Chapter Eleven – Supply Chain Management (terms)

Avoidance – finding ways to minimize the number of items that are returned

Bullwhip effect – inventory oscillations become progressively larger looking backward through the supply chain

Centralized purchasing – purchasing is handled by one special department

Collaborative Planning, Forecasting, and Replenishment (CPFR) – a supply chain initiative that focuses on information sharing among supply chain trading partners in planning, forecasting, and inventory replenishment

Cross-docking – a technique whereby goods arriving at a warehouse from a supplier are unloaded from the supplier’s truck and loaded onto outbound trucks, thereby avoiding warehouse storage

Decentralized purchasing – individual departments or separate locations handle their own purchasing requirements

Delayed differentiation – production of standard components and subassemblies, which are held until late in the process to add differentiating features

Disintermediation – reducing one or more steps in a supply chain by cutting out one or more intermediaries

Distribution requirements planning (DRP) – a system for inventory management and distribution planning

E-business – the use of electronic technology to facilitate business transactions

Event management – the ability to detect and respond to unplanned events

Fill rate – the percentage of demand filled from stock on hand

Gatekeeping – screening returned goods to prevent incorrect acceptance of goods

Information velocity – the rate at which information is communicated in a supply chain

Inventory velocity – the rate at which inventory (material) goes through the supply chain

Logistics – the part of a supply chain involved with the forward and reverse flow of goods, services, cash, and information

Outsourcing – buying goods of services instead of producing or providing them in-house

Purchasing cycle – series of steps that begin with a request for purchase and end with notification of shipment received in satisfactory condition

Reverse logistics – the backward flow of goods returned to the supply chain from their final destination

Radio frequency identification (RFID) – a technology that uses radio waves to identify objects, such as goods in supply chains

Strategic partnering – two or more business organizations that have complementary products or services join so that each may realize a strategic benefit

Supply chain – a sequence of organizations – their facilities, functions, and activities – that are involved in producing and delivering a product or service

Supply chain visibility – a major trading partner can connect to its supply chain to access data in real time

Third-party logistics (3-PL) – the outsourcing of business management

Traffic management – overseeing the shipment of incoming and outgoing goods

Vendor analysis – evaluating the sources of supply in terms of price, quality, reputation, and service

Vendor-managed inventory (VMI) – vendors monitor goods and replenish retail inventories when supplies are low