物流国际术语（英文版）
The Language of Logistics
A Supply Chain and Logistics Glossary
Copyright 1997 by Edward H. BlicksteinDuplicating forsharing
with others， by any means， is illegal. Printed in USA
Year 2000 Issue
Purpose
Written and compiled for the benefit of logistics and transportation
professionals ， students of the field ， and for clients of TranSolutions
Consulting. It is hoped that this tool will enable the user to gain a better
understanding of logistics by providing a useful and easy-to-understand
glossary that will be up-dated annually. The author and TranSolutions
Consulting acknowledge important contributions from many of its client's
logistics and transportation personnel as well as information derived from
other expert sources in the compilation of this glossary.
This issue of The Language of Logistics attempts to include the newest
terminology and acronyms utilized in the field of business logistics. Special
attention has been made to compile terms and offer advice in connection with
year 2000 business issues （not the Y2K issue） like e-commerce. However，
I make no claim that this issue is 100% complete as the challenge of compiling，
researching， defining， and occasionally creating meaningful terminology is
never ending. Writers in the field of logistics and supply-chain management，
consulting firms ， industry providers of 3PL services ， transportation
companies， and shippers are constantly contributing to the development of
new terminology through their efforts to improve the effectiveness of
supply-chain management. Consequently， the language of logistics is always
expanding due to the evolving nature of the field.
As you use this tool you will note that there is a new emphasis on
technology， the Internet， and e-commerce. While most everyone is aware
of the current consumer orientation of the Internet and e-commerce， the
greatest growth over the next several years will be in the use of the Internet in
business-to-business （ B2B ） applications not in business to consumer
（B2C）。 These applications， for logistics and supply chain improvement，
will range from procurement， inventory management， distribution， and
transportation to sales （including order entry） and customer service.
As a result， logistics and supply chain professionals will continue to be
constantly challenged by the speed of change and emphasis on cost reduction
in their companies as well as in business in general. It is hoped that this
publication will assist these professionals in their work by being a good
reference source.
Students of supply chain and logistics should continue to find this
publication beneficial as well. In 1999 ， university and college students
worldwide accounted for almost 50% of downloads of this publication. Also，
in future editions I will attempt to do a better job at 'internationalizing“ this
publication.
Last but not least， most of the observations and opinions reflected in
this publication are the result of project work performed for our clients over
the last six years. This includes our partnership work with Moore &
Associates.
Section 1： Supply Chain Management and Logistics
Supply-chain management is one of the hottest topics of discussion today
amongst CEO's and other senior officers of businesses worldwide. Articles
permeate the business press and many publications have designated it as the
last frontier for creating strategic competitive advantage. Why all the
interest？ The answer is that companies worldwide are now cognizant of the
great potential for cost reduction and increased customer service from
successful supply-chain management.
The payoff potential can result from reduction or elimination of
inventories， being able to respond quickly to customized orders， reduction
or elimination of steps in moving goods to market ， enhanced customer
service， upstream vendor relationships， and transportation improvements
including carrier programs.
In this regard， logistics can help improve a company's sales by adding
value in a variety of ways. Specifically， by providing a means for ensuring
that goods are prepared for sale properly and delivered quickly. This could
involve specialized packaging， labeling， kitting， constructing floor ready
pallets ， shipment consolidations ， pooling ， and merge-in-transit
programs ， anything that gets products downstream faster. Excellent
customer service can differentiate a company in the marketplace and help
that company win contracts.
Error free delivery accomplished on a consistent basis is a key
differentiator. In dealings with our clients and 3PLs ， TranSolutions
Consulting finds that most of the time the ability to have almost real-time
visibility to information is an operating advantage or a marketing advantage
depending on whether you are the client or the 3PL. This is important
because supply chains are being shortened and companies are depending on
more frequent shipments from their partner-suppliers so that visibility to
component whereabouts is extremely critical. All of the new logistics
strategies should be removing significant cost from supply chains but as many
companies have found， it is all in the execution.
For 1999， according to The Controller's Report ， total logistics costs
rose % over the previous year when measured as percentage of sales and
% when measured by cost per hundredweight. The cost elements
measured were transportation， warehousing， order entry/customer service，
administrative， and inventory carrying. The average company logistics costs
were % of sales and/or $ cost per hundredweight. Most
professionals believe there is ample room for improvement by optimizing the
supply chain and including the use of new inventory management tools like
VMI ， e-commerce ， and by improved planning between partners and
internal functional groups. Execution is key.
This first section of The Language of Logistics defines terms frequently
used by logistics professionals， writers， and consultants and represents an
umbrella approach to organizing these terms recognizing that the ultimate
goal of logistics professionals is to integrate logistics processes to the overall
supply-chain of a company. The sections following flow in an order related to
what is usually given emphasis first but is not intended to rank areas of
opportunity， as this will vary by company.
ABC： Activity Based Costing is a valuable tool for cost management，
total quality management and business process reengineering. Originally， a
method for product costing ， it is now used for generating accurate cost
information that relates to a variety of decisions. ABC isolates direct costs
and overheads to specific products， customers， and services attributing
activity costs only if the activities are performed on the products or services.
Baldrige Award ： Refers to the Malcolm Baldrige National Quality
Award instituted by the . Congress and presented annually to up to six
. companies for their excellence in improving quality.
Benchmarking ： An approach to improving performance through
comparison of current operations against another operation or mode.
Benchmarking can be applied to any part of the supply chain to evaluate
current operations and set performance goals through the implementation of
“best practices”。
Best Practices： Refers to companies whose operations set the industry
standard for performance in one or more areas.
BPI ： Business Process Improvement. Term used when logistics
managers take a process improvement approach to improve the company's
logistics process performance. A BPI model is constructed for approval with
the objective being successful implementation. Usually， the next involves a
benchmarking effort （case study） in order to apply what has been learned.
Capabilities ： Broader than core competencies ， capabilities
encompasses processes such as order cycle time， customer service， as well
as overall business behavior and culture. Refer to “core competencies ， ”
“demand-oriented capabilities，” and “supply-oriented capabilities” in this
publication.
Category Management ： The management of individual product
categories as strategic business units. Emphasizes profits and sales for entire
product groups rather than individual brands.
C-commerce： “Collaborative commerce”。 This involves combining
trading partners to reduce cost through the sharing of logistics resources.
CDL： “Consumer Direct Logistics”。 This consists of processing and
fulfillment of consumer orders from a retail store or dedicated distribution
center. and Peapod are two examples of companies perfecting
this channel.
Channel： Business components of a company's supply chain such as
manufacturing support， manufacturing， distribution， and retailing or
direct sales. Product moves from one channel member ， with value being
added， to the next channel member until product reaches the customer. A
channel may also be a geographic area or zone wherein volumes are shipped.
Collaborative Supply Network ： A network that manages the
convergence of execution networks and strategic planning. Core Competency：
Attributes， processes， knowledge， abilities and skills that allow a firm to
achieve competitive advantage. Often used to mean things a company does
best. See “capabilities”。
CCM ： Abbreviation for “Commerce Chain Management” 。 CCM
consists of systems， commerce networks， procurement， and in-house or
3PL logistics.
CPFR： Abbreviation for “Means Collaborative Planning Forecasting
and Replenishment” 。 Purpose is to create efficient flow of information
amongst supply chain partners （. vendors， customers）。
CR： “Collaborative Replenishment”。 When large retailers share all
their needs on a 52-week， individual store basis with their suppliers.
CRP： “Continuous Replenishment Planning/Program”。 This is an
innovative logistics method that integrates the logistics operations of the
supplier and the customer into one coordinated logistics effort. Inventories
are tracked electronically and a replenishment planning/ordering system
often linked to POS manages a “pull” type method of inventory management
rather then a “push” type.
