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Supply Chain Glossary

This supply chain management glossary will provide a list of definitions for terms and phrases that are relevant when understanding some of the unfamiliar concepts in supply chain management.

Activity Based Costing (ABC)
Activity based costing is a methodology that measures the cost and performance of cost objects

Assemble to Order
Assemble to order is a production method that occurs when an item is assembled after receipt of a customer's order

Change Management
Change Management is the process that is used to help the company, employees and partners adapt successfully to the changes taking place.

Continuous Replenishment
Continuous replenishment is based on the principal of pulled logistics.

Cross Docking
Cross docking reduces costs by shipping material as it is received.

CSCO - Chief Supply Chain Officer
Today the supply chain is the backbone to any business and having a senior executive in charge of supply chain is the next logical step.

Cycle Counting
Cycle counting is important procedure in the warehouse as it ensures inventory accuracy.

Dry Lease
A dry lease is typically a lease of an aircraft without a crew.

Enterprise Resource Planning
Enterprise Resource Planning (ERP) software is used by companies to help them achieve efficiencies in their supply chain.

Evaluated Receipts Settlement
Evaluated Receipts Settlement is a method of paying vendors without vendor generated invoices.

Freight Forwarder
Freight forwarder is used by companies who need to ship items internationally.

Just In Time (JIT)
Just in Time or JIT method creates the movement of material into a specific location at the required time, i.e. just before the material is needed in the manufacturing process.

Kanban is a Japanese production technique that uses cards or electronic signals in a computer system to monitor and control workflow in a factory.

Last In, First Out (LIFO)
LIFO can be used in the warehouse where the first items moved out are the last to arrive in the warehouse

Maintenance, Repair, and Operating Supplies (MRO)
MRO items are consumed as part of the production and plant maintenance process.

Public Warehouse
A public warehouse provides short or long-term storage to companies that require additional warehouse space.

Radio Frequency (RF)
Radio frequency (RF) is a form of wireless communication used in warehousing.

Radio Frequency Identification (RFID)
RFID uses RF technology and is hoped that the technology will improve the efficiency of inventory tracking and management.

Six Sigma
Six Sigma is a business management strategy. It will identify and remove the causes of defects and errors in manufacturing and business processes.

Third Party Logistics Provider (3PL)
A Third Party Logistics (3PL) provider is a firm that provides outsourced or "third party" logistics.

Vendor Managed Inventory (VMI)
Vendor Managed Inventory (VMI) is where the buyer of a product provides information to a vendor of that product and the vendor takes full responsibility for maintaining an agreed inventory of the material.

Wet Lease
A wet lease of an aircraft is a lease of an aircraft, crew, and maintenance.

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