See: Sales and Operations Planning.
See: Sensitivity Analysis
See: Software as a Service
Society of Automotive Engineers
Safety Stock:
The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand.
Salable Goods:
Products which are available for sale to customers as differentiated from items which are parts or assemblies that are not generally sold independently. In the retail environment salable is differentiated from ‘unsalable’ which denotes goods which are damaged, spoiled or past pull date.
Sales and Operations Planning (SOP):
A strategic planning process that reconciles conflicting business objectives and plans future supply chain actions. S&OP Planning usually requires various business functions such as sales, operations and finance to work together to agree on a single plan/forecast that can be used to drive the entire business. Some organizations include suppliers and customers in their S&OP processes.
Sales Cycle Time:
Measures the time required for a product to sell out completely from the store/shelf i.e., beginning from the day itenters the floor.
Sales Forecast:
A prediction of future sales based on past performance of a given time period (Five month rolling average) and analysis of current market conditions.
Sales Mix:
The relative volumes of sales for a variety of products as a percentage of the total sales volume.
Sales Plan:
This is composed of two primary sections - sales strategy (objectives, market position, competition, conversion methods, etc.) and Tactics (implementation of the strategy, infrastructure, and projections). The sales plan projections are expressed in units and in sales dollars, they are a necessary for production planning or sales and operations planning process. Also see: Aggregate planning, Production Planning, Sales and Operations Planning
Sales Planning:
The process of determining the level of sales necessary to meet general business objectives of profitability, productivity, competitive customer lead times, and so on, as expressed in the overall business plan. Also see: Production Planning, Sales and Operations Planning
Salvage Material:
Unused materials in the form of waste or obsolete material that has a market value and can be sold.
Sarbanes-Oxley Public Accounting and Investor Protection Act:
A United States federal law enacted on July 30, 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. The law is divided into 11 sections ranging from additional corporate board responsibilities to criminal penalties.
Saw-Tooth Diagram:
An X/Y diagram showing quantity on one axis and time depicting the inventory level for a typical item in stock with inventory level declining as it is consumed and rising as incoming orders are received.
See: Scan-Based Trading
See: Standard Carrier Alpha Code
1) How quickly and efficiently a company can ramp up to meet demand. See also uptime production flexibility. 2) How well a solution to some problem will work when the size of the problem increases. The economies to scale don't really kick in until you reach the critical mass, then revenues start to increase exponentially.
A computer term referring to the action of scanning bar codes or RF tags.
Scan-Based Trading (SBT):
A practice that uses point-of-sale scanner data to manage payment, promotion and replenishment of products in a retail store. It is similar in nature to and an enhanced version of Vendor Managed / Owned Inventory where the retailers POS data is used as the basis for transactions between the supplier and the retailer. Supplements the consumption / replenishment component of CPFR and ECR strategies.
Scanlon Plan:
A system of group incentives on a companywide or plant-wide basis that sets up one measure that reflects the results of all efforts. The Scanlon plan originated in the 1930’s by Joe Scanlon and MIT. The universal standard is the ratio of labor costs to sales value added by production. If there is an increase in production sales value with no change in labor costs, productivity has increased while unit cost has decreased.
See: Supply Chain Execution
See: Supply Chain Event Management
Scenario Forecasts:
A methodology used to anticipate possible large scale changes that could affect, either positively or negatively, an organization. The organization would develop scenarios for how the organization will respond to different future situations the organization may encounter in the future.
Scenario Planning:
A form of planning in which likely sets of relevant circumstances are identified in advance, and used to assess the impact of alternative actions.
See: Supply Chain Integration
See: Supply Chain Management
See: Supply Chain Operations Reference Model
A performance measurement tool used to capture a summary of the key performance indicators(KPIs)/metrics of a company. Metrics dashboards/scorecards should be easy to read and usually have “red, yellow, green” indicators to flag when the company is not meeting its targets for its metrics. Ideally, a dashboard/scorecard should be cross-functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly – at least on a monthly basis and weekly in key functions such as manufacturing and distribution where activities are critical to the success of a company. The dashboard/scorecards philosophy can also be applied to external supply chain partners such as suppliers to ensure that suppliers’ objectives and practices align. Synonym: Dashboard.
Scrap Material:
Unusable material that has no market value and must generally be disposed of as a cost
A factor used in forecasting to reflect the seasonal variability in demand for certain products. Seasonality explains the fluctuation in demand for various recreational products which are used during different seasons.
Secondary Highways:
Highways that serve primarily rural areas.
Secure Electronic Transaction (SET):
An early standard protocol for securing credit card transactions over insecure networks, specifically, the Internet.
In marketing, it is the identification and classification of groups of buyers within a market who share similar needs and who demonstrate similar buyer behavior.
Seiri (Sort):
A Lean 5 S term which refers to the practice of sorting through all the tools, materials, etc., in the work area and keeping only essential items. Everything else is stored or discarded. This leads toincreased safetyand less clutter to interfere with productive work.