CSC： “Continuous Supply Chain”。 This is an innovative logistics
product involving the integration of a company's logistics operations with
suppliers into a coordinated “pull” effort. The most important characteristics
of this undertaking are execution and dependability with repeated success
leading to competitive advantage.
CSR ： “Customer Service Representative” 。 Individuals who take
customers orders and requests for information via telephone ， fax ， or
through Internet web sites. They are responsible for accurately entering
order information and for making sure their part of this process operates
satisfactorily for the customer.
De-engineering ： The process of simplifying previously redesigned
business processes that have become ineffective and/or too complicated.
Demand-Oriented Capabilities： Customer-oriented logistics approach
emphasizing demands of the external customer. Capabilities encompass
time-advantages， responsiveness to target markets， and customer service.
Direct Product Profitability Analysis： DPP is an approach to analyzing
profit for a bundle of products. It involves determining the marginal cost for
each product and determining which ones are profitable and which ones are
marginal （requiring too much overhead costs）。
ECR： Efficient consumer response； involves examining supply chain
and trade practices to identify opportunities for changes in practices or
technology to make the supply chain more competitive. Term originates in the
grocery industry where it refers to a strategy in which distributors and
suppliers work cooperatively to bring better value to customers by jointly
focusing on efficiency in the total grocery supply chain. Accurate information
and high-quality product flows are aided by a paperless system between the
manufacturing line and point of sale. Objective is to reduce inventories and
cost in the supply chain by matching the flow of product to consumer
demand. The most advanced ECR strategy across the total supply chain.
Efulfillment Center （ eFC ） ： A warehouse with more than a
traditional WMS. The e-warehouse receives goods， operates as a crossdock，
and orders are picked， value-added processing performed； orders packed，
and merge-in-transit utilized. Other key attributes include a “returns”
program and a quality assurance program. All of this should be supported by
dynamic customer service.
Efulfillment： The process that supports a website order from click to
customer.
E-Procurement： There are three ways to build this solution： （1） use
of suppliers Websites whereby purchaser connects directly with individual
supplier sites ， （ 2 ） use of procurement software and the inclusion of
existing s well as new vendors， and （3） vertical trading network that
operates between purchaser and suppliers.
Flow Modeling ： This is a tool to assist logistics managers in the
management of cycle time at the various levels of the company across all
components in the supply chain. This tool identifies both the time and cost
associated with a process. Components include cumulative lead-time analysis，
cumulative value analysis， schedules， and a structure built that reflects the
relationships of the components.
Gain Sharing： During the life of an outsourced agreement， a third
party provider shares in the savings generated through continuous
improvement.
Gantt Chart： A project tracking tool used to identify all activities that
need to be in progress during a period （weekly， monthly） in order to
assure successful completion of a project.
GPO ： Abbreviation for Group Purchasing Organization. Hospital
groups purchase through GPOs to maximize pricing levels and distribution
services.
Green Logistics： A system designed for produce （fruits and vegetables）
wherein the produce arrives store-ready at a distribution center packed in
re-usable trays ； eliminating use of corrugated packaging and quality is
improved with less damage. Trays are bar coded.
Integrated ： A methodology employed to more efficiently manage
inventory mechanisms. Usually involves the inventory pulls from
manufacturing sites and warehouses ， on an integrated basis through
distribution to the customer.
Integrators： Logistics service providers that will manage most or all
aspects of the supply chain.
Integrated logistics： Involves viewing the entire process or movement as
a system， as opposed to many disparate and individual activities.
Insourcing： Refers to programs that bring logistics suppliers into the
customer location， including manager level supplier professionals and the
supplier's computer systems. Insourcing
Just In Time （JIT）： A distribution and materials handling system，
which keeps inventory levels to ， a minimum by ordering and delivering
supplies only as needed.
Kanban： A method of re-ordering items， which require instantaneous
replacement. A Kanban card has a standardized quantity； when the card is
used， the item is shipped immediately in the quantity specified on the card.
Kitting： Simplifying receipt of inbound materials prior to delivery and
organizing them into user packages for the manufacturing process. See
Warehousing Section.
KRA： Key Result Areas. Term used to describe the areas of a business
enterprise that are key to process improvement.
KPI ： Key Performance Indicators ； also known as KPF or Key
Performance Factor. Examples are manufacturing cost per unit， cost per
unit for transportation， on time delivery， on time pickup， and billing
errors.
Lifestyle Collection Point ： A B2C customer order-delivery operation
whereby all orders are delivered to a common site at the same time. An
example would be grocery orders placed through a website by a large group
of customers working in the same company or building in accordance with a
window governing order time and a delivery window for 5PM same day in
the parking lot.
Logistics： The integrated system of planning， managing， allocating，
and controlling financial ， physical and human resources committed to
physical distribution ， manufacturing support and purchasing operations.
Logistics is the glue that binds the business functions and a company's
suppliers into a unified supply chain.
Council of Logistics Management definition： “Logistics is that part of
the supply chain process that plans， implements， and controls the efficient，
effective flow and storage of goods， services， and related information from
the point of origin to the point of consumption in order to meet customers'
requirements.”
Logistics Management & Distribution Report definition ： “Any
discussion of supply chain management must include logistics-essentially the
management of goods and materials in motion or at rest-as a critical
component. For all of the advances in technology that are crucial to supply
chain management， the central reality is that the chain is not complete until
the physical goods move through the system.”
Logistics Provider ： A third party company with technical and
specialized knowledge that manages tactically and operationally elements of
logistics services， such as transportation， freight management， carrier
management， warehousing and distribution， as a single service offering or
in combination as part of a comprehensive service package meeting the needs
of the customer. Logistics providers are often referred to as 3PLS.
Management Reporting or Metrics： Carrier performance information
captured periodically by systems and/or manual methods to measure quality.
Merge-in-Transit： A strategy used by certain manufacturers involving
the shipment of products from different production points or warehouses to a
consolidation point where the components are combined for final assembly.
Personal computer， printer， and other related equipment manufacturers
frequently use this strategy. Double handling and the buildup of pipeline
inventory costs are eliminated. Customers also get faster delivery.
Multi-Vendor Consolidation： a method of reducing the cost of shipping
LTL quantities by consolidating shipments from different vendors to
make-up TL shipments. LTL can cost up to four times the cost of TL. Besides
cost ， other advantages are reduced inventory ， reduced order cycle ，
reduced costs at the DC ， reduced damage ， and improved in-stock
positions.
MRP： Materials requirement planning. Production operation planning
system that provides scheduling， inventory management， and materials
billing capabilities. MRPII refers to a more recent， expanded application
that also considers issues such as purchasing and forecasting.
Open To Buy： Control on or budget for the purchase of certain items；
as purchases are made， the dollars not spent are “the open to buy” when
compared to the dollars allotted to the total buy of an item.
Optimization： The actions taken through use of certain skills and tools
to make a company's 1） order entry to delivery cycle； 2） inbound raw
materials routing； 3） outbound routing； 4） warehouse sites； and in
general ， make any aspect of a company's total logistics function more
effective from a cost and customer service perspective eliminating waste.
POP ： In retail ， merchandising companies arrange for the
manufacture and installation （ usually through 3rd party installers ） of
“point-of-purchase” materials ranging from free standing displays ， wall
mounted displays， hanging displays， racks for collateral material， racks
containing goods for placement in mass merchants and in dealer type stores.
Postponement ： A strategy whereby a warehouse undertakes final
assembly of a product adding certain features after orders customer orders
are received. An example would be a women's clothing manufacturer that
inventories close to a large market and when orders are received the
warehouse sews in the appropriate label.
