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B2B - See Business to Business

B2C - See Business to Consumer

Back Order - Product ordered but out of stock and promised to ship when the product becomes available.

Back Scheduling - A technique for calculating operation start dates and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation.

Backflush - A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component's upper-level parent item based on what should have been used as specified on the bill of material and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Synonym explode-to-deduct. Also see Pre-deduct Inventory Transaction Processing

Backhaul - The process of a transportation vehicle returning from the original destination point to the point of origin. The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby allowed carriers to contract for the return trip. The backhaul can be with a full, partial, or empty load. An empty backhaul is called deadheading. Also see Deadhead

Backlog Customer - Customer orders received but not yet shipped

Backorder - 1) The act of retaining a quantity to ship against an order when other order lines have already been shipped. Backorders are usually caused by stock shortages. 2) The quantity remaining to be shipped if an initial shipment(s) has been processed. Note In some cases backorders are not allowed, this results in a lost sale when sufficient quantities are not available to completely ship and order or order line. Also see Balance to Ship

Backsourcing - Pulling a function back in-house as an outsourcing contract expires

Balance to Ship (BTS) - Balance or remaining quantity of a promotion or order that has yet to ship. Also see Backorder

Balance-of-Stores Record - A double-entry record system that shows the balance of inventory items on hand and the balances of items on order and available for future orders. Where a reserve system of materials control is used, the balance of material on reserve is also shown.

Balanced Scorecard - A structured measurement system developed by David Norton and Robert Kaplan of the Harvard Business School. It is based on a mix of financial and non financial measures of business performance. A list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions of the balanced scorecard might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements. Each dimension has goals and measurements. Also see Scorecard

BAM - See Business Activity Monitoring

Bar Code - A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.

Bar code scanner - A device to read bar codes and communicate data to computer systems.

Barge - The cargo-carrying vehicle used primarily by inland water carriers. The basic barges have open tops, but there are covered barges for both dry and liquid cargoes.

Barrier to Entry - Factors that prevent companies from entering into a particular market, such as high initial investment in equipment.

Base Demand - The percentage of a company's demand that is derived from continuing contracts and/or existing customers. Because this demand is well known and recurring, it becomes the basis of management's plans. Synonym Baseload Demand.

Base Index - See Base Series

Base Inventory Level - The inventory level made up of aggregate lot-size inventory plus the aggregate safety stock inventory. It does not take into account the anticipation inventory that will result from the production plan. The base inventory level should be known before the production plan is made. Also see Aggregate Inventory.

Base Series - A standard succession of values of demand-over-time data used in forecasting seasonal items. This series of factors is usually based on the relative level of demand during the corresponding period of previous years. The average value of the base series over a seasonal cycle will be 1.0. A figure higher than 1.0 indicates that the demand for that period is more than the average

Base Stock System - A method of inventory control that includes as special cases most of the systems in practice. In this system, when an order is received for any item, it is used as a picking ticket, and duplicate copies, called replenishment orders, are sent back to all stages of production to initiate replenishment of stocks. Positive or negative orders (called base stock orders) are also used from time to time to adjust the level of the base stock of each item. In actual practice, replenishment orders are usually accumulated when they are issued and are released at regular intervals.

Baseload Demand - See Base Demand

Basic Producer - A manufacturer that uses natural resources to produce materials for other manufacturing. A typical example is a steel company that processes iron ore and produces steel ingots

Batch Control Totals - The result of grouping transactions at the input stage and establishing control totals over them to ensure proper processing. These control totals can be based on document counts, record counts, quantity totals, dollar totals, or hash (mixed data, such as customer AR numbers) totals.

Batch Number - A sequence number associated with a specific batch or production run of products and used for tracking purposes. Synonym Lot Number.

Batch Picking - A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed. Also see Discrete Order Picking, Order Picking,Zone Picking

Batch Processing - A computer term which refers to the processing of computer information after it has been accumulated in one group, or batch. This is the opposite of "real-time" processing where transactions are processed in their entirety as they occur.

Baud - A computer term describing the rate of transmission over a channel or circuit. The baud rate is equal to the number of pulses that can be transmitted in one second, often the same as the number of bits per second. Common rates are now 1200, 2400, 4800, 9600 bits and 19.2 and 56 kilobytes (Kbs) for "dial-up" circuits, and may be much higher for broadband circuits.

BCP - See Business Continuity Plan

Beginning Available Balance - See Available Inventory

Benchmarking - The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance.

Benefit-cost ratio - An analytical tool used in public planning

Best Practice - A specific process or group of processes which have been recognized as the best method for conducting an action. Best Practices may vary by industry or geography depending on the environment being used. Best practices methodology may be applied with respect to resources, activities, cost object, or processes.

Best-in-Class - An organization, usually within a specific industry, recognized for excellence in a specific process area.

Beta release - A pre-released version of a product that is sent to customers for evaluation and feedback.

