O

Obeya:
Japanese word for "big room", similar in concept to a traditional “war room,” and containing charts and graphs which show milestones and progress to date, problem resolution activities, etc. A command center type atmosphere.
Object Linking and Embedding (OLE):
An object system created by Microsoft. OLE lets an author invoke different editor components to create a compound document.
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 A condition of being out of date.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.
Obsolescence:
A loss in the utility or value of property that results over time from intrinsic limitations (as outmoded facilities) or external circumstances.
Occupational Safety and Health Administration (OSHA):
A United States Department of Labor Agency whose mission is the prevention of work-related injuries, illnesses, and death.
Ocean Bill of Lading:
The bill of lading issued by the ocean carrier to its customer.
OE:
See: Order Exchange System
OEE:
See: Overall Equipment Effectiveness
OEM:
See: Original Equipment Manufacturer
Offshoring:
The practice of moving domestic operations such as manufacturing to another country.
Offer:
See: Tender
Offline:
A computer term which describes work done outside of the computer system or outside of a main process within the corporate system. In general usage this term describes any situation where equipment is not available for use, or individuals cannot be contacted.
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
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. May also refer to computer applications which are accessed remotely via a subscription service where charges for use are incurred as opposed to paying a set period fee.
On-Hand Balance:
1) The ‘book’ quantity recorded in the inventory records. 2) The ‘physical’ quantity as can be actually counted in the storage location(s).
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 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 (OTIF):
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 Time Delivery:
A metric defined as % of orders received on time by the by the company (inbound) or its customers (outbound).
One Piece Flow:
Moving parts through a process in batches of one
One Up/One Down:
A new International Standards Organization (ISO) Food Traceability Standard that requires each company to know who their immediate supplier is and to whom the product is being shipped. Also, the Bioterrorism Act of 2002 requires One Up/One Down traceability for each link in the supply chain.
One-Way Networks:
The advantages generally live with either the seller or buyer, but not both. B2C websites are one-way networks.
Online:
A computer term which describes activities performed using computer systems.
Open-to-Buy:
Open-to-Buy: A retail category management technique which identifies merchandise budgeted for purchase during a certain time period that has not yet been ordered. It is also the process of planning merchandise sales and purchases. OTB budgets are typically set by commodity group rather than supplier. Also see: Open-to-ReceiveCalculation: OTB = Planned Sales + Planned Markdowns + Planned Inventory - Actual Inventory - On Order - Actual Sales
Open-to-Receive:
A retail category management technique which identifies how much merchandise you can receive based on inventory levels and sales for a period. It tells you how much inventory should be on hand at the beginning of any given period and how much new merchandise should be received during the period. Also see: Open-to-Buy
Operational Availability:
the percent of time that a system is available for a mission or the ability to sustain operations tempo.
Operational Performance Measurements:
The set of performance measures (metrics) used to monitory activity in the operational area of the business. These include those related employee and machine productivity in the areas of receiving, warehouse management, manufacturing and assembly, inventory management, fulfillment. Also see: Performance Measures
Operating ratio:
A measure of operation efficiency defined as: (Operating expenses / Operating revenues) x 100
Optimization:
The process of making something as good or as effective as possible with given resources and constraints.
Option:
In the area of product management an option is a functional capability of the product which can be included at the discretion of the buyer. The option could be a physical component, a color choice or a software feature. Options can be related in such a way that if “A” is chosen then “B” must be too, or if “A” is chosen “B” cannot be also.
Optional Replenishment Model:
An optional replenishment model similar to the fixed order period model. In this model, unless inventory has dropped below a prescribed level when the order period has elapsed, no order is placed. Intended to protect against placing very small orders it is attractive when review and ordering costs are large. Also see: Fixed Reorder Cycle Inventory Model, Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, Independent Demand
Order:
A type of request for goods or services such as a purchase order, sales order, work order, etc..
Order Batching:
The practice of compiling and collecting orders before they are sent in to the manufacturer.
Order Complete Manufacture to Customer Receipt of Order:
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 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 Exchange (OE) System:
A system designed to transfer orders to a more applicable area or department within a company or store. For returns, this process would update the system to acknowledge the product needs to be restocked (if product is not defective) and a credit is processed to the customer.
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, Engineer-to-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 set period of time which controls order placement in a fixed order point model. Also see: Fixed Reorder Cycle Inventory Model, Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, Independent Demand
Order Level System:
See: Fixed Reorder Cycle Inventory Model
Order Management:
The process of managing activities involved in customer orders, manufacturing orders, and purchase orders. For customer orders this includes order entry, picking, packing, shipping, and billing. For manufacturing it includes order release, routing, production monitoring, and receipt to inventory. For P.Os the activities are order placement, monitoring, receiving, and acceptance.
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 Picking:
The function of gathering the items associated with an order from their storage locations in order to make them available to be included in production processes or to customers. 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 Inventory System
Order Processing:
Activities associated with accepting and filling customer orders.
Order Promising:
The act of agreeing to a customer’s stated requirements for delivery of products or services to be provided in a given quantity on a given date. 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.
Origin:
The place where a shipment begins its movement.
Open to Buy (OTB):
A budgeting and procurement guide used by many retailers to establish appropriate procurement and inventory levels based on projected sales. Usually set at a category or higher level rather than at the individual SKU level. The formula for calculating the Open-To-Buy is:Calculation: OTB = Planned Sales + Planned Markdowns + Planned Inventory - Actual Inventory - On Order - Actual Sales
Original Equipment Manufacturer (OEM):
The rebranding of equipment and selling it under another name, or as a component of another product. OEM refers to the company that made the products (the "original" manufacturer), but with the growth of outsourcing, eventually became widely used to refer to the organization that buys the products and resells them. This term has two generally acceptable definitions which are actually opposites of each other and may vary by industry: 1) The OEM reseller is often the designer of the equipment (which is made to order). An example would be a computer manufacturer OEM which includes components built by other manufacturers, and 2) Companies that make products for others to repackage and sell, or to incorporate into a final assembly. An example would be an OEM manufacturing tires for use on automobiles.
OS&D:
See: Over, Short and Damaged
OSHA:
See: Occupational Safety and Health Administration
OTB:
See: Open to Buy
OTIF:
See: On Time In Full
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 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.
Outbound Supply Chain Network Planning:
See: Network Planning
Outgate:
The process of checking a container or trailer out of an intermodal facility. The process includes inspection of the unit, input of data into a computer system.
Outlier:
In statistical analysis an outlier refers to a data point that is statistically different from the main body, either significantly high or low, from other data for a similar phenomenon. An example would be where the average monthly usage of an item is 100 and one of the months in the average set is 500. Also see: Abnormal Demand
Outpartnering:
A variant of outsourcing seen primarily in the healthcare industry. Outpartnering is characterized by close working relationships between buyers and suppliers as a source of knowledge, expertise, and complementary core competencies. Also see: Customer-Supplier Partnership, Outsource
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, short and damaged (OS&D):
This is typically a report issued at warehouse when goods received are more or less than indicated by the packing slip, or are damaged. Used to file claim with carrier.
Over-the-Road:
A motor carrier operation that reflects long-distance, intercity moves; the opposite of local operations.
Overall Equipment Effectiveness (OEE):
A measure of overall equipment effectiveness that takes into account machine availability & performance as well as output quality.
Overpack:
The practice of using a large box or carton to contain multiple smaller packages which are all going to the same destination in order to achieve a reduced overall shipping cost vs. the individual packages.
Owner-Operator (OO):
A trucking operation in which the owner of the truck is also the driver.