H

Handling cost
The cost involved in the movement of material. In some cases, the handling cost depends on the size of the inventory.

Hard automation
Use of specialized machines to manufacture and assemble products. Each machine is normally dedicated to one function, such as milling.

Hard copy
A printed (computer) report, message, or special listing.

Hardware
1) In manufacturing, relatively standard items such as nuts, bolts, washers, or clips. 2) In data processing, the computer and its peripherals.

Harmonic smoothing
An approach to forecasting based on fitting some set of sine and cosine functions to the historical pattern of a time series. Syn: seasonal harmonics.

Hash total
A control process used to ensure that all documents in a group are present or processed. In practice, the arithmetic sum of data not normally added together is found, the checking (audit) process adds the same data, and a comparison is made. If the sums do not agree, an error exists. Example: the last digit of every part number in an assembly is added and the last digit of the sum becomes the last digit of the assembly. If the last digit of an assembly is not the same as the sum of the last digit of the components’ sum, the assembly must be missing a part or must have the wrong combination of parts.

Hazardous waste
A waste such as chemicals or nuclear material that is hazardous to humans or animals and requires special handling.

Hedge
1) An action taken in an attempt to shield the company from an uncertain event such as a strike, price increase, or currency reevaluation. 2) In master scheduling, a scheduled quantity to protect against uncertainty in demand or supply. The hedge is similar to safety stock, except that a hedge has the dimension of timing as well as amount. A volume hedge or market hedge is carried at the master schedule or production plan level. The master scheduler plans excess quantities over and above the demand quantities in given periods beyond some time fence such that, if the hedge is not needed, it can be rolled forward before major resources must be committed to produce the hedge and put it in inventory. A product mix hedge is an approach where several interrelated optional items are overplanned. Sometimes, using a planning bill, the sum of the percent mix can exceed 100% by a defined amount, thus triggering additional hedge planning. 3) In purchasing, any purchase or sale transaction having as its purpose the elimination of the negative aspects of price fluctuations. See: market hedge, option overplanning, planning bill of material, safety stock, time fence, two-level master schedule.

Hedge inventory
A form of inventory buildup to buffer against some event that may not happen. Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company’s strategic initiatives. Risk and consequences are unusually high, and top management approval is often required.

Hedging
The practice of entering into contracts on a commodity exchange to protect against future fluctuations in the commodity. This practice allows a company to isolate profits to the value-added process rather than to uncontrolled pricing factors.

Heel
In the process industry, an item used in the manufacture of itself. For example, in the manufacture of plastic, the ingredients will include the parent as well as the components.

Heijunka
In the Just-in-Time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales.

Helper application
Software that assists the browser when audio, video, or large images are requested.

Heuristics
A form of problem solving in which the results or rules have been determined by experience or intuition instead of by optimization. Heuristics can be used in such areas as forecasting; lot sizing; or determining production, staff, or inventory levels.

Hierarchical database
A method of constructing a database that requires that related record types be linked in tree-like structures, where no child record can have more than one physical parent record.

High-level language (HLL)
Relatively sophisticated computer language that allows users to employ a notation with which they are already familiar. For example: COBOL (business), ALGOL (mathematical and scientific), FORTRAN, BASIC, Java, and Visual Basic.

Histogram
A graph of contiguous vertical bars representing a frequency distribution in which the groups or classes of items are marked on the x axis and the number of items in each class is indicated on the y axis. The pictorial nature of the histogram lets people see patterns that are difficult to see in a simple table of numbers. The histogram is one of the seven tools of quality.

Historical analogy
A judgmental forecasting technique based on identifying a sales history that is analogous to a present situation, such as the sales history of a similar product, and using that past pattern to predict future sales. See: management estimation.

Hit
In information systems, an instance of a request of a single item made to an Internet server. A hit is counted each time there is a request to the server. Multiple hits may be counted from one visit to a site as the user moves around the site.

HLL
Abbreviation for high-level language.

Holding company
In financial management, a firm that controls the voting stock of other firms.

Hold order
A written order directing that certain operations or work be interrupted or terminated pending a change in design or other disposition of the material. Syn: stop work order.

