19939405 code 305 understanding terms associated with logistics

8/12/2019 19939405 Code 305 Understanding Terms Associated With Logistics

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Understanding Terms Associated wi 1

UnderstandingTerms

Associated

With Logistics




Disclaimer

Although every effort is made to ensure accuracy andcompleteness of the information, it is understood that there isno warranty as to the accuracy or completeness of suchinformation and assumes no liability for any damages or losssuffered as a result of any inaccuracy or incompleteness

therein. These explanations are intended to provide the entrants to thesubject with a basic understanding of as many technical terms.

These explanations are not regulations or rules with the forceof law.

As difficult or detailed questions arise, the participant should

seek clarification from their manager or supervisor, rather thanattempting to derive precise guidance from these generalexplanations.




Activity-Based Costing (ABC) An accounting system that measures the cost and performance of

specific activities performed in an organization.

Advanced Shipment Notice (ASN) etailed shipment information transmitted to a customer or consignee

in advance of delivery, designating the contents and nature of theshipment. !ay also include expected time of arrival.

Average Inventory The average inventory level over a period of time.

Back rder "roduct ordered but out of stock and promised to ship when the

product becomes available.

Backha!"

The return movement of a vehicle from its original destination to itsoriginal point of origin, especially when carrying goods back over allor part of the same route.




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.

Benchmarking The process of comparing performance against the practices of other

leading companies for the purpose of improving performance. #ompanies also benchmark internally by tracking and comparing

current performance with past performance.

Best #ractice $tate%of%industry performance or application.

Bi"" o$ Lading A transportation document that is the contract of carriage containing

the terms and conditions between the shipper and carrier.

Break-B!"k The separation of a single consolidated bulk load into smaller

individual shipments for delivery to the ultimate consignees.




Carrier A firm which transports goods or people.

Common Carrier A for%hire carrier that holds itself out to transport goods and serve the

general public at reasonable rates and without discrimination.

Consignee The party to whom goods are shipped and delivered. The receiver of a

freight shipment.

Consignor The party who originates a shipment of goods &shipper'. The sender of a freight shipment, usually the seller.

Conso"idation #ombining two or more shipments in order to realize lower

transportation rates. (nbound consolidation from vendors is called make%bulk consolidation) outbound consolidation to customers is called break%bulk

consolidation.




Contin!o!s %ep"enishment #"anning (C%#) A program that triggers the manufacturing and movement of

product through the supply chain when the identical product ispurchased by an end user.

Core Competency *ne of a company+s primary functions which is considered

essential to its success.

Cost o$ Capita" The cost to borrow or invest capital.

Cross-&ocking The direct flow of merchandise from the receiving function to

the shipping function, eliminating any additional steps inbetween, including the need for storage.

Cyc"e Time The amount of time it takes to complete a business process.




&edicated Contract Carriage A third%party service that dedicates equipment &vehicles' and drivers

to a single customer for its exclusive use on a contractual basis.

&emand Chain Another name for the supply chain, with emphasis on customer or

end%user demand pulling materials and product through the chain.

&istri'!tion *utbound logistics, from the end of the production line to the end

user.

&istri'!tion Center A post%production warehouse for finished goods.

&istri'!tion %e!irements #"anning (&%#) A system of determining demands for inventory at distribution centers

and consolidating demand information in reverse as input to theproduction and materials system.




,i"" %ate % The percentage of order items that the picking operationactually fills within a given period of time.

,inished oods Inventory (,I) % "roducts completely

manufactured, packaged, stored, and ready for distribution.

,i.ed Costs % #osts which do not fluctuate with business volume inthe short run.

,B (,ree on Board) % #ontractual terms between a buyer and a

seller which define where title transfer takes place.

,B &estination % Title passes at destination, and seller has totalresponsibility until shipment is delivered.

,B rigin % Title passes at origin, and buyer has total responsibilityover the goods while in shipment.

,oreign Trade /one (,T/) % An area or zone set aside at or near aport or airport, under the control of the -.$. #ustoms $ervice, forholding goods duty%free pending customs clearance.




,!""-Service Leasing % An equipment%leasing arrangement thatincludes a variety of services to support leased equipment &i.e.,motor carrier tractors'.

"o'a"i0ation The process of making something worldwide in scope or

application.

1and"ing Costs The cost involved in moving, transferring, preparing, and

otherwise handling inventory.

1a0ardo!s 2ateria" A substance or material which the epartment of Transportation

has determined to be capable of posing a risk to health, safety,and property when stored or transported in commerce.

1!ndred3eight (c3t) A pricing unit used in transportation &equal to // pounds'.




Inventory Carrying Costs A financial measurement that calculates all the costs associated with holding

goods in storage, usually expressed as a percentage of the inventory value. (tincludes inventory%in%storage, warehousing, obsolescence, deterioration orspoilage, insurance, taxes, depreciation, and handling costs.

Inventory &ep"oyment A technique for strategically positioning inventory to meet customer service

levels while minimizing inventory and storage levels. 0xcess inventory isreplaced with information derived through monitoring supply, demand andinventory at rest as well as in motion.

Inventory 2anagement The process of ensuring the availability of products through inventory

administration.

Inventory T!rns The cost of goods sold divided by the average level of inventory on hand. This

ratio measures how many times a company+s inventory has been sold during aperiod of time. *perationally, inventory turns are measured as total throughputdivided by average level of inventory for a given period.

Inventory +e"ocity The speed with which inventory moves through a defined cycle &i.e., from

receiving to shipping'.




4!st-In-Time (4IT) An inventory control system that controls material flow into assembly

and manufacturing plants by coordinating demand and supply to thepoint where desired materials arrive just in time for use.

