B2B
See Business-to-Business.

B2C
see Business-to-Consumer

Back Door Selling
Enticements by vendors for agencies to purchase goods or services without seeking competitive offers or bidding.

Back Haul
To obtain transport on the home run from B to A after having performed a full transport from A to B.

Back Order
Product ordered but out of stock and promised to ship when the product becomes available.

Back Scheduling
A technique for calculating operation start dates and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation.

Backflush
A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the bill of material and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Synonym: explode-to-deduct. Also see: Pre-deduct Inventory Transaction Processing

Backhaul
The process of a transportation vehicle returning from the original destination point to the point of origin. The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby allowed carriers to contract for the return trip. The backhaul can be with a full, partial, or empty load. An empty backhaul is called deadheading. Also see: Deadhead

Backlog Customer
Customer orders received but not yet shipped, also includes backorders and future orders.

Backorder
(1) The act of retaining a quantity to ship against an order when other order lines have already been shipped. Backorders are usually caused by stock shortages.(2) The quantity remaining to be shipped if an initial shipment(s) has been processed. Note: In some cases backorders are not allowed, this results in a lost sale when sufficient quantities are not available to completely ship and order or order line. Also see: Balance to Ship

Backsourcing
Pulling a function back in-house as an outsourcing contract expires

BAF
see Bunker Adjustment Factor

Balance sheet
A financial statement showing the resources owned, the debts owed, and the owner’s share of a company at a given point in time.

Balance to Ship
Balance or remaining quantity of a promotion or order that has yet to ship. Also see: Backorder

Balanced Scorecard
A structured measurement system developed by David Norton and Robert Kaplan of the Harvard Business School. It is based on a mix of financial and non financial measures of business performance. A list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions of the balanced scorecard might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements. Each dimension has goals and measurements. Also see: Scorecard

Balance-of-Stores Record
A double-entry record system that shows the balance of inventory items on hand and the balances of items on order and available for future orders. Where a reserve system of materials control is used, the balance of material on reserve is also shown.

Bale
Compressible articles or material assembled in a shaped unit and usually bound with cord or metal ties under tension. May be wrapped in paper or textile material or combinations thereof.

BAM
see Business Activity Monitoring

Bank Guarantee
(1) Under certain circumstances, accepted in lieu of original bill of lading to release cargo. (2) A statement issued by an importer’s bank guaranteeing the payment of (L/C) drafts to the exporter or to the carrier. (3) Other forms of guarantees by banks in favour of a beneficiary.

Banker’s Acceptance
A form of financing used in import/export transactions.

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. A popular example is the UPC code used on retail packaging.

Bar Code Scanner
An electrical device to read bar codes and communicate accurate data to computer programs.

Barcode
A series of bars and spaces read by a scanning device for translation into a numeric or alphanumeric identification code that represents data in machine-readable or computerised form.

Barcode, 2-D
The PDF 1000 style barcode is used to store up to 1800 characters of text. Designed to allow more information to be stored and retrieved electronically, it has not achieved wide use.

Barge
(1) Conveyance used to carry loose cargo or containers in small volumes. (2) The cargo-carrying vehicle used primarily by inland water carriers. The basic barges have open tops, but there are covered barges for both dry and liquid cargoes.

Barrier to Entry
Factors that prevent companies from entering into a particular market, such as high initial investment in equipment.

Base Demand
The percentage of a company’s demand that is derived from continuing contracts and/or existing customers. Because this demand is well known and recurring, it becomes the basis of management’s plans. Synonym: Baseload Demand.

Base Index
See Base Series

Base Inventory Level
The inventory level made up of aggregate lot-size inventory plus the aggregate safety stock inventory. It does not take into account the anticipation inventory that will result from the production plan. The base inventory level should be known before the production plan is made. Also see: Aggregate Inventory.

Base Port
Ports from which standard tariff rates apply to those normally serviced directly by members.

Base Rate
Rate used only for construction of other rates.

Base Series
A standard succession of values of demand-over-time data used in forecasting seasonal items. This series of factors is usually based on the relative level of demand during the corresponding period of previous years. The average value of the base series over a seasonal cycle will be 1.0. A figure higher than 1.0 indicates that the demand for that period is more than the average, a figure less than 1.0 indicates less than the average. For forecasting purposes, the base series is superimposed upon the average demand and trend in demand for the item in question. Synonym: Base Index. Also see: Seasonality

Base Stock System
A method of inventory control that includes as special cases most of the systems in practice. In this system, when an order is received for any item, it is used as a picking ticket, and duplicate copies, called replenishment orders, are sent back to all stages of production to initiate replenishment of stocks. Positive or negative orders (called base stock orders) are also used from time to time to adjust the level of the base stock of each item. In actual practice, replenishment orders are usually accumulated when they are issued and are released at regular intervals.

