Vocabulary used in Manufacturing and Logistics

Here are vocabulary terms used in the Logistics Industry:

Absorption Costing:

A cost accounting approach which captures overhead and other indirect costs as separate from unit costs for a given period,

and then applies (absorbs) those costs into unit costs at the period end based on various factors such as movement and COGS elements

Acceptable Quality Level (AQL):

In quality assessment, acceptable quality level, also known as assured quality level, describes the maximum

number of defects acceptable during the random sampling of an inspection.

Accountability:

The act of making a group or individual responsible for certain activities or outcomes. For example, managers and executives are

accountable for business performance even though they may not actually perform the work

Accounts Payable (A/P):

1) a financial term referring to the amount of transactions which have been accrued but not paid to a vendor. 2) An accounting function

Accounts receivable (A/R):

On a company's balance sheet, accounts receivable is the amount that customers owe to that company. Sometimes called

trade receivables, they are classified as current assets assuming that they are due within one year.

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 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.

All-Cargo Carrier:

An air carrier that transports cargo only.

Back Order:

Product ordered but out of stock and promised to ship when the product becomes available.

Balance of Trade:

The surplus or deficit which results from comparing a country's exports and imports of merchandise only

Bar Code: A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.

Bilateral Contract:

An agreement in which each of the parties to the contract makes a promise or promises to the other party.

Bill of Lading (BOL):

A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.

Book Inventory:

An accounting term used to refer to the value or quantity of inventory shown in the company’ s accounting ‘books” such as an inventory control database or the general ledger. Book inventory is compared to physical inventory during audit processes for validation and to determine any variances

Cellular Manufacturing:

A manufacturing approach in which equipment and workstations are arranged to facilitate small-lot, continuous-flow production. In a manufacturing "cell," all operations necessary to produce a component or subassembly are performed in close proximity, thus allowing for quick feedback between operators when quality problems and other issues arise. Workers in a manufacturing cell typically are cross trained and able to perform multiple tasks as needed

Certificate of Origin:

An international business document that certifies the country of origin of the shipment.

Common Carrier:

Any carrier engaged in the interstate transportation of persons/property on a regular schedule at published rates, whose services are for hire to the general public.

Dashboard:

A performance measurement tool used to capture a summary of the key performance indicators (KPIs)/metrics of a company. Metrics dashboards/scorecards should be easy to read and feature “ red, yellow, green” indicators to flag when metrics targets are not being met. Ideally, a dashboard/scorecard should be cross-functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly—at least on a monthly basis—and weekly for key functions—such as manufacturing and distribution—where activities are critical to the success of a company. The dashboard/scorecards philosophy can also be applied to external supply chain partners (such as suppliers) to ensure that supplier’ s objectives and practices align. Synonym: Scorecard.

Drop and Hook: An arrangement among shipper, carrier and consignee whereby the carrier leaves a trailer filled with freight at a destination and hooks up and hauls away an empty trailer.

Export declaration:

A document required by the Department of commerce that provides information as to the nature, value, etc., of export activity

Exports:

A term used to describe those products produced in one geography (typically a country) and shipped / sold in another. Also See: Export

Four Wall Inventory:

The stock which is contained within a single facility or building.

Freight Bill:

The carrier’ s invoice for transportation charges applicable to a freight shipment

Frozen Zone:

In forecasting, this is the period in which no changes can be made to scheduled work orders based on changes in demand. Use of a

frozen zone provides stability in the manufacturing schedule

Global Positioning System (GPS):

A system which uses satellites to precisely locate an object on earth. Used by trucking companies to locate over the-road equipment

Hub:

1) A large retailer or manufacturer having many trading partners. 2) A reference for a transportation network as in “hub and spoke” which is common in the airline and trucking industry. For example, a hub airport serves as the focal point for the origin and termination of long-distance flights where flights from outlying areas are fed into the hub airport for connecting flights. 3) A common connection point for devices in a network. 4) A Web "hub" is one of the initial names for what is now known as a "portal". It came from the creative idea of producing a website, which would contain many different "portal spots" (small boxes that looked like ads, with links to different yet related content). This content, combined with Internet technology ,made this idea a milestone in the development and appearance of websites, primarily due to the ability to display a lot of useful content and store one's preferred information on a secured server. The web term"hub"was replaced with portal

Hyperlink:

A computer term. Also referred to as “ link”. The text you find on a website which can be "clicked on"with a mouse which, in turn, will take you to another web page or a different area of the same web page. Hyperlinks are created or "coded" in HTML

Image Processing:

allows a company to take electronic photographs of documents. The electronic photograph then can be stored in a computer and

retrieved from computer storage to replicate the document on a printer. The thousands of bytes of data composing a single document are encoded in an optical disk. Many carriers now use image processing to provide proof-of-delivery documents to a shipper. The consignee signs an electronic pad that automatically digitizes a consignee's signature for downloading into a computer. A copy of that signature then can be produced to demonstrate that a delivery took place.

Just-in-Time (JIT):

An inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and

supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered "just in time”. Developed by the auto industry, it refers to shipping goods in smaller, more frequent lots.

Lead Time from Complete Manufacture to Customer Receipt: Includes the time from when an order is ready for shipment to customer receipt of order. Time from complete manufacture to customer receipt includes the following elements: pick/pack time, prepare for shipment, total transit time (all components to consolidation point), consolidation, queue time, and additional transit time to customer receipt.

Lead Time from Order Receipt to Complete Manufacture: Includes times from order receipt to order entry complete, from order entry complete to start to build, and from start to build to ready for shipment. Time from order receipt to order entry completion includes the following elements:order revalidation, configuration check, credit check, and scheduling. Time from order entry completion to start to build includes the following elements: customer wait time and engineering and design time. Time from start to build to ready for shipment includes the following elements :release to manufacturing or distribution, order configuration verification, production scheduling, and build or configure time.