SCPro flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Bullwhip effect

Demand variability amplification moving upstream; caused by forecast updating, order batching, price fluctuations, rationing and shortage gaming, and long or variable lead times.

Little's Law

WIP = throughput rate × cycle time; applies to any stable process, so for example inventory equals demand rate multiplied by flow time.

Cash-to-Cash Cycle

Days inventory outstanding + days sales outstanding − days payable outstanding; measures the working capital tied up in the supply chain and shorter is better.

Perfect Order Fulfillment

Percentage of orders delivered on time, complete, damage-free, with correct documentation; computed by multiplying the four component rates together.

S&OP cycle

Monthly process with demand review, supply review, reconciliation, executive decision meeting and final plan; balances demand and supply at an aggregate level.

SCOR model

Supply Chain Operations Reference framework with processes Plan, Source, Make, Deliver, Return and Enable, used for benchmarking and supply chain process design.

Postponement

Delaying final product configuration or localization until customer demand is known, which reduces forecast risk and the variety of finished inventory held.

ABC-XYZ classification

ABC ranks items by value or volume; XYZ ranks by demand variability; the combined grid sets inventory policy and forecasting method for each class.

Kraljic matrix

Segments purchased items by profit impact and supply risk into non-critical, leverage, bottleneck and strategic quadrants, each requiring a different sourcing approach.

Total cost of ownership

Sum of price, logistics, quality, inventory carrying, transaction and end-of-life costs across a purchase's life; used to compare suppliers on a fair basis.

Incoterms risk transfer

Rules defining who bears cost and risk in trade; under FOB risk passes when goods are on board, under DDP the seller bears risk to destination.

Three-way match

Reconciliation of purchase order, goods receipt and supplier invoice before payment, which detects quantity or price discrepancies and prevents incorrect payment.

Early supplier involvement

Involving suppliers in product design so their expertise shortens development time and reduces costly engineering changes later in the lifecycle.

Supplier scorecard

Periodic rating of suppliers on delivery (OTIF), quality (PPM defects), cost and responsiveness, used to steer order allocation and improvement actions.

Fixed-price contract

Buyer and supplier agree the price upfront, so the supplier carries cost-overrun risk; suitable when specifications are stable and requirements are clear.

Vendor-managed inventory

Supplier monitors the buyer's stock levels and replenishes to agreed targets; reduces buyer ordering effort and dampens the bullwhip when demand data are shared.

EOQ formula

Economic order quantity = square root of (2 × annual demand × order cost ÷ annual holding cost per unit); the order size minimizing total ordering plus holding cost.

Reorder point

Expected demand during lead time plus safety stock; an order is released when the inventory position falls to this level.

MRP inputs

Master production schedule, bill of materials and inventory records; outputs are planned orders and reschedule notices for components and materials.

OEE

Overall equipment effectiveness = availability × performance × quality; expresses how much of scheduled production time actually yields good product.

Takt time

Available production time divided by customer demand rate; sets the pace a line must match to meet demand without overtime.

Inventory turns

Cost of goods sold divided by average inventory value; higher turns free up capital but can raise stockout risk if buffers are too thin.

Kanban

Authorization signal, card or electronic, that triggers replenishment of a fixed container quantity in a pull production or inventory system.

Theory of constraints

Five focusing steps: identify the constraint, exploit it, subordinate everything else to it, elevate it, then repeat; system throughput is set by the constraint.

Landed cost

Purchase price plus freight, insurance, duties, tariffs, handling and currency costs; the true cost of goods delivered to the buyer's location.

OTIF

On-time in-full: percentage of orders delivered by the promised date with complete quantities; a core delivery service metric in carrier and supplier scorecards.

Cross-docking

Goods move from inbound to outbound vehicles with little or no storage, cutting handling and inventory while speeding flow to customers.

TL vs LTL

Full truckload moves one shipment point-to-point at lower unit cost; less-than-truckload consolidates shipments but adds handling, transit time and variability.

Hub-and-spoke network

Traffic consolidates through central hubs to gain economies of scale and wider coverage, at the cost of extra handling and longer transit.

Milk run

One vehicle collects or delivers to several stops on a fixed route and schedule, consolidating small shipments into economical loads.

Cube utilization

Volume of stored goods divided by available warehouse volume; measures space use and is constrained by racking, aisles and access requirements.

Order cycle time

Elapsed time from receiving a customer order to delivering it; shorter cycles improve responsiveness but typically increase fulfillment cost.