Seiton (Straighten):
Focuses on the need for an orderly workplace. "Orderly" in this sense means arranging the tools and equipment in an order that promotes work flow. Tools and equipment should be kept where they will be used, and the process should be ordered in a manner that eliminates extra motion.
Seiso (Shine):
Indicates the need to keep the workplace clean as well as neat by making cleaninga daily activity. At the end of each shift, the work area is cleaned up and everything is restored to its place. The key point is that maintaining cleanliness should be part of the daily work - not on occasional activity initiated when things get too messy.
Seiketsu (Standardise):
Refers to standardized work practices. It is more than standardized cleanliness. This means operating in a consistent and standardized fashion. Everyone knows exactly what his or her responsibilities are.
Self Billing:
A transportation industry strategy which prescribes that a carrier will accept payment based on the tender document provided by the shipper.
Self Correcting:
A computer term for an online process that validates data allowing the data to enter the system only after all errors are corrected.
Sell In:
Units which are sold to retail stores by the manufacturer or distributor for re-sale to consumers. The period of time in a Product Life Cycle where the manufacture works with it’s resellers to market and build inventory for sale. Also see: Sell Through
Sell Through:
Units sold from retail stores to customers. The point in a Product Life Cycle where initial consumption rates are developed and demand established. Also see: Sell In
Selling, General and Administrative (SG&A) Expenses:
Includes marketing, communication, customer service, sales salaries and commissions, occupancy expenses, unallocated overhead, etc. Excludes interest on debt, domestic or foreign income taxes, depreciation and amortization, extraordinary items, equity gains or losses, gain or loss from discontinued operations and extraordinary items.
Sensitivity Analysis (SA):
The study of how the variation (uncertainty) in the output of a mathematical model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of a model.
Separable Cost:
A cost that can be directly assignable to a particular segment of the business.
Serial Number:
A serial number is a unique number assigned for identification which varies from its successor or predecessor by a fixed discrete integer value. Common usage has expanded the term to refer to any unique alphanumeric identifier for one of a large set of objects, however in data processing and allied fields in computer science. Not every numerical identifier is a serial number; identifying numbers which are not serial numbers are sometimes called nominal numbers.
Serial Shipping Container Code (SSCC):
An 18-character identification number used to identify containers including pallats and boxes primarily for containers which are a part of a shipment covered by an Autemated Shipment Notice (ASN)
Serpentine Picking:
A method used for picking warehouse orders wherein the pickers are directed to pick from racks on both sides of an aisle as they move from one end to the other. A different method would be to pick from one side (front to back) then from the opposite side (back to front). Where used, serpentine picking can halve travel time and improve traffic flow down the aisles.
Service Level:
A measure (usually ex­pressed as a percentage) of satisfying demand through inventory or by the current production schedule in time to satisfy the customer’s requested delivery dates and quantities.
Service Level Agreement (SLA):
may be used in lieu of a contract to represent and document the terms of the performance based agreement for organic support
Service Oriented Architecture (SOA):
A computer system term which describes an software architectural concept that defines the use of services to support business requirements. In an SOA, resources are made available to other participants in the network as independent services that are accessed in a standardized way. Most definitions of SOA identify the use of web services (using SOAP and WSDL) in its implementation, however it is possible to implement SOA using any service-based technology.
Service Parts Revenue:
The sum of the value of sales made to external customers and the transfer price valuation of sales within the company of repair or replacement parts and supplies, net of all discounts, coupons, allowances, and rebates.
See: Secure Electronic Transaction
Setup Costs:
The costs incurred in staging the production line to produce a different item
Seven Wastes:
Developed by Taiichi Ohno, Toyota’s Chief Engineer for many years who was the innovator at the heart of the Toyota quality system, this refers to identified seven barriers to improving quality. They are the: 1)waste of overproduction, 2)waste of waiting, 3)waste of transportation, 4) the waste of inappropriate processing, 5) the waste of unnecessary Inventory, 6)waste of unnecessary motions, and 7) waste of the defects.
See: Special Economic Zone
See: Selling General and Administrative Expense
Shared Services:
Consolidation of a company's back-office processes to form a spinout (or a separate "shared services" unit, to be run like a separate business), providing services to the parent company and, sometimes, to external customers. Shared services typically lower overall cost due to the consolidation, and may improve support as a result of focus.
Shareholder Value:
Combination of profitability (revenue and costs) and invested capital (working capital and fixed capital).
Shelf Life:
The stated amount of time an item may be held in inventory before it becomes unusable due to some form of deterioration of the product or due to technical obsolescence.
Shewhart Cycle:
See: Plan-Do-Check-Action
Ship Agent:
A liner company or tramp ship operator representative who facilitates ship arrival, clearance, loading and unloading, and fee payment while at a specific port.
Ship Broker:
A firm that serves as a go-between for the tramp ship owner and the chartering consignor or consignees
The party that tenders goods for transportation.
