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backfill scheduling- Scheduling small, short-run production jobs using fixed duration or stop-time parameters that use idle or underutilized resources and can be run without delaying the start of priority jobs. Typically used in filling safety stock or other to-stock requirements.
backflush- The calculated reduction of a component inventory balance based on the reported production of a parent item and the quantity of the component used per each parent. A system transaction that may not represent physical usage based on timing and bill of material accuracy issues. (syn: post-deduct)
backlog- Booked (accepted) but unshipped customer orders or interplant orders. The backlog represents all open orders, not necessarily a past due status.
back office- Internal organizational functions such as production operations or cycle counting that normally do not interact with outside entities.
backorder- A current or past due customer order (or line item) that cannot be shipped due to lack of inventory availability. Customer agreements govern how backorders are handled (ship when available, ship whole order only, cancel, etc.).
backward scheduling- A method that calculates production and purchase order dates by taking a given order or operation due date and backing into the required start or release date based on the indicated lead time. The opposite of forward scheduling.
balanced scorecard- A business performance measurement and management system developed by Robert S. Kaplan and David P. Norton that analyzes organizational success by reviewing the combination of financial, customer, internal business process and employee learning and growth perspectives. A balanced system includes both leading and lagging measures, and aligns individual and department goals with overall corporate strategic objectives.
balance sheet- A basic financial statement that measures the positions of a company's assets, liabilities and shareholders' equity as of a given date and usually compares those positions to the status on the same date in the previous fiscal year.
balloon number- A reference number that points to a component or assembly on an engineering drawing and corresponds to a part number, usually listed in a table on the side of the drawing. (syn: bubble number)
bar code- An arrangement of bars and spaces on a label or stamped or embossed onto an item or container that identifies the item and sometimes its quantity. A variety of fixed and variable length code schemes are used by industries and standards bodies to enable automatic interpretation by collection systems and avoid manual input. (See: Code 39, Code 128)
bar code reader- A movable or fixed device that scans a bar code and interprets the combination of bars and spaces to record a transaction or a status.
baseline- A set of measurements that establishes the status of a system or other item as of a given date. Used to provide a common denominator and starting point for later measurements and comparisons.
base standard- In a costing system, the initial standard established at the beginning of a fiscal year used for creating budgets and performance measurements for that period. The base standard may be frozen to provide a consistent starting point for the period; the current standard is updated to reflect changes in process or material costs during the year.
batch- 1) In production, a lot or given quantity processed at the same time with the same process parameters. A batch may consist of more than one item number but all items are considered to have the same characteristics for purposes of traceability. 2) In data processing, a set of files or records gathered and processed together instead of one at a time. When a batch run is being processed, the files or records used may be locked from additional update until the batch is done.
batch-and-queue- The production of multiple parts at a given operation as a batch that is finished and moved to the input queue of the succeeding operation.
batch bill of material- A bill of material typically used in process industries that describes an ingredients list required for a batch quantity of the end item, instead of a quantity of one as typically used in discrete manufacturing environments.
batch pull- An order picking efficiency technique that combines multiple orders for a date or customer range and summarizes the total requirements for items on all orders. It allows going to an inventory location once to pick for several orders instead of returning to the same location multiple times.
Bayes' Theorem- A formula that considers the conditional probability of the existence of a given event or variable as being caused by a second variable, and the probability of the occurrence of the second variable.
beginning inventory- The calculated (perpetual) inventory at the start of an accounting period; often generated from month-end close functions that use the ending inventory of one period as the beginning inventory of the next.
benchmarking- The practice of establishing goals and targets for process performance levels and identifying required improvement areas based on the published or known performance of direct competitors or a relevant industry.
best fit- In forecasting, software functions that compare multiple possible forecast methods to past actual demand to determine the best method to use in the future. Generically used to indicate the best alternative from given choices.
best of breed- Systems or functions that exhibit the highest level of performance in their class. Tradeoffs occur in multiple-function systems when the costs of integrating several systems offset the benefits of having the best system in each individual area.
best practices- Standard, published operating methods found to produce the best performance and results in a given industry or organization.
beta test- A software version released to a limited population of users for functionality and bug test evaluation before the final release to the general user base.
bias- A set of results consistently above or below an established centerline that indicates the need for corrective action.
bi-directional bar code- A bar code that can be scanned in either direction.
bill of activities- In activity-based costing, a list of the activities and associated costs used by a cost object (product, department, etc.).
bill of lading (BOL)- A document created for a given shipment that indicates the contents and destination, and forms a contractual basis for claims or resolution with the carrier if required.
bill of material (BOM)- A structured list of the items used in making a parent assembly that reflects the actual production process in terms of timing and quantities consumed. It is constructed in conjunction with the routing, which describes the individual production steps and rates used. A BOM may optionally include information relating to backflushing, use of alternate and optional components, tie between components and the operations that use them, and other data. BOMs are used by the MRP function to calculate component requirements when given a parent demand, and in building product costs. (Syn: product structure, recipe, formulation, ingredients list)
bill of material comparison- A tool that compares two or more bills of material to identify duplicates and highlight exceptions and differences in the components. Used in database maintenance and obsolescence reporting.
bill of material explosion- The function of using the bill of material to generate component item demand quantities and timing given a requirement for the parent.
