| APICS Dictionary 11th Edition |
| A B C D E F G H I J K L M N O P Q R S T U V W X Y Z |
| S |
Safety capacity
In the theory of constraints: The planned amount by which the available
capacity exceeds current productive capacity. This capacity provides protection
from planned activities, such as resource contention, and preventive maintenance
and unplanned activities, such as resource breakdown, poor quality, rework,
or lateness. Safety capacity plus productive capacity plus excess capacity is
equal to 100% of capacity. See: protective capacity.
Safety factor
1) The ratio of average strength to the worst stress expected. It is essential
that the variation, in addition to the average value, be considered in design.
2) The numerical value used in the service function (based on the standard deviation
or mean absolute deviation of the forecast) to provide a given level of customer
service. For example, if the item MAD is 100 and a .95 customer service level
(safety factor of 2.06) is desired, then a safety stock of 206 units should
be carried. This safety stock must be adjusted if the forecast interval and
item lead times differ. Syn: service factor. See: service function.
Safety lead time
An element of time added to normal lead time to protect against fluctuations
in lead time so that an order can be completed before its real need date. When
used, the MRP system, in offsetting for lead time, will plan both order release
and order completion for earlier dates than it would otherwise. Syn: protection
time, safety time.
Safety stock
1) In general, a quantity of stock planned to be in inventory to protect
against fluctuations in demand or supply. 2) In the context of master production
scheduling, the additional inventory and capacity planned as protection against
forecast errors and short-term changes in the backlog. Overplanning can be used
to create safety stock. Syn: buffer stock, reserve stock. See: hedge, inventory
buffer.
Safety time
Syn: safety lead time.
Salable goods
A part or assembly authorized for sale to final customers through the marketing
function.
Sale-and-leaseback
An agreement by which a firm first sells its assets to a financial institution
and then leases these same assets from the financial institution.
Sales and operations planning
A process to develop tactical plans that provide management the ability
to strategically direct its businesses to achieve competitive advantage on a
continuous basis by integrating customer-focused marketing plans for new and
existing products with the management of the supply chain. The process brings
together all the plans for the business (sales, marketing, development, manufacturing,
sourcing, and financial) into one integrated set of plans. It is performed at
least once a month and is reviewed by management at an aggregate (product family)
level. The process must reconcile all supply, demand, and new-product plans
at both the detail and aggregate levels and tie to the business plan. It is
the definitive statement of the company’s plans for the near to intermediate
term, covering a horizon sufficient to plan for resources and to support the
annual business planning process. Executed properly, the sales and operation
planning process links the strategic plans for the business with its execution
and reviews performance measurements for continuous improvement. See: aggregate
planning, production plan, production planning, sales plan, tactical planning.
Sales forecast
Syn: forecast accuracy, forecast.
Sales mix
The proportion of individual product-type sales volumes that make up the
total sales volume.
Sales order configuration
Syn: customer order servicing system.
Sales order number
A unique control number assigned to each new customer order, usually during
order entry. It is often used by order promising, master scheduling, cost accounting,
invoicing, etc. For some make-to-order products, it can also take the place
of an end item part number by becoming the control number that is scheduled
through the finishing operations.
Sales plan
A time-phased statement of expected customer orders anticipated to be received
(incoming sales, not outgoing shipments) for each major product family or item.
It represents sales and marketing management’s commitment to take all reasonable
steps necessary to achieve this level of actual customer orders. The sales plan
is a necessary input to the production planning process (or sales and operations
planning process). It is expressed in units identical to those used for the
production plan (as well as in sales dollars). See: aggregate planning, production
plan, production planning, sales and operations planning.
Sales planning
The process of determining the overall sales plan to best support customer
needs and operations capabilities while meeting general business objectives
of profitability, productivity, competitive customer lead times, and so on,
as expressed in the overall business plan. See: production planning, sales and
operations planning.
Sales promotion
1) Sales activities that supplement both personal selling and marketing,
coordinate the two, and help to make them effective, e.g., displays. 2) More
loosely, the combination of personal selling, advertising, and all supplementary
selling activities. 3) Promotion activities—other than advertising, publicity,
and personal selling—that stimulate interest, trial, or purchase by final customers
or others in the marketing channel.
Sales quota
The level of sales that an individual or group is expected to meet.
Sales representative
An employee authorized to accept a customer’s order for a product. Sales
representatives usually go to the customer’s location when industrial products
are being marketed.