Purchased Transportation： Term used to describe service offering by
third party logistics providers. Involves the program of buying freight
capacity at volume levels for many shippers at substantial discounts. Includes
the administration and coordination of all activities associated with a freight
management system.
Quality： “Meeting the requirements.” To have quality， three things
must happen. First， the customer must understand and accurately define
the requirements. Second ， the customer must clearly communicate the
requirements to the supplier. Third ， the supplier must meet the
requirements. QOS： Measurements of “quality of service” as used in weekly，
monthly reports.
QR： “Quick response”； strategy in which retailers and suppliers work
cooperatively to respond to consumer needs by sharing information on point
of sales （POS） activity to forecast demand for replenishable items and to
monitor trends to detect new opportunities.
QVR： Stands for “quality， value， and responsiveness”； used in
re-engineering efforts by a company to make itself the ideal business partner
for its customers.
Re-engineering ： The fundamental rethinking and redesign of a
company's business processes to achieve dramatic improvements in critical
measures of performance， such as cost， quality， service and speed.
Reverse Logistics ： Returnables that are handled by transportation
provider or shipper and are re-used （after refurbishment if necessary），
reclaimed/recycled， resold or disposed of by shipper or shipper's suppliers.
SCE ： Supply Chain Execution. Definition refers to integrating the
supply chain. SCE is the software that picks up where an advance planning
or enterprise system ends. The objective is to provide visible inventory.
SCR： Synchronized consumer response； an initiative of manufacturers
and distributors of fast-moving consumer goods based on the consumer pull
model （replenishment is pull driven back through the supply chain）。 SCR
emphasizes flexible software solutions that enable companies to respond to
their customers' requirements.
Seamless Corporation： Synonymous with extended enterprise or supply
chain enterprise. Redefines organizational structure to include organizations
with which it interacts. Corporation forms long term partnerships with
suppliers， buyers， vendors， customers， and other external companies
that constitute the supply chain. Managing the supply chain is the goal of the
seamless corporation. Sequencing The action of providing production-ready
materials for the assembly line so that the right part arrives in the correct
order at the right time.
SFLM ： Synchronous Flow Leadership Manufacturing. This is an
on-going ， continuous improvement process that has been developed to
synchronize and manage material flow and to lead this transformation in a
manufacturing environment to increase plant effectiveness. See Synchronous
Manufacturing in this Section.
Single Customer Focus ： Logistics provider's operation is geared to
handle all of the needs of a particular customer with the goal of ensuring
error-free service performance.
SOE： “Statement of Expectations”； first step used in formulating an
implementation plan for a logistics initiative to be accomplished internally by
a corporation or by a third party provider with the purpose of defining the
expectations of the parties and corresponding accountabilities.
Sourcing ： The skill of effectively identifying and procuring raw
materials for productive manufacturing. This includes component parts and
supplies. Streamlining this process and managing raw material inventories is
part of effective sourcing. The process may include inspections and
measurements against quality standards.
Statistical Process Control ： （ SPC ）。 Engineering approaches to
developing best methods to increase the efficiency of an operation， improve
quality， and reduce costs.
Sub-Assembly ： Involves pre-assembling of parts and components to
keep low work-in-process inventories. Reduces number of assembly processes
manufacturing or operations has to manage enabling a company to reduce or
eliminate on-site activities. Allows a company to focus on main assembly
functions. See Kitting in Warehousing Section.
Supply Chain： The components of business operations such as vendors，
procurement， operations or manufacturing， warehousing and distribution，
customers， and third party suppliers that service or manage segments of the
supply chain that interact with the products from the raw material stage to
delivery to the customer.
Supply Chain Management （SCM）： Encompasses all of the activities
associated with moving goods from raw materials stage through to the end
user. This includes systems management ， sourcing and procurement ，
production scheduling ， order processing ， inventory management ，
transportation ， warehousing ， and customer service. Successful supply
chain management， then， coordinates and integrates these activities for
sustainable competitive advantage.
Supply Chain Network ： The infrastructure required to support
e-commerce with the Internet functioning as an enabler to the physical
distribution of goods. Infrastructure will consist of suppliers ，
manufacturers， warehouses， transportation partners， and the software
that ties it all together for the e-company for the purpose of providing
flawless execution of orders.
Supply Channel： Members of the supply chain that hold， control， or
effect inventory of raw materials， parts or goods.
Supply-Oriented Capabilities ： Related to a firm's operational
capabilities ， supply-oriented capabilities emphasize the internal customers
of a company such as production and marketing departments. Focused on
distribution networks to gain competitive advantage ， supply-oriented
logistics capabilities include widespread product availability ， selective
distribution coverage， and low total distribution cost.
SWOT ： Managerial analysis of a company's specific strengths ，
weaknesses， opportunities and threats.
Synchronous manufacturing ： Advanced control system that aims to
increase throughput while minimizing inventory investment by
manufacturing the right components timely and in the right order. Combines
JIT with flexible manufacturing， also known as “flex-flow”。
TCP： Abbreviation for “total cost of production” in manufacturing.
Unsalables ： Product returns resulting from goods not sold by a
customer （. grocery store， retail chain， department store） or goods
damaged enroute to and/or at the distribution center. Leading causes of
unsalables are management indifference， out-of-code product， inefficient
handling practices， seasonal product returns， and pallet overhang. When
companies begin to deal with unsalables a team manager is usually appointed
to recommend policies ， review packaging requirements ， consider a
reclamation approach， and set up benchmarks to track progress in reducing
unsalables to， for example， less than 1% of sales.
Value-chain： The strategy to build collaborative relationships and select
trading partners from the outset of raw materials procurement to the
delivery of the finished product to the ultimate customer. Involves linking the
customer's customer and the supplier's supplier through electronic b2b.
Visioneering： The ability to look into the future and anticipate customer
responses ， business processes ， knowledge capital of a company ， and
determine windows of opportunity.
VOC： Voice of the customer； term used by companies when describing
an element of their customer service/quality initiatives. 3PLS： See Logistics
Provider in this Section.
Section 2： Distribution and Warehousing
There are some experts in this field that predict the demise of
warehouses because inventory stocking will no longer be needed. They claim
that ECR and JIT in combination with POS data will fully synchronize the
company's demand chain. Most other experts disagree and believe that
integrated logistics will spur DCs to modify their roles， which will be based
on speeding the flow of product and providing value-added services.
Examples of the changing role of warehouses can be seen in consolidations of
shipments， crossdocking， and value-added processes such as packaging，
sub-assembly， kitting， labeling， and final custom work such as providing
color and style to products based on customer orders. Certainly ，
eCommerce has led to warehouse expansion in the USA and Europe and
refocus by existing warehousing companies.
Basically， warehouses hold inventory and inventory itself should not be
viewed as a total liability because only bad inventory is a liability （bad is
defined as obsolete or excess）。 Therefore， the right inventory available in
the right location at the time needed allows a company to achieve customer
satisfaction. This remains the underlying role of the warehouse regardless of
technology advances. As a general benchmark ， warehousing averages
approximately % of sales for a manufacturing company.
Bar Code ： Information embedded into an identification pattern of
parallel bars that can be read by an electronic scanner （ hand held or
stationary scanner）。
Bar Code Scanner： A device that reads bar codes with a built-in laser
and transmits information to a computer for inventory management and sales
purposes.
Batch picking： A process whereby the goods are selected in quantities to
meet the demand for more than one order. Goods are first picked by SKU，
and later sorted by order， address， and other criteria.
Batch ： A group of orders in the same wave ， picked in one pass
through the warehouse.
Bin： A bar-coded location in the warehouse where product is stored.
Bill of Lading： A document used to record the receipt of goods.