Shipper-carriers (also called private carriers) are companies with goods to be shipped that own or manage their own vehicle fleets. Many large retailers, particularly groceries and "big box" stores, are shipper-carriers.
Shipper’s Agent:
A firm that acts primarily to match up small shipments, especially single-traffic piggyback loads to permit use of twin-trailer piggyback rates.
Shipper’s Association:
A nonprofit, cooperative consolidator and distributor of shipments owned or shipped by member firms; acts in much the same was as for-profit freight forwarders.
  1. The act of conveying materials from one point to another.
  2. The functional area which preparers the outgoing shipment for transport.
Shipping Lane:
A predetermined, mapped route on the ocean that commercial vessels tend to follow between ports. This helps ships avoid hazardous areas. In general transportation, the logical route between the point of shipment and the point of delivery used to analyze the volume of shipment between two points.
Shipping Manifest:
A document which is typically presented to the carrier outlining the individual shipping orders included in a shipment. The manifest will show the reference number of each shipping order in the load, the weight and count of boxes or containers, and the destination.
Shop Calendar:
See: Manufacturing Calendar
Shop Floor Production Control Systems:
The systems that assign priority to each shop order, maintaining work-in-process quantity information, providing actual output data for capacity control purposes and providing quantity by location by shop order for work-in-process inventory and accounting purposes.
A short move that is usually under 1000 miles.
Short-Haul Discrimination:
Charging more for a shorter haul than for a longer haul over the same route, in the same direction, and for the same commodity.
Short Sea Shipping:
Refers to the use of coastal waters for transport of cargo between coastal port areas as an alternative to the use of the highway system between the same two areas. An example would be using roll-on, roll-off vessels and truck trailers to transport cargo from the northeast US to the southeast or gulf coast.
Short Shipment:
Piece of freight missing from shipment as stipulated by documents on hand.
Refers to the loss of inventory count due to pilferage, damage, spoilage, etc. Shrinkage can occur while material is in stock and while it is in transit.
See: Standard Industrial Classification
A Greek letter (Σ) commonly used to designate the standard deviation of a population. Sigma is a statistical term that measures how much a process varies from perfection, based on the number of defects per million units produced. In a process audit measurement, sigma would be the number of times the process failed for each million time the process was run. In either case the subject is generally referred to as an “opportunity.” One Sigma = 690,000 per million units. Two Sigma = 308,000 per million units. Three Sigma = 66,800 per million units. Four Sigma = 6,210 per million units. Five Sigma = 230 per million units. Six Sigma = 3.4 per million units.
Also frequently called “foxhole” or “stovepipe”, relates to a management / organization style where each functional unit operates independently, and with little or no collaboration between them and other units regarding major business processes and issues.
A mathematical technique for testing the performance of a system due to uncertain inputs and/or uncertain system configuration options. Simulation produces probability distributions for the behavior (outputs) of a system. A company may build a simulation model of its build plan process to evaluate the performance of the build plan under multiple product demand scenarios.
Single Minute Exchange of Dies (SMED):
A manufacturing procedure which provides for a rapid and efficient way of converting a manufacturing process from running the current product to running the next product.
Single-Period Inventory Models:
An inventory model, sometimes called the ‘newsboy’ model, which is used to define economical or profitable lot-size quantities when an item is ordered or produced only once ( newspapers, perishables, etc.) it balances the cost of a potential shortage with the cost of excess stock.
Single Sourcing:
When an organization deliberately chooses to use one supplier to provide a product or service, even though there are other suppliers available.
Single Source Leasing:
Leasing both the truck and driver from one source.
Six-Sigma Quality:
Six Sigma is a term coined to stress the continuous reduction in process variation to achieve near-flawless quality. When a Six Sigma rate of improvement has been achieved, defects are limited to 3.4 per million opportunities.
Skill Based Pay System:
An incentive based pay system that promotes and rewards workers based on the number, type and depth of skills acquired, mastered and applied.
Skills Matrix:
A visible means of displaying people’s skill levels in various tasks. Used in a team environment to identify the skills required by the team and which team members have those skills.
See: Stock Keeping Unit
Sleeper Team:
The use or two drivers to operate a truck equipped with a sleeper berth; while one driver sleeps in the berth to accumulate the mandatory off-duty time, the other driver operates the vehicle.
Slip Seat Operation:
A term used to describe a motor carrier relay terminal operation where one driver is substituted for another who has accumulated the maximum driving time hours.
Slip Sheet:
Similar to a pallet, the slip sheet, which is made of cardboard or plastic, is used to facilitate movement of unitized loads.
Slot Based Production:
A lean manufacturing term used to describe a production system which has been level loaded (Heijunka) with a few slots held open for situations where demand must be met immediately.
