Advertising revenue model
Provides users with information on services and products and provides an opportunity for suppliers to advertise
Affiliate revenue model
Companies receive a referral fee for directing business to an affiliate
Appraisal cost
The cost associated with uncovering defects
Automated order entry systems
A method using telephone models to send digital orders to suppliers.
Backwards integration
Owning or controlling sources of raw materials and components.
Benchmarking
Studying other companies business practices for comparison.
Bullwhip effect
Inaccurate or distorted demand information created in the supply chain.
Business to Business commerce
Businesses buying and selling to other businesses.
Business to consumer commerce
Businesses selling to individual consumers.
Cause and effect diagrams
A chart that identifies potential causes of particular quality problems.
Checklist
A list of common defects and the number of observed occurrences of each.
Conformance to specifications
how well a product or service meets the targets and tolerances set by designers.
Continuous improvement
A philosophy of never ending improvement.
Control charts
Charts used to evaluate whether a process is operating within expectations.
Crossdocking
Eliminates storage and order picking functions of a distribution warehouse.
Customer defined quality
an integrated effort designed to improve quality performance at every level of the organization.
Deming Prize
Japanese award for companies to recognize efforts in quality improvement.
Distribution management
Responsible for the movement of material from the manufacturer to the customer.
Distribution warehouse
Used for short term storage, consolidation, and product mixing.
Distributor crossdocking
the receiving and consolidating of inbound products from different vendors into a multi-SKU pallet.
E-commerce
Using the internet and web to do business.
E-distributors
Independently owned net marketplaces having catalogs representing thousands of suppliers and designed for spot purchases.
E-purchasing
Companies that connect onlone MRO suppliers to businesses that pay fees to join the market, usually for long term contractual purchasing.
Early supplier involment (ESI)
Involvement of critical suppliers in new product design.
Electronic data interchange (EDI)
A form of computer to computer communications that enables sharing business documents.
Electronic requests for quotes (eRFQs)
An electronic request for a quote on goods and services.
Electronic storefront
online catalogs of products made available to the general public by a single supplier
Exchanges
Marketplaces that focus on spot requirements of larger firms in a single industry
External Failure costs
Costs associated with failures that occur at the customer site.
Extranets
intranets that are linked to the internet so that suppliers and customers can be included in the system.
Fitness for use
How well the product performs its intended purpose.
Flowchart
A schematic of the sequence of steps involved in a process.
Forward integration
Owning or controlling the channels of distributions
General warehouse
used for long term storage
Green supply chain management
Focucses on the role of the supply chain with regard to its impact on the environment.
Histogram
A chart that shows frequency distribution of observed values of a variable.
Incoming inspection
verifies the quality of incoming goods
Industry consortia
Industry owned markets for purchase of direct inputs from limited number of suppliers.
Insourced
processes and activities completed in house
Internal failure costs
costs associated with discovering poor quality product before it reaches customers.
Intranets
networks internal to the organization
ISO 14000
Set of standards & certification focused on environmental responsiblity
ISO 9000
Set of quality standards & certification indicating companies have met that standard.
Kaizen
Japanese term for continuous improvement through learning and problem solving.
Logistics
Obtaining, producing an distributing materials and products.
Malcolm Baldridge Award
Award for demonstrating quality excellence and establishing best practices.
Manufacturing crossdocking
receiving and consolidating inbound supplies and materials for JIT manufacturing.
Net Marketplaces
suppliers and buyers conduct trade in a single internet based environment.
Outsourced
Processes/activities completed by suppliers.
Pareto Analysis
A technique used to identify quality problems based on their degree of importance.
Partnering
A process of developing long term relationships with a supplier based on trust, shared vision, and shared information, and shared risk.
Plan-do-study-act (PDSA) cycle
a diagram that describes the actvities that need to be performed to incorporate continuous improvement.
Postponement
Strategy shifts production differentiation closer to the consumer by postponing final configuration
Prevention costs
Costs associated with preventing poor quality/defects from occurring.
Price and availability
Current prices and whether the quantity is available when needed.
Psychological criteria
way of defining quality, focuses on judgement of what constitutes product or service excellence.
Purchase order
legal document committing to buy goods and providing details of purchase.
Quality at the source
best to uncover problems at source and correct it.
Quality Circle
Team of volunteer production workers and supervisors who meet regularly to solve quality issue.
Quality function deployment (QFD)
tool to translate preferences of the customer into specific technical requirements.
Radio frequency identificaion (RFID)
unpowered microchips used to transmit encoded info through antennae
Reliability
probability of part, product or services will perform as intended.
Requisition request
indicates the need for an item.