Carrier ： A trucking company usually unrelated to Shipper ， that
transports a shipment.
Carton： A box into which an order is packed.
Compliance Label： A type of shipping label for cartons that conforms to
major retailers' standards for format ， size ， and bar code size
（length/type）。
Consignment： Occurs in warehousing where consignor （property or
merchandise owner） appoints consignee as a merchandise depository （the
warehouse operator ） and the consignee holds and cares for property ；
however ， title to the merchandise remains in the name of the consignor.
Property remains under and subject to the control of the consignor.
Cross-dock： A temporary storage facility， not necessarily a warehouse，
which is situated close to the marketplace that acts as a transfer point.
Palletized cargo is supplied to the cross-dock and then transferred， using
forklifts ， off the dock to other trucks or tractor-trailers ， which make
deliveries into the geographic area served. There is no storage of product. The
positioning of the cross-dock enables the vehicles domiciled there to make
multiple turns each day which could not be accomplished by straight through
deliveries from a manufacturing plant.
Consumer direct program ： Consumer home shopping for groceries
bypassing the supermarket. Orders are placed via websites on the Internet
（ Peapod ， Inc. ）， fax ， or telephone. Chains and superstores like
Wal-Mart and Kroger offer this program in certain geographic areas.
Cycle Counts： A way of physically counting and verifying inventory
levels.
Data Collection Terminal： A stationary terminal connected to a host
computer as part of a data collection system.
Data Collection Terminal-Portable： A handheld or forklift mounted
terminal that collects and processes data from bar code readers， key entry，
and the like.
EAN ： European Article Number. This is the international product
marking bar code standard.
Fill Rate： Customer service ratio. A set of performance measures of the
volume of orders shipped on time and complete.
Flow-Thru Warehousing ： The movement of product from different
methods of inbound transport to the manufacturing process using a metered
JIT delivery system. Reduces the need for on-site warehousing at the
manufacturing facility and frees up space for production or operations.
Kitting： The process by which individual items are grouped together to
create a single item. An example would be sub-assembly of tires onto wheels
in an off-site warehouse in the automotive manufacturing industry with
re-shipment to the assembly line on a JIT basis.
Mixed case： A case or carton that is filled with multiple SKUs.
Pallet Jack： A device used by a dockworker or driver to lift and move
pallets of freight. The operator uses it from a standing position as opposed to
a sitting position on a forklift truck. A pallet jack may be manual or
electrically powered.
Put-to-light： A warehousing picking system where selections are made
with a hand-held transmitter which reads customer orders ， assists with
breaking packs （making selections from split cases ）， reads labels to get
SKUs and places items at assigned door locations for loading on trailers.
Put-to-light，
Returnables： Re-usable containers， pallets， bins， rolls， and/or
parts， or other customer goods that need to be shipped back or otherwise
returned to shipper （usually at point of origin）。
SKU： Abbreviation for “stock keeping units”。 This is a method for
tracking inventory and usually involves bar coding methodology for
computerized automatic stock reordering or replenishment.
SLC： Shippers Load and Count. This is a notation made on bills of
lading when that carrier has not been allowed to observe or cannot count the
freight being loaded on its trailer， this limits the liability of the carrier from
shortage claims.
Slipsheet： A flat， plastic or cardboard replacement for wooden pallets
used for storage and shipment purposes.
VAP： Value-added Processing. Refers to tasks normally performed by
manufacturing but now being moved into distribution as final processing
decisions are postponed until order fulfillment. These tasks include packaging，
labeling， and mass customization of configurations （.， size， style，
and colors）。
VMI ： Vendor Managed Inventory. VMI is a demand inventory
replenishment solution that monitors sales data and inventory levels to
maintain optimum inventory levels. The data allows companies to forecast
and plan better and thus react quickly to market changes and customer needs
resulting in lower inventory levels. Typically， information is shared so both
suppliers and distributors and/or customers can improve demand forecasting，
marketing or merchandising activities ， replenishment planning ， and
transportation load planning. Often ， a manufacturer holds inventory sold
or to be sold to a customer in a specific location （s ） based on customer
order levels and releases shipments， as customer requires the goods. Saves
customers money by utilizing manufacturers warehouse space ， handling
labor， and often results in the customer receiving better payment terms.
Wave and Batch Picking： Time scheduling method for picking by SKUs.
Wave picking is releasing a defined amount of work to pickers for a set time.
Batch picking involves picking a particular item for many orders
simultaneously and then sorting the items later by order.
WMS： Warehouse Management Systems. A system designed to help the
user in the warehouse to fulfill the needs of various corporate systems， such
as order entry， materials requirements planning， and distribution， with
speed and efficiency. A WMS works in real time ， eliminating batch
processing and the status delays usually associated with typical inventory
systems. WMS transforms information from the corporate systems into an
optimized plan for the warehouse. In the paperless warehouse， WMS issues
instructions to materials handlers for SKU selection through their radio
frequency terminals.
SYSTEMS GLOSSARY——TRADITIONAL
Receiving Activities
ASN/EDI： Advance Shipping Notification （ from or to suppliers，
carriers， and consignees） sent in advance of a shipment listing contents
and shipping information transmitted via Electronic Data Interchange.
Conventional： Manual or lift truck handling of receipts with key entry
or bar code scanner input of relevant data.
Automatic： Receipts moved via conveyor/AGVS past automatic scanner.
Purchase order： Receipts checked against user's purchase order.
Lot/date codes ： Item lot numbers recorded as part of the receiving
process and normally tracked throughout processing.
Serial number： Serial numbers recorded as part of the receiving process
and normally tracked throughout processing. Vendor： Files maintained by
and receipts logged by vendor.
QC sampling ： Samples pulled from incoming shipments for QC
（ Quality Control ） with balance of receipt quarantined until samples
released.
Receipts tagging： Receipts tagged with unique number and/or bar code
to facilitate storage， picking， and tracking.
Crossdocking ： Backordered or hot items spotted at receiving and
moved directly to shipping. Returns： System manages returns processing
and disposition.
Storage/Putaway Conventional： Material moved by manually or by lift
truck， pallet truck， etc.
Mechanized ： Material moved by conveyor/AGVS ， or automated
storage system （AS/RS， mini-load， carousel， etc.）
Operator directed ： Operator selects storage location and manually
enters into warehouse management system.
System directed： System selects storage location and produces putaway
ticket or transmits to operator terminal. Dedicated storage： Zones and/or
slots dedicated to particular SKUs or products.
Random storage： Zones ABC/or slots not assigned. Forward pick：
System replenishes forward pick locations from receiving and reserve
storage.
Verification ： System requires operator to verify bar-coded putaway
location using bar code reader and/or radio frequency data terminal.
Quarantine： System can inhibit puts to and picks from any location.
Inventory Control
Units of measure ： System accommodates multiple UOMs and
conversions.
Shelf life： System monitors product expiration dates.
QC Hold： System quarantines material until quality control release.
Bulk stores： System maintains bulk/non-conveyable inventories.
Lot tracking： Lot integrity maintained and managed by system. Note
that date codes and serial numbers can also be tracked.
Consolidation： System utility for consolidating partial pallets of same
SKU.
Relocation： Utility that permits operator to execute and record material
moves from one storage location to another.
Cycle counting： System supports anomaly-driven and routine inventory
checking.
Order Processing Conventional： Orders processed by host computer
and downloaded to WMS for filling.
Local terminal： Order entry via warehouse terminal.
Emergency： Override utility that permits insertion of emergency order
ahead of scheduled picks.
Back orders： System handles backorders.
Section 3： Transportation
The number one priority of today's transportation managers is ensuring
that the right product arrives on time， at the correct location， without
damage. More than one discipline contributes to the success of this action.
