Pre Engineering
A systematic approach to the integrated, parallel design of products and their related processes, including manufacturing and support? This method emphasizes collaboration across different departments early in the product development cycle to reduce time to market and improve quality.
Concurrent Engineering
A holistic approach to managing the supply chain that spans the entire process from product design, sourcing, and manufacturing to distribution and customer delivery. This approach considers every aspect of the supply chain to optimize performance and responsiveness, minimizing inefficiencies and bottlenecks.
End-to-End Supply Chain
The process of moving goods from their final destination back through the supply chain for returns, repair, remanufacture, recycling, or disposal. Reverse logistics is a key part of sustainability efforts and helps companies recover value from products that might otherwise be considered waste.
Reverse Logistics
A management philosophy that focuses on identifying the most critical limiting factor (constraint) in a process and systematically improving it until it no longer limits the system’s performance. The goal is to achieve continuous improvement by focusing on the bottleneck and aligning the entire process around it.
Theory of Constraints (TOC)
A financial estimate that considers the direct and indirect costs associated with purchasing, operating, maintaining, and disposing of a product or system over its entire lifecycle. TCO helps organizations make more informed procurement decisions by factoring in long-term costs beyond the initial purchase price.
Total Cost of Ownership (TCO)
A technique used to determine the optimal order quantity that minimizes total costs while considering varying demand levels over time. Dynamic lot sizing adjusts order quantities based on changing demand patterns to reduce holding and setup costs.
Dynamic Lot Sizing
A multi-echelon material planning and execution methodology that combines the concepts of traditional MRP with lean, Six Sigma, and Theory of Constraints principles. DDMRP is designed to protect and promote the flow of relevant information and materials across the supply chain by dynamically adjusting inventory buffers based on actual demand signals.
Demand-Driven MRP (DDMRP)
A software application designed to support and optimize warehouse and distribution center management. WMS solutions help control inventory levels, manage stock locations, track shipments, and streamline the picking, packing, and shipping processes, ultimately improving efficiency and accuracy in warehouse operations.
Warehouse Management System (WMS)
The application of AI technologies, such as machine learning and predictive analytics, to optimize supply chain operations. AI-SC can enhance demand forecasting, inventory management, route optimization, and anomaly detection.
Artificial Intelligence in Supply Chain (AI-SC)
A financial performance metric that calculates the true economic profit of a company. EVA is determined by subtracting the cost of capital from net operating profit after taxes (NOPAT). It emphasizes value creation for shareholders by focusing on returns exceeding the cost of capital.
Economic Value Added (EVA)
A production strategy in which multiple tasks or processes are carried out simultaneously to reduce lead times and improve overall efficiency. Parallel processing is common in assembly lines and manufacturing environments.
Parallel Processing
A method used in supply chain management to determine if a company can fulfill an order based on available resources, including materials, labor, and production capacity. Unlike Available-to-Promise (ATP), which only considers current inventory, CTP considers future capacity and availability.
Capable-to-Promise (CTP)
A measure of how effectively an organization uses its available production capacity. Capacity utilization is calculated as the ratio of actual output to potential output, expressed as a percentage. It highlights underused resources or overburdened operations.
Capacity Utilization
A distributed ledger technology used to record transactions securely and transparently. In supply chain management, blockchain provides traceability, reduces fraud, and improves trust among trading partners by ensuring accurate and immutable records of transactions.
Blockchain in Supply Chain
A supply chain strategy that integrates multiple channels (e.g., online, in-store, and mobile) to provide seamless and consistent service to customers. Omnichannel fulfillment optimizes inventory and delivery networks to meet customer expectations across channels.
Omnichannel Fulfillment
A lean manufacturing methodology that focuses on maximizing the effectiveness of equipment. TPM emphasizes preventive maintenance, employee involvement, and continuous improvement to reduce downtime and increase productivity.
Total Productive Maintenance (TPM)
The ability of a supply chain to anticipate, prepare for, respond to, and recover from disruptions while maintaining the flow of goods and services. Supply chain resilience involves creating contingency plans, diversifying supply sources, and building flexibility into operations to mitigate risks from disruptions like natural disasters or geopolitical events.
Supply Chain Resilience
The total time required to complete a production process, from the start of work to the delivery of the finished product. Cycle time is a critical metric for identifying bottlenecks and improving process efficiency.
Cycle Time
A methodology that combines lean manufacturing principles with Six Sigma’s focus on quality improvement. This aims to reduce waste, enhance product quality, and improve process efficiency by eliminating non-value-added activities and reducing variability.
Lean Six Sigma
A refinement of vendor-managed inventory (VMI), where suppliers take responsibility not only for managing inventory but also for replenishing stock levels based on real-time demand signals. VMR provides an even greater level of integration, enabling just-in-time inventory and reducing stockouts.
Vendor-Managed Replenishment (VMR)
An advanced, extended version of Sales and Operations Planning (S&OP) that aligns financial, operational, and strategic plans across an organization. IBP incorporates all aspects of the business, including finance, sales, marketing, and supply chain, to drive alignment with long-term business goals.
Integrated Business Planning (IBP)
An approach that incorporates environmental considerations into supply chain practices. GSCM focuses on reducing carbon footprints, minimizing waste, and promoting sustainable practices across sourcing, production, and distribution.
Green Supply Chain Management (GSCM)
A logistics practice where products are unloaded from inbound trucks, sorted, and then directly loaded onto outbound trucks with minimal or no storage time. Cross-docking reduces warehousing costs, speeds up the flow of goods, and improves inventory turnover.
Cross-Docking
The process of strategically designing a supply chain network’s structure, including the location of manufacturing plants, warehouses, and distribution centers. Network design optimization balances service levels and cost-efficiency by evaluating factors like transportation costs, lead times, and customer proximity.
Network Design Optimization
A technique in material requirements planning (MRP) where the system calculates the net requirements for a product by considering both current inventory levels and projected gross requirements. Gross-to-net calculation helps ensure that the company orders only what is needed to meet production demands.
Gross-to-Net Calculation