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1. 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. [This] can be eliminated
by synchronizing the supply chain.

2. Push System 1) In production, the production of items at times required

by a given schedule planned in advance.
2) In material control, the issuing of material according
to a given schedule or issuing material to a job order at
its start time.
3) In distribution, a system for replenishing field ware-
house inventories where replenishment decision making
is centralized, usually at the manufacturing site or central
supply facility. See: pull system.

3. Global Strategy A strategy that focuses on improving worldwide per-

formance through the sales and marketing of common
goods and services with minimum product variation by
country. Its competitive advantage grows through select-
ing the best locations for operations in other countries.
See: multinational strategy.

4. Strategic Plan The plan for how to marshal and determine actions to
support the mission, goals, and objectives of an or-
ganization. Generally includes an organization's explicit
mission, goals, and objectives and the specific actions
needed to achieve those goals and objectives. See: busi-
ness plan, operational plan, strategic planning, strategy,
tactical plan.

5. Visibility The ability to view important information throughout a

facility or supply chain no matter where in the facility or
supply chain the information is located.

6. Postponement

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A product design, or supply chain strategy that delib-
erately delays final differentiation of a product (assem-
bly, production, packaging, tagging, etc.) until the latest
possible time in the process. This shifts product differ-
entiation closer to the consumer to reduce the anticipa-
tory risk of producing the wrong product. The practice
eliminates excess finished goods in the supply chain.
Sometimes referred to as delayed differentiation.

7. Value The worth of an item, good, or service.

8. Velocity 1) The rate of change of an item with respect to time.

See: inventory turnover, lead time.
2) In supply chain management, a term used to indicate
the relative speed of all transactions, collectively, within
a supply chain community. [The maximum of this] is most
desirable because it indicates higher asset turnover for
stockholders and faster order-to-delivery response for
customers.

9. Value-Stream Map- A lean production tool to visually understand the flow

ping of materials from supplier to customer that includes the
current process and flow as well as the value-added and
non-value-added time of all the process steps. Used to
lead to reduction of waste, decrease flow time, and make
the process flow more efficient and effective.

10. Pull System 1) In production, the production of items only as demand-

ed for use or to replace those taken for use. See: pull
signal.
2) In material control, the withdrawal of inventory as
demanded by the using operations. Material is not issued
until a signal comes from the user.
3) In distribution, a system for replenishing field ware-
house inventories where replenishment decisions are
made at the field warehouse itself, not at the central
warehouse or plant.

11. Spend Manage- Managing the outflow of funds in order to buy goods
ment and services. The term is intended to encompass such
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processes as outsourcing, procurement, e-procurement,
and supply chain management.

12. Value Chain The functions within a company that add value to the
goods or services that the organization sells to cus-
tomers and for which it receives payment.

13. 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. [It] is usually stated
in terms of dollars and grouped by product family. [It]
is then translated into synchronized tactical functional
plans through the production planning process (or the
sales and operations planning process). Although fre-
quently stated in different terms (dollars versus units),
these tactical plans should agree with each other and
with [this concept]. See: long-term planning, strategic
plan.
2) A document consisting of the business details (orga-
nization, strategy, and financing tactics) prepared by an
entrepreneur to plan for a new business.

14. Value Stream The processes of creating, producing, and delivering a

good or service to the market. For a good, [this] encom-
passes the raw material supplier, the manufacture and
assembly of the good, and the distribution network. For
a service, [this] consists of suppliers, support personnel
and technology, the service "producer," and the distribu-
tion channel. May be controlled by a single business or
a network of several businesses.

15. Customer Service 1) The ability of a company to address the needs, in-
quiries, and requests of customers.
2) A measure of the delivery of a product to the customer
at the time the customer specified.