Baseload Demand
See Base Demand

Basic Producer
A manufacturer that uses natural resources to produce materials for other manufacturing. A typical example is a steel company that processes iron ore and produces steel ingots, others are those making wood pulp, glass, and rubber.

Basing Points
A point (location) used in construction of through rates between other points.

Batch Control Totals
The result of grouping transactions at the input stage and establishing control totals over them to ensure proper processing. These control totals can be based on document counts, record counts, quantity totals, dollar totals, or hash (mixed data, such as customer AR numbers) totals.

Batch Number
A sequence number associated with a specific batch or production run of products and used for tracking purposes. Synonym: Lot Number.

Batch Picking
A method of picking orders specific to the order requirements that reduces movement to and from product locations. The aggregated quantities of each product are then relocated to a common area where individual orders are constructed.

Batch Processing
A computer term which refers to the processing of computer information after it has been accumulated in one group, or batch. This is the opposite of ‘real-time’ processing where transactions are processed in their entirety as they occur.

Baud
A computer term describing the rate of transmission over a channel or circuit. The baud rate is equal to the number of pulses that can be transmitted in one second, often the same as the number of bits per second. Common rates are now 1200, 2400, 4800, 9600 bits and 19.2 and 56 kilobytes (Kbs) for ‘dial-up’ circuits, and may be much higher for broadband circuits.

Bay
Section of vessel in which containers are held.

Bay
Designated area within a section of a storage area, or a shop, outlined by marking on columns, posts or floor. Usually, a specific area within a section, such as 20′ x 20′ squares.

BCP
see Business Continuity Plan

Beginning Available Balance
See Available Inventory

Benchmarking
The process of comparing a firm’s performance against the practices of other leading companies - in or outside of an industry - for the purpose of improving performance. Companies also benchmark internally by tracking and comparing past performance.

Benefit-cost ratio
An analytical tool used in public planning, a ratio of total measurable benefits divided by the initial capital cost.

Berth
Vessel docking area.

Best Interest of the State (or Political Subdivisi
A procurement action taken when acceptance of a superior offer is made and a definite advantage is determined.

Best Practice
A specific process or group of processes which have been recognized as the best method for conducting an action. Best Practices may vary by industry or geography depending on the environment being used. Best practices methodology may be applied with respect to resources, activities, cost object, or processes. Also known as competitive benchmarking, the methodology that determines state-of-industry performance or application.

Best-in-Class
An organization, usually within a specific industry, recognized for excellence in a specific process area.

Beta release
A pre-released version of a product that is sent to customers for evaluation and feedback.

Bid Award File
A file maintained on certain bidders or commodities to provide comparable information for future bidding or to indicate if collusion may be expected.

Bid Bond
An agreement by a third party financier that a certified amount of money is insured and payable if a bidder refuses to accept a contract.

Bid Deposit
The deposit of a specified amount submitted by a bidder to a purchaser which would be forfeited should the bidder fail to accept the contract if awarded.

Bid Opening
The timely process of opening bids made to an invitation and making them available to review for the first time.

Bid Sample
An exact example of a product offered by a bidder as a requirement. Such samples may be compared and/or tested to determine compliance with bid specifications.

Bidders List (or Vendors List)
A list of vendors maintained by a purchasing agency designating sources for certain goods and services that would be required by bid solicitation.

Bilateral Contract
An agreement wherein each party makes a promise to the other party.

Bill
See Invoice.

Bill of Activities
A listing of activities required by a product, service, process output or other cost object. Bill of activity attributes could include volume and or cost of each activity in the listing.

Bill of Exchange
(1) A signed, written order by one company that instructs another company to pay a third party a specific amount. (2) An unconditional written order addressed by one person to another and signed by the person placing it. It requires the person, to whom it is addressed, to pay on demand or at a fixed or determinable future time, a certain sum of money to the order of a specified person or to bearer. The drawee is not liable on it until he has accepted it.(3) Usually used in foreign transactions.

Bill of Lading
A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier. The document is issued by a carrier to a shipper, signed by the captain, agent, or owner of a vessel, furnishing written evidence regarding receipt of freight, the conditions on which transportation is made and the date to deliver goods at the prescribed port of destination to the lawful holder of the bill of lading.

Bill of Material
A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or manufactured part, whether purchased or not.