Retail crossdocking
sorting product from multiple vendors onto outbound trucks headed for specific stores.
Robust design
A design that results in a product that can perform over a wide range of conditions.
Sales revenue model
a means of selling goods, information, or services directly to consumers.
Scatter diagram
Graphs that show how two variables relate.
Sourcing strategy
A plan indicating suppliers to be used when making purchases.
Subscription revenue model
a web site that charges a subscription fee for access to its contents and services.
Supply Chain
All the activities involved in delivering a finished product or service to customer
Supply chain management
Coordinates and manages all the activities of the supply chain
Supply chain management
The speed at which product moves through a pipeline from the manufacturer to the customer
Supply chain velocity
The speed at which product moves through a pipeline from manufacturer to the customer.
Support Serviecs
Quality defined in terms of the support provided after the product services is purchased.
Taguchi loss function
costs of quality increase as a quadratic function as conformance values move away from target.
Tier one suppliers
Supplies materials directly to processing facility
Tier three suppliers
Directly supplies materials or services to a tier two supplier in the supply chain.
Tier two suppliers
directly supplies tier one suppliers
Total quality management
The meaning of quality as defined by the customer
Transaction fee model
A company receives a fee for executing a transaction
Transportation crossdocking
Consideration of LTL shipments to gain economics of scale.
Value for price paid
Quality defined in terms of consumer's perception of usefulness of service or product related to prices paid.
Vertical integration
A measure of how much of the supply chain is owned by the manufacturing company.
Virtual private network (VPN)
A private internet based communications environment that is used by the company, its suppliers, and its customers for day to day activities.
Best Operating level
the output volume that results in lowest average unit cost.
Break even analysis
used to compute the amount of goods that must be sold just to cover costs.
Capacity
maximum output rate that can be achieved by a facility.
Capacity cushions
additional capacity added to regular capacity requirements for greater flexibility.
Capacity planning
The process of establishing the output rate that can be achieved by a facility
Capacity utilization
Percentage measure of how well available capacity is being used.
Decision tree
Modeling tool used to evaluate independent decisions that must be made in sequence.
Design capacity
the maximum output rate that can be achieved under ideal conditions
Diseconomies of scale
A condition in which the cost of each additional unit made increases.
Economies of scale
A condition in which the cost of each additional unit made decreases.
Effective capacity
maximum output rate under normal conditions, lower than design capacity.
Expected value
a weighted average of chance events, where each chance event is given a probability of occurrence.
Factor rating
a procedure that can be used to evaluate multiple alternative locations based on a number of selected factors.
Focused factories
Facilities that are small specialized and focused on narrow set of objectives.
Globalization
the process of locating facilities around the world.
Load-distance model
a procedure for evaluating location alternatives based on distance.
Location analysis
technique for determining location decisions
Rectilinear distance.
The shortest distance between two points measured by using only north-south and east-west movements
Beliefs defining JIT philosophy
Operations, simplicity, continuous improvement, visibility, and flexibility.
Bottom-round management
consensus management by committees or teams.
Broad view of JIT
philosophy that encompasses the entire organization
Broad view of the organization
tasks and procedures are important only if they meet goals.
Cell manufacturing
Placement of dissimilar machines and equipment together to produce a family of products with similar requirements.
External setups
can be performed while the machine is still running
Flexible
A company can quickly adapt to changing customer needs.
Jidoka
Authority given to workers to stop production line if quality problems are detected.
JIT system
Three elements JIT manufacturing, TQM, and respect for people
Just-in-time philosophy
Right quantity, right place, right time
JIT manufacturing
the element of JIT that focuses on production to achieve value added manufacturing
Kanban card
A card that specifies the exact quantity of product that needs produced.
Multifunction workers
Capable of performing more than one job
Poka-yoke
Foolproof devices or mechanisms that prevent defects from occuring.
Production cards
A Kanban card that authorizes production
Pull system
JIT system based on a pull rather than a push system.
Respect for people
An element of JIT that considers human resources as an essential part of the philosophy
Setup costs
Costs incurred when setting up production equipment
Simplicity
The simpler a solution the better it is.
Single source suppliers
Suppliers that supply an entire family of parts to a manufacturer.
Small lot production
The ability to produce small quantities of products
Types of waste
Material, energy, time and space
Uniform plant loading
A constant production plan for a facility with a given planning horizon.
Visible
Problems must be visible to be identified and solved.
Waste
Anything that does not add value
Withdrawal Cards
A Kanban card that authorizes withdrawal of material
Automated order entry system
A method using telephone models to send digital orders to suppliers
Backward integration
Owning or controlling the source of raw materials and components