Bilateral Contract - An agreement wherein each party makes a promise to the other party.

Bill of Activities - A listing of activities required by a product, service, process output or other cost object. Bill of activity attributes could include volume and or cost of each activity in the listing.

Bill of Lading (BOL) - A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.

Bill of Material (BOM) - A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or manufactured part, whether purchased or not.

Bill of Material Accuracy - Conformity of a list of specified items to administrative specifications, with all quantities correct

Bill of Resources - A listing of resources required by an activity. Resource attributes could include cost and volumes.

Bin - 1) A storage device designed to hold small discrete parts. 2) A shelving unit with physical dividers separating the storage locations.

Binary - A computer term referring to a system of numerical notation that assumes only two possible states or values, zero (0) and one (1). Computer systems use a binary technique where an individual bit or "Binary Digit" of data can be "on" or "off" (1 or 0). Multiple bits are combined into a "Byte" which represents a character or number.

Bisynchronous - A computer term referring to a communication protocol whereby messages are sent as blocks of characters. The blocks of data are checked for completeness and accuracy by the receiving computer.

Bitmap Image (BMP) - The standard image format on Windows-compatible computers. Bitmap images can be saved for Windows or OS/2 systems and support 24-bit color.

Blanket Order - See Blanket Purchase Order

Blanket Purchase Order - A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. Synonym Blanket Order, Standing Order.

Blanket rate - A rate that does not increase according to the distance the commodity is shipped.

Blanket Release - The authorization to ship and/or produce against a blanket agreement or contract.

Bleeding Edge - An unproven process or technology so far ahead of its time that it may create a competitive disadvantage.

Block diagram - A diagram that shows the operation, interrelationships and interdependencies of components in a system. Boxes, or blocks (hence the name), represent the components

Blocking bug - A defect that prevents further or more detailed analysis or verification of a functional area or feature, or any issue that would prevent the product from shipping.

Blow Through - An MRP process which uses a "phantom bill of material" and permits MRP logic to drive requirements straight through the phantom item to its components. The MRP system usually retains its ability to net against any occasional inventories of the item. Also see Phantom Bill of Material

BMP - See Bitmap Imagine

Body of knowledge (BOK) - The prescribed aggregation of knowledge in a particular area an individual is expected to have mastered to be considered or certified as a practitioner.

BOK - See Body of Knowledge

BOL - See Bill of Lading

BOM - See Bill of Materials

Bonded Warehouse - Warehouse approved by the Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner.

Book Inventory - An accounting definition of inventory units or value obtained from perpetual inventory records rather than by actual count.

Bookings - The sum of the value of all orders received (but not necessarily shipped), net of all discounts, coupons, allowances, and rebates.

Bottleneck - A constraint, obstacle or planned control that limits throughput or the utilization of capacity.

Bottom-up Replanning - In MRP, the process of using pegging data to solve material availability or other problems. This process is accomplished by the planner (not the computer system), who evaluates the effects of possible solutions. Potential solutions include compressing lead time, cutting order quantity, substituting material, and changing the master schedule.

Box-Jenkins Model - A forecasting method based on regression and moving average models. The model is based not on regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting. See Forecast.

Boxcar - An enclosed rail car typically 40 to 50 feet long

BPM - See Business Performance Measurement

BPO - See Business Process Outsourcing

BPR - See Business Process Reengineering

Bracing - Securing a shipment inside a carrier's vehicle to prevent damage.

Bracketed Recall - Recall from customers of suspect lot numbers plus a specified number of lots produced before and after the suspect ones.

Branding - The use of a name, term, symbol, or design, or a combination of these, to identify a product.

Breadman - A specific application of Kanban, used in coordinating vendor replenishment activities. In making bread or other route type deliveries, the deliveryman typically arrives at the customer's location and fills a designated container or storage location with product. The size of the order is not specified on an ongoing basis, nor does the customer even specify requirements for each individual delivery. Instead, the supplier assumes the responsibility for quantifying the need against a prearranged set of rules and delivers the requisite quantity.

Break-Bulk - The separation of a single consolidated bulk load into smaller individual shipments for delivery to the ultimate consignees. This is preceded by a consolidation of orders at the time of shipment, where many individual orders which are destined for a specific geographic area are grouped into one shipment in order to reduce cost.

Break-Even Chart - A graphical tool showing the total variable cost and fixed cost curve along with the total revenue curve. The point of intersection is defined as the break-even point, i.e., the point at which total revenues exactly equal total costs. Also see Total Cost Curve

Break-Even Point - The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves. Also see Total Cost Curve

Bricks and Mortar - The act of selling through a physical location. The flip side of clicks and mortar, where selling is conducted via the Internet. An informal term for representing the old economy versus new economy or the Industrial economy versus information economy.