Bill of Material Accuracy
Conformity of a list of specified items to administrative specifications, with all quantities correct

Bill of Materials
A listing of materials required by a supplier to complete or produce a specified product required by an agency (as required by certain bids or a Request for Proposal).

Bill of Resources
A listing of resources required by an activity. Resource attributes could include cost and volumes.

Billed Weight
Weight stated in a waybill and/or (freight) bill of lading.

Bin
(1) A storage device designed to hold small discrete parts. (2) A shelving unit with physical dividers separating the storage locations.

Binary
A computer term referring to a system of numerical notation that assumes only two possible states or values, zero (0) and one (1). Computer systems use a binary technique where an individual bit or ‘Binary Digit’ of data can be ‘on’ or ‘off’ (1 or 0). Multiple bits are combined into a ‘Byte’ which represents a character or number.

Bisynchronous
A computer term referring to a communication protocol whereby messages are sent as blocks of characters. The blocks of data are checked for completeness and accuracy by the receiving computer.

Bitmap Image
The standard image format on Windows-compatible computers. Bitmap images can be saved for Windows or OS/2 systems and support 24-bit color.

Blanket Order
See Blanket Purchase Order

Blanket Purchase Order
A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. Synonym: Blanket Order, Standing Order.

Blanket Rate
A rate will not increase according to the distance a commodity is shipped.

Blanket Release
The authorization to ship and/or produce against a blanket agreement or contract.

Blanket Wrap
A service provided by moving companies and specific carriers that eliminate packaging material by wrapping product in padded ‘blankets’. This will protect the goods during transit, usually on ‘air ride’ vans. See Pad Wrap.

Bleeding Edge
An unproven process or technology so far ahead of its time that it may create a competitive disadvantage.

Blind Counts
Describes a method used in cycle counting and physical inventories providing inventory counters with the item number and location but no quantity information.

Block diagram
A diagram that shows the operation, interrelationships and interdependencies of components in a system. Boxes, or blocks (hence the name), represent the components, connecting lines between the blocks represent interfaces. There are two types of block diagrams: a functional block diagram, which shows a system’s subsystems and lower level products and their interrelationships and which interfaces with other systems, and a reliability block diagram, which is similar to the functional block diagram except that it is modified to emphasize those aspects influencing reliability.

Blocking bug
A defect that prevents further or more detailed analysis or verification of a functional area or feature, or any issue that would prevent the product from shipping.

Blow Through
An MRP process which uses a ‘phantom bill of material’ and permits MRP logic to drive requirements straight through the phantom item to its components. The MRP system usually retains its ability to net against any occasional inventories of the item. Also see: Phantom Bill of Material

BMP
see Bitmap Image

Body of knowledge
The prescribed aggregation of knowledge in a particular area an individual is expected to have mastered to be considered or certified as a practitioner.

BOK
see Body of knowledge

BOL
see Bill of Lading

Bolero
Bolero is a neutral, open platform, intended to be a cross-industry community moving world trade onto the Internet. The focus is to process trade documents fully electronically via a secure communication platform (CMP). The initial focus has been on the carrier’s bill of lading through the Title Registry replicating the paper bill of lading functionality and bill of lading parties’ roles. Lately, Bolero’s focus has changed towards the trade settlement engine, ‘SURF’, Settlement Utility for Risk and Finance, which Bolero has developed together with some major banks.

BOM
see Bill of Material

Bonded Goods
A dutiable goods upon excise duty has not been paid, i.e., good in transit or warehouse pending usage. The bond is the agreement entered into by the owner of the dutiable goods with Customs and the excise authority that the owner agrees to pay the duty when goods are released for final distribution or usage.

Bonded Warehouse
Warehouse owned by persons approved by the relevant customs and excise authorities (for example in the USA it is the Treasury Department), and under bond (or guarantee) for the strict observance of the revenue laws. Utilised for storing goods until duties are paid or goods are otherwise properly released.

Bonded Warehouse - Export
A secure building or area, approved by customs, where cargo, for which export clearance has been performed, is stored. Goods are considered foreign and must go out for export. In some countries, a bonded warehouse is defined as a warehouse with customs officials onsite. In others, it is a warehouse in which customs inspect cargo prior to authorising export clearance. Ensure the local definition is established. In some countries, some manufacturers are also granted a licence to operate a bonded warehouse in which they can store manufactured products in anticipation of export and hence suspend payment of local taxes (e.g. on cigarettes).

Bonded Warehouse - Import
A secure building or area, approved by customs, where cargo, for which export clearance has been performed, is stored.

Book Inventory
An accounting definition of inventory units or value obtained from perpetual inventory records rather than by actual count.

