Glossaire
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A
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ABC
Activity Based Costing
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AGVS
Automated Guided Vehicle System
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AMERICAN NATIONAL STANDARDS INSTITUTE (ANSI)
A non-profit organization chartered to develop, maintain, and promulgate voluntary U.S. national standards in a number of areas, especially with regard to setting EDI standards. ANSI is the U.S. representative to the International Standards Organization (ISO)
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ARTIFICIAL INTELLIGENCE (AI)
Software that uses abstract reasoning, pattern recognition, learning and/or problem-solving to approach tasks.
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ASN
Advanced Shipping Notice
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AUTOMATED GUIDED VEHICLE SYSTEM (AGVS)
Materials-handling or assembly vehicles capable of operating without direct human intervention.
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AUTOMATIC IDENTIFICATION AND DATA COLLECTION (AIDC)
AIDC describes the direct entry of data into a computer system, programmable logic controller (PLC) or other microprocessor-controlled device, without using a keyboard.
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B
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B2B
Business-to-Business
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B2C
Business-to-Consumer
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BACKORDER
An unfilled customer order or commitment. It is an immediate (or past-due) demand against an item whose inventory is insufficient to satisfy the demand.
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BAR CODE
A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers. A bar code is used to facilitate timely and accurate input of data into a computer.
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BENCHMARKING
Learning approach originally consisting of observing and analyzing the management of certain processes in a company operating in a different business but with comparable challenges.
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BILL OF LADING (BOL)
A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.
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BOL
Bill of Lading
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BOM
Bill of Material
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C
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C-TPAT
Custom-Trade Partnership against terrorism
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CLASSIFICATION 20/80
Method of product classification used in inventory management based on the definition of two classes. The first group includes 20% of the items representing about 80% of the inventory value.
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CONTINUOUS IMPROVEMENT (KAIZEN)
From the Japanese ''Kai'' change and ''Zen'' good (for better). Applied to a company, Kaïzen is an approach of encouraging participation of all employees, whatever their hierarchical level, for the maintenance of work standards.
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CONTINUOUS REPLENISHMENT PROGRAM (CRP)
Inventory management approach based on collaboration between manufacturers and distributors developed as part of ECR.
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CORE PROCESS
That unique capability that is central to a company's competitive strategy.
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CROSS-DOCKING
Stock reduction approach for assuring availability of products on retail shelves through breaking up of batches on the distributor receiving dock or the creation of retail packages by the manufacturer.
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CYCLE COUNTING
An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year.
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CYCLE TIME
The amount of time it takes to complete a business process.
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D
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DASHBOARD
A performance measurement tool used to capture a summary of the Key Performance Indicators/metrics of a company.
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DATA MINING
Computer application that automatically structures, analyzes and interprets data stored in the Data Warehouse to provide value-added information that supports the company's decision-making process.
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DIRECT STORE DELIVERY (DSD)
Process of shipping direct from a manufacturer's plant or distribution centre to the customer's retail store, thus bypassing the customer's distribution centre. Also called Direct-to-Store Delivery.
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DISTRIBUTION CHANNEL
Series of companies involved sequentially in the movement of products or services from the producer to the end customer.
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DISTRIBUTION COSTS
Those items of cost related to the activities associated with the movement and storage of finished products. This can include inventory costs, transportation costs, and order processing costs.
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DISTRIBUTOR
A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory. Synonym: Wholesaler.
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DYNAMIC PROCESS CONTROL (DPC)
Continuous monitoring of process performance and adjustment of control parameters to optimize process output.
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E
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EAN
European Article Number
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EDI
Electronic Data Interchange
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EDIFACT
Electronic Data Interchange for Administration, Commerce and Transport. The United Nations EDI standard.
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ELECTRONIC DATA INTERCHANGE (EDI)
Exchange of formatted data between the different applications of the partners' computer systems (computer to computer). This exchange is based on use of common languages (the EDIFACT standard, for example) and use of telecommunications channels.
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ELECTRONIC PRODUCT CODE (EPC)
Identifier of a unique article at the pallet, case, or unit level. A coding standard for manufacturers and distributors allowing complete traceability down to the serial number.
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ENTERPRISE RESOURCE PLANNING (ERP)
Computer application integrating all information flows to do with management of the different corporate functions (accounting, production, sales, logistics, etc.).
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EOQ
Economic Order Quantity
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ERP
Enterprise Resources Planning
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EUROPEAN ARTICLE NUMBER (EAN)
A defined numbering mechanism used in Europe to uniquely identify every retail product and packaging option. The EAN is similar in concept and design to the UPC code and is usually what the bar code represents on goods.