Inventory slotting or profiling is the process of identifying the most efficient placement for each item in a distribution center. Since each warehouse is different, proper slotting depends on a facility’s unique product, movement, and storage characteristics. An optimal profile allows workers to pick items more quickly and accurately while reducing the risk of injuries.
Dry commodities that are made into a liquid form by the addition of water or other fluids to permit movement by pipeline.
Small Group Improvement Activity:
A framework for problem solving which involves the formation of a team often a cross-section of hourly and salaried employees, customers, and suppliers -- to brainstorm solutions and develop an implementation plan. Also see: Quality Circle
Small Parcel Ground:
Mode of transportation where the unit being transported meets all of the following descriptions: under 150 lbs, inside of 130 inches in length and girth combined, individually labeled, and can be individually handled and transported absent of a pallet. Typically broken down for rating purposes into separate categories for commercial and residential.
See Specific, Measurable, Achievable, Realistic, Time-Based
Smart and Secure Trade Lanes (SST):
Private initiative of the Strategic Council on Security Technology, an assembly of executives from port operators, major logistics technology providers, transportation consultancies, and former generals and public officials. Aims to enhance the safety, security and efficiency of cargo containers and their contents moving through the global supply chain into U.S. ports.
Smart Grid:
An electricity grid which features added computers and digital communications technology to deliver electricity from suppliers to consumers to save energy, reduce costs and increase reliability and transparency.
Smart Label:
A label that has an RFID tag integrated into it.
SmartWay Certification:
A voluntary certification program that partners the freight industry sector with the EPA, focused on recognition and incentives for fuel efficiency improvements and greenhouse gas emissions reductions. Eligibility for the truck certification is based on a comprehensive set of fuel-saving, low-emission equipment specifications for new Class 8 long-haul tractors.
See: Single Minute Exchange of Dies
In statistics, a data set is smoothed by creating an approximating function that attempts to capture important patterns in the data, while leaving out noise.
See: Service Oriented Architecture
Social Networking:
Refers to systems that allow members of a specific site to learn about other members' skills, talents, knowledge, or preferences. Commercial examples include Facebook and LinkedIn. Some companies use these systems internally to help identify experts.
Social Responsibility:
The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of that of the local community and society at large. Its responsible production, socially responsible labor relations, community involvement, environmental cognizance, and sustainability.
Society of Logistics Engineers:
A professional association engaged in the advancement of logistics technology and management.
Software as Services (SaaS):
A term which describes the use of computer systems provided by a remote third party, similar to what has traditionally been called a “Service Bureau” or “Application Service Provider (ASP)”. In this setting the service provider maintains all of the computer hardware and software at their location, while the user accesses the systems via an internet connection and is charged a rate based on access time. It is also ometimes also referred to as “On Demand” services.
See: Sales and Operations Planning
See: Statement of Objectives
See: Statement of Work
Sole Sourcing:
When there is only one supplier for a product or service, and no alternate suppliers are available.
Separating items (parcels, boxes, cartons, parts, etc.) according to their intended destination within a plant or for transit.
A computer industry term referring to the Act of sending identical and irrelevant postings to many different newsgroups or mailing lists. Usually this posting is something that has nothing to do with the particular topic of a newsgroup or of no real interest to the person on the mailing list.
See: Statistical Process Control
Special-Commodities Carrier:
A common carrier trucking company that has authority to haul a special commodity; there are 16 special commodities, such as household goods, petroleum products, and hazardous materials.
Special-Commodity Warehouses:
A warehouse that is used to store products that require unique types of facilities, such as grain (elevator), liquid (tank), and tobacco (barn).
Special Economic Zone (SEZ):
A geographical region that has economic laws that are more liberal than a country's typical economic laws. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of an SEZ structure is to increase foreign investment.
Specific, Measurable, Achievable, Realistic, Time-Based (SMART):
A shorthand description of a way of setting goals and targets for individuals and teams.
See: Small Parcel Ground
Splash Page:
A "first" or "front" page that you often see on some websites, usually containing a "click-through" logo or message, or a fancy Flash presentation, announcing that you have arrived. The main content and navigation on the site lie "behind" this page (a.k.a. the homepage or "welcome page").
Split Case Order Picking:
A process used to fill orders for quantities less than a full case thereby requiring ordered items to be picked from a case or some similar container.
Split Delivery:
The act of creating a purchase order for a large volume of product in order to get a reduced price (price break), and then designating a spread of delivery dates to eliminate the need to pay for and stock the full quantity initially.
To move a trailer or boxcar into place for loading or unloading.
Spot Demand:
Unusual demand for a product with a corresponding short lead time. An example of this is during a disaster when certain materials are immediately needed in larger than normal quantities.
Spur Track:
A railroad track that connects a company’s plant or warehouse with the railroad’s track; the cost of the spur track and its maintenance is borne by the user.
See: Serial Shipping Container Codes
See: Smart and Secure Trade Lanes
Stack Car:
An intermodal flat car designed to place one container on top of another for better utilization and economics. Also referred to as a well car because the cars are lowered in the center to allow clearance when moving under low-lying structures.
