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

 

F

 

Fabricator: A manufacturer that turns the product of a raw materials supplier into a larger variety of products. For example, a fabricator may turn steel rods into nuts, bolts, and twist drills, or may turn paper into bags and boxes.

 

Facilities: The physical plant, distribution centre's, service centres, and related equipment. Failure Modes Effects Analysis (FMEA): A proactive method of predicting faults and failures so that preventive action can be taken

 

Failure Modes Effects Analysis (FMEA): A pro-active method of predicting faults and failures so that preventive action can be taken.

 

Fair-share Quantity Logic: In inventory management, the process of equitably allocating available stock among field distribution centres. Fair-share quantity logic is normally used when stock available from a central inventory location is less than the cumulative requirements of the field stocking locations. The use of fair-share quantity logic involves procedures that "push" stock out to the field, instead of allowing the field to "pull"in what is needed. The objective is to maximize customer service from the limited available inventory.

 

FAS Free Alongside: price includes delivery of goods alongside ship at port of export. See also FOB. Also "Flexible Accounting System".

 

FB: Freight Bill

 

FCI: Freight Carriage & Insurance: price includes transport and insurance.

 

FCL: Full Container Load

 

FCP: Freight Carriage Paid

 

FCR: Forwarders' Certificate of Receipt: negotiable banking document. Also "Forwarders Cargo Receipt".

 

Feature: A distinctive characteristic of a good or service. The characteristic is provided by an option, accessory, or attachment. For example, in ordering a new car, the customer must specify an engine type and size (option), but need not necessarily select an air conditioner (attachment).

 

FEU: Forty-Foot Equivalent Unit: a standard measure for containers (see also TEU).

 

FFS: Finite Forward Scheduling: manufacturers' scheduling approach which assumes there is a finite production capacity (c.f. the "infinite" capacity assumptions of MRP II planning).

 

FG: See Finished Goods Inventory

 

FGI: See Finished Goods Inventory

 

FGP: Factory Gate Pricing: price excludes delivery. By taking over responsibility for primary transport, retailers aim to reduce empty running.

 

Fiber Distributed Data Interface (FDDI): LAN technology that runs at 100 million bits/sec, a much higher data rate than standard Ethernet or Token Ring. FDDI networks originally required fiber optic cable, but today can run on UTP. FIFO: First In, First Out. The most common method of inventory accounting.

 

FIFO: First In First Out: warehousing term, meaning that the oldest inventory (first in) is the first to be used (first out). See also LIFO.

 

FILE: Any group or collection of related information stored in memory. To add data to a file or to read data from a file, the program must access the file by its file name.

 

File Transfer Protocol (FTP): The Internet service that transfers files from one computer to another, over standard phone lines.

 

Fill Rate: The percentage of order items that the picking operation actually fills within a given period of time.

 

Fill Rates by Order: Whether orders are received and released consistently, or released from a blanket purchase order, this metric measures the percentage of ship-from-stock orders shipped within 24 hours of order "release." Make-to-Stock schedules attempt to time the availability of finished goods to match forecasted customer orders or releases. Orders that were not shipped within 24 hours due to consolidation but were available for shipment within 24 hours are reported separately. In calculating elapsed time for order fill rates, the interval begins at ship release and ends when material is consigned for shipment. Calculation: [Number of orders filled from stock shipped within 24 hours of order release] / [Total number of stock orders] Note: The same concept of fill rates can be applied to order lines and individual products to provide statistics on percentage of lines shipped completely and percentage of products shipped completely.

 

Film Master: Film negative or positive, or contact print of a bar code used to make printing plates (or in original artwork).

 

Final Assembly: The highest level assembled product, as it is shipped to customers. This terminology is typically used when products consist of many possible features and options that may only be combined when an actual order is received. Also see: End Item, Assemble to Order

 

Final Assembly Schedule (FAS): A schedule of end items to finish the product for specific customers' orders in a make-to-order or assemble-to-order environment. It is also referred to as the finishing schedule because it may involve operations other than just the final assembly; also, it may not involve assembly, but simply final mixing, cutting, packaging, etc. The FAS is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked (or master scheduled) to the end- item level.

 

Final Invoice: A final invoice is one which has no further entry needed. All the information concerning the invoice and the receiving status of all merchandise related to the invoice is complete and final.