Salvage
Property that, because of its worn, damaged, deteriorated, or incomplete
condition or specialized nature has no reasonable prospect of sale or use as
serviceable property without major repairs or alterations, but that has some
value in excess of its scrap value.
Salvage value
1) The cost recovered or that could be recovered from used property when
removed, sold, or scrapped. A factor in appraisal of property value and in computing
depreciation. 2) The market value of a machine or facility at any point in time.
Normally, an estimate of an asset’s net value at the end of its estimated life.
Sample
A portion of a universe of data chosen to estimate some characteristics
about the whole universe. The universe of data could consist of sizes of customer
orders, number of units of inventory, number of lines on a purchase order, etc.
Sample size
The number of elements selected for analysis from the population.
Sampling
1) A statistical process where generalizations regarding an entire body
of phenomena are drawn from a relatively small number of observations. 2) In
marketing, the delivery of free trial goods to consumers.
Sampling distribution
The distribution of values of a statistic calculated from samples of a given
size.
Sawtooth diagram
A quantity-versus-time graphic representation of the order point/order quantity
inventory system showing inventory being received and then used up and reordered.
SBQ
Abbreviation for standard batch quantity.
SBU
Abbreviation for strategic business unit.
Scanlon plan
A system of group incentives on a companywide or plantwide basis that sets
up one measure that reflects the results of all efforts. The universal standard
is the ratio of labor costs to sales value added by production. If there is
an increase in production sales value with no change in labor costs, productivity
has increased while unit cost has decreased.
Scanner
An electronic device that optically converts coded information into electrical
control signals for data collection or system transaction input.
Scarcity
A concept central to economics—that less of a good is freely available than
consumers would like.
Scatter chart
A graphical technique to analyze the relationship between two variables.
Two sets of data are plotted on a graph, with the y axis used for the variable
to be predicted and the x axis used for the variable to make the prediction.
The graph will show possible relationships (although two variables might appear
to be related, they might not be—those who know most about the variables must
make that evaluation). The scatter chart is one of the seven tools of quality.
Syn: cross plot, scatter diagram.
Scatter diagram
Syn: scatter chart.
Schedule
A timetable for planned occurrences, e.g., shipping schedule, master production
schedule, maintenance schedule, supplier schedule. Some schedules include the
starting and ending time for activities, e.g., project schedule.
Schedule board
Syn: control board.
Schedule chart
Usually a large piece of graph paper used in the same manner as a control
board. Where the control board often uses strings and markers to represent plans
and progress, the schedule chart is typically filled in with pencil. See: control
board.
Schedule control
Control of a plant floor by schedules rather than by job orders (called
order control). Schedules are derived by taking requirements over a period of
time and dividing by the number of workdays allowed to run the parts or assemblies.
Production completed is compared with the schedule to provide control. This
type of control is most frequently used in repetitive and process manufacturing.
Scheduled downtime
Planned shutdown of equipment or plant to perform maintenance or to adjust
to softening demand.
Scheduled finish date
In project management, an activity’s planned finish time, normally between
the early finish time and the late finish time. It may reflect resource limitations.
Syn: planned finish date.
Scheduled load
The standard hours of work required by scheduled receipts, i.e., open production
orders.
Scheduled receipt
An open order that has an assigned due date. See: open order.
Scheduled start date
In project management, an activity’s planned start time, normally between
the early start time and the late start time. It may reflect resource limitations.
Syn: planned start date.
Schedule harmony
In supply chains, the arrival of goods at a transfer point with a small
buffer time in front of their departure via a different transportation mode.
Scheduler
A general term that can refer to a material planner, dispatcher, or a combined
function.
Scheduling
The act of creating a schedule, such as a shipping schedule, master production
schedule, maintenance schedule, or supplier schedule.
Scheduling algorithm
Syn: scheduling rules.
Scheduling rules
Basic rules that can be used consistently in a scheduling system. Scheduling
rules usually specify the amount of time to allow for a move, queue, load calculation,
etc. Syn: scheduling algorithm.
Scientific inventory control
Syn: statistical inventory control.
Scope
In project management, the totality of products to be created by a project.
Scope change
In project management, a change to a project’s scope, usually requiring
an adjustment to the project’s budget and schedule.
Scope definition
In project management, subdividing a project into smaller components to
facilitate management.
Scrap
Material outside of specifications and possessing characteristics that make
rework impractical.