Stable Demand:
Products for which demand does not fluctuate widely at specific points during the year.
Staff Functions:
The support activities of planning and analysis, provided to assist line managers with daily operations. Logistics staff functions include location analysis, system design, cost analysis, and planning.
The practice of picking material for a production or sales order and moving to a separate area for purposes of consolidation or identifying shortages. Staging may also refer to the placement of equipment in preparation of being used. Also see: Accumulation Bin
People with a vested interest in a company or in a project, including managers, employees, stockholders, customers, suppliers, and others.
Stand Up Fork Lift:
A forklift where the operator stands rather than sits. This type of forklift is most commonly used in case picking operations where the operator must get on and off the lift frequently.
Standard Carrier Alpha Code (SCAC/SCAC Code):
A unique 2 to 4-letter code assigned to transportation companies for identification purposes. SCAC codes are required for EDI, and are printed on bills of lading and other transportation documents.
Standard Components:
Components (parts) of a product, for which there is an abundance of suppliers. Not difficult to produce. An example would be a power cord for a computer.
Standard Cost Accounting System:
A cost accounting system that uses cost units determined before production for estimating the cost of an order or product inventory. For management control purposes, the standards are compared to actual costs, and variances are computed.
Standard Deviation/Variance:
Measures the dispersion for a probability dis­tribution. The variance is the average squared difference of a distribution from the distribution’s mean (average) value. The standard deviation is defined mathematically as the square root of the variance, and is thereby expressed in the same units as the random variable that’s described by the probability distribution. A distribution that varies widely about its mean value will have a larger standard deviation/variance than a distribution with less variation about its mean value..
Standard Industrial Classification (SIC):
A United States government system for classifying industries by a four-digit code. Established in 1937, it is being supplanted by the six-digit North American Industry Classification System, which was released in 1997; however certain government departments and agencies, such as the U.S. Securities and Exchange Commission (SEC), still use the SIC codes.
Standing Order:
See: Blanket Purchase Order
Start Manufacture to Order Complete Manufacture:
Average lead-time from the time manufacturing begins to the time end products are ready for shipment, including the following sub-elements: order configuration verification, production scheduling, time to release order to manufacturing or distribution, and build or configure 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.
Statement of Objectives (SOO):
A document that expresses both technical and management requirements in the form of performance objectives. In these cases, the bidders are expected to prepare the Statement of Work in response to the SOO.
Statement of Work (SOW):
A document that captures and acknowledges mutual agreement on the work activities, deliverables and timeline that a vendor will execute against in performance of work for a customer. Detailed requirements and pricing are usually specified in a Statement of Work, along with various other terms and conditions.
Statistical Process Control (SPC):
A method for achieving quality control in processes. The technique hinges on the observation that any process is subject to seemingly random variations, which are said to have common causes, and non-random variations, which are said to have special causes. SPC relies on measuring variation in output and setting control limits based on observations of variations arising solely from common causes. A process that is "in control" is expected to generate output that is within the control limits.
Steamship Conferences:
Collective rate-making bodies for liner water carriers.
Labor management companies that provide equipment and hire workers to transfer containers and cargo between ships and docks.
Placing customer-specific stickers on boxes of product. An example would be where Wal-Mart has a request for their own product codes to be applied to retail boxes prior to shipment.
Stochastic Models:
Models where uncertainty is explicitly considered in the analysis.
Stock Keeping Unit (SKU):
A category of unit with unique combination of form, fit, and function (i.e. unique components held in stock). For example, if two items are indistinguishable to the customer, or if any distinguishing characteristics visible to the customer are not important to the customer, so that the customer believes the two items to be the same, these two items are part of the same SKU. As a further illustration consider a computer company that allows customers to configure a product from a standard catalogue components, choosing from three keyboards, three monitors, and three CPUs. Customers may also individually buy keyboards, monitors, and CPUs. If the stock were held at the configuration component level, the company would have nine SKUs. If the company stocks at the component level, as well as at the configured product level, the company would have 36 SKUs. (9 component SKUs + 3*3*3 configured product SKUs. If as part of a promotional campaign the company also specially packaged the products, the company would have a total of 72 SKUs.
Stock Out:
A term referring to a situation where no stock was available to fill a customer or pro­duction order during a pick operation. Stock outs can be costly, including the profit lost for not having the item available for sale, lost goodwill, substitutions, or lost customer They can also be referred to out of stock (OOS)
Moving shipments through regular channels at an accelerated rate; to take extraordinary action because of an increase in relative priority. Synonym: Expediting.
Stockless Inventory:
A materials management technique where management of an organization's supplies is switched to an outside vendor.
Stockless Purchasing:
A practice whereby the buyer negotiates a price for the purchases of annual requirements of MRO items and the seller holds inventory until the buyer places an order for individual items.
Stock-Out Cost:
The opportunity cost associated with not having sufficient supply to meet demand.