16. Value Added 1) In accounting, the addition of direct labor, direct mate-
rial, and allocated overhead assigned at an operation. It
is the cost roll-up as a part goes through a manufacturing
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process to finished inventory.
2) In current manufacturing terms, the actual increase
of utility from the viewpoint of the customer as a part
is transformed from raw material to finished inventory;
the contribution made by an operation or a plant to the
final usefulness and value of a product, as seen by the
customer.
The objective is to eliminate all non-value-added activi-
ties in producing and providing a good or service.

17. Multi-Country A strategy in which each country market is self-con-

Strategy tained. Customers have unique product expectations
that are addressed by local production capabilities. Syn:
multidomestic strategy.

18. Demand-Driven A method for planning material needs that enables a

Requirements company to build more closely to actual market require-
Planning {DDMRP} ments.

19. Mass Marketing The strategy of sending the same message to all poten-
tial customers.

20. Return on Invest- A relative measure of financial performance that pro-

ment (ROI) vides a means for comparing various investments by
calculating the profits returned during a specified time
period. In the theory of constraints, [this] is calculated as
throughput minus operating expense divided by invest-
ment.

21. Organizational De- The creation of an organizational structure to support

sign the strategic business plans and goals of an enterprise
(e.g., for-profit versus not-for-profit companies). Given
the mission and business strategy, the organizational
structure design provides the framework within which the
business operational and management activities will be
performed.

22. Strategy For an enterprise, identifies how the company will func-
tion in its environment. Specifies how to satisfy cus-
tomers, how to grow the business, how to compete in
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its environment, how to manage the organization and
develop capabilities within the business, and how to
achieve financial objectives. See: strategic plan.

23. Inventory Opti- A computer application that can find optimal inventory
mization Software strategies and policies related to customer service and
return on investment over several echelons of a supply
chain.

24. Product Differenti- A strategy of making a product distinct from the compe-
ation tition on a nonprice basis such as availability, durability,
quality, or reliability.

25. Competitive An analysis of a competitor that includes its strategies,

Analysis capabilities, prices, and costs.

26. Return on Assets Net income for the previous 12 months divided by total
assets. See: return on owner's equity (ROE).

27. Capacity 1) The capability of a system to perform its expected

function. 2) The capability of a worker, machine, work
center, plant, or organization to produce output per time
period. Capacity required represents the system capabil-
ity needed to make a given product mix (assuming tech-
nology, product specification, etc.). As a planning func-
tion, both capacity available and capacity required can
be measured in the short term (capacity requirements
plan), intermediate term (rough-cut capacity plan), and
long term (resource requirements plan). Capacity control
is the execution through the I/O control report of the
short-term plan. Capacity can be classified as budgeted,
dedicated, demonstrated, productive, protective, rated,
safety, standing, or theoretical. See: capacity available,
capacity required.
3) Required mental ability to enter into a contract.

28. Target Costing The process of designing a product to meet a spe-

cific cost objective. Target costing involves setting the
planned selling price and subtracting the desired profit

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as well as marketing and distribution costs, thus leaving
the required manufacturing or target cost.

29. Demand-Driven A situation in which a customer purchase initiates

Supply Network real-time information flows through the supply chain that
consequently cause movement of product through the
network.

30. Business Strategy A plan for choosing how to compete. Business strategies
can be classified into three general categories:
(1) least cost,
(2) differentiation, and
(3) focus.

31. Environmentally Designing with consideration of how a product or its

Sensitive packaging will ultimately be disposed.
Engineering

32. Certification Documentation of competency by a supplier or by an or-

ganization, such as ISO 9000 certification. See: supplier
certification, ISO 9000.

33. ISO 14000 Series A series of generic environmental management stan-

Standards dards, developed by the International Organization for
Standardization, that provide structure and systems for
managing environmental compliance with legislative and
regulatory requirements and affect every aspect of a
company's environmental operations.

34. Conflict Minerals Minerals mined in conditions of armed conflict and hu-
man rights abuses, and that are sold or traded by armed
groups.