Booking
(1) Act of recording arrangements for the movement/transportation of goods by vessel or other conveyance. (2) To express in advance a desire for something in order to reserve it e.g. transportation of goods. (3) Also known as a booking request.

Booking Number
The unique number assigned to a certain space reservation by the carrier or the carrier’s agent.

Bookings
The sum of the value of all orders received (but not necessarily shipped), net of all discounts, coupons, allowances, and rebates.

Bottleneck
A constraint, obstacle or planned control that limits throughput or the utilization of capacity.

Bottom-up Replanning
In MRP, the process of using pegging data to solve material availability or other problems. This process is accomplished by the planner (not the computer system), who evaluates the effects of possible solutions. Potential solutions include compressing lead time, cutting order quantity, substituting material, and changing the master schedule.

Box Rate
A lump sum charged to move cargo in various size containers from origin to destination.

Boxcar
An enclosed rail car typically 40 to 50 feet long, used for packaged freight and some bulk commodities.

Box-Jenkins Model
A forecasting method based on regression and moving average models. The model is based not on regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting. See: Forecast.

BPM
see Business Performance Measurement

BPO
see Business Process Outsourcing

BPR
see Business Process Reengineering

Bracing
Securing a shipment inside a carrier’s vehicle to prevent damage.

Bracketed Recall
Recall from customers of suspect lot numbers plus a specified number of lots produced before and after the suspect ones.

Branding
The use of a name, term, symbol, or design, or a combination of these, to identify a product.

Breadman
A specific application of Kanban, used in coordinating vendor replenishment activities. In making bread or other route type deliveries, the deliveryman typically arrives at the customer’s location and fills a designated container or storage location with product. The size of the order is not specified on an ongoing basis, nor does the customer even specify requirements for each individual delivery. Instead, the supplier assumes the responsibility for quantifying the need against a prearranged set of rules and delivers the requisite quantity.

Break-Bulk
(1) The separation of a single consolidated bulk load into smaller individual shipments for delivery to the ultimate consignees. This is preceded by a consolidation of orders at the time of shipment, where many individual orders which are destined for a specific geographic area are grouped into one shipment in order to reduce cost. (2) Cargo which is not containerised due to its weight and/or size e.g. steel pipes, boats etc.

Break-Even Chart
A graphical tool showing the total variable cost and fixed cost curve along with the total revenue curve. The point of intersection is defined as the break-even point, i.e., the point at which total revenues exactly equal total costs. Also see: Total Cost Curve

Break-Even Point
The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves. Also see: Total Cost Curve

Bricks and Mortar
The act of selling through a physical location. The flip side of clicks and mortar, where selling is conducted via the Internet. An informal term for representing the old economy versus new economy or the Industrial economy versus information economy.

Broadband
A high-speed, high-capacity transmission channel. Broadband channels are carried on radio wave, coaxial or fiberoptic cables that have a wider bandwidth than conventional telephone lines, giving them the ability to carry video, voice, and data simultaneously.

Broken case
An open case. The term is often used interchangeably with ‘repack’ or ‘less-than-full-case’ to name the area in which materials are picked in that form.

Broker
A person or firm, other than a motor carrier or agent of a motor carrier that as a principal or agent sells, offers for sale, or holds itself out by solicitation, advertisement or otherwise as selling, providing or arranging for transportation by motor carrier for competition. A broker is a middleman that brings together the shipper and carrier, a broker does not take responsibility for the transportation. An agent/middleman who for a fee or commission negotiates contract e.g. purchase and sale (such as real estate, commodities or securities) between buyers and sellers without himself taking title to that which is the subject of negotiation and usually without having physical possession of it.

Brokerage Licence
Authority granted by the Interstate Commerce Commission (ICC) to persons to engage in the business of arranging for the transportation of persons or property in interstate commerce.

Brokered Systems
Independent computer systems, owned by independent organizations or entities, linked in a manner to allow one system to retrieve information from another. For example, a customer’s computer system is able to retrieve order status from a supplier’s computer.

Browser
A utility that allows an internet user to look through collections of things. For example, Netscape Navigator and Microsoft Explorer allow you to view contents on the World Wide Web.

BTS
see Balance to Ship

Bucketed System
An MRP, DRP, or other time-phased system in which all time-phased data are accumulated into time periods, or buckets. If the period of accumulation is one week, then the system is said to have weekly buckets.

Bucketless system
An MRP, DRP, or other time-phased system in which all time-phased data are processed, stored, and usually displayed using dated records rather than defined time periods, or buckets.

Buffer
(1) A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center.(2) In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points.

