own generation of a replenishment
signal.
putaway- The
activities related to the receipt of material, determination of its
storage or other destination, movement to that location and the
stocking and physical arrangement as required.
Q
quality- The
characteristics of an item or process that indicate its conformance to
designated parameters, and its degree of perceived customer acceptance
or satisfaction. Quality characteristics often include reliability,
consistency and the ability to continue performance in stress or
volume situations, but are critical only in relation to the value
placed on them by the user or customer.
quality assurance- The
set of activities that specifies acceptable material and process
parameters and measures actual performance in meeting defined quality
standards. When used in reference to a department- quality assurance
(QA) or quality control (QC)- it often indicates that responsibility
for meeting quality standards has been delegated to that department,
and is not an assumed function of other company
operations.
quality at the
source- A system that certifies the acceptability of a vendor's
goods or services by audits or demonstration of conformance to the
required process, and eliminates the need for incoming inspection by
the customer.
quality costs- The
quality life cycle costs identified with conformance and customer
satisfaction, usually categorized as prevention (training and
predictive process controls), appraisal (inspection and testing),
internal failure (rework, scrap, downtime) and external failure
(customer returns processing, warranty charges, replacements).
quality function
deployment (QFD)- An overall methodology that begins in the design
process and attempts to map the customer-defined expectation and
definition of quality into the processes and parameters that will
fulfill them. It integrates customer interview and market research
techniques with internal cross-functional evaluations of the
requirements.
quality of service (QoS)
level- A network or system agreement that specifies uptime,
response time, acceptable error rates and other conditions for a given
service and designated user base.
quantity rounding- System
functions that modify the original result of a transaction by rounding
up or down to a specified number of decimal places. Typically used
when a unit of measure conversion is performed (cases to eaches) and
the generated value does not make sense from a physical or operating
standpoint.
queue- Jobs,
orders or activities waiting to be processed and prioritized by a
FIFO, LIFO, critical ratio or other measure.
queue time- Time
spent by a specific job or order waiting to be processed by a resource
that is currently not immediately available for that job.
quick response- Systems
that attempt to provide quick turnaround and reduced lead time based
on the location and level of inventory, and linked communications systems
that quickly translate and evaluate changes in customer requirements
based on usage and POS
data.
quote- A specific
determination of the cost, timing, description and terms associated
with a projected good or service to be provided by a supplier to a
customer. A quote is normally valid for a certain timeframe, or up to
a specified quantity limit, and modified based on changes in the item
or service configuration.
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Glossary
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