35. ISO 26000 An international standard adopted by the International

Organization for Standardization to assist organizations
in contributing to sustainable development beyond legal
compliance through a common understanding of social
responsibility. [This] is not a management system stan-
dard and is not intended or appropriate for certification
purposes or regulatory or contractual use.
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36. Environmentally A firm that operates in such a way as to minimize detri-

Responsible mental impacts on society. See: green manufacturing,
Business green supply chain.

37. Accreditation Certification by a recognized body of the facilities, capa-

bility, objectivity, competence, and integrity of an agency,
service, operational group, or individual to provide the
specific service or operation needed. For example, the
Registrar Accreditation Board accredits those organiza-
tions that register companies to the ISO 9000 Series
Standards.

38. Environmentally A collection of manufacturing activities that includes de-

Responsible sign of the product, facility, manufacturing processes,
Manufacturing logistics, and supplier relationships that reduce or elim-
inate environmental waste through innovation and im-
provements.

39. Global Reporting A network-based organization that pioneered the world's

Initiative (GRI) most widely used sustainability reporting framework.

40. ANSI Z.10 A voluntary consensus standard on occupational health

and safety management systems. It uses recognized
management system principles in order to be compati-
ble with quality and environmental management system
standards such as the ISO 9000 and ISO 14000 Series.

41. SA8000 (Social Ac- A widely recognized international standard for managing
countability 8000) human rights in the workplace. It provides an auditable
framework for assuring that social accountability is being
stewarded by an organization.

42. Sustainability

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An organizational focus on activities that provide present
benefit without compromising the needs of future gener-
ations.

43. Gap Analysis A tool designed to assess the difference that exists be-
tween a service that is offered and customer expecta-
tions.

44. Work Breakdown In project management, a hierarchical description of a

Structure (WBS) project in which each lower level is more detailed. See:
project summary work breakdown structure.

45. Learning Curve A curve reflecting the rate of improvement in time per
piece as more units of an item are made. A planning
technique, [this] is particularly useful in project-oriented
industries in which new products are frequently phased
in. The basis for the [this] calculation is that workers will
be able to produce the product more quickly after they
get used to making it. Syn: experience curve, manufac-
turing progress curve.

46. Automated Guid- A transportation network that automatically routes one or

ed Vehicle System more material handling devices, such as carts or pallet
(AGVS) trucks, and positions them at predetermined destinations
without operator intervention.

47. Information Sys- A model of how the organization operates regarding

tem Architecture information. The model considers four factors:
(1) organizational functions;
(2) communication of coordination requirements;
(3) data modeling needs; and
(4) management and control structures. [This] should be
aligned with and match the architecture of the organiza-
tion.

48. Project Manage- The use of skills and knowledge in coordinating the
ment organizing, planning, scheduling, directing, controlling,
monitoring, and evaluating of prescribed activities to en-
sure that the stated objectives of a project, manufactured
good, or service are achieved. See: project.
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49. Supply Chain Strategy for how the supply chain will function in its
Strategy environment to meet the goals of the business and or-
ganizational strategies.

50. Every Good Sup- Needs to address collaborating with supply chain part-
ply Chain Strategy ners, delivering value using supply chain information
systems, and specifying the proper methods of acquiring
and managing data.

51. Network and Specifying who, what, where, when and why for every
process design or detail of a supply chain; not only the location and number
redesign is about of facilities, but also how the products will be designed
to facilitate organizational strategy & how information
systems will make the network transparent.

