Industry Terminology

Num A B C D E F G H I J K L M N O P Q R S T U V W




A2A: Anything-to-Anything: complete connectivity (systems term), e.g. A2A EDI.


ABB: See Activity Based Budgeting


ABC: Activity Based Costing: common accounting method used, for example, where there are a number of different clients in a shared warehouse (see also ABM, ZBB). Also "ABC Analysis" or "ABC Classification": the classification of different stock items in a warehouse in accordance with their importance (e.g. individual sales volumes) - where Class A contains items with the highest volume and Class C the lowest (aka "Distribution by Value").


ABC Inventory Control: An inventory control approach based on the ABC classification.


ABM: Activity-Based Management. The application of activity-based costing to improve business performance.


ABP: See Activity Based Planning


ABP: Asset-Based Provider


Absorption Costing: In cost management, an approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. Synonym: Allocation Costing.


Acceptable Quality Level (AQL): In quality management, when a continuing series of lots is considered, AQL represents a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average. Also see: Acceptance Sampling.


Accessory: A choice or feature added to the good or service offered to the customer for customizing the end product. An accessory enhances the capabilities of the product but is not necessary for the basic function of the product. In many companies, an accessory means that the choice does not have to be specified before shipment but can be added at a later date. In other companies, this choice must be made before shipment.


Accountability: Being answerable for, but not necessarily personally charged with, doing specific work. Accountability cannot be delegated, but it can be shared. For example, managers and executives are accountable for business performance even though they may not actually perform the work.


Accounts payable (A/P): The value of goods and services acquired for which payment has not yet been made.


Accounts receivable (A/R): The value of goods shipped or services rendered to a customer on whom payment has not yet been received. Usually includes an allowance for bad debts.


Accreditation: Certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, operational group, or individual to provide the specific service or operation needed. For example, the Registrar Accreditation Board accredits those organizations that register companies to the ISO 9000 Series Standards.


Accredited Standards Committee (ASC): A committee of ANSI chartered in 1979 to develop uniform standards for the electronic interchange of business documents. The committee develops and maintains U.S. generic standards (X12) for Electronic Data Interchange.


Accumulation bin: A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor. Syn: assembly bin.


Accuracy: In quality management, the degree of freedom from error or the degree of conformity to a standard. Accuracy is different from precision. For example, four: significant-digit numbers are less precise than six-significant-digit numbers; however, a properly computed four significant- digit number might be more accurate than an improperly computed six-significant digit number.


Acknowledgment: A communication by a supplier to advise a purchaser that a purchase order


Acquisition Cost: In cost accounting, the cost required to obtain one or more units of an item. It is order quantity times unit cost.


ACR All: Commodity Rate


Activation: In constraint management, the use of non-constraint resources to make parts or products above the level needed to support the system constraint(s). The result is excessive work- in-process inventories or finished goods inventories, or both. In contrast, the term utilization is used to describe the situation in which non-constraint resource(s) usage is synchronized to support the needs of the constraint.


Active Inventory: The raw materials, work in process, and finished goods that will be used or sold within a given period.


Activity: Work performed by people, equipment, technologies or facilities. Activities are usually described by the "action-verb-adjective-noun" grammar convention. Activities may occur in a linked sequence and activity-to-activity assignments may exist. 1) In activity-based cost accounting, a task or activity, performed by or at a resource, required in producing the organization's output of goods and services. A resource may be a person, machine, or facility. Activities are grouped into pools by type of activity and allocated to products. 2) In project management, an element of work on a project. It usually has an anticipated duration, anticipated cost, and expected resource requirements. Sometimes "major activity" is used for larger bodies of work.


Activity Based Budgeting (ABB): An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization's activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals.


Activity Based Costing (ABC): A methodology that measures the cost and performance of cost objects, activities and resources. Cost objects consume activities and activities consume resources. Resource costs are assigned to activities based on their use of those resources, and activity costs are reassigned to cost objects (outputs) based on the cost objects proportional use of those activities. Activity-based costing incorporates causal relationships between cost objects and activities and between activities and resources.