Stop Sequence:
A load building technique where the first stop is loaded last.
See: Silo
Straight Truck:
A truck which has the driver’s cab and the trailer combined onto a single frame. Straight trucks do not have a separate tractor and trailer. The driving compartment, engine and trailer are one unit.
Strategic Alliance:
Business relationship in which two or more independent organizations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives. Also see: Marquee Partners
Strategic Planning:
Looking one to five years into the future and designing a logistical system (or systems) to meet the needs of the various businesses in which a company is involved.
Strategic Profit Model:
Visualization of an organization's finances to provide the ability to understand and analyze financial performance and return on investment (ROI).
Strategic Sourcing:
The process of determining long-term supply requirements, finding sources to fulfill those needs, selecting suppliers to provide the services, negotiating the purchase agreements and managing the suppliers' performance. Focuses on developing the most effective relationships with the right suppliers, to ensure that the right price is paid and that lifetime product costs are minimized. It also assesses whether services or processes would provide better value if they were outsourced to specialist organizations.
Strategic variables:
The variables that effect change in the environment and logistics strategy. The major strategic variables include economics, population, energy, and government.
A Specific action to achieve an objective.
Stretch Hood:
A form of pallet packaging similar to stretch wrap. With the stretch hood method a machine feeds a length of plastic sleeve over the pallet while at the same time stretching it wide enough to fit. After the sleeve is placed it is cut and sealed at the top creating a water tight enclosure, the stretchers release the film allowing it to shrink and hold the pallet contents.
Stretch Wrap:
Clear plastic film that is wrapped around a unit load or partial load of product to secure it. The wrap is elastic.
Stop Sequence:
A load building technique where the first stop is loaded last.
The function associated with the storage and issuing of items that are frequently used. Stores is also frequently seen as an alternative term for warehouse.
Decisions or activities in a part made at the expense of the whole. An example of sub-optimization is where a manufacturing unit schedules production to benefit its cost structure without regard to customer requirements or the effect on other business units.
Sub-Tier Suppliers:
A successive supplier who provides a product or service to a direct supplier who ultimately provides that product or service to the customer.
Sending work outside the enterprise to a third party. This typically involves specialized operations related to production. Also see: Outsource
Substance of Very High Concern (SVHC):
Achemical substance (or part of a group of chemical substances) for which it has been proposed that the use within the European Union be subject to authorization under the REACH Regulation. Indeed, listing of a substance as an SVHC by the European Chemicals Agency (ECHA) is the first step in the procedure for authorization and restriction of use of a chemical. The first list of SVHCs was published on 28 October 2008.
The ability of a buyer to substitute the products of different sellers.
Sunk Cost:
In economics and business decision-making sunk, costs are costs that cannot be recovered once they have been incurred. Sunk costs are sometimes contrasted with variable costs, which are the costs that will change due to the proposed course of action, and prospective costs which are costs that will be incurred if an action is taken.Surrogate [item] Driver: A substitute for the ideal driver, but is closely correlated to the ideal driver, where [item] is Resource, Activity, Cost Object. A surrogate driver is used to significantly reduce the cost of measurement while not significantly reducing accuracy. For example, the number of production runs is not descriptive of the material disbursing activity, but the number of production runs may be used as an activity driver if material disbursements correlate well with the number of production runs.
Supermarket Approach:
An inventory management and picking technique used in lean enterprises. This concept was conceived by Taiichi Ohno of Toyota after a visit to the US in 1956 where he was impressed by how consumers could pick whatever they need from the shelf, and the store would simply replenish what was taken. This became the basis for the “pull system”.
An individual or an organization who supplies goods or services to the company. This is also sometimes referred to as a ”vendor.” In some settings—where a company provides goods through a distribution network—network members may be referred to as suppliers, even though they are the immediate customers of the company
Supplier Capacity Analysis:
An assessment of a supplier’s available capacity and whether the available capacity will meet the investigating organization’s requirements.
Supplier Certification:
A process for ensuring that a supplier meets certain requirements. Such requirements can include cost, quality, delivery, flexibility, maintenance, safety, and ISO quality and environmental standards.
Supplier Council:
A council that develops and supports businesses by facilitating important connections between corporations and suppliers.
Supplier Criticality Assessment:
This is a key component of a strategic sourcing program. Supplier criticality is based on factors such as relationship to the customer’s core mission, access to technology, switching cost, and uniqueness of product/service. To assess criticality, suppliers are grouped into four relationship categories: fundamental, preferred, technology, mission.
Supplier Cycle Time:
A Key indicator of On-Time Product Deliveries, in terms of whether the lead times are being met and product is reaching the market at the right time. Time required for a supplier to complete a single cycle, beginning with receipt of an order and ending with the fulfillment of the order
Supplier Management Program:
A defined policy regarding how suppliers are governed with respect to overall material planning, planning procurement staff, supplier negotiation and qualification, etc.
