Glossary

The value derived from a product from the customer's perspective that comes from ownership of the product and the choice to use it immediately.

In logistics, delaying activities (i.e., assembly, production, packaging, etc.) as long as possible to eliminate excess inventory in the form of finished goods.

Following up on open orders (with suppliers) prior to the scheduled delivery date to ensure the timely delivery of materials in the specified quantity.

Generally, the same as Freight Prepaid. Can also be used to describe invoice terms or paying for and accounting in one term for something received later.

The shipper, rather than the consignee, is responsible for paying the carrier for the transportation charges of the shipment. Opposite of Collect Freight.

The current worth of a future sum of money or stream of cash flows given a specified rate of return or market rate of interest.

A negative price realization in the market; occurs when there is a decline in what customers will pay for a product or service, usually due to competition.

A test previously used by the ICC (a U.S. government agency no longer in existance) to determine if a trucking operation is bona fide private transportation.

A company’s main manufacturing strategy. It generally accounts for over 80% of a company’s product volume.

A private motor carrier transports its own cargo, usually as a part of a business that produces, uses, sells and/or buys the cargo that is being hauled.

A product sold under a retailer's brand name and usually made by a contract or third-party manufacturer. Walmart's "Sam's Choice" is an example of this.

When a Private Carrier (see above) uses multiple vehicles, it comprises a private fleet.

A storage facility that does not lease space to the public (other companies). The products stored and the facility are both owned by the same company.

Conducting warehouse activities in one or more locations as a Private Warehouse (see above).

Anticipating an issue or event prior to its occurance and acting in advance to avoid it (if negative) or encourage it (if positive).

A systemic series of actions linked to complete a specific output.

Benchmarking an activity (e.g., average time to approve invoices) against organizations known to be the best in class in this process. See Benchmarking.

To make a procedural change which is designed to improve quality or reduce costs, preferably both. See Continuous Improvement (CI).

A production method that creates goods by combining supplies, ingredients or raw materials using a formula or recipe. Different from Discrete Manufacturing.

The end result of a process, such as the number of items manufactured. Also, the number of items that are acceptable as a percentage of the total produced.

Business functions related to negotating, purchasing, transportating and storing materials needed to make goods and services offered by a company.

A physical item, generally one that has been though a manufacturing process to enhance its value, and is offered for sale.

All elements that define the physical aspects of a product, such as size, shape, weight, etc.

A summary of information about the product including its functions and characteristics.

A group of products with similar characteristics. Also, a group of related goods that are manufactured by a single company.