52. Key Processes * Identifying customer & business requirements

that Supply Chain * Identifying the current & future states
Managers Need to * Performing a gap analysis between the current & future
Perform Related states
to Designing the * Developing an action plan to close the gaps
Supply Chain are:

53. Supply Chain Man- * Communicating & receiving feedback

agers Implement- * Using project management
ing Action Plans * Using project management to change the culture and
Include: ensure that project results become standard operating
procedure

54. Business Model 1) A plan that details how a company creates, delivers,
and generates revenues.
2) It shows how the company will differentiate itself from
the competition & how it will function, including the ex-
penses it expects to incur.
3) The company's modus operandi, or way of doing
things

55. Business Plan * Value Proposition

{How to Make * Set of Core Competencies
Strategy Happen}
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* Cost Structure
* Revenue Model

56. Low-Cost Strategy Low-Cost Strategy = focuses on delivering no-frills ba-

vs Target Cost sics with low prices that are hard to match; cost is the
basis for competition
Target Cost = pre-determined cost for a product given
the market and consumer preference

57. Ways to Create a * Niche Marketing = High Net Worth Customers or Target
Focus Advantage Age Group
* Responsiveness = Placing products close to Cus-
tomers to prevent outages
* Innovation = Providing the latest technology to the
Market; think Apple, Nike

58. Primary Driver of Serving the end-user customer

Supply Chain De-
cisions

59. Since the Bullwhip Replace the forecasts with actual demand information to
Effect is Driven the degree this is feasible. It is not a simple matter. Sup-
by Demand Fore- ply Chain Professionals have developed demand-driven
casts, a Solution techniques for letting actual orders (not forecasts) drive
is: production.

60. Byrnes Breaks 1) Staples = steady, year-round demand and low mar-
Products into 3 gins
Categories: 2) Seasonal Products = outdoor patio furniture, holiday
decor
3) Fashion Products = innovative items with unpre-
dictable demand; Zara uses 2 categories - fashion &
staple clothing

61. Michael Porter's 1) Customer Service = Accuracy, flexibility & speed of

"Competitive Ad- responses and deliveries
vantage" Business 2) Sales Channels = Allowed methods of placing an
Strategy 5 Funda- order for goods / services
mental Elements 3) Value System = Details how the supply chain partners
- Do Not Con- will add value
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fuse with Porter's 4) Operating Model = The way the company will plan,
5 Forces make, source, deliver & return to meet working capital
5) Asset Footprint = Scope & location of owned & leased
property, plant & equipment

62. An Organization's Subcategories Leverage SCOR Processes:

Core Competen- * Decision-making Activities
cies Analyzed Best - Planning & - Enabling
into Categories: * Execution Activities
- Sourcing, - Making, - Delivering - Returning

63. Name the 3 V's of 1) Visibility = Increasing

SCM 2) Velocity = Increasing
3) Variability = Decreasing

64. Name Additional 4) Vocalization = Good communication between supply

V's of SCM chain partners
5) Variety = Too much or too little variety can be bad
6) Volume = Amount of product produced in a given time

65. Overarching Goals Provide customers with goods and services when and
of Supply Chain where they want them, at a competitive price, to remain
consistent with the strategies of the organization and the
extended supply chain, and to ensure that the supply
chain is globally competitive.

66. Impacts to Supply The basic elements are:

Chain's Ability to 1) Time
Respond to Com- 2) Distance
petitive Changes 3) Collaboration
in the Global Mar-
ketplace

67. Elkington's Triple When the business plan determines ways to satisfy all
Bottom Line - 3 bottom lines at once. This is the center of the Venn
"Sweet Spot" Diagram.

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68. "Window Dress- Manipulating customer orders or inventory on a balance

ing" (Creative Ac- sheet - when performed in a legal way.
counting) Note- this harms long-term sustainability.

69. Brief Tips to Make 1) Start with things that fit in the sweet spot
Your Supply Chain 2) In online ordering systems, place the more sustain-
More Sustainable able choices as the first options in lists
3) Make requests for proposal / invitation to tender con-
tracts specify sustainability as a criteria
4) Use service contracts to incentivize vendors to reduce
materials
5) Do an audit on what composes waste in the supply
chain to determine if items can be removed from the
waste stream
6) Get an environmental, safety or quality certification
from an accredited third party

