Object Linking and Embedding
An object system created by Microsoft. OLE lets an author invoke different editor components to create a compound document.

OBL
Original bill of lading. See also Negotiable Bill of Lading.

Obsolescence or Obsolete
Goods that are no longer usable for their intended purpose through expiration, contamination, or change of need.

Obsolete Inventory
Inventory for which there is no forecast demand expected. A condition of being out of date. A loss of value occasioned by new developments that place the older property at a competitive disadvantage.

Occupiable Space
The space remaining in the warehouse for storing warehousing units after allocating space for service aisles, access aisles, and other utility space.

Occupied Space
Occupiable space actually occupied by warehousing units or other warehousing elements.

OCP
see Overland Common Port

OEE
see Overall Equipment Effectiveness

OEM
see Original Equipment Manufacturer

Offshore
Utilizing an outsourcing service provider (manufacturer or business process) located in a country other than where the purchasing enterprise is located.

OLE
see Object Linking and Embedding

Oligopoly
Where market availability is held by a limited number of firms.

OMT, ORT, DMT
Origin Motor Terminal, Origin Rail Terminal, Destination Motor Terminal. Location designated by a motor/rail carrier at origin/destination points where, the motor carrier or his authorised agent assembles, holds or stores an ocean carrier’s containers and chassis, where loaded containers are received from shippers or their agents, where empty containers are delivered to shippers or their agents.

On Deck Stowage
Cargo stowed on the deck of the vessel.

On Order
The amount of goods that has yet to arrive at a location or retail store. This includes all open purchase orders including, but not limited to, orders in transit, orders being picked, and orders being processed through customer service.

On Time In Full
Sales order delivery performance measure which can be expressed as a target, say, of achieving 98% of orders delivered in full, no part shipments, on the requested date.

On-Carriage
The carriage of goods (containers) by any mode of transport to the place of delivery after discharge from the ocean vessel (main means of transport) at the port (place) of discharge.

On-Demand
Pertaining to work performed when demand is present. Typically used to describe products which are manufactured or assembled only when a customer order is placed.

One Piece Flow
Moving parts through a process in batches of one

One-Way Networks
The advantages generally live with either the seller or buyer, but not both. B2C websites are one-way networks.

On-Hand Balance
The quantity shown in the inventory records as being physically in stock.

Online
A computer term which describes activities performed using computer systems.

On-line receiving
A system in which computer terminals are available at each receiving bay and operators enter items into the system as they are unloaded.

On-Time Performance
The proportion of time that a transit system adheres to its published schedule times within stated tolerances.

Open Market Purchases
Purchasing without contract or negotiation. Such practice may exist in an emergency situation when a contract is not in place.

Open Rates
Rates established for each individual carrier. These rates are listed in a tariff list but may differ according to carrier.

Open Storage
A condition in which all lots may be withdrawn or partial withdrawals made from lots without disturbing another lot.

Open-End Contract
A contract in which the term or quantity is not defined.

Open-to-Buy
A control technique used in aggregate inventory management in which authorizations to purchase are made without being committed to specific suppliers. These authorizations are often reviewed by management using such measures as commodity in dollars and by time period.

Open-to-Receive
Authorization to receive goods, such as a blanket release, firm purchase order item, or supplier schedule.

Operating ratio
A measure of operation efficiency defined as (Operating expenses / Operating revenues) x 100

Operational Performance Measurements
(1) In traditional management, performance measurements related to machine, worker, or department efficiency or utilization. These performance measurements are usually poorly correlated with organizational performance.2) In theory of constraints, performance measurements that link causally to organizational performance measurements. Throughput, inventory, and operating expense are examples. Also see: Performance Measures

Optimization
The process of making something as good or as effective as possible with given resources and constraints.

Option
A choice that must be made by the customer or company when customizing the end product. In many companies, the term option means a mandatory choice from a limited selection.

Option to Renew
A contract may stipulate that the purchasing authority has the option to reinstate for another term.

Optional Replenishment Model
A form of independent demand item management model in which a review of inventory on hand plus on order is made at fixed intervals. If the actual quantity is lower than some predetermined threshold, a reorder is placed for a quantity M x, where M is the maximum allowable inventory and x is the current inventory quantity. The reorder point, R, may be deterministic or stochastic, and in either instance is large enough to cover the maximum expected demand during the review interval plus the replenishment lead time. The optional replenishment model is sometimes called a hybrid system because it combines certain aspects of the fixed reorder cycle inventory model and the fixed reorder quantity inventory model. Also see: Fixed Reorder Cycle Inventory Model, Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, Independent Demand Item Management Models

Order
A request for goods or services that is provided by telephone, fax, EDI transmission or via e-mail transmission.

Order Batching
Practice of compiling and collecting orders before they are sent in to the manufacturer.

Order Complete Manufacture to Customer Receipt of
Average lead time from when an order is ready for shipment to customer receipt of order, including the following sub-elements: pick/pack time, preparation for shipment, total transit time for all components to consolidation point, consolidation, queue time, and additional transit time to customer receipt. (An element of Order Fulfillment Lead-Time). Note: Determined separately for Make-to-Order, Configure/Package-to-Order, Engineer-to-Order and Make-to-Stock products.