Obviously， effective and efficient transportation is essential. However， this
cannot be accomplished without appropriate Information Technology
support on the part of the carrier and usually the shipper. IT is covered
under Section 5 of this book.
Transportation consists of several forms or modes and effective as well
as efficient mode selection is key to a successful logistics function. Modes
under the strategic and usually tactical control of the transportation and/or
logistics manager include air ， water or ocean ， truck ， and rail. This
Section deals with the various modes.
As a general benchmark， transportation averages approximately %
of sales for a manufacturing company.
ASC： Advance Shipping Confirmation； objective is to accomplish this
by EDI.
ASN： Advance Shipping Notification； objective is to accomplish this by
EDI.
Assessorial： Additional charges or rates， not included in the base rate
for carrier， contract carrier， and dedicated transportation services， such
as stop pay， loading/unloading， additional drivers and equipment， and
detention （waiting）。 Sometimes referred to as ancillary charges.
Axle Load： The maximum weight allowed on each axle of a truck，
tractor， and trailer. Varies by country. In the .， generally the limit is
12，000 pounds on the steering axle and 34，000 pounds on a tandem axle for
highway transport.
Backhaul： A load of freight being returned close to the vehicles original
point of origin or domicile. In a private fleet operation or dedicated carriage
arrangement， this freight may consist of raw materials for the company's
manufacturing plants or other freight owned by third parties that was
secured through solicitation or brokers. The objective behind securing
backhauls is to maximize vehicle utilization， which usually results in cost
savings for the entire trip.
Bobtailing： Driving a tractor without a trailer. In some states a bobtail
refers to a straight truck. See “deadheading”。
Breakbulk： Consolidation and distribution center； a facility which
unloads and consolidates shipments received from other terminals or
manufacturing plants， satellites as well as from other breakbulks.
Butthead ： Two or more tractor/trailer units meet （ from different
origins） at a designated location to exchange loads and then return to their
respective points of origin. Sometimes referred to as relay operations.
Objective is to eliminate layovers of drivers and equipment.
Cabotage ： USA Customs Service has altered rules that prohibited
Canadian trucks from carrying freight back to Canada to allow Canadian
trucks to carry freight if the trucks are returning to Canada or going to pick
up cargo for export to Canada. Also ， new guidelines allow freight that
originates in Canada to be transported anywhere in the USA， regardless of
what tractor hauls it.
Closed Loop System ： A shipping pattern that brings all trucks or
tractors back to their domicile on a regular basis.
Co-mingling： Mixing of compatible multi customer freight on the same
trailer that has common origin/destination characteristics.
Consolidation： Consolidation of small shipments， under 10，000 lbs.，
into truckload shipments. Also， consolidation of small package shipments
into loads which can be dropped into hubs. Deadheading ： Term used to
describe driving a tractor without being attached to a trailer.
Dedicated Contract Carriage： Providing specific equipment， drivers，
and other personnel， fleet management （usually including dispatchers）
and route analysis services on a contractual basis for a specific shipper either
as a stand-alone operation or as part of an integrated package of logistics
services.
Delivery Windows： The time in which each customer will accept freight
deliveries.
See “Windows.” Demurrage： Charges resulting from the detention of a
cargo ship or ocean shipping container beyond scheduled departure time in
the case of a ship or beyond the required return time of the container back to
the pier/container depot.
Detention ： Refers to drivers being detained at point of delivery by
receiver or consignee. Most drivers are paid after a certain time period ，
such as one （1） or two （2） hours， after arrival at the appointment time
at an hourly rate for detention per stop. See “Assessorial”。
Diversion： The stopping of a shipment at a point intermediate to the
origin and planned destination and diverting the shipment to an unplanned
destination at a different location.
DOT： Department of Transportation； federal and state DOT agencies
regulate transportation ， safety ， maintenance activities and other
improvements on state and federal facilities.
Drop & Hook： The act of delivering one trailer and picking up another
trailer at the same location， without driver unloading.
Drug Testing： All CDL qualified drivers and employees that perform
safety sensitive functions as described in the Federal Motor Carrier Safety
Regulations will be subject to Controlled Substance and Alcohol testing. The
types of tests required are pre-employment ， post-accident ， random ，
reasonable suspicion， return to duty and follow-up. The substances tested
for are marijuana， cocaine， amphetamines， opiates， phencyclidine
（PCP） and alcohol. Those employees that test positive will be referred to a
Substance Abuse Professional （SAP） for assistance. See CDL in Section 4.
Dynamic Routing ： Daily changes to meet demands of customers by
maximizing loaded miles.
Expediting： A shipment that has to be delivered earlier than expected
and/or a critical shipment ， . replacement part for down machinery ，
medical supplies， by utilizing a guaranteed service contracted to deliver the
shipment via truck or air.
FAK： Freight All Kinds； refers to a LTL freight rate classification.
Fleet Sizing ： The process by which you determine a particular
customer's equipment needs by using historical data and computer generated
analysis.
Freight Payment ： The process of paying freight invoices by using a
system that match-pays or a manual audit system ， both of which checks
rates and other cost factors. The data is transferred to an accounting system
that records coding and produces checks.
Fuel Adjustments： Adjustments made weekly or monthly to dedicated
transportation customers for the actual cost of fuel used. Adjustments are
made by using a “Fuel Peg” as a base cost in contract and by using the diesel
fuel index as published in Transport Topics， or the actual cost increase over
the base.
Fuel surcharge： Charges made to shippers to recoup fuel cost increases
in periods of fuel price volatility.
Fuel Peg： This refers to the initial price of fuel used for a dedicated
transportation customer in pricing. Adjustments are made up or down when
pegged price is compared to the actual price of fuel paid for a particular
period. A “zero” fuel peg is defined as a pass through of fuel cost to the
customer. Carriers use a fuel surcharge mechanism.
General Freight ： All commodities except household goods ，
refrigerated goods， bulk commodities or commodities requiring specialized
equipment （. heavy machinery trailers or armored trucks）。
GRI： Stands for general rate increases. In the USA， regional rate
bureaus prepare proposals annually for GRIs that begins a process for
member truck carriers. Usually ， the GRIs are effective October 1 of each
year.
Headload： A shipment placed in the nose of a trailer that is destined to a
different delivery point then the remainder of the load. A headload is
common in a multiple hub and spoke environment.
IFF： International Freight Forwarders； provides service of securing
vessel space ， payment of freight charges ， shipment consolidation ，
document preparation， and a variety of other services. Many IFFs use EDI
systems.
Imbalance： Uneven freight flow into or out of a particular geographic
area resulting in either a surplus or shortage of truck equipment.
IMC： Intermodal marketing company. Intermodal： This is defined as
the movement of freight containers using a combination of transport modes，
. truck， rails， ocean and air transportation.
Intermodal Transportation Glossary
ALM： Air Landbridge. Similar to MLB， except that air is used to ship
from West Coast . to an Eastern . city. All-In： All-inclusive. This is
defined as the total price of moving a container from origin to destination，
inclusive of assessorial charges.
Cargo Tonnage： The weight ton in the . is the short ton or 2，000
pounds. In British countries it is the English long ton or gross ton at 2，240
pounds. In France and other countries using the metric system， the weight
ton is 2， pounds. The measurement ton is 40 cubic feet.
Cabotage： Water transportation term applicable to shipments between
ports of a nation. Commonly refers to coast-wide navigation or trade.
Cabotage laws require domestic vessels to provide domestic interport service.
Demurrage Free Time： The amount of time in the tariff， usually in
days ， that shipper or consignee may allow the carrier's equipment to
remain at the rail ramp without incurring a penalty charge.