Activity Based Management (ABM): A discipline focusing on the management of activities within business processes as the route to continuously improve both the value received by customers and the profit earned in providing that value. ABM uses activity-based cost information and performance measurements to influence management action.


Activity Based Planning (ABP): Activity-based planning (ABP) is an ongoing process to determine activity and resource requirements (both financial and operational) based on the ongoing demand of products or services by specific customer needs. Resource requirements are compared to resources available and capacity issues are identified and managed. Activity-based budgeting (ABB) is based on the outputs of activity-based planning.


Activity Level: A description of types of activities dependent on the functional area. Product related activity levels may include unit, batch, and product levels. Customer-related activity levels may include customer, market, channel, and project levels.


Activity Ratio: A financial ratio used to determine how an organization's resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.


Actual Cost System: A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products.


Actual Costs: The labour, material, and associated overhead costs that are charged against a job as it moves through the production process.


Actual Demand: Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or "consumes"the forecast, depending upon the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence), but will net against the forecast outside this horizon based on the chosen forecast consumption rule.


ADP: Automatic Data Processing


ADPE: Automatic Data Processing Equipment


Advanced Planning and Scheduling (APS): Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the "official plan." The five main components of APS systems are demand planning, production planning, production scheduling, distribution planning, and transportation planning.


Advanced Shipping Notice (ASN): Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. May also include carrier and shipment specifics including time of shipment and expected time of arrival. See also: Assumed Receipt


Aggregate Inventory: The inventory for any grouping of items or products involving multiple stock keeping units. Also see: Base Inventory Level.


Aggregate Inventory Management: Establishing the overall level (dollar value) of inventory desired and implementing controls to achieve this goal.


Aggregate Plan: A plan that includes budgeted levels of finished goods, inventory, production backlogs, and changes in the workforce to support the production strategy. Aggregated information (e.g., product line, family) rather than product information is used, hence the name aggregate plan.


Aggregate Planning: A process to develop tactical plans to support the organization's business plan. Aggregate planning usually includes the development, analysis, and maintenance of plans for total sales, total production, targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist: production planning and sales and operations planning.


Agility: The ability to successfully manufacture and market a broad range of low-cost, high quality products and services with short lead times and varying volumes that provides enhanced value to customers through customization. Agility merges the four distinctive competencies of cost, quality, dependability, and flexibility.


AGM: Annual General Meeting: also EGM.


AGV: Automated Guided Vehicle: also AGVS ("Automated Guided Vehicle System").


AGVS: Automated guided vehicle system.


AI: See Artificial Intelligence.


AIDC: Automatic Identification and data capture. A general category of technology including bar coding and RFID.


aka also known as


Alignment: The relative position and orientation of a scanner to a bar code.


Allocated item: In an MRP system, an item for which a picking order has been released to the stockroom but not yet sent from the stockroom.


Allocation: Assignment of quantities of products to specific orders before they are released for picking/delivery, particularly for items in short supply. Often refers to the breakdown of a bulk shipment into many shipments to specific stores.


Alphanumeric: Character set containing letters, numbers, and punctuation marks: not just numbers.


Alternate Routing: A routing, usually less preferred than the primary routing, but resulting in an identical item. Alternate routings may be maintained in the computer or off- line via manual methods, but the computer software must be able to accept alternate routings for specific jobs.


American National Standards Institute: See ANSI.


American Society for Quality (ASQ): Founded in 1946, a not-for-profit educational organization with 144,000 members who are interested in quality improvement.


AMP: Advertising, Marketing and Promotion


AMT: Arm-Mounted Terminal: RF terminal.


ANSI: American National Standards Institute. A clearinghouse for electronic data standards in the USA. ANSI itself does not develop standards; industry- and technology-specific standards committees do. ANSI's retail standards include X.12 for electronic data interchange (EDI) and X.400 for electronic mail.


AOC: Agent of Change


API: Application Programming Interface. A piece of software code written for integration of an application with other applications.