Broadband - A high-speed, high-capacity transmission channel. Broadband channels are carried on radio wave, coaxial or fiberoptic cables that have a wider bandwidth than conventional telephone lines, giving them the ability to carry video, voice, and data simultaneously.

Broken case - An open case. The term is often used interchangeably with "repack" or "less-than-full-case" to name the area in which materials are picked in that form.

Broker - An intermediary between the shipper and the carrier. The broker arranges transportation for shippers and represents carriers.

Brokered Systems - Independent computer systems, owned by independent organizations or entities, linked in a manner to allow one system to retrieve information from another. For example, a customer's computer system is able to retrieve order status from a supplier's computer.

Browser - A utility that allows an internet user to look through collections of things. For example, Netscape Navigator and Microsoft Explorer allow you to view contents on the World Wide Web.

BTS - See Balance to Ship

Bucketed System - An MRP, DRP, or other time-phased system in which all time-phased data are accumulated into time periods, or buckets. If the period of accumulation is one week, then the system is said to have weekly buckets.

Bucketless system - An MRP, DRP, or other time-phased system in which all time-phased data are processed, stored, and usually displayed using dated records rather than defined time periods, or buckets.

Buffer - 1) A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. 2) In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points.

Buffer Management - In the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers). By expediting this material into the buffers, the system helps avoid idleness at the constraint and missed customer due dates. In addition, the causes of items missing from the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities.

Buffer Stock - See Safety Stock.

Bulk area - A storage area for large items which at a minimum are most efficiently handled by the pallet load.

Bulk packing - The process or act of placing numbers of small cartons or boxes into a larger single box to aid in the movement of product and to prevent damage or pilferage to the smaller cartons or boxes.

Bulk storage - The process of housing or storing materials and packages in larger quantities, generally using the original packaging or shipping containers or boxes.

Bulletin Board - An electronic forum that hosts posted messages and articles related to a common subject.

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. The bullwhip effect can be eliminated by synchronizing the supply chain.

Bundle - A group of products that are shipped together as an unassembled unit.

Burn Rate - The rate of consumption of cash in a business. Burn rate is used to determine cash requirements on an on-going basis. A burn-rate of $50,000 would mean the company spends $50,000 a month above any incoming cash flow to sustain its business. Entrepreneurial companies will calculate their burn-rate in order to understand how much time they have before they need to raise more money, or show a positive cash flow.

Business Activity Monitoring (BAM) - A term which refers to capturing operational data in real-time or close to it, making it possible for an enterprise to react more quickly to events. This is typically done through software and includes features to provide alerts / notifications when specific events occur. See also Supply Chain Event Management

Business Application - Any computer program, set of programs, or package of programs created to solve a particular business problem or function.

Business Continuity Plan (BCP) - A contingency plan for sustained operations during periods of high risk, such as during labor unrest or natural disaster. CSCMP provides suggestions for helping companies do continuity planning in their Securing the Supply Chain Research. A copy of the research is available on the CSCMP website.

Business logistics - The systematic and coordinated set of activities required to provide the physical movement and storage of goods (raw materials, parts, finished goods) from vendor/supply services through company facilities to the customer (market) and the associated activities--packaging, order processing, etc.--in an efficient manner necessary to enable the organization to contribute to the explicit goals of the company.

Business Performance Measurement (BPM) - A technique which uses a system of goals and metrics to monitor performance. Analysis of these measurements can help businesses in periodically setting business goals, and then providing feedback to managers on progress towards those goals. A specific measure can be compared to itself over time, compared with a preset target or evaluated along with other measures.

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

Business Process Outsourcing (BPO) - The practice of outsourcing non-core internal functions to third parties. Functions typically outsourced include logistics, accounts payable, accounts receivable, payroll and human resources. Other areas can include IT development or complete management of the IT functions of the enterprise.

Business Process Reengineering (BPR) - The fundamental rethinking and oftentimes, radical redesign of business processes to achieve dramatic organizational improvements.

Business Unit - A division or segment of an organization generally treated as a separate profit-and-loss center.

Business-to-Business (B2B) - As opposed to business-to-consumer (B2C). Many companies are now focusing on this strategy, and their sites are aimed at businesses (think wholesale) and only other businesses can access or buy products on the site. Internet analysts predict this will be the biggest sector on the Web.

Business-to-Consumer (B2C) - The hundreds of e-commerce Web sites that sell goods directly to consumers are considered B2C. This distinction is important when comparing Websites that are B2B as the entire business model, strategy, execution, and fulfillment is different.

Buyer Behavior - The way individuals or organizations behave in a purchasing situation. The customer-oriented concept finds out the wants, needs, and desires of customers and adapts resources of the organization to deliver need-satisfying goods and services.

Byte - A computer term used to define a string of 7 or 8 bits, or binary digits. The length of the string determines the amount of data that can be represented. The 8-bit byte can represent numerous special characters, 26 uppercase and lowercase alphabetic characters, and 10 numeric digits, totaling 256 possible combinations.