Intermodal Transport ： Moving ocean freight containers by various
transportation modes. The fact that the containers are of standardized size
and have common handling characteristics enables them to be transferred
from truck to railroad to air carrier to ocean carrier.
Landbridge： Movement of cargo by water from one country through
the port of another country， thence， using rail or truck， to an inland
point in that country or to a third country.
Landed Cost： The total cost of goods to a buyer， including the cost of
all transportation.
LCL： Less than container load. Defined as the quantity of freight less
than that required for the application of a container load rate. LD： Lower
deck. A type of air container used for cargo stowed in lower deck
compartments of passenger or freighter airplanes. Lloyds' Registry ： An
organization maintained for the surveying and classing of ships so that
insurance underwriters and others may know the quality and condition of the
vessels offered for insurance or employment.
MLB ： Mini Land Bridge. An intermodal system for transporting
containers by ocean and then by rail or truck to a port previously served as
an all-water move （.， Hong Kong to New York over San Pedro）。
Mini-Bridge： Cargo moving on one bill of lading from a foreign port
through two . ports and to an inland destination.
Minimum Bill of Lading： Ocean bills of lading are known as minimum
because they contain a clause that specifies the least charge that the carrier
will make for issuing a lading. The charge may be a definite sum or the
current charge per ton for any specified quantity.
Mixed Container Load： A container load of different articles in a single
consignment. A specific shipping rate will be applied to such a load.
NVOCC： Non-vessel Operating Common Carrier. Defined as a cargo
consolidator of small shipments in the ocean trade. This carrier solicits
business and arranges for containerization functions at the port. For example，
an NVOCC will buy space from APL and sub-sell it to small shippers.
Unit Train： A train of a specified number of railcars， perhaps 100，
which remain as a unit for a designated destination or until a change in
routing is made. Irregular
Routes： Routes that have no set pattern. These routes may change from
time to time without notice； customer requirements dictate scheduling and
therefore route change constantly.
Lane Balancing： The process of matching loads to empty lanes of travel
for a particular customer. This is similar to backhauling.
Lane/Mode Optimization ： A transportation redesign that selects
optimal modes ， lanes ， and amounts of transportation to maximize
customer benefit in a given situation.
Layover ： Refers to a driver waiting overnight or over an extended
period of time for a delivery or pickup. Driver may also have to layover
because the driver is out of service hours as dictated by DOT regulations.
LTP： Lead Transportation Provider. Also referred to as Lead Logistics
Provider depending on scope. Involves a third party provider that manages
all or most of a company's freight movements including carriers and private
fleets， utilizes all modes， and optimizes， consolidates and deploys other
methods to reduce cost and improve customer service.
Less-than-truckload （LTL）： Shipments weighing less than 10，000
pounds each. Many LTL shipments weigh less than 500 pounds； most are
below 1 ， 000 pounds. Three quarters or more of business is short-haul ，
either overnight or second AM deliveries —— maximum 2 to 3 days.
Line-Haul： Transportation from one city to another as distinguished
from a local cartage company.
Live Delivery： A delivery made when customer's employee's are present
while freight is being unloaded （opposite of turnkey ）。 Driver waits for
unloading to be completed and may or may not assist.
Live Load： Loading of a trailer while the driver waits for the loading to
be completed.
Load Tendering/Acceptance： Information relative to carrier selection
can be transmitted to the origin location for the creation of shipping
documents. At this point ， the appropriate carrier segregates shipments.
Carriers are then notified to make pick-ups via EDI， telephone， fax， or
Internet. Carriers are asked to acknowledge receipt of the tender and confirm
acceptance.
Merge-in-transit ： The activity of moving goods or products
manufactured from multiple plant locations to a single location nearby to the
final delivery site for final assembly. The goods are not put in storage but
consolidated into a single shipment to customer. Often， this is utilized in JIT
environments.
MPG： Miles Per Gallon. Defined as the MPG assumption that dedicated
contract carriage providers use in rating when fuel is included in pricing.
Sometimes a MPG “peg” is used for billing purposes. In other cases fuel is left
out of pricing and billed on a consumption basis at actual cost per gallon plus
an administrative charge to cover purchasing and EPA issues. Shippers in
these cases will need to make an assumption of MPG with the assistance of
the provider to project total costs.
NMFC ： National Motor Freight Classification. Refers to industry
standard codes and transportation management software is designed to use
standard packing codes instead of having to enter specific dimensions of
boxes.
Long haul： Traditionally defined as the movements of freight requiring
three or more days.
O/O： Owner-Operator. Defined usually as an individual who owns （or
is financing their own equipment， sometimes with the assistance of a carrier）
his/her tractor and sometimes trailer （ s ） as well. The O/O provides
driving/equipment services to a carrier for a fee but bears the risks of
maintenance ， fuel expense ， licensing ， taxes ， and other operating
supplies. O/Os operate under the authority and liability insurance of the
carrier.
OS & D： An acronym for over， short and damaged. This is used in
conjunction with freight loss and damage claims.
Peddle Delivery： Term used to describe multiple stops being delivered
from the same trailer or truck.
： Proof of delivery such as a signed bill of lading or other form of
receipt.
Regional Carrier ： A carrier serving customers within a specific
geographic region of the country， usually within a distance， which can be
served overnight or in two days.
Routing： A process that selects how a shipment or load moves from
origin to destination.
Routing Guide： A compilation of the instructions for carrier selection to
ensure compliance by traffic personnel.
SCAC ： In the USA ， this term is the abbreviation for “Standard
Carrier Alpha Code.” For example， the SCAC for Con-Way Transportation
is CNWY. Short haul： The movement of freight requiring two days or less.
Sleeper teams： Pairs of drivers dispatched together in tractors that are
equipped with a sleeping berth. Used in long haul movement of goods to
maximize equipment utilization and transit speed.
Slipseat： Term used to describe the use of more than one driver per
vehicle ， but at different times or shifts during the day. This maximizes
tractor utilization.
Spotting： Describes the act of placing a trailer at a loading dock or a
parking place to be coupled with a tractor at a later time.
Static Routes ： Truck movements based on data that is static or
unchanging； the moves occur on a regular basis， the schedule （daily，
weekly， monthly） is constantly repeated with no or little variation.
Tracking/Tracing： Once a shipment has been tendered and accepted by
a carrier， periodic status updates are transmitted to a TMS system operated
by Shipper or outsourcing partner. Visibility of shipments is maintained and
status is monitored to assure transit time commitments. Tracing is conducted
for the purpose of determining shipment disposition after the shipment has
been completed.
Truckload： Traditionally defined as shipments weighing 10，000 pounds
or more. Turnkey Delivery： A delivery made when a customer's employees
are not present during unloading. Drivers are given keys to each stop and
cargo is placed in a cage or limited access room and then locked. Also
referred to as “unattended delivery”。
Tailgating Freight ： Term used to describe a driver only being
responsible to bring freight to the tailgate of each trailer or truck.
Time Definite/Critical Shipments： Shipments usually of an expedited
nature and for which a commitment has been made for delivery at a specific
time.
Windows： Not software. Refers to time slots or hours freight may be
received either without exact time appointment or with exact time
appointment within an overall time period each day.
Section 4： Equipment and Leasing
Equipment acquisition and leasing （as an alternative to purhasing or
owning equipment） is very competitive and leasing is a mature business……
Leasing represents an alternative to using cash or bank lines of credit.
Experienced lessees or buyers of leased equipment know the importance of
securing multiple bids based on a clear and comprehensive RFP. Contractual
terms that provide for flexibility and ease of termination for change in
operation should be sought. Customized contracts are normally preferred to
the vendor's standard agreement.