APICS: Educational Society for Resource Management, formerly American Production and Inventory Control Society


Application Service Provider (ASP): A company that offers access over the Internet to application (examples of applications include word processors, database programs, Web browsers, development tools, communication programs) and related services that would otherwise have to be located in their own computers. Sometimes referred to as & "apps-ontap", ASP services are expected to become an important alternative, especially for smaller companies with low budgets for information technology. The purpose is to try to reduce a company's burden by installing, managing, and maintaining software.


APR: Adjustable Pallet Racking. Also "Annual Percentage Rate".


APS: Advanced Planning & Scheduling: manufacturers' approach to planning and scheduling that deals directly with the constraints of production capacity and materials availability. Often used in connection with such software. See also MRP, ERP.


AQL: Acceptable Quality Level


AQR: Any Quantity Rate: a fixed rate for transport, with no discount available for larger shipments.


AR: Automatic Replenishment: an extension of QR and CR (q.v.) where suppliers assume responsibility for retail inventories and replenishment (aka "Profile Replenishment").


Artificial Intelligence (AI): Software that uses abstract reasoning, pattern recognition, "learning," and/or problem-solving to approach tasks.


AS/RS: Automatic Storage and Retrieval System. Automated, robotic system for storing and retrieving items in a warehouse.


ASC: Advance Shipping Confirmation


ASCII: American Standard Code for Information Interchange. A standard code that allows interchange of 128 alphanumeric and related characters between different information systems.


ASN: Advance Ship Notice. An EDI transaction sent ahead of a shipment. The ASN lists contents and shipping information.


ASP: Appleton Service Providers


ASP: Application Service Provider: application hosting and online network infrastructure for software vendors and end-users.


ASRS Automated Storage and Retrieval System: automated warehousing.


ASS: Automatic Storage and Retrieval System


Assemble-to-order: A production environment where a good or service can be assembled after receipt of a customer's order. The key components (bulk, semi- finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components. Synonym: finish-to-order. Also see: Make-to-Order, Make-to-Stock.


Assembly Line: An assembly process in which equipment and work centres are laid out to follow the sequence in which raw materials and parts are assembled.


Assortment Planning: A decision-making process to determine the selection of merchandise SKUs that will optimize sales and margin.


Assumed Receipt: The principle of assuming that the contents of a shipping or delivery note are correct. Shipping and receiving personnel do not check the delivery quantity. Used in conjunction with bar codes and an EDI-delivered ASN to eliminate invoices.


ATM: Asynchronous Transfer Mode. A fast, digital communications technology for linking computer networks. Also, Automatic Teller Machine for banking and dispensing cash remotely.


ATM Card: Automatic Teller Machine Card. Also called a debit card.


ATP: See Available-to-promise.


ATS: Automatic Transportation System


Attributes: A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures.


A-Type Warehouse: A public Customs Warehouse (i.e. where goods are not subject to excise duty) in which anyone can store anything. See also C, D, E.


Audit Trail: Manual or computerized tracing of the transactions affecting the contents or origin of a record.


Auditability: A characteristic of modern information systems, gauged by the ease with which data can be substantiated by trading it to source documents and the extent to which auditors can rely on pre-verified and monitored control processes.


Authentication: 1) The process of verifying the eligibility of a device, originator, or individual to access specific categories of information or to enter specific areas of a facility. This process involves matching machine-readable code with a predetermined list of authorized end users. 2) A practice of establishing the validity of a transmission, message, device, or originator, which was designed to provide protection against fraudulent transmissions.


Autodiscrimination: The ability of certain bar-code reading devices to recognize and decode more than one bar code symbology (e.g., it reads both UPC-A product bar codes and UCC 128 shipping container bar codes).


Automated Call Distribution (ACD): A feature of large call centre or "Customer Interaction Canter" telephone switches that routes calls by rules such as next available employee, skill-set etc.


Available Inventory: The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called beginning available balance. Synonym: beginning available balance, net inventory.


Available to Promise (ATP): The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue. Three methods of calculation are used: discrete ATP, cumulative ATP with look ahead, and cumulative ATP without look ahead.


Avoidable Cost: A cost associated with an activity that would not be incurred if the activity was not performed (e.g., telephone cost associated with vendor support.


AWB: Air Way Bill

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