1 Reply Latest reply on Aug 25, 2015 11:19 AM by jcannata@kinaxis.com

    Supply Chain Management Terms & Definitions

    acheater@kinaxis.com Expert

      As a relative supply chain newbie, I’m still working on developing a deeper understanding of the complexities of managing a supply chain. With my growing knowledge has come many new terms to learn. NC State University has very nicely put together a list of supply chain management terms and definitions. I’ve taken the liberty of including a few of them below, along with my take on what the terms actually mean, to help all those other supply chain newbies out.


      Collaboration: The process by which partners adopt a high level of purposeful cooperation to maintain a trading relationship over time.

      In other words when you take your head out of that silo you’ve been slaving away in and actually talk to the other people involved in your supply chain. This one’s pretty vital, so make sure you take the time to answer those emails about supplier concerns or inventory issues. Do not just file them to the dark recesses of your inbox where the other hordes of ‘to read later’ messages live. That is not good collaboration!

      Forecasting: The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance.

      In other words, the thing you really, really hope is right, as you’ve based a large portion of your business off it. But that chances are isn’t hitting a 100% accuracy rate every single time. Even if you’ve done all the research, legwork and data analysis, or looked into a magical crystal ball, forecasting is tricky business, and isn’t an exact science. Be prepared to be wrong. A LOT. Why? Because demand requirements can change at the drop of a hat.

      Lean Manufacturing: A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise.

      In other words, something that can save your business money by reducing inefficiencies and waste. Think reduce, reuse, recycle on a much larger scale. It’s also linked to sustainability and developing a greener supply chain, two things more and more consumers are demanding.

      Order Management: A practice that involves the seamless integration of orders from multiple channels with inventory databases, data collection, order processing including credit card verification, fulfillment systems and returns across the entire fulfillment network.

      In other words, the way you keep your customers happy by making sure their order gets to them on time, all in one piece, and exactly as they placed it! Personal experience as a consumer has taught me getting this one right isn’t as always easy as it seems despite a lot of online promises of it’s as easy as ‘click and ship’!

      Scheduling: A practice that involves taking decisions regarding the allocation of available capacity or resources (equipment, labor and space) to jobs, activities, tasks or customers over time.

      In other words, the thing that keeps every aspect of your business running like it’s supposed to. One small misstep in your schedule and it can be weeks worth of headaches sorting it all out. It’s an incredibly tough job being in charge of this monumental task. So yes, you should pay attention to (and thank!) the person behind the curtain. A great master scheduler really is a lot like a wizard!

      What new terms have you learned in your supply chain role? Let me know!