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EXTERNAL FAILURES COST
The cost related to problems found after the product reaches the customer. This usually includes such costs as warranty and returns.
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F
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FDA
Food and Drug Administration
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FEFO
First Expiry First Out
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FIFO
First In First Out
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FILE TRANSFER PROTOCOL (FTP)
The Internet service that transfers files from one computer to another, over standard phone lines.
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FILL RATE
The percentage of order items that the picking operation actually fills within a given period of time.
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FIRST IN FIRST OUT (FIFO)
Accounting method of valuing stock issues by extracting the articles in the order they were received.
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FOB
Free On Board
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FOB DESTINATION
Title passes at destination, and seller has total responsibility until shipment is delivered.
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FOB ORIGIN
Title passes at origin, and buyer has total responsibility over the goods while in shipment.
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FOOD AND DRUG ADMINISTRATION (FDA)
The U.S. Food and Drug Administration.
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FREE ON BOARD (FOB)
Contractual terms between a buyer and a seller that define where title transfer takes place.
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FREIGHT FORWARDER
An organization that provides logistics services, acting as an intermediary between the shipper and the carrier, typically on international shipments.
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FTP
File Transfer Protocol
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FULFILLMENT
Delegation of certain physical operations to an external service provider. The main areas in which fulfillment are used are direct marketing, management of promotions and logistics.
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G
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H
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HANDLING COSTS
The costs involved in moving, transferring, preparing, and otherwise handling inventory.
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I
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INBOUND LOGISTICS
The movement of materials from suppliers and vendors into production processes or storage facilities.
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INTELLIGENT LABEL (''TAG'' OR RADIO FREQUENCY LABEL)
Programmable and re-recordable label, read without contact using radio-frequency identification (RFID).
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INVENTORY RECORD ACCURACY (IRA)
Accuracy of inventory records, calculated in number of units out of 100 that fall within accepted tolerances during a stock count.
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INVENTORY TURNS
The cost of goods sold divided by the average level of inventory on hand. This ratio measures how many times a company's inventory has been sold during a period of time.
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J
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JIT
Just in Time
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JUST-IN-TIME (JIT)
Lean Manufacturing model developed initially by the engineer Taiichi Ohno at Toyota which consists of monitoring and controlling the production system to eliminate all sources of waste, in particular related to intermediate stocks and poor quality.
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K
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KEY PERFORMANCE INDICATORS (KPI)
A measure which is of strategic importance to a company or department.
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KITTING
Light assembly of components or parts into defined units. Kitting reduces the need to maintain an inventory of pre-built completed products, but increases the time and labour consumed at shipment.
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KPI
Key Performance Indicators
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L
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LANDED COST
Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc. Also called Total Landed Cost or Net Landed Costs.
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LAST IN FIRST OUT (LIFO)
Accounting method of valuing stock issues by first extracting the articles last entered into inventory. This leads to creation of fictitious individual lots on the product file, and to lower issue costs and therefore a decrease of reported profits.
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LEAD TIME
Quantitative indicator measuring the time difference between stimulus and response. This indicator can be applied to different levels of the logistics process, for example to measure the actual time taken between the placing of an order and the delivery of a product.
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LESS-THAN-TRUCKLOAD (LTL)
Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.
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LOGISTICS
The function of sourcing and distributing material and product in the proper place and in the proper quantities.
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LOGISTICS CHAIN MANAGEMENT
Series of interdependent companies (considered as links of the chain) collaborating to carry out activities (procurement, production and distribution) for the movement of products or services from product development to end of life.
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LOGISTICS SERVICE PROVIDER
Company performing logistics activities on behalf of a manufacturer or distributor.
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LOT TRACEABILITY
The ability to identify the lot or batch numbers of consumption and/or composition for manufactured, purchased, and shipped items. This is a federal (U.S.) requirement in certain regulated industries.
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LTL
Less-Than-Truckload
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M
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MAKE-TO-ORDER (MANUFACTURE-TO-ORDER)
A manufacturing process strategy where the trigger to begin manufacture of a product is an actual customer order or release, rather than a market forecast.
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MATERIAL REQUIREMENTS PLANNING (MRP)
Method of manufacturing planning that establishes a Master Production Schedule and Material Requirements Plan based on end demand.
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MRP
Material Requirement Planning
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O
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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.
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OEM
Original Equipment Manufacturer
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ORDER CYCLE (OC)
The time and process involved from the placement of an order to the receipt of the shipment.
