Key Terms in Supply Chain and Logistics Management

  • Supply Chain Management: the coordination and management of all activities involved in the production and delivery of a product or service, from the supplier to the end customer.
  • Logistics: the management of the flow of goods, information, and other resources between the point of origin and the point of consumption in order to meet customer requirements.
  • Procurement: the process of acquiring goods and services from external sources, typically from suppliers.
  • Demand Planning: the process of estimating future demand for a product or service, which is a crucial factor in supply chain management.
  • Forecasting: the process of using historical data and other information to make informed predictions about future demand.
  • Inventory Management: the practice of overseeing and controlling the inventory of a business to ensure that enough inventory is available to meet demand, while avoiding excess inventory that can lead to waste and increased costs.
  • Material Requirements Planning (MRP): a system that calculates the materials required to manufacture a product based on demand, inventory levels, and other factors.
  • Manufacturing Resource Planning (MRP II): a system that integrates all aspects of production planning, from demand forecasting to capacity planning, in order to optimize production processes.
  • Capacity Planning: the process of determining the production capacity required to meet future demand.
  • Distribution: the process of getting products from the manufacturer to the customer, which can include transportation, warehousing, and other activities.
  • Transportation Management: the process of planning and executing the movement of goods from one location to another, including shipping, freight, and other related activities.
  • Warehouse Management: the practice of managing the flow of goods into, through, and out of a warehouse.
  • Cross-Docking: a logistics technique where goods are unloaded from incoming trucks and immediately reloaded onto outbound trucks, with minimal handling or storage in between.
  • Just-In-Time (JIT): a manufacturing philosophy that focuses on producing goods only when they are needed, to avoid excess inventory and reduce costs.
  • Kanban: a visual system for managing production processes, often used in JIT systems.
  • Lean Manufacturing: a production philosophy that focuses on reducing waste and maximizing efficiency, to create a continuous flow of materials and products through the supply chain.
  • Total Quality Management (TQM): a management approach that focuses on continuous improvement of processes, products, and services to meet or exceed customer expectations.
  • Six Sigma: a data-driven approach to quality management, which seeks to eliminate defects and reduce variability in production processes.
  • Kaizen: a Japanese term meaning "continuous improvement," often used in the context of lean manufacturing and other quality improvement methodologies.
  • Continuous Improvement: the ongoing effort to improve products, services, and processes over time, often using methods such as Kaizen or TQM.
  • Quality Control: the process of ensuring that products or services meet established quality standards.
  • Quality Assurance: the process of ensuring that a product or service is designed and produced to meet customer requirements.
  • Reverse Logistics: the process of managing the flow of goods in the reverse direction, from the customer back to the manufacturer or distributor, for purposes such as returns, repairs, or recycling.
  • Green Logistics: the practice of managing the logistics process in an environmentally friendly way, to reduce the impact on the environment.
  • Last-Mile Delivery: the final stage in the delivery of a product or service to the end customer, typically the most expensive and time-consuming part of the logistics process.
  • Freight Forwarder: a company that arranges and coordinates the transportation of goods on behalf of shippers.
  • Carrier: a company that provides transportation services, such as shipping or trucking.
  • Third-Party Logistics (3PL): a company that provides logistics services on behalf of other companies, such as warehousing, transportation, or distribution

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