Order Consolidation Profile
The activities associated with filling a customer order by bringing together in one physical place all of the line items ordered by the customer. Some of these may come directly from the production line others may be picked from stock.

Order Cycle
The time and process involved from the placement of an order to the receipt of the shipment.

Order Cycle Time
The time required completing a given process including the placement of an order until receipt of order. The overall process includes many sub-processes such as order entry, inspection, preparation, and shipping.

Order Entry and Scheduling
‘The process of receiving orders from the customer and entering them into a company’s order processing system. Orders can be received through phone, fax, or electronic media. Activities may include ”technically” examining orders to ensure an orderable configuration and provide accurate price, checking the customer’s credit and accepting payment (optionally), identifying and reserving inventory (both on hand and scheduled), and committing and scheduling a delivery date.’

Order Entry Complete to Start Manufacture
Average lead-time from completion of customer order to the time manufacturing begins, including the following sub-elements: order wait time, engineering and design time. (An element of Order Fulfillment Lead-Time). Note: Determined separately for Make-to-Order, Configure/Package-to-Order, and Engineer-to-Order products. Does not apply to Make-to-Stock products.

Order Fill
A measure of the number of orders processed without the need to back order, expressed as a percentage of all orders processed in the distribution center (dc) or warehouse.

Order Fulfillment Lead Times
Average, consistently achieved lead-time from customer order origination to customer order receipt, for a particular manufacturing process strategy (Make-to-Stock, Make-to-Order, Configure/Package-to-Order, Engineerto- Order). Excess lead-time created by orders placed in advance of typical lead times (Blanket Orders, Annual Contracts, Volume Purchase Agreements, etc.), is excluded. (An element of Total Supply Chain Response Time) Calculation: Total average lead time from [Customer signature/authorization to order receipt] + [Order receipt to completion of order entry] + [Completion of order entry to start manufacture] + [Start manufacture to complete manufacture] + [Complete manufacture to customer receipt of order] + [Customer receipt of order to installation complete] Note: The elements of order fulfillment lead time are additive. Not all elements apply to all manufacturing process strategies. For example, for Make-to-Stock products, the lead-time from Start manufacture to complete manufacture equals 0.

Order Interval
The time period between the placement of orders.

Order Level
The level of stock of any item at which an order is initiated for more supplies of that item.

Order Level System
See Fixed Reorder Cycle Inventory Model

Order Management
The planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders. Regarding customer orders, order management includes order promising, order entry, order pick, pack and ship, billing, and reconciliation of the customer account. Regarding manufacturing orders, order management includes order release, routing, manufacture, monitoring, and receipt into stores or finished goods inventories. Regarding purchasing orders, order management includes order placement, monitoring, receiving, acceptance, and payment of supplier.

Order Management Costs
One of the elements comprising a company’s total supply-chain management costs. These costs consist of the following: (1) New Product Release Phase-In and Maintenance: This includes costs associated with releasing new products to the field, maintaining released products, assigning product ID, defining configurations and packaging, publishing availability schedules, release letters and updates, and maintaining product databases. (2) Create Customer Order: This includes costs associated with creating and pricing configurations to order and preparing customer order documents. (3) Order Entry and Maintenance: This includes costs associated with maintaining the customer database, credit check, accepting new orders, and adding them to the order system as well as later order modifications. (4) Contract/Program and Channel Management: This includes costs related to contract negotiation, monitoring progress, and reporting against the customer’s contract, including administration of performance or warranty related issues. (5) Installation Planning: This includes costs associated with installation engineering, scheduling and modification, handling cancellations, and planning the installation. (6) Order Fulfillment: This includes costs associated with order processing, inventory allocation, ordering from internal or external suppliers, shipment scheduling, order status reporting, and shipment initiation. (7) Distribution: This includes costs associated with warehouse space and management, finished goods receiving and stocking, processing shipments, picking and consolidating, selecting carrier, and staging products/systems. (8) Transportation, Outbound Freight and Duties: This includes costs associated with all company paid freight duties from point-of-manufacture to end-customer or channel. (9) Installation: This includes costs associated with verification of site preparation, installation, certification, and authorization of billing. (10) Customer Invoicing/Accounting: This includes costs associated with invoicing, processing customer payments, and verification of customer receipt.

Order Picker
A warehouseman assigned to the function of making withdrawals of warehousing units.

Order Picking
‘Selecting or ”picking” the required quantity of specific products for movement to a packaging area (usually in response to one or more shipping orders) and documenting that the material was moved from one location to shipping. Also see: Batch Picking, Discrete Order Picking, Zone Picking’

Order Point Order Quantity System
The inventory method that places an order for a lot whenever the quantity on hand is reduced to a predetermined level known as the order point. Also see: Fixed Reorder Quantity Inventory Model, Hybrid system

Order Processing
Activities associated with filling customer orders.

Order Processing Time
The amount of time, determined by the inventory manager, needed to carry out all of the steps of issue and reconciliation of merchandise.

