DEFINITION OF KEY TERMS USED IN SUPPLY CHAIN AUTOMATION

Advanced Planning and Scheduling (APS) – Advanced planning and scheduling (APS) is a type of system that tracks costs based on the activities that are responsible for driving costs in the production of manufactured goods. An APS allocates raw materials and production capacity optimally to balance demand and plant capacity

Vendor Managed Inventory (VMI) – The manufacturer receives electronic data (usually via EDI or the internet) that tells him the distributor’s sales and stock levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer generates the order, not the distributor. VMI does not change the “ownership” of inventory. It remains as it did prior to VMI.

Collaborative Planning, Forecasting and Replenishment (CPFR) – Collaborative Planning, Forecasting and Replenishment(CFPR) is a business model that takes a holistic approach to supply chain management and combines the intelligence of multiple trading partners in planning and fulfilling customer demand by using common metrics, language and firm agreements to improve efficiency for all participants. CFPR links sales and marketing best practices – category management, supply chain planning and execution processes to increase availability while reducing inventory, merchandizing, transportation and logistics costs.

E-Procurement – In simplest terms, electronic procurement defines the automation of an organization’s procurement processes using web-based applications. Unlike enterprise resource planning (ERP) systems that enable businesses to automate their internal processes, eProcurement enables widely dispersed buyers and suppliers to come together, interact, and execute purchase transactions directly over the Internet.

Master Production Schedule (MPS) – A Master Production Schedule is a Schedule of the completions of the end items and these completions are very much planned in nature. Master  production schedule acts as a very distinct and important linkage between the planning processes. With the help of this schedule, one can know the requirements for the individual end items by date and quantity. In companies, MPS are generally produced in order to know the number of each product that is to be made over some planning horizon. This schedule forms a very unique part of the company’s sales program which deals with the planned response to the demands of the market. A master production schedule is also in management language referred to as the master of all the
schedules as this schedule provides the production, planning, purchasing & top management, the most needed information required for planning and control of the whole manufacturing process or the operation.

Material Requirements Planning (MRP) – Material requirements planning (MRP) is a type of planning focused on the management of processes in manufacturing industries. MRP looks at the availability of materials for production and other related metrics.

Manufacturing Resource Planning (MRP-II) – Successor to the material requirements planning (MRP), it integrates planning of all aspects (not just production) of a manufacturing firm. MRP-II includes functions such as business planning, production planning and
scheduling, capacity requirement planning, job costing,

Warehouse Management System (WMS) – A software application which supports the daily operations of a warehouse. The software application allows for a system of centralized management of warehousing tasks including inventory control, tracking, and the location of stock items. WMS may work on their own as a single application or be an integrated part of a larger system. Current WMSs are capable of being highly complex and handle significant amounts of data many companies will allocate an entire staff to the operation of the software.

Yard Management Systems (YMS) – A yard management system (YMS) is a software system designed to oversee the movement of trucks and trailers in the yard of a manufacturing facility, warehouse, or distribution center. YMS provides real-time information on the location of trailers in the yard and allows yard employees to move trailers from staging to docks to fill orders in an efficient manner. Help prioritize shipment arrivals, identify trailer contents, manage yard jockey activity, standardize yard processes, reduce the time needed to allocate vehicles to loads, and avoid unnecessary vehicle movements.

Transportation Management System (TMS) – A Transportation Management System (TMS) is a subset of Supply Chain Management (SCM) software focused on transport logistics. TMS systems facilitate interactions between an Order Management System (OMS) and the Warehouse or Distribution Center (DC).

Efficient Consumer Response (ECR) – System for replenishing merchandise based on actual consumer demand. Prior methods of inventory replenishment were order driven, relying on retailers and wholesalers to predict demand. ECR is demand driven, initiating the manufacture and shipment of goods based on consumer purchase activity. ECR reduces the cycle time from purchase to replenishment, reduces the cost of warehousing excess inventory, and assists retailers, wholesalers, and manufacturers in determining the optimum product mix. ECR predicts the impact of a product promotion on retail demand and production requirements. ECR is
dependent upon the efficient and timely sharing of data along the supply chain beginning with sales information collected at a point-of-sale terminal. Given thin margins on average transactions and significant expenditures on warehouse space, some food and drug retailers resist manufacturers’ ECR initiatives.

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