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ORDER FILL (OF)
Percentage of all orders fulfilled without relying on re-stocking.
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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).
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ORDER LEAD TIME
Time from the transmission of an order to a supplier for a current product until delivery.
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ORDER POINT
Stock level that triggers a replenishment order. This stock level considers the forecast stock usage during the replenishment lead time, plus Safety Stock.
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OUTSOURCING
Corporate decision to assign activities, previously performed internally, to a third party (for example, a Logistics Service Provider).
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P
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PACKING LIST
A packing list is a document that summarizes the list of articles and quantities making up each parcel of a shipment. Depending on the industry, this document can have different formats.
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PARETO'S LAW
Inventory classification method (ABC Classification or 20/80 Classification) used to distinguish the products with high value, for which strict monitoring is enforced, from products of lesser value whose monitoring will be more flexible.
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PHYSICAL INVENTORY
The determination of inventory quantity by actual count. Physical inventories can be taken on a continuous, periodic, or annual basis.
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PICK AND PACK
Method of preparing orders combining operations of stock picking and packing.
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POD
Proof of Delivery
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POKA YOKE (MISTAKE-PROOF)
The application of simple techniques that prevent process quality failure.
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Q
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QR
Quick Response
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QUALITY ASSURED DELIVERY (QAD)
Logistics company takes responsibility for quality control.
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QUARANTINE
Removing items from availability for use or sale until all required quality tests have been performed and conformance certified.
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QUICK RESPONSE
Flow management model developed in the distribution sector which triggers the just-intime restocking of sales outlets based on cases output, to reduce stock levels and improve the quality of service
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R
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REPLENISHMENT
Approach to determining the order quantity and order date of stocks. There are 4 traditional replenishment policies: date-managed inventory, replenishment method, order point method, and replenishment of variable quantities at variable dates.
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REPLENISHMENT LEVEL
Replenishment policy using fixed dates and variable quantities. In each period a quantity is ordered to reach the previously defined optimal stock level.
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REVERSE LOGISTICS
Process for handling merchandise return: requested by consumers because of errors or technical problems requiring repair; initiated by the company to recycle or eliminate products at the end of their life or put a value on them.
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RFID
Radio Frequency Identification
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S
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SCM
Supply Chain Management
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SHIPPING MANIFEST
The shipping manifest summarizes the list of deliveries (bills of lading) that a carrier has been assigned by a shipper.
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SKU
Stock-Keeping Unit
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SPECIFICATIONS
Written document associated with a commercial contract formalizing the obligations (regulatory, administrative, technical, security, etc.) of the parties to the agreement (a manufacturer and their Logistics Service Provider, for example).
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STOCK KEEPING UNIT (SKU)
A category of unit with unique combination of form, fit, and function (i.e., unique components held in stock).
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STORAGE COST
Set of costs due to different warehouse activities: direct and indirect personnel costs, cost of information system operation, depreciation of movable and immovable installations, etc.
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SUPPLY CHAIN MANAGEMENT (SCM)
Approach to managing and synchronizing all the processes enabling one or more customer / supplier systems to take into account and respond to expectations of the end customers (from the supplier of the supplier to the customer of the customer).
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T
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TOTAL COST OF OWNERSHIP (TCO)
Total cost of a computer asset throughout its lifecycle, from acquisition to disposal. TCO is the combined hard and soft costs of owning networked information assets.
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TOTAL QUALITY MANAGEMENT (TQM)
Approach to managing corporate human, financial, physical and technological resources based on quality methods and practices with the aim of satisfying the various parties involved (customers, shareholders, employees, etc.).
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TRACEABILITY
Ability to track a product from the development stage to its end of life.
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U
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UNIFORM PRODUCT CODE (UPC)
A standard product numbering and bar coding system used by the retail industry. UPC codes are administered by the Uniform Code Council; they identify the manufacturer as well as the item, and are included on virtually all retail packaging.
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UPC
Universal Product Code
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V
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VALUE CHAIN
A series of activities, which combined, define a business process; the series of activities from manufacturers to the retail stores that define the industry supply chain.
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W
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WAREHOUSE MANAGEMENT SYSTEM (WMS)
Computer application, and component of SCE packages, with the goal of managing and optimizing warehouse operations.
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WIP
Work-in-Process
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WMS
Warehouse Management System
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WORK-IN-PROCESS (WIP)
Parts and subassemblies in the process of becoming completed finished goods.
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Wiptec
Work In Progress Travail En Cours
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