Supplier On Time Delivery: A metric which m
easures the performance of a supplier/vendor on his delivery commitment and to what extent he is matching with the lead times expressed in % terms. Number of orders received on time divided by number of total orders received.Calculation: [Number of orders received on time] / [number of total orders received.]
Supplier-Owned Inventory (SOI):
A variant of vendor-managed inventory and con¬signment inventory. In this case, the supplier not only manages the inventory, but also owns the stock close to or at the customer location until the point of consumption or usage by the customer.
Supplier Scorecards:
Assessment of suppliers based on performance benchmarks in several key areas. Some examples are manufacturing Critical path time (MCT), on time delivery, quality parts per million, cost of poor quality, inventory turns, and productivity gains. A supplier’s rank can then be established and the data used to measure the relative performance of a supplier within the supply base, and track improvement in supplier’s quality over time.
Supplier Service Level:
A metric which Helps measure the overall performance of a supplier. It Measures the ability of the business suppliers to provide their goods at the agreed times, quantity and quality.
Supplemental carrier:
A for-hire air carrier subject to economic regulations; the carrier has no time schedule or designated route; service is provided under a charter or contract per plane per trip.
Supply Chain:
1) starting with unprocessed raw materials and ending with the final customer using the finished goods, the supply chain links many companies together. 2) the material and informational interchanges in the logistical process stretching from acquisition of raw materials to delivery of finished products to the end user. All vendors, service providers and customers are links in the supply chain.
Supply Chain Council:
A non-profit organization dedicated to improving the supply chain efficiency of its members. The Supply-Chain Council's membershipconsists primarily practitioners representing a broad cross section of industries, including manufacturers, services, distributors, and retailers. It is the organization responsible for the SCOR standards.
Supply Chain Design:
The process of designing an efficient supply chain. Elements of a good supply chain design include partners, location, capacity, capability, transportation, information systems integration, etc.
Supply Chain Execution (SCE):
The ability to move the product out the warehouse door. This is a critical capacity and one that only brick-and-mortar firms bring to the B2B table. Dot-coms have the technology, but that's only part of the equation. The need for SCE is what is driving the Dot-coms to offer equity partnerships to the wholesale distributors.
Supply Chain Event Management (SCEM):
SCEM is an application that supports control processes for managing events within and between companies. It consists of integrated software functionality that supports five business processes: monitor, notify, simulate, control and measure supply chain activities.
Supply Chain Integration (SCI):
Likely to become a key competitive advantage of selected e-marketplaces. Similar concept to the Back-End Integration, but with greater emphasis on the moving of goods and services.
Supply Chain Inventory Visibility:
The ability to visualize the status of inventory in the supply chain from some point upstream—beginning with the various tiers of suppliers—on to downstream—through distribution and retail channels. In most cases, this will only be one level in each direction; however, it may include the ability to access supply and demand information at those points as well.
Supply Chain Management (SCM):
As defined by the Council of Supply Chain Management Professionals (CSCMP): Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology.
Supply Chain Network Design Systems:
The systems employed in optimizing the relationships among the various elements of the supply chain manufacturing plants, distribution centers, points-of-sale, as well as raw materials, relationships among product families, and other factors-to synchronize supply chains at a strategic level.
Supply Chain Operations Reference Model (SCOR):
This is the model developed by the Supply-Chain Council SCC and is built around six major processes: plan, source, make, deliver, return and enable. The aim of the SCOR is to provide a standardized method of measuring supply chain performance and to use a common set of metrics to benchmark against other organizations.
Supply Chain-Related Finance and Planning Cost Element:
One of the elements comprising a company's total supply-chain management costs. These costs consist of the following:
  1. Supply-Chain Finance Costs: Costs associated with paying invoices, auditing physical counts, performing inventory accounting, and collecting accounts receivable. Does NOT include customer invoicing/ accounting costs (see Order Management Costs).
  2. Demand/Supply Planning Costs: Costs associated with forecasting, developing finished goods, intermediate, subassembly or end item inventory plans, and coordinating Demand/Supply
Supply Chain-Related IT Costs:
Information Technology (IT) costs (in US dollars) associated with major supply-chain management processes as described below. These costs should include: Development costs (costs incurred in process reengineering, planning, software development, installation, implementation, and training associated with new and/or upgraded architecture, infrastructure, and systems to support the described supply-chain management processes), Execution costs (operating costs to support supply-chain process users, including computer and network operations, EDI and telecommunications services, and amortization/depreciation of hardware, Maintenance costs (costs incurred in problem resolution, troubleshooting, repair, and routine maintenance associated with installed hardware and software for described supply-chain management processes. Include costs associated with data base administration, systems configuration control, release planning and management.

These costs are associated with the following processes:
    1. Product Data Management - Product phase-in/phase-out and release; post introduction support and expansion; testing and evaluation; end-of-life inventory management. Item master definition and control.