5itting 1ight assembly of components or parts into defined units.

Less-Than-Tr!ck"oad (LTL) Carriers Trucking companies that consolidate and transport smaller &less than

truckload' shipments of freight by utilizing a network of terminals and

relay points.

Logistics According to the #ouncil of 1ogistics !anagement &#1!', logistics is

the process of planning, implementing, and controlling the efficient,effective flow and storage of goods, services, and related informationfrom point of origin to point of consumption for the purpose of

conforming to customer requirements.2argina" Cost The cost to produce one additional unit of output. The change in total

variable cost resulting from a one%unit change in output.




2ateria"s 1and"ing The physical handling of products and materials between procurement

and shipping.

2ateria"s 2anagement (nbound logistics from suppliers through the production process. The

movement and management of materials and products fromprocurement through production.

2ateria"s %e!irements #"anning (2%#) A decision%making methodology used to determine the timing and

quantities of materials to purchase.

N626,6C6 (Nationa" 2otor ,reight C"assi$ication) A tariff which contains descriptions and classifications of commodities

and rules for domestic movement by motor carriers in the -.$.

ptimi0ation The process of making something as good or as effective as possible

with given resources and constraints.




rder Cyc"e The time and process involved from the placement of an order to

the receipt of the shipment.

rder #rocessing Activities associated with filling customer orders.

!t'o!nd Conso"idation (Break-B!"k) #onsolidation of a number of small shipments for various

customers into a larger load. $hipped to a location near the

customers) then the small shipments are distributed to thecustomers.

!t'o!nd Logistics The process related to the movement and storage of products

from the end of the production line to the end user.




!tso!rce To utilize a third%party provider to provide services

previously performed in%house.

#ick7#ack "icking of product from inventory and packing into

shipment containers.

#oint o$ Sa"e In$ormation "rice and quantity data from retail locations as sales

transactions occur.

#ostponement The delay of final activities &i.e., assembly, production,packaging, etc.' until the latest possible time.




#repaid A freight term which indicates that charges are to be

paid by the shipper.

#resent +a"!e Today+s value of future cash flows, discounted at an

appropriate rate.

#rocess Improvement esigns or activities which improve quality or reduce

costs, often through the elimination of waste or non%value%added tasks.

#roo$ o$ &e"ivery (#66&6)

(nformation supplied by the carrier containing the nameof the person who signed for the shipment, the time anddate of delivery, and other shipment delivery relatedinformation.




*!ick %esponse A business strategy for reducing inventory in the pipeline and

shortening the cycle time for a product to be made, distributedand sold. "oint of sale information is electronically transmitted

back to the store supplier, who is responsible for adequatesupply at the store.

%eengineering A fundamental rethinking and radical redesign of business

processes to achieve dramatic improvements in performance.

%ep"enishment The process of moving or re%supplying inventory from a

reserve storage location to a primary picking location, or toanother mode of storage in which picking is performed.

%everse Logistics A specialized segment of logistics focusing on the movement

and management of products and resources after the sale andafter delivery to the customer.




Sa$ety Stock The inventory a company holds above normal needs as a

buffer against delays in receipt of supply or changes in

customer demand.

Shipper The party which tenders goods for transportation.

Stock 5eeping Unit (S5U) 2umbering system which makes a product or item

distinguishable from all others.

S!'-ptimi0ation ecisions or activities in a part made at the expense of

the whole.




S!pp"y Chain The physical, financial, and information networks that involve

the movement of materials, funds, and related informationthrough the full logistics process, from the acquisition of raw

materials to delivery of finished products to the end user. Thesupply chain includes all vendors, service providers,customers, and intermediaries.

S!pp"y Chain 2anagement (SC2) The management and control of all materials, funds, and

related information in the logistics process from the acquisitionof raw materials to the delivery of finished products to the enduser.

S!pp"y Wareho!se A warehouse that stores raw materials or components. 3oods

from different suppliers are picked, sorted, staged, orsequenced at the warehouse to assemble plant orders.




Tari$$ A tax assessed by a government on goods entering or leaving a

country. The term is also used in transportation in reference to thefees and rules applied by a carrier for its services.

Third #arty Logistics Transportation, warehousing and other logistics related services

provided by companies employed to assume tasks that werepreviously performed in%house by the client.

Thro!ghp!t

A measure of warehousing output volume &weight, number of units'.Also, the total amount of units received plus the total amount of unitsshipped, divided by two.

Time-&e$inite Services elivery is guaranteed on a specific day or at a certain time of the

day.

T,C Trailer%on%flat car &piggyback'.




Tota" Average Inventory Average normal use stock, plus average lead stock, plus safety stock.

Tota" Cost Ana"ysis

A decision%making approach that considers minimization of total costsand recognizes the interrelationship among system variables such astransportation, warehousing, inventory, and customer service.

Tracking and Tracing !onitoring and recording shipment movements from origin to

destination.

Tra$$ic 2anagement The management and controlling of transportation modes, carriers

and services.

Transit Time

The total time that elapses between a shipment+s pickup and delivery.

Tr!ck"oad Carriers (TL) Trucking companies which move full truckloads of freight directly from

the point of origin to destination.




Unit Cost The cost associated with a single unit of product. The total cost of

producing a product or service divided by the total number of units.

+a"!e Added (ncreased or improved value, worth, functionality or usefulness.

+aria'"e Cost A cost that fluctuates with the volume or activity level of business.

+isi'i"ity The ability to access or view pertinent data or information as it relatesto logistics and the supply chain.

Wareho!sing The storage &holding' of goods.

Work-in-#rocess (WI#) "arts and subassemblies in the process of becoming completed

finished goods.

19939405 code 305 understanding terms associated with logistics

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