Buffer Management
In the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers). By expediting this material into the buffers, the system helps avoid idleness at the constraint and missed customer due dates. In addition, the causes of items missing from the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities.

Buffer Stock
See Safety Stock.

Bulk area
A storage area for large items which at a minimum are most efficiently handled by the pallet load.

Bulk packing
The process or act of placing numbers of small cartons or boxes into a larger single box to aid in the movement of product and to prevent damage or pilferage to the smaller cartons or boxes.

Bulk storage
The process of housing or storing materials and packages in larger quantities, generally using the original packaging or shipping containers or boxes.

Bulletin Board
An electronic forum that hosts posted messages and articles related to a common subject.

Bullwhip Effect
An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. The bullwhip effect can be eliminated by synchronizing the supply chain.

Bundle
A group of products that are shipped together as an unassembled unit.

Bunker Adjustment Factor
Surcharge assessed by carrier which is applied to freight rates to supplement an unexpected rise in fuel costs.

Bunker Surcharge
Surcharge assessed by carrier which is applied to freight rates to supplement an unexpected rise in fuel costs.

Burn Rate
The rate of consumption of cash in a business. Burn rate is used to determine cash requirements on an on-going basis. A burn-rate of $50,000 would mean the company spends $50,000 a month above any incoming cash flow to sustain its business. Entrepreneurial companies will calculate their burn-rate in order to understand how much time they have before they need to raise more money, or show a positive cash flow.

Business Activity Monitoring
A term which refers to capturing operational data in real-time or close to it, making it possible for an enterprise to react more quickly to events. This is typically done through software and includes features to provide alerts / notifications when specific events occur. See also: Supply Chain Event Management

Business Application
Any computer program, set of programs, or package of programs created to solve a particular business problem or function.

Business Continuity
Any process, item or asset that is needed for a customer to maintain operations during a disaster or contingency.

Business Continuity Plan
A contingency plan for sustained operations during periods of high risk, such as during labor unrest or natural disaster. CSCMP provides suggestions for helping companies do continuity planning in their Securing the Supply Chain Research. A copy of the research is available on the CSCMP website.

Business Logistics
The process of planning, implementing, and controlling the efficient, effective flow and storage of product from the point of origin to the point of destination for the purpose of conforming to customer requirements. The systematic and coordinated set of activities required to provide the physical movement and storage of goods (raw materials, parts, finished goods) from vendor/supply services through company facilities to the customer (market) and the associated activities–packaging, order processing, etc.–in an efficient manner necessary to enable the organization to contribute to the explicit goals of the company.

Business Performance Measurement
A technique which uses a system of goals and metrics to monitor performance. Analysis of these measurements can help businesses in periodically setting business goals, and then providing feedback to managers on progress towards those goals. A specific measure can be compared to itself over time, compared with a preset target or evaluated along with other measures.

Business Plan
(1) A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. A business plan is usually stated in terms of dollars and grouped by product family. The business plan is then translated into synchronized tactical functional plans through the production planning process (or the sales and operations planning process). Although frequently stated in different terms (dollars versus units), these tactical plans should agree with each other and with the business plan. See: long-term planning, strategic plan.(2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business.

Business Process Outsourcing
The practice of outsourcing non-core internal functions to third parties. Functions typically outsourced include logistics, accounts payable, accounts receivable, payroll and human resources. Other areas can include IT development or complete management of the IT functions of the enterprise.

Business Process Reengineering
The fundamental rethinking and oftentimes, radical redesign of business processes to achieve dramatic organizational improvements.

Business Unit
A division or segment of an organization generally treated as a separate profit-and-loss center.

Business-to-Business
As opposed to business-to-consumer (B2C). Many companies are now focusing on this strategy, and their sites are aimed at businesses (think wholesale) and only other businesses can access or buy products on the site. Internet analysts predict this will be the biggest sector on the Web.

Business-to-Consumer
The hundreds of e-commerce Web sites that sell goods directly to consumers are considered B2C. This distinction is important when comparing Websites that are B2B as the entire business model, strategy, execution, and fulfillment is different.

Buyer Behavior
The way individuals or organizations behave in a purchasing situation. The customer-oriented concept finds out the wants, needs, and desires of customers and adapts resources of the organization to deliver need-satisfying goods and services.

Byte
A computer term used to define a string of 7 or 8 bits, or binary digits. The length of the string determines the amount of data that can be represented. The 8-bit byte can represent numerous special characters, 26 uppercase and lowercase alphabetic characters, and 10 numeric digits, totaling 256 possible combinations.

Built-to-order
Syn: Make-to-Order

BTO
See Built-to-Order