    2. Forecasting and Demand/Supply Manage and Finished Goods - Forecasting; end-item inventory planning, DRP, production master scheduling for all products, all channels.
    1. Sourcing/Material Acquisition - Material requisitions, purchasing, supplier quality engineering, inbound freight management, receiving, incoming inspection, component engineering, tooling acquisition, accounts payable.
    2. Component and Supplier Management - Part number cross-references, supplier catalogs, approved vendor lists.
    3. Inventory Management - Perpetual and physical inventory controls and tools.
    1. Manufacturing Planning - MRP, production scheduling, tracking, mfg. engineering, mfg. documentation management, inventory/obsolescence tracking.
    2. Inventory Management - Perpetual and physical inventory controls and tools.3. Manufacturing Execution - MES, detailed and finite interval scheduling, process controls and machine scheduling.
    1. Order Management - Order entry/ maintenance, quotes, customer database, product/price database, accounts receivable, credits and collections, invoicing.
    2. Distribution and Transportation Management - DRP shipping, freight management, traffic management.
    3. Inventory Management - Perpetual and physical inventory controls and tools.
    4. Warehouse Management - Finished goods, receiving and stocking, pick/pack.
    5. Channel Management - Promotions, pricing and discounting, customer satisfaction surveys.
    6. Field Service/Support - Field service, customer and field support, technical service, service/call management, returns and warranty tracking.
    Plan/Source/Make/Deliver - Interfaces, gateways, and data repositories created and maintained to exchange supply-chain related information with the outside world. E-Commerce initiatives. Includes development and implementation costs.

    Note: Accurate assignment of IT-related cost is challenging.It can be done using Activity-Based-Costing methods, or using other approaches such as allocation based on user counts, transaction counts, or departmental headcounts. The emphasis should be on capturing all costs. Costs for any IT activities that are outsourced should be included.

    Supply Chain Resiliency:
    A term describing the level of hardening of the supply chain against disasters.
    Supply Chain Strategy Planning:
    The process of process of analyzing, evaluating, defining supply chain strategies, including network design, manufacturing and transportation strategy and inventory policy.
    Supply Chain Vulnerability:
    Of equal importance to Variability, Velocity and Volume in the elements of the Supply Chain. The term evaluates the supply chain based on the level of acceptance of the five steps of disaster logistics being planning, detection, mitigation, response and recovery.
    Supply Planning:
    The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon and interval.
    Supply Planning Systems:
    The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon and interval.
    Supply Warehouse:
    A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders.
    Support Costs:
    Costs of activities not directly associated with producing or delivering products or services. Examples are the costs of information systems, process engineering and purchasing. Also see: Indirect Cost
    The inherent quality of system – including design, technical support date, and maintenance procedures to facilitate detection, isolation, and timely repair/replacement of system anomalies. This includes factors such as diagnostics, prognostics, real-time maintenance data collection, “design for support”, and “support the design” aspects, corrosion protection and mitigation, reduced logistics footprint, and other factors that contribute to optimum environment for developing and sustaining a stable, operational system.
    An add-on charge to the applicable charges; motor carrier have a fuel surcharge, and railroads can apply a surcharge to any joint rate that does not yield 110% of variable cost.
    Surge Capacity:
    A measure of the ability to respond to a short term increase in demand or a demand spike.
    Sustaining Activity:
    An activity that benefits an organizational unit as a whole, but not any specific cost object.
    Corporate sustainability refers to efforts a company makes related to conducting business in a socially and environmentally responsible manner. It includes elements including sustainable development, corporate social responsibility (CSR), stakeholder concerns, and corporate accountability.
    See: Substance of Very High Concern
    Store-Within-A-Store. A concept that is popular with some large retailers where a department such as the tire shop is run by an independent third party who leases space from the retailer.
    A row on a business process diagram type called a “Swimlane Chart” which provides a way of indicating which department or individual is responsible for a given process or activity. The responsible area or party is named on the left side of the diagram with processes organized left to right and lines of linkage between each lane to show handoffs between areas.
    Switch Engine:
    A railroad engine that is used to move rail cars short distances within a terminal and plant.
    Switching company:
    A railroad that moves rail cars short distances; switching companies connect two mainline railroads to facilitate through movement of shipments.
    See: SWOT Analysis
    SWOT Analysis:
    A management strategy tool which considers the analysis of strengths, weaknesses, opportunities, and threats of and to an organization.
    The concept that all supply chain functions are integrated and interact in real time; when changes are made to one area, the effect is automatically reflected throughout the supply chain.
    Synchronous Process:
    A series of activities which are linked to each other, one to the next, and in which each preceding activity must complete before the next is started.
    The grammar or rules which define the structure of the EDI standard.
    A set of interacting elements, variables, parts, or objects that are functionally related to each other and form a coherent group.
    Systems Concept:
    A decision-making strategy that emphasizes overall system efficiency rather than the efficiency of the individual part of the system.