Agreed Value ： Refers to Schedule “A” value placed on full service lease
equipment （motor vehicle trucks ） which lessee agrees to by execution of
the Schedule “A”。 Represents delivered cost of equipment plus artwork/logo
identification ， local installation of accessories （ on-board computers ，
cellular telephones， truck body or trailer modifications， safety and spill
kits etc.）， “get ready service”， local sales tax if paid by lessor at time of
registration， and a margin to cover sales and administrative costs. In the
event of early termination lessee may have a buyout obligation and a
depreciation credit is deducted from this value based on time in service.
Valuation may affect lessee in the event of a casualty loss or theft as the
valuation less depreciation credit is what the lessor expects to recover.
Materials Handling Operator Certification： Refers to forklift operator
and that employer must certify that training and evaluations are done
periodically especially after any accidents or near misses.
CPI： Refers to . Bureau of Labor Statistics publication， which
summarizes a series of statistical measurements of inflation or indexes ，
hence， Consumer Price Index. A review of the publication is necessary to
select an index if it is to be used for cost adjustment. The most commonly
used index is the one for “All Urban Consumers.” There are also a
“Wholesale Index” and several narrowly defined indexes. Commonly used by
full service lessors and dedicated contract carriers.
Date-in-Service ： Delivery date of equipment pursuant to a
non-maintenance lease ， full service lease or dedicated transportation
agreement.
Depreciation Credit ： The dollar amount a vehicle depreciates per
month as determined by the lessor under a full service lease contract. It is
expressed on the Schedule “A” and is used to calculate a buy out value of the
equipment. The number of months in service is multiplied by the credit and
deducted from the Schedule “A” Agreed Value. There are usually other fees
to be paid in the event of a buy out. See Agreed Value. This practice is usually
applicable to all types of equipment.
Finance lease： May be in the form of an operating or capital lease and
does not include maintenance or servicing. It may be structured as a FMV
purchase option （ fair market value ） closed end lease or as a TRAC
（ terminal rental adjustment clause ） type lease with a stated residual
percentage which the lessee guarantees. A lessee will decide between a TRAC
or FMV after weighing tax and rate benefits. In a TRAC lease， the lessee
has the option to bid on the equipment at end of term. The lessee is liable for
any shortfall （which become the terminal rental adjustment amount） in
residual realization in the event the lessee does not option to purchase. The
lessee usually benefits by any gain.
Fuel Peg： This refers to the initial price of fuel used in a full service
lease （motor vehicles）。 Adjustments are made up or down when pegged
price is compared to the actual price of fuel paid for a particular period. A
“zero” fuel peg is defined as a pass through of fuel cost to the customer.
Carriers use a fuel surcharge mechanism.
Full Service Lease： Also known as FSL， this form of lease provides
truck， tractor， trailer equipment and the operating supplies and services
needed to operate efficiently. These usually include maintenance ， road
service ， parts and tires required due to normal wear and tear ，
replacement vehicles for mechanical breakdown， and washing. This service
is bundled into a fixed and mileage charge with pricing components usually
undisclosed. Fuel is usually sold at a pump price or as a separate charge.
Lease Term： Length of lease expressed in months or years that lessee is
liable for payments （ and other obligations such as insurance coverage ）
when executing a lease agreement.
Lift Trucks： There are many types and models of materials handling
equipment produced by many different manufacturers. There are Reach
trucks ， Orderpickers ， three-wheel machines ， Walkies ， sitdown
machines， cushion tire or pneumatic tire equipment， powered electrically，
by propane gas， gasoline， or diesel.
Materials Handling Equipment Lease： In developing a lease agreement，
a lessor assesses the conditions and applications in which the lift truck will
operate， as well as the number of hours it will run per year and the number
of years the company wants to use it， and calculates how much the truck
will be worth at the end of the lease. Next， the residual value is determined，
. $5000 on a $22，000 lift truck， and the lessee pays only for the difference
in the lease rate.
Section 5： Information Technology
Information Technology is the backbone of logistics and effective supply
chain management. It is the life-blood of competent logistics performance.
Without a sound IT competency it will be almost impossible to seek a
competitive advantage through logistics. Companies have to choose between
developing this competency in-house or to outsource with IBM ， EDS or
similar provider. Implementation under either alternative is no quick and
easy assignment and you can usually figure that it will take two to three times
as long as your supplier of software or outsource vendor promises during
their initial assessment.
However， the benefits can be substantial. In an effective supply chain，
an increase in the flow of information can result in lower inventories ，
increased productivity ， and improved customer service. Productivity can
increase 20-30%； inventory and shipping accuracy rates can exceed 99%；
inventory reductions from 25% to 60% ； improvements in forecasting
accuracy 25 to 80%.
A key capability needed for smooth product flow， effective distribution，
and quality delivery of goods to customers is EDI transmission. Traditional
EDI will eventually give way to Internet EDI communications. Again ，
implementation can be frustrating taking between a few weeks
（unfortunately this is the exception） to six or more months. EDI can also
be expensive. It is estimated that 100，000 businesses worldwide use EDI. And，
this has been driven by retailers who demand carriers utilize EDI allowing
the retailers to significantly reduce time in moving products through the
supply chain from manufacturers， to warehouses or direct， to the store
shelves. Manufacturers use EDI so they can manage distribution networks
with greater efficiency in a just-in-time production mode.
Traditional EDI software can cost between US$35，000 to US$125，000
with out-of-pocket expenses ranging from US$1200 to US$2500 for each
vendor. The goal is to achieve per transaction cost of US$50 or less （US$25
is an excellent target but not always attainable）。 The new direction is to
accomplish EDI type communications over the Internet. Internet systems now
in place or being tested show the potential for reducing per transaction costs
to US$10 or less. One project called UCCnet， a subsidiary of the Uniform
Code Council ， is planning its rollout in year 2000. This new standards
technology will provide an infrastructure that will enable trading partners to
collaborate more efficiently. UCCnet has launched a pilot program with six
companies including Proctor and Gamble， Kroger （a US based grocery
chain）， and PepsiCo.
Now ， this writing would not be complete without a word about the
Internet. We are at the dawn of the Internet Age. Corporations worldwide
are struggling to jumpstart their e-commerce activities. Established players，
like ， less than five years on the Web， are broadening their
appeal and building a bigger gap between itself and competitors. Leading
futurists predict that some businesses that are household names today will not
exist tomorrow. Strategic planners are in a frenzy coping with business
planning cycles that are now measured in weeks versus 12 months. In the
United States， Internet penetration is estimated to be only 5%， perhaps
less， but this is expected to grow on a quantum basis. However， leading
firms like Sun Microsystems， IBM， and the big consulting organizations
forecast the biggest growth in the use of the Internet worldwide to be in the
business-to-business sector.
Dell Computer CFO Tom Meredith said， “Fortunes are won and lost in
moments of transition， and the Internet is all about a moment in transition”。
Thus， it is apparent that E-commerce is here and the future is bright for
those companies that can execute a good model quickly.
Now a word about how one determines if investing in a certain
information technology makes sense. The answer may seem simplistic but the
basic rule is to invest only in technology that addresses fully three transaction
types： （1） day-to-day activities， （2） planning and decision making，
（3） strategic analysis.
ASP： Abbreviation for “Application Service Provider”。 This is an
emerging Internet business model that will provide for the rental of software
in lieu of the purchase of software. Revenues from rentals are expected to
exceed that of purchase with Microsoft ， Compaq ， KPMG ， British
Telecom and Nortel expected to be the big hitters.
CAD ： Computer-aided design ； design workstations that enable
designers to manipulate parts diagrams and simulate operations ； can be
linked to CAM.
CAM ： Computer-aided manufacturing ； systems which facilitate
manufacturing processes， including computer numerical control （CNC），
materials planning， process control and robotics.