Scrap factor
A factor that expresses the quantity of a particular component that is expected
to be scrapped upon receipt from a vendor, completion of production, or while
that component is being built into a given assembly. It is usually expressed
as a decimal value. For a given operation or process, the scrap factor plus
the yield factor is equal to one. If the scrap factor is 30% (or .3) then the
yield is 70% (or .7). In manufacturing planning and control systems, the scrap
factor is usually related to a specific item in the item master, but may be
related to a specific component in the product structure. For example, if 50
units of a product are required by a customer and a scrap factor of 30% (a yield
of 70%) is expected then 72 units (computed as 50 units divided by .7) should
be started in the manufacturing process. Syn: scrap rate. See: yield, yield
factor.
S-curve
In project management, graphic display of cumulative project attributes
such as costs, labor hours, or percentage of work. The name derives from the
typical shape of the curve.
SDS
Abbreviation for single-digit setup.
Search engines
Web software that enables a user to find a page or Web site devoted to a
particular topic.
Search models
Operations research models that attempt to find optimal solutions with adaptive
searching approaches.
Seasonal adjustment
Syn: seasonal index.
Seasonal component
A component of demand, usually describing the impact of variations that
occur because of the time of year (quarter, month, week) on demand. See: decomposition,
time series analysis.
Seasonal harmonics
Syn: harmonic smoothing.
Seasonal index
A number used to adjust data to seasonal demand. Syn: seasonal adjustment.
See: base series.
Seasonal inventory
Inventory built up to smooth production in anticipation of a peak seasonal
demand. Syn: seasonal stock.
Seasonality
A repetitive pattern of demand from year to year (or other repeating time
interval) with some periods considerably higher than others. See: base series.
Seasonal stock
Syn: seasonal inventory.
Second-order smoothing
A method of exponential smoothing for trend situations that employs two
previously computed averages, the singly and doubly smoothed values, to extrapolate
into the future. Syn: double smoothing.
Secular trend
The general direction of the long-run change in the value of a particular
time series.
Secure electronic transaction
(SET)
In e-commerce, a system for guaranteeing the security of financial transactions
conducted over the Internet.
Secure server
In e-commerce, a Web server that protects users’ messages from interception
while being transmitted over the Internet.
Self-directed work team
Generally, a small, independent, self-organized, and self-controlling group
in which members flexibly plan, organize, determine, and manage their duties
and actions, as well as perform many other supportive functions. It may work
without immediate supervision and can often have authority to select, hire,
promote, or discharge its members.
Seller’s market
A market condition in which goods cannot easily be secured (purchased) and
when the economic forces of business tend to cause goods to be priced at the
supplier’s estimate of value.
Selling expense
An expense or class of expense incurred in selling or marketing, e.g., salespersons’
salaries and commissions, advertising, samples, and shipping cost.
Semifinished goods
Products that have been stored uncompleted awaiting final operations that
adapt them to different uses or customer specifications.
Semiprocess flow
A manufacturing configuration in which most jobs go through the same sequence
of operations even though production is in job lots.
Semivariable costs
Costs that change in increments. They remain fixed over a given range, and
outside that range, the cost changes to a new level.
Send ahead
The movement of a portion of a lot of material to a subsequent operation
before completion of the current operation for all units of the lot. The purpose
of sending material ahead is to reduce the manufacturing lead time. See: overlapped
schedule.
Sensitivity analysis
A technique for determining how much an expected outcome or result will change in response to a given change in an input variable. For example, given a projected level of resources, what would be the effect on net income if variable costs of production increased 20%?
Sensors
Devices that can monitor differences in conditions to control equipment
on a dynamic basis.
Sequencing
Determining the order in which a manufacturing facility is to process a
number of different jobs in order to achieve certain objectives.
Sequential
In numeric sequence, normally in ascending order.
Serial number
A unique number assigned for identification to a single piece that will
never be repeated for similar pieces . Serial numbers
are usually applied by the manufacturer but can be applied at other points,
including by the distributor or wholesaler.
Server
A computer, or software package, that provides a specific kind of service
to client software running on other computers. The term can refer to a particular
piece of software, for example a Web server, or to the machine on which the
software is running. A single server machine could have several different server
software packages running on it, thus providing many different servers to clients
on the network.
Server address
The Internet address of a server.
Service
Sometimes used to describe those activities that support the production
or distribution functions in any organization, such as customer service and
field service.