 

Finished Goods Inventory (FG or FGI): Products completely manufactured, packaged, stored, and ready for distribution. Also see: End Item

 

Finite Scheduling: A scheduling methodology where work is loaded into work centres such that no work centre capacity requirement exceeds the capacity available for that work centre. See: drum-buffer-rope, finite forward scheduling.

 

Firewall: A computer term for a method of protecting the files and programs on one network from users on another network. A firewall blocks unwanted access to a protected network while giving the protected network access to networks outside of the firewall. A company will typically install a firewall to give users access to the Internet while protecting their internal information.

 

Firm Planned Order: A planned order which has been committed to production. Also see: Planned Order

 

First In, First Out (FIFO): Warehouse term meaning first items stored are the first used. In accounting this tem is associated with the valuing of inventory such that the latest purchases are reflected in book inventory. Also see: Book Inventory

 

First Mover Advantage: Market innovator, putting the company in the leadership position.

 

First Pass Read Rate: A bar code and scanner quality measure expressed as a percentage of successful scans per total attempts.

 

First Pass Yield: The ratio of usable, specification conforming output from a process to its input, achieved without rework or reprocessing.

 

Fixed Assets: Tangible durable assets used continually by organizations, such as buildings and major equipment, that are not easily varied according to need, unlike hourly labor or inventory.

 

Fixed Costs: Costs, which do not fluctuate with business volume in the short run. Fixed costs include items such as depreciation on buildings and fixtures.

 

Fixed Interval Order System: See Fixed Reorder Cycle Inventory Model

 

Fixed Order Quantity: A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof if net requirements for the period exceed the fixed order quantity.

 

Fixed Order Quantity System: See Fixed Reorder Cycle Inventory Model

 

Fixed Overhead: Traditionally, all manufacturing costs, other than direct labour and direct materials, that continue even if products are not produced. Although fixed overhead is necessary to produce the product, it cannot be directly traced to the final product. Also see: Indirect Cost

 

Fixed Reorder Cycle Inventory Model: A form of independent demand management model in which an order is placed every n time units. The order quantity is variable and essentially replaces the items consumed during the current time period. Let M be the maximum inventory desired at any time, and let x be the quantity on hand at the time the order is placed. Then, in the simplest model, the order quantity will be M x. The quantity M must be large enough to cover the maximum expected demand during the lead time plus a review interval. The order quantity model becomes more complicated whenever the replenishment lead time exceeds the review interval, because outstanding orders then have to be factored into the equation. These reorder systems are sometimes called fixed- interval order systems, order level systems, or periodic review systems. Synonyms: Fixed-Interval Order System, Fixed-Order Quantity System, Order Level System, Periodic Review System, Time-Based Order System. Also see: Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, Independent Demand Item Management Models, Optional Replenishment Model

 

Fixed Reorder Quantity Inventory Model: A form of independent demand item management model in which an order for a fixed quantity is placed whenever stock on hand plus on order reaches a predetermined reorder level. The fixed order quantity may be determined by the economic order quantity, by a fixed order quantity (such as a carton or a truckload), or by another model yielding a fixed result. The reorder point may be deterministic or stochastic, and in either instance is large enough to cover the maximum expected demand during the replenishment lead time. Fixed reorder quantity models assume the existence of some form of a perpetual inventory record or some form of physical tracking, e.g., a two-bin system that is able to determine when the reorder point is reached. Synonym: Fixed Order Quantity System, Lot Size System, Order Point-Order Quantity System, Quantity Based Order System. Also see: Fixed Reorder Cycle Inventory Model, Hybrid Inventory System, Independent Demand Item Management Models, Optional Replenishment Model, Order Point Order Management System

 

Fixed-Location Storage: A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random- location storage system, fixed locations become familiar, and therefore a locator file may not be needed. Also see: Random-Location Storage

 

Flexibility: The ability of a firm's processes and systems to respond quickly to changes in the business environment. It includes the capacity to accommodate shifts in consumer demand, in competitors' strategies, in rate of growth, and in suppliers' deals and shipment problems.

 

Float: The time required for documents, payments, etc. to get from one trading partner to another.

 

Floor-Ready Merchandise (FRM): Goods shipped by suppliers to retailers with all necessary tags, prices, security devices, etc. already attached, so goods can be cross docked rapidly through retail DCs, or received directly at stores.

