Chapter 16 – Key Terms

Supply chain: A sequence of organizations-their facilities, functions, and activities-that are involved in producing and delivering a product or service. (693)

Outsourcing: Buying goods or services instead of producing or providing them in-house. (695)

Bullwhip effect: Inventories become progressively larger looking backward throught he supply chain. (696)

Logistics: The movement of materials and information in a supply chain. (697)

Traffic management: Overseeing the shipment of incoming and outgoing goods. (699)

Distribution requirements planning (DRP): A system for inventory management and distribution planning. (700)

Electronic data interchange (EDI): The direct transmission of interorganizational transactions, computer-to-computer, including purchase orders, shipping notices, and debit or credit memos. (700)

Efficient consumer response (ECR): A quick response initiative using EDI and bar codes specific to the food industry. (700)

3-PL (third-party logistics): is the term used to describe the outsourcing of logistics management.(701)

E-commerce: The use of electronic technology to facilitate business transactions. (702)

Supply chain visibility: A major trading partner can connect its supply chain to access data in real time. (705)

Even management: The ability to detect and respond to unplanned events. (705)

Fill rate: The percentage demand filled from stock on hand. (705)

CPFD: A supply chain initiative that focuses on information sharing among supply chain trading partners in planning, forecasting, and inventory replenishment. (706)

Strategic partnering: Two or more business organizations that have complementary products or services join so that each may realize a strategic benefit. (708)

Inventory velocity: The rate at which inventory (material) goes through the supply chain. (709)

Information velocity: The rate at which information is communicated in a supply chain. (709)

Cross-docking: Goods arriving at a warehouse from a supplier are unloaded from the supplier’s truck and loaded onto outbound trucks, thereby avoiding warehouse storage. (711)

Delayed differentiation: Production of standard components and subassemblies, which are held until late in the process to add differentiating features. (711)

Disintermediation: Reducing one or more steps in a supply chain by cutting out one or more intermediaries. (712)

Purchasing cycle: Series of steps that begin with a request for purchase and end with notification of shipment received in satisfactory condition. (714)

Value analysis: Examination of the function of purchased parts and materials in an effort to reduce cost and/or improve performance. (715)

Centralized purchasing: Purchasing is handled by one special department. (716)

Decentralized purchasing: Individual departments or separate locations handle their own purchasing requirements. (716)

Vendor analysis: Evaluating the sources of supply in terms of price, quality, reputation and service. (717)