Order Promising
The process of making a delivery commitment, i.e., answering the question, When can you ship? For maketo- order products, this usually involves a check of uncommitted material and availability of capacity, often as represented by the master schedule available-to-promise. Also see: Available-to-Promise

Order Receipt to Order Entry Complete
Average lead-time from receipt of a customer order to the time that order entry is complete, including the following sub-elements: order revalidation, product configuration check, credit check, and order scheduling. Note: Determined separately for Make-to-Order, Configure/Package-to-Order, Engineer-to-Order, and Make-to-Stock products.

Order Selector
Same as order picker.

Order Tracking
The order status is monitored on the progress of the order from pickup to the final delivery.

Order-to-cash
An intertrading partner business process of taking the customer’s order, picking the product at the warehouse, shipping the product through logistics, receiving the product at the customer’s site, and flowing the cash from the customer’s payment to the general ledgers of the respective trading partners.

Organizational transparency
Refers to virtual organizations in which all the functions of an organization are carried out but are not under the total control of a single company.

Origin
The location where a shipment begins its movement.

Original Equipment Manufacturer
A manufacturer that buys and incorporates another supplier’s products into its own products. Also, products supplied to the original equipment manufacturer or sold as part of an assembly. For example, an engine may be sold to an OEM for use as that company’s power source for its generator units.

OS&D
see Over, Short, and Damaged

OTIF
see On Time In Full

Out of Gauge
Cargo which exceeds the internal dimensions of the container in width, length or height.

Out Of Stock
The state of not having inventory at a location and available for distribution or for sell to the consumer (zero inventory).

Out of Stocks
See Stock Outs

Outbound
Export shipments.

Outbound Consolidation
Consolidation of a number of small shipments for various customers into a larger load. The large load is then shipped to a location near the customers where it is broken down and then the small shipments are distributed to the customers. This can reduce overall shipping charges where many small packet or parcel shipments are handled each day. Also see: Break Bulk

Outbound Logistics
The process related to the movement and storage of products from the end of the production line to the end user.

Outlier
A data point that differs significantly from other data for a similar phenomenon. For example, if the average sales for a product were 10 units per month, and one month the product had sales of 500 units, this sales point might be considered an outlier. Also see: Abnormal Demand

Outpartnering
The process of involving the supplier in a close partnership with the firm and its operations management system. Outpartnering is characterized by close working relationships between buyers and suppliers, high levels of trust, mutual respect, and emphasis on joint problem solving and cooperation. With outpartnering, the supplier is viewed not as an alternative source of goods and services (as observed under outsourcing) but rather as a source of knowledge, expertise, and complementary core competencies. Outpartnering is typically found during the early stages of the product life cycle when dealing with products that are viewed as critical to the strategic survival of the firm. Also see: Customer-Supplier Partnership

Outport
Destination port, other than a base port, to which rates apply but which may be subject to additional outport arbitraries.

Outsource
To utilize a third-party provider to perform services previously performed in-house. Examples include manufacturing of products and call center/customer support.

Outsourced Cost of Goods Sold
Operations performed on raw material outside of the responding entity’s organization that would typically be considered internal to the entity’s manufacturing cycle. Outsourced cost of goods sold captures the value of all outsourced activities that roll up as cost of goods sold. Some examples of commonly outsourced areas are assembly by subcontract houses, test, metal finishing or painting, and specialized assembly process.

Over Landed
(1) Cargo volume count more than originally shipped. 2. Cargo taken beyond original port of discharge.

Over, Short, and Damaged
Excess, shortage or damaged items are included in a report issued at the warehouse. Used to file a claim with a carrier.

Overall Equipment Effectiveness
A measure of overall equipment effectiveness that takes into account machine availability & performance as well as output quality.

Overhang
The condition created by using a plane loading area that is larger in area than the pallet or platform surface upon which the first course is laid.

Overhead
Includes all of the factors other than direct labor and materials included in the cost of goods sold. This figure is usually expressed as a percentage of direct labor cost, a dollar amount per production unit, and several other ways.

Overland Common Port
A special rate concession made by shipping lines, rail carriers and truckers serving the U.S. West Coast for export and import traffic, intended to benefit midwest shippers and importers by equalising rates to and from other coastal areas, and offering these midwest companies a comparable alternative. The steamship companies lower their rates and the inland carriers pick up the terminal charges, which consist of handling charges, wharfage charges and car loading or unloading charges. OCP rates apply to cargo shipped from or consigned to the states of: North Dakota, South Dakota, Nebraska, Colorado, New Mexico and all states east thereof. OCP rates in Canada apply to the provinces of: Manitoba, Ontario and Quebec.

Over-the-road
A motor carrier operation that reflects long-distance, intercity moves, the opposite of local operations.

Owner-operator
A trucking operation in which the opener of the truck is also the driver.

Ownership, concentration of
Large companies can get economies of scale and efficient operations, so a few large companies often dominate industries (with examples like supermarket chains and transport companies). Continuing benefits mean that these large companies tend to grow at the expense of smaller rivals. The result is a continuing concentration of ownership, with the largest organizations setting the standards that others strive to match.