CBO： Carrier bid optimization. Emerging TMS segment of enterprise
transportation planning that provides help to logistics managers in
controlling the annual process of requesting carrier bids and awarding
carrier contracts.
CIM ： Computer integrated manufacturing. Applies information
technology to manufacturing processes and organization to streamline
operations. CIM often focuses on integrating systems and processes
company-wide， including order entry， scheduling， and production.
CNC ： Computer numerical control ； allows production machines
（such as punch presses and machining equipment） to operate by numerical
control instructions generated by CAD/CAM or from a programmable logic
controller （PLC）。
Connectivity： The data interface capabilities between IT of a provider
and customer.
CVISN： Commercial vehicle information systems and networks. The
first step in establishing a national ITS （intelligent transportation system），
CVISN brings regulatory information for trucking online and integrates
existing technologies to support commercial vehicle operations throughout
North America. Data ， accessible with a keystroke ， will include safety
information， vehicle credentials and tax data. In the future， vehicles will
be electronically tagged and serviced by mobile communications， onboard
computers and navigation monitors.
DSS ： Abbreviation for “decision support system” used as a tool for
analysis to reduce costs in logistics/distribution operations. Allows user to
focus on inventory， warehousing， and transportation.
E-business： Involves company-to-company trading activity and data
exchange. E-business activity often involves many line items per order， each
with a specific delivery confirmation dates， quantities， delivery points，
and shipping methods. The interface used may provide user-selected
information type/content/scope and associated interaction tools， reflecting
the system's greater scale， scope， and depth of functionality. E-business
uses purchase orders and releases against blanket Pos and involves invoicing
and payment methods. E-business includes transactions using any or all EDI
protocols， Web based screens， thin-client networks， browser screens
presenting system displays and interaction ， faxing ， and automatic
interception of electronic servicing by customer response teams. E-business
offers internal employee services such as access to personnel records， travel
and expense reporting， and non-production procurement.
E-commerce ： Involves both business and consumer activity ， with
emphasis on the consumer. Usually involves high order volumes， with few
individual line items per order. E-commerce uses an interface and a system
designed for ease of use. E-commerce buying is by credit card rather than by
purchase order.
E-frame： This is a technology framework for supply chains or customer
fulfillment networks and connects a company with its trading partners. The
objective is to create a fast and efficient network that enables all participants
to view and control the activities taking place along the supply chain in real
time.
EFT： Electronic funds transfer. This can be a component of EDI.
Electronic Data Interchange （EDI）： The exchange of information
between one computer and another in a format or language that is
understood by both the sender and receiver. For example， information may
be exchanged on shipment status between the shipper ， consignee ， and
client. Common EDI transactions are 204=Load Tendering Form ，
210=Invoice ， 214=Load Status Report ， and 990=Load Tender
Acknowledgement. Traditional EDI is conducted through a proprietary
phone line and data exchanged between trading partners is usually sent
through a value-added network called a VAN. A VAN translates the data into
the recipient's format and distributes forms ， also called transaction sets.
Also see “Web EDI”。
Enterprise Resource Planning （ERP）： Systems designed to integrate
and optimize all of a manufacturer's internal operations ， from materials
management to accounting to sales and distribution ， within a single
management information system.
EIS： “Enterprise Information System”。 This is a system that scans
accounts/information and also reports on KPIs （see KPI in this Glossary）。
ERO： “Enterprise Resource Optimization”。 ERP is now expanding into
the supply chain and many ERP systems providers are or have incorporated
supply chain planning and optimization into their core product. This will
enable increased access to information， greater efficiency among functions，
and better planning.
GIS： “Geographic Information Systems”； geographic based software
systems used in the transportation industry to optimize route planning ，
dispatching， facility management and other supply chain support functions.
Global Visibility Solutions： This is a desktop end user application that
enables a company to monitor ， control ， and report on activities
throughout their supply chain or customer fulfillment network.
Global Visibility Manager ： This enables users to view customized
logistics activities along the supply chain ， investigate order progress and
associated details， and receive proactive alerts when problems or delays are
expected. Global Visibility
Browsers ： This enables users to view customized logistics activities
using Web browsers. GPS： “Global Positioning Systems”。 This is a .
government owned satellite-based system that can pinpoint a moving truck
with accuracy of several hundred feet. The government allows access to
certain communications companies for commercial purposes and to
non-profit organizations for mapping and research purposes.
HRIS： “Human Resource Information System” that records， compiles，
tracks， and reports on a broad range of employee information.
Internet Logistics： This involves the utilization of Internet technologies
to enhance a company's logistics process.
ITL： International Trade Logistics. Desired segment of TMS designed
to meet the special international trade and transportation needs of global
manufacturers and distribution companies. It is suited for companies
operating global supply chains across multiple trading blocs ； companies
trading commodities subject to tariffs and quotas or subject to import/export
licenses and regulatory controls； and for those who can claim drawbacks on
the exports of components and parts on which duty was paid.
ITS： Intelligent Transportation Systems.
IT ： Stands for information technology and implies state-of-the-art
systems including sharing information with customers.
Legacy Systems： Existing or older software and information technology
that is in place within a company not state of the art technology. These
systems are often replaced by a client-server system as a result of an
acquisition. The term may also be used by a third party logistics provider to
refer to an existing （ sometimes antiquated ） customer system requiring
“connectivity” to the provider's state-of-the art-IT system and the issues
involved in attempting connectivity. .
LCM： Logistics Composite Model. “Method of evaluating approaches to
solving logistics problems which enables logistics managers to gain a
thorough understanding of current practices and system support， compare
them to best practices ， and make necessary changes that will improve
operations. As a result， managers can determine which software tools will
address the various components of their supply chains the most effectively.”
M-commerce ： Defined as eCommerce conducted via cell or mobile
phones. On Board Computer： A computerized unit designed for installation
in tractors. These are used to monitor vehicle and driver activity and for data
transmission relating to deliveries ， routes ， dispatch orders ， and
emergency messaging. Qualcomm ， XATA ， Rockwell ， and Highway
Master are a few of the key vendors in this arena.
OBT： On-board tracking （for example， via satellite， voice control
cellular）。 PLC： Programmable logic controller； simple computer that
codes ， stores and downloads numerical control instructions to machines
without using tapes or punch card readers.
Real Time： Recording data transaction at the immediate point in time
that it occurs.
RFID： Radio frequency identification tracking system； one application
of radio frequency tracking capabilities is for yard management. Such a
system tracks vehicles' arrival and departure times， identifies locations and
searches yards for lost equipment. Forklifts can be similarly tracked in
warehouses. Tags on trucks can be read from as far as a quarter of a mile.
Supply Chain Technology Strategy： A strategy that supports multiple
levels of decision making and gives a clear view of the flow of products ，
services， and information.
TMS： Transportation Management System. A software system that is
off-the-shelf， customized， or proprietary that addresses comprehensive
needs including such functions as dispatch， routing， tracking and tracing，
equipment availability， and EDI.
Voice-recognition systems （VRS）： Allows warehouse workers to keep
their hands free to do the job needed to be done. It provides the opportunity
for creating a truly paperless environment. The results desired from
installing a VRS are improvements in accuracy of picking or other activities
and productivity. A good application for VRS is in food and pharmaceuticals，
where there is high volume in handpicking. A poor candidate would be
operations that are heavy with pallet picking. The three main warehousing
applications for VRS are： （1） receiving， （2） voice-directed picking，
and （3） inventory.
Visibility： Usually refers to IT access. Business departments and units
have access from point of order entry through confirmed shipment delivery.
Web EDI： The transmission of a message by e-mail to a Web site，
which has EDI capabilities. The site reformats the message to an EDI
standard and then transmits the message to the desired destination.