Hold points
Stockpoints for semifinished inventory.

Holding costs
Syn: carrying costs.

Holonic network
1) A network of autonomous, distributed human or computer systems with the capability to act in an integrated manner. 2) A network of companies dynamically interacting to act as one system. Each company or holon has a different process and core competency. Virtual enterprises are created by organizing the holons, to take advantage of core competencies.

Home page
The introductory page of a Web site, usually containing the name and a list of contents. It usually contains links to other pages on the site.

Homogeneous product
A product that is effectively identical from producer to producer.

HOQ
Abbreviation for house of quality.

Horizontal dependency
The relationship between the components at the same level in the bill of material, in which all must be available at the same time and in sufficient quantity to manufacture the parent assembly. See: vertical dependency.

Horizontal merger
An alliance of two or more competing firms.

Hoshin planning
Breakthrough planning. A Japanese strategic planning process in which a company develops up to four vision statements that indicate where the company should be in the next five years. Company goals and work plans are developed based on the vision statements. Periodic audits are then conducted to monitor progress.

Host computer
Any computer on a network that is a repository for services available to other computers on the network. It is common to have one host machine provide several services such as the World Wide Web.

Housekeeping
The manufacturing activity of identifying and maintaining an orderly environment for preventing errors and contamination in the manufacturing process.

House of quality (HOQ)
A structured process that relates customer-defined attributes to the product’s technical features needed to support and generate these attributes. This technique achieves this mapping by means of a six-step process: (1) identification of customer attributes; (2) identification of supporting technical features; (3) correlation of the customer attributes with the supporting technical features; (4) assignment of priorities to the customer requirements and technical features; (5) evaluation of competitive stances and competitive products; and (6) identification of those technical features to be used (deployed) in the final design of the product. HOQ is part of the quality function deployment (QFD) process and forces designers to consider customer needs and the degree to which the proposed designs satisfy these needs. See: customer-defined attributes, quality function deployment.

HTML
Abbreviation for hypertext markup language.

HTTP
Abbreviation for hypertext transfer protocol.

Human factors engineering
A merging of those branches of engineering and the behavioral sciences that concern themselves principally with the human component in the design and operation of human-machine systems. Human factors engineering is based on a fundamental knowledge and study of human physical and mental abilities and emotional characteristics.

Hurdle rate
The minimum acceptable rate of return on a project.

Hybrid EDI
A situation in which only one trading partner is EDI enabled, while the other continues to use paper and fax. Usually the EDI-enabled partner would have electronic documents converted to fax.

Hybrid inventory system
An inventory system combining features of the fixed reorder quantity inventory model and the fixed reorder cycle inventory model. Features of the fixed reorder cycle inventory model and the fixed reorder quantity inventory model can be combined in many different ways. For example, in the order point-periodic review combination system, an order is placed if the inventory level drops below a specified level before the review date; if not, the order quantity is determined at the next review date. ­Another hybrid inventory system is the optional replenishment model. See: fixed reorder cycle inventory model, fixed reorder quantity inventory model, optional replenishment model, order point system.

Hybrid organizational structure
An organizational structure that embodies multiple organizational forms (functional, product, or geographical) simultaneously. For example, some functions may be centralized (such as finance and accounting), whereas others may be duplicated geographically (such as sales).

Hybrid production method
A production planning method that combines the aspects of both the chase and level production planning methods. Syn: hybrid strategy. See: chase production method, level production method, production planning method.

Hybrid strategy
Syn: hybrid production method.

Hypermedia
An addition to hypertext to include sound, pictures, and/or music.

Hypertext
A system of relating information without using menus or hierarchies.

Hypertext links
Links contained within text connecting to other Web sites or other pages on the current site.

Hypertext markup language (HTML)
A language used to create Web pages that permits the user to create text, hypertext links, and multimedia elements within the page. HTML is not a programming language, but a way to format text.

Hypertext transfer protocol (HTTP)
A protocol that tells computers how to communicate with each other. Most internet addresses begin with http://.

Hypothesis testing
Use of statistical models to test conclusions about a population or universe based on sample information.

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