 

FLT : Fork Lift Truck

 

FMCG: Fast Moving Consumer Goods: i.e. food, drink, pharmaceuticals, household products, etc.

 

FOB: Free on Board, or Freight on Board. The FOB Point is the point at which the responsibility for the merchandise changes from the Vendor to the Purchaser.

 

FOB: Free On Board: point during transportation where title, transport costs, risk, etc. transfer from seller to another party (e.g. FOB Truck, FOB Vessel, FOB Warehouse). See also FAS, FOR, FOT. Also "Freight On Board".

 

FOB Destination: Title passes at destination, and seller has total responsibility until shipment is delivered.

 

FOB Origin: Title passes at origin, and buyer has total responsibility over the goods while in shipment.

 

FOC: Free of Charge

 

Follow up: The routine tracking of a purchase order to assure that the supplier will be able to

 

FOR: Free On Rail: point during transportation where title, transport costs, risk, etc. transfer from seller to another party (see also FOB, FOT).

 

Forecast: An estimate of future demand. A forecast can be constructed using quantitative methods, qualitative methods, or a combination of methods, and it can be based on extrinsic (external) or intrinsic (internal) factors. Various forecasting techniques attempt to predict one or more of the four components of demand: cyclical, random, seasonal, and trend. Also see: Box- Jenkins Model, Exponential Smoothing Forecast, Extrinsic Forecasting Method, Intrinsic Forecasting Method, Qualitative Forecasting Method, Quantitative Forecasting Method

 

Forecast Accuracy: Measures how accurate your forecast is as a percent of actual units or dollars shipped, calculated as 1 minus the absolute value of the difference between forecasted demand and actual demand, as a percentage of actual demand. Calculation: [1-(|Sum of Variances|/Sum of Actual)]

 

Forecast Cycle: Cycle time between forecast regenerations that reflect true changes in marketplace demand for shippable end products.

 

Forecast Error: The difference between actual demand and forecasted demand.

 

Forecasting: Predictions of how much of a product will be purchased by customers. Relies upon both quantitative and qualitative methods. Also see: Forecast

 

Forward Buy: Process by which a retailer buys more product than the chain could normally sell within the next buying period, generally at a lower price.

 

FOT: Free On Truck: point during transportation where title, transport costs, risk, etc. transfer from seller to another party (see also FOB, FOR).

 

Four Wall Inventory: The stock which is contained within a single facility or building.

 

Fourth-generation language (4GL): A series of high-level nonprocedural computer languages that use menus, drag-and-drop, point-and-click, and English-like wording to design and develop applications.

 

Fourth-Party Logistics (4PL): Differs from third party logistics in the following ways; 1)4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners; 2)4PL organization acts as a single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the client's supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure (Strategic Supply Chain Alignment; John Gattorna). Also see: Lead Logistics Provider

 

fpm: feet per minute

 

Free Domicile: Shipper pays all taxes and duty.

 

Free on Board (FOB): Contractual terms between a buyer and a seller, that define where title transfer takes place.

 

Freight Bill: Document that accompanies a load of freight. Tells how many cases, pallets, or bundles or merchandise, identifies the purchase orders numbers shipped against, and the amount of freight charges.

 

Freight Consolidation: The grouping of shipments to obtain reduced costs or improved utilization of the transportation function. Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using third-party pooling services such as public warehouses and freight forwarders.

 

Freight Forwarder: An organization which provides logistics services as an intermediary between the shipper and the carrier, typically on international shipments. Freight forwarders provide the ability to respond quickly and efficiently to changing customer and consumer demands and international shipping (import/export) requirements.

 

FRM: See Floor Ready Merchandise

 

FRS: Financial Record System.

 

FTA: Freight Transport Association: UK trade association. Also "Free Trade Agreement".

 

FTE: See Full Time Equivalents

 

FTL: Full Truck Load or Full Trailer Load. Also former name of TBG's IT department.

 

FTP: See File Transfer Protocol

 

FTZ: Foreign Trade Zone

 

Future order: An order entered for shipment at some future date. This may be related to new products which are not currently available for shipment, or scheduling of future needs by the customer.

 

FZ: Free Zone: a duty free zone.

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