bill of resource- A listing of the key resources and quantities used in production of an item or family. A bill of resource may list only critical resources consumed (machine, personnel, logistics or other), while the product routing shows each individual step or operation. Used in rough cut capacity planning (RCCP) to provide resource requirements for a given forecast or master schedule.
bin- 1) A standard container for components 2) An inventory shelf or rack location with a specific identifier.
black belt- In the six sigma quality improvement methodology, a fulltime leadership position in teams that develop related programs and monitor progress.
blanket order- A purchase order or customer order combining requirements for a given vendor or customer and group of items over an agreed-upon time frame. It creates a purchase commitment and pricing definition for the specified period, which can range from weeks to years based on the industries or commodities involved. The blanket often consists of the total agreement terms only; individual delivery dates and quantities are later generated by the planning system.
blanket order release- A purchase or customer order requesting delivery of specific items and quantities against a previously-created blanket authorization. Based on requirements generated by the planning system, releases are accumulated against the total commitment in the blanket authorization.
blend- The mixing or combination of multiple ingredients to create a liquid, powder or gas form identified by a unique item number. An initial batch may be modified with a subsequent blend based on the analysis of quality tests that require additional processing to meet specifications.
blind count- A physical inventory or cycle count in which the count tag or sheet contains item and location information but does not include the book (calculated) inventory as of the time of count.
block schedule- A schedule based on blocks or periods of time rather than quantities. Sometimes required when the process dictates a fixed drying or curing time, or a contracted vendor turnaround time.
blowthrough- See: phantom.
bolt-on- A third party, specific application designed to enhance or extend a base system through increased functionality.
bonded- Contractual description of service delivery performance specifying terms and conditions that may involve posting a bond.
bookings- New customer orders taken or accepted over a designated time frame. Cancellations are deducted to arrive at net bookings.
book inventory- See: perpetual inventory.
bottleneck- A resource that constrains the flow of production, inventory movement or data in a system. In a free-flowing system, the first place to restrict throughput when demand is raised.
Box-Behnken design- A three-level, multiple-variable experiment design method that assumes values at the center point and eliminates extreme values.
Box-Jenkins Model- A variation of ARIMA modeling that creates a forecast using regression and moving average and incorporates previous errors. Most often used in developing short-term forecasts.
boxplot- A graphical representation of a quality test that shows process variability distribution based on the mean, upper and lower specification limits in the form of a box.
break-even analysis- An examination of changes in fixed and variable costs based on varying revenue and production levels that identifies a break-even point where revenues are equal to costs. It highlights the profit results from alternative levels of operation. (syn: cost-profit-volume analysis)
breeder bill of material- A bill of material that accounts for the generation and cost implications of byproducts as a result of manufacturing the parent item.
bricks and mortar- Organizations with physical (vs. Internet-only) production or logistics facilities and operations.
broadcast system- Sequenced plans or data communicated to multiple points at the same time in order to provide a common view and synchronize results.
bucketed- A reporting system that accumulates multiple daily records into a larger, user-specified time frame (weeks, quarters, years, etc.). Enables easier analysis when daily detail is not required.
bucketless- A reporting system that presents a view of orders or records based on individual dates rather than accumulating into a larger time frame. Useful for short-term detail planning and analysis.
budget- A planning, control and reporting system that estimates future costs and revenues based on projected operating levels. It provides target spending levels and profit estimation, and allows for interim review and corrective action.
budgeted cost of work performed (BCWP)- The earned (standard) cost or budget value of project tasks completed for a given time period. It is compared to actual cost of work performed (ACWP) to determine variance conditions.
budgeted cost of work scheduled (BCWS)- The earned (standard) cost or budget value of project tasks scheduled to be completed for a given time period. A cumulative view of the planned costs based on the budget schedule.
buffer- Stock positioned at a processing or usage point to allow for demand or process variations, or to maintain continued operation of a constrained resource.
buffer management- The set of processes used in the theory of constraints to manage the buffers used to ensure continued operation of the constraint. Activities and materials processing operations are prioritized on the basis of their criticality to maintaining or rebuilding buffer stocks.
bulk issue- Components and materials issued to the production floor based on the cumulative requirements for multiple production orders, shifts or days. Not used in to-order environments where lot traceability is an issue.
burden rate- A percentage or fixed-dollar amount that allocates department or product overhead expenses to production on a labor hour, machine hour. labor dollar, material dollar or unit basis. (syn: overhead rate)
business case scenario- A common, defined situation encountered in normal business operations; systems and procedures are developed and documented to define the standard methodology used for that process.
business intelligence- Systems that provide directed background data and reporting tools to support and improve the decision-making process.
business plan- A long term, family-level financial and operating plan that supports the strategic plan in fulfilling organizational objectives. It provides the high-level detail for the strategic considerations of market, product, facility and resource positioning. An intermediate planning level between the strategic plan and the sales and operations plan (S&OP).
business process mapping- Techniques that specify the steps, control points and resources involved in current state business processes, identify desired changes and risk/reward tradeoffs, and create the methods to implement cross-functional systems that support the desired new processes.
buyer/planner- A buyer, authorized to determine sourcing, negotiate agreements and place purchase orders with vendors, who also performs material planning and review functions done solely by planners in other organizations.
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