Glossary

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Capable-to-Promise (CTP): Refers to a system that enables an enterprise to commit orders against available capacity, as well as inventory. These systems are evolving to include multiple sites, as well as the entire distribution network, and can model any number of constraints, such as capacity, freight or cost.

Computerized Maintenance Management System (CMMS): CMMS is intended to help maintenance workers do their jobs more effectively (for example, by determining which machines require maintenance and which storerooms contain the spare parts they need) and to help management make informed decisions (for example, calculating the cost of machine breakdown repair versus preventive maintenance for each machine, possibly leading to better allocation of resources). CMMS data may also be used to verify regulatory compliance.

Demand-Driven Supply Chain: A concept, which, in part, is the application of lean principles to the broader supply chain, wherein the end-to-end supply chain is driven by end-consumer demand signals.

Deterministic Optimization: Optimization methods, where the value (outputs) of the objective function is assumed to be exact, and the computation is intended to specify the best outcome determined by the values and parameters modeled in the optimization process. For example, in a transportation planning exercise, the system would specify the best route that minimized miles or cost with specific shipments and other variables as given.

Distribution Requirements Planning (DRP): The ability to assess where products and services should be deployed in relation to anticipated demand and to determine the stock-keeping unit/location-level replenishment plan (see Supply Planning).

Enterprise Asset Management (EAM): the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities. "Enterprise" refers to the management of the assets across departments, locations, facilities and, in some cases, business units. By managing assets across the facility, organizations can improve utilization and performance, reduce capital costs, reduce asset-related operating costs, extend asset life and subsequently improve ROA (return on assets).

Flow-Based Supply Chain: Extending the concept of flow-through distribution to allow the crossfunctional synchronization of the extended supply chain, taking into consideration planning and executing around network-wide demands, in-bound supply and network-wide inventory strategies with the goal of managing the supply chain while product is in motion.

Just-in-Time (JIT): The concept of reducing inventories by working closely with suppliers to coordinate delivery of materials just before their use in the manufacturing process. JIT is a production or SCM approach that strives to eliminate sources of waste by synchronizing production demand with material supply so that parts arrive at the right place, at the right time.

Lean Supply Chain: The application of lean manufacturing principles, such as minimizing waste, continuous improvement and becoming demand-driven, at the supply chain level (see Toyota Production System).

Material Requirements Planning (MRP): MRP is a concept of creating material plans and production schedules based on the lead times of a supply chain. However, even if you create an MRP-based plan based on an ideal factory model, problems may still actually occur.

In MRP-based planning, demand plans i.e. sales plans, are created independently from constraints on production and material plans, and production plans are created based on the lead times of the supply chain. If a schedule is created by determining the "product remix", i.e. products to manufacture and their BOM (Bill of Materials) then exploding processes and imposing loads on each operation will result in a schedule that exceeds operation capacity because capacity constraints are not reflected on the schedule. If the operation capacity is sufficient then the MRP-based schedule will be an optimal just-in-time schedule in which the lead time is minimized and throughput is maximized.

Pull-Based Supply Chain: A pull-based system determines the supply, or production, according to actual customer demand, and all activities are based (pulled) solely through the supply chain initiated by the customer demand signal.

Push-Based Supply Chain: A push-based system determines the supply, or production, from a forecast or prediction of future demand and activities. Inventory is moved (pushed) through the supply chain based on plans without a formal mechanism, to take into account realized customer demand.

Real-Time Planning: Using real-time, conditional changes in planning parameters and data to make real-time (now) changes to plans, which contrasts with traditional (batch) planning systems that group and aggregate data to periodically (day, week or month) plan.

Rough Cut Capacity Planning (RCCP): RCCP is a term used in relationship with production planning and controlling an environment. (RCCP) is also an important part of the manufacturing process within a company’s Supply Chain by evaluating capacity with availability within a company's manufacturing environment.

Here is an example of how Supply Chain related activities relate to one another.
Forecasting of demand, Bill of Materials, along with Customer Orders are tied into a Master Production Schedule. A Master Production Schedule (MPS) is what a company uses to determine how many products to make for a given period of time. From the master production schedule is where the Rough Cut Capacity Planning (RCCP) comes into play. Following this is the Material requirements planning, ending with the Capacity Requirements Planning (CRP)

Now a company using this system could be a make to stock (MTS) or a make to order (MTO) company depending on the needs of a customer. There are also many factors that need to be included in an MPS known as Lead time, Safety Stock, Inventory levels, order policies such as lot for lot (LFL) or certain quantified amounts, as well as Carrying charge.

A repeating occurrence of an abundance amount of inventory being created or pulled through a supply chain application has become a problem. This abundance of inventory creates more finished goods, which in turn add higher carrying costs applied to the goods, as opposed to their raw state. To solve this problem, RCCP has been implemented in an MRP system to prevent an over production of materials and determining the appropriate amount of capacity that should be used in the system.

Supply Chain Execution (SCE): A subset of SCM, focused on execution-oriented applications, including warehouse management systems (WMS), TMS, GTM systems and other execution applications, such as real-time decision support systems (for example, dynamic routing and dynamic sourcing systems) and supply chain visibility systems within the enterprise, as well as throughout the extended supply chain. Sometimes, order management systems are also included in SCE, but, generally, Gartner does not include order management in its definition of SCE.

Supply Chain Management (SCM): A business strategy to improve shareholder and customer value by optimizing the flow of products, services and related information from source to customer. SCM encompasses the processes of creating and fulfilling the market's demand for goods and services. It is a set of business processes that encompasses a trading partner community engaged in a common goal of satisfying the end customer. Thus, a supply chain process can stretch from a supplier's supplier to a customer's customer. Functionally, SCM encompasses transactional execution systems (for example, enterprise resource planning, WMS, manufacturing execution systems, TMS and ITS), planning, optimization systems (for example, SCP) and supply chain analytics (for example, data warehousing).

Supply Chain Management for Process Automation: SCM for process automation is a series of programs focused on doing SCM and achieving SCM best practices. The focus is on incremental improvements to the current way of doing SCM; on process efficiency, rather the process effectiveness; on evolutionary cost management and riskadverse programs; and on industry competitive parity, rather than true competitive advantage.

Supply Chain Planning (SCP): A subset of SCM, this is the process of coordinating assets to optimize the delivery of goods, services and information from supplier to customer, balancing supply and demand. An SCP suite is an analytic application that usually sits on top of a transactional system to provide planning, what-if scenario analysis capabilities and real-time demand commitments. Typical modules include strategic network design, capacity planning, demand and event planning, manufacturing planning and scheduling, distribution or supply planning, and deployment planning.

Supply Chain Visibility (SCV), Supply Chain Inventory Visibility (SCIV) or Supply Chain Event Management (SCEM): Applications that enable enterprises to monitor and manage events across the supply chain to plan their activities more effectively and preempt problems. SCV systems enable enterprises to not only track and trace orders, inventory and shipments globally on a line-item level, but also receive alerts when events deviate from expectations.

Source: "Understand Supply Chain Management through 100 words" by Zenjiro Imaoka.
Source: Gartner
Source: Wikipedia