70. UN Global Com- The United Nations created the Global Compact as a
pact 10 Key Princi- means of helping businesses voluntarily align their op-
ples erations and strategies with 10 key principles across 4
categories
1) Human Rights = Principles 1, 2
2) Labor = Principles 3, 4, 5, & 6
3) Environment = Principles 7, 8 & 9
4) Anti-corruption = Principle 10

71. 2 Complementary 1) Incorporate 10 key principles into global business

Objectives of UN activities
Global Compact 2) Catalyze actions in support of the broader United
Nations goals

72. OECD (Organiza- Created to promote policies that will improve economic
tion for Econom- and social well-being of people around the world.
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ic Cooperation and OECD measures productivity, investment and global
Development) flows of trade.
Located in Paris, France & has 38 member countries

73. OECD 3 Guide- 1) Ensure that these enterprises' operations align with
lines government policies
2) Reinforce trust and confidence between enterprises
and the societies in which they operate
3) Strengthen the foreign investment climate and aug-
ment contributions to sustainable development made by
the enterprises

74. 5 Key Aspects * Voluntary = As an (NGO), Non Government Organi-

of ISO (Internation- zation, ISO has no legal authority to enforce standards
al Organization for implementation
Standardization) * Market-driven = Develop standards for which there is a
market need
* Consensus = Standards developed in response to the
Market and reviewed every 5 years to decide if they
should be maintained, updated or withdrawn
* Registration = The audit of an organization's implemen-
tation and conformance to ISO standards
* Generic Management System Standards = Many ISO
standards are highly specific to a particular product,
material or process

75. ISO Certification Certification must be renewed every 3 years.

Renewal When a new ISO version of a standard becomes avail-
able, certified organizations have a 3 year period to make
the transition.

76. ISO Certification in Because ISO certification has become so widespread,

Requests for Pro- it has become an expected requirement in RFP's and
posal (RFP) or In- ITT's.
vitation to Tender
(ITT)

77. 7 Primary Subjects 1) Organizational Governance, 2) Human Rights, 3) La-

of ISO 26000 bor Practices, 4) Environment, 5) Fair Operating Prac-

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tices, 6) Consumer Issues & 7) Community Involvement
& Development

78. Cloud Computing * Includes the ongoing lease cost,

Downsides * The fact that ending the lease ends the service
* The risk of internet failure restricting access
* The risk of the organization's sensitive data being in the
hands of a 3rd party

79. Supply Chain Con- Much like an airport control tower, it is intended to
trol Tower provide centralized visibility and control by consolidates
real-time, end-to-end data from around the supply chain
to enable visibility, analysis, prediction and control.
There is no standard definition of what a control tower is.

80. Quantum Comput- This is not a super computer! A quantum computer uses
ing principles from quantum physics to perform millions or
billions of permutations of a problem in a vast multi-di-
mensional space.

81. Stock Price as a Stock price is NOT a measure for IT investment because
Measure for IT it fluctuates in response to many factors.

82. IT Audits Can Re- * Software vendor promises that were false
veal * Failure to provide the promised level of system integra-
tion
* That full features of the software are not being exploited
because of resistance to change or inadequate training.
Results of audits are rarely entirely positive, but negative
results should be used to create positive organizational
changes.

83. Tuckman Ladder Psychologist Bruce Tuckman proposed that teams do

of Team Develop- not begin as a highly productive unit.
ment * Forming = members are trying to understand their roles
* Storming = team questions objectives, competition and
conflict for status are expected
* Norming = Team grows in confidence & project man-
agers sustain motivation and collaboration
* Performing = Team is at peak efficiency, project man-
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ager helps with long-term skill development
* Adjourning = lessons are learned & captured, success-
es are celebrated, team disbands

84. Common Causes * Budget or schedule is missed

of Project Failures * Project results are ineffective
* Deliverables have no valid purpose
* Project sponsors allow scope creep

85. How do you avoid The work done during the planning phase is the most
pitfalls of project critical to a traditional project's success. Activities and
management? risks that are poorly planned will contribute to increased
costs later - a trend that is very difficult to reverse later.

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