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Terms & Definitions
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Scheduling	Scheduling involves taking decisions regarding the allocation of available capacity or resources (equipment, labor and space) to jobs, activities, tasks or customers over time. Scheduling thus results in a time-phased plan, or schedule of activities. The schedule indicates what is to be done, when, by whom and with what equipment. Scheduling seeks to achieve several conflicting objectives: high efficiency, low inventories and good customer service. Scheduling can be classified by the type of process: line, batch and project. Source: http://www.apics.org/ (10th ed.)
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Service Level Agreement	Service-level agreements (SLAs) are contracts between service providers and customers that define the services provided, the metrics associated with these services, acceptable and unacceptable service levels, liabilities on the part of the service provider and the customer, and actions to be taken in specific circumstances. Source: Dobler, D.W., & Burt, D.N. (1996). Purchasing and Supply Management. (6th ed.). New York: McGraw Hill.
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Six Sigma	See: Quality Programs
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Sourcing Strategy	A successful sourcing strategy requires a thorough understanding of a company’s business strategy, the resources required to deliver that strategy, the market forces and the unique risks within the company associated with implementing specific approaches. A periodic review of the sourcing strategy ensures achievement of desired results and continued alignment with business objectives. Some of the sourcing strategies that are used in supply chain management today include: Single sourcing: A method whereby a purchased part is supplied by only one supplier. A JIT manufacturer will frequently have only one supplier for a purchased part so that close relationships can be established with a smaller number of suppliers. These close relationships (and mutual interdependence) foster high quality, reliability, short lead times, and cooperative action. Multisourcing: Procurement of a good or service from more than one independent supplier. Companies may use it sometimes to induce healthy competition between the suppliers in order to achieve higher quality and lower price. Outsourcing: The process of having suppliers provide goods and services that were previously provided internally. Outsourcing involves substitution—the replacement of internal capacity and production by that of the supplier. Insourcing: The goods or services are developed internally. Source: http://www.apics.org/
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Specifications	Specifications are the most detailed method of describing requirements. Various types of design specifications are the detailed descriptions of the materials, parts, and components to be used in making a product. Hence, they are the descriptions that tell the seller exactly what the buyer wants to purchase. Source: Dobler, D.W., & Burt, D.N. (1996). Purchasing and Supply Management. (6th ed.). New York: McGraw Hill.
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Standard/Compatibility	1) An established norm against which measurements are compared. (APICS 10th ed.) 2) The Internet has transformed supply chain management into something closer to an exact science. However for information to be shared, systems, both hardware and software, must be able to communicate and be compatible so that all supply chain activities can be optimized across company boundaries. Standards promote interoperability and compatibility among operating environments.
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Statement of Work (S.O.W)	The most critical ingredient of a successful procurement of services is the development and documentation of the requirements - the statement of work. The S.O.W. identifies what the contractor is to accomplish. It first clearly identifies the primary objective and then the subordinate objectives. One of the goals of the S.O.W. is to gain understanding and agreement with a contractor about the specific nature of the technical activity to be performed. The S.O.W. also impacts the administration of the contract by defining the scope of the contract, that is, what the contractor is supposed to do and the purchaser supposed to receive. Source: Dobler, D.W., & Burt, D.N. (1996). Purchasing and Supply Management. (6th ed.). New York: McGraw Hill.
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Statistic Quality Control	See: Quality Programs
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Strategic Alliance	A relationship formed by two or more organizations that share (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies. Many organizations form strategic alliances to increase the performance of their common supply chain. Source: http://www.apics.org/
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Supplier-Customer Partnership	A long-term relationship between a buyer and a supplier characterized by teamwork and mutual confidence. The supplier is considered an extension of the buyer’s organization. The partnership is based on several commitments. The buyer provides long-term contracts and uses fewer suppliers. The supplier implements quality assurance processes so that incoming inspection can be minimized. The supplier also helps the buyer reduce costs and improve product and process designs. Sources: Monczka, R., Trent, R., & Handfield, R. (1998). Purchasing and Supply Chain Management. Cincinnati, OH: South Western College Publishing.
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Supplier Development Training	Education and training is the most common approach to supplier development and improvement. A purchaser may provide training in statistical process control, quality improvement techniques, just-in-time delivery or any other crucial performance area. In order for purchasing to adequately assess and aid suppliers in improving quality, purchasers need to become familiar with the important components of quality management. In many organizations, purchasing may request the assistance of quality and engineering departments in assisting with the supplier quality training. Purchasing companies emphasize four areas of quality training with their suppliers: 1) Total quality management and quality improvement training, 2) statistical quality control techniques training, 3) training focusing on integrating quality into the design of products and processes to reduce variability, and 4) training in problem solving techniques. Sources: Monczka, R., Trent, R., & Handfield, R. (1998). Purchasing and Supply Chain Management. Cincinnati, OH: South Western College Publishing. Dobler, D.W., & Burt, D.N. (1996). Purchasing and Supply Management. (6th ed.). New York: McGraw Hill.
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Supplier Integration in New Product Development	Supplier integration into new product/process/service development suggests that suppliers are providing information and directly participating in decision making for purchases used in the new product/process/service. This integration can occur during idea generation, preliminary business/technical assessment, product/process/service concept development, product/process/service design and development and prototype build, test or production ramp up. Source: Handfield, R.B., Ragatz, G.L., & Monczka, R.M. (1999). Involving suppliers in New Product Development. California Management Review, 42(1), 59-82.
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Supplier Intelligence	Supplier Intelligence is the purposeful, coordinated and ethical monitoring of strategic suppliers, within a specific marketplace.
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Supplier Performance Evaluation	The main objective of the supplier evaluation process is to reduce purchase risk and maximize the overall value of the purchaser. It typically involves evaluating, at a minimum, supplier quality, cost competitiveness, potential delivery performance and technological capability. Some of the other criteria used in the preliminary evaluation of suppliers include financial risk analysis, evaluation of previous performance, and evaluation of supplier provided information. Source: Monczka, R., Trent, R., & Handfield, R. (1998). Purchasing and Supply Chain Management. Cincinnati, OH: South Western College Publishing.
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Supply Chain Inventory Visibility	Software applications that permit monitoring events across a supply chain. These systems track and trace inventory globally on a line-item level and notify the user of significant deviations from plans. Companies are provided with realistic estimates of when material will arrive. Source: http://www.apics.org/ (10th ed.) See: Inventory Management Systems
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Supply Chain Design	Supply chain design involves the determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of warehouse and production facilities, the products, the modes of transportation, and supporting information systems. Source: http://www.apics.org/ (10th ed.)
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