Serviceability
1) Design characteristic that facilitates the easy and efficient performance
of service activities. Service activities include those activities required
to keep equipment in operating condition, such as lubrication, fueling, oiling,
and cleaning. 2) A measurement of the degree to which servicing of an item will
be accomplished within a given time under specified conditions. See: maintainability.
3) The competitive advantage gained when an organization focuses on aspects
such as the speed and courtesy in which customer complaints and questions are
answered, following up with customers after the sale to ensure satisfaction,
and offering on-site service for product repairs.
Service blueprint
A service analysis method that allows service designers to identify processes
involved in the service delivery system, isolate potential failure points in
the system, establish time frames for the service delivery, and set standards
for each step that can be quantified for measurement.
Service bureau model
A business strategy in which a company outsources certain products and services
from another company. The company prefers to concentrate on its core business
rather than expending resources on the outsourced item.
Service factor
Syn: safety factor.
Service function
A mathematical relationship of the safety factor to service level, i.e.,
the fraction of demand that is routinely met from stock.
Service industry
1) In its narrowest sense, an organization that provides an intangible product,
e.g., medical or legal advice. 2) In its broadest sense, all organizations except
farming, mining, and manufacturing. This definition of service industry includes
retail trade; wholesale trade; transportation and utilities; finance, insurance,
and real estate; construction; professional, personal, and social services;
and local, state, and federal governments.
Service level
Syn: level of service.
Service parts
Those modules, components, and elements that are planned to be used without
modification to replace an original part. Syn: repair parts, spare parts.
Service parts demand
The need or requirement for a component to be sold by itself, as opposed
to being used in production to make a higher level product. Syn: repair parts
demand, spare parts demand.
Service positioning
Syn: product positioning.
Service time
The time taken to serve a customer, e.g., the time required to fill a sales
order or the time required to fill a request at a tool crib.
Service vs. investment chart
A curve showing the amount of inventory that will be required to give various
levels of customer service.
Servo system
A control mechanism linking a system’s input and output, designed to feed
back data on system output to regulate the operation of the system.
SET
Acronym for secure electronic transaction.
Setup
1) The work required to change a specific machine, resource, work center,
or line from making the last good piece of item A to making the first good piece
of item B. 2) The refitting of equipment to neutralize the effects of the last
lot produced (e.g., teardown of the just-completed production and preparation
of the equipment for production of the next scheduled item). Syn: changeover,
turnaround, turnaround time.
Setup costs
Costs such as scrap costs, calibration costs, downtime costs, and lost sales
associated with preparing the resource for the next product. Syn: changeover
costs, turnaround costs.
Setup lead time
Syn: setup time.
Setup time
The time required for a specific machine, resource, work center, process,
or line to convert from the production of the last good piece of item A to the
first good piece of item B. Syn: setup lead time.
Seven tools of quality
Tools that help organizations understand their processes in order to improve
them. The tools are the cause-and-effect diagram, check sheet, control chart,
flowchart, histogram, Pareto chart, and scatter chart.
Sexual harassment
A violation of Section VII of the 1964 Civil Rights Act by unwanted sexual
advances, comments, touching, or promise of benefits or loss contingent on the
giving of sexual favors.
Shareholder wealth
The present value of all anticipated payments to the shareholders of a firm.
Shelf life
The amount of time an item may be held in inventory before it becomes unusable.
Shelf life control
A technique of physical first-in, first-out usage aimed at minimizing stock
obsolescence.
Shewhart circle of quality
Syn: plan-do-check-action.
Shewhart cycle
Syn: plan-do-check-action.
Shingo’s seven wastes
Shigeo Shingo, a pioneer in the Japanese Just-in-Time philosophy, identified
seven barriers to improving manufacturing. They are the waste of overproduction,
waste of waiting, waste of transportation, waste of stocks, waste of motion,
waste of making defects, and waste of the processing itself.
Ship-age limit
The date after which a product cannot be shipped to a customer.
Shipping
The function that performs tasks for the outgoing shipment of parts, components,
and products. It includes packaging, marking, weighing, and loading for shipment.
Shipping lead time
The number of working days normally required for goods to move between a
shipping and receiving point, plus acceptance time in days at the receiving
point.
Shipping manifest
A document that lists the pieces in a shipment. A manifest usually covers
an entire load regardless of whether the load is to be delivered to a single
destination or to many destinations. Manifests usually list the items, piece
count, total weight, and the destination name and address for each destination
in the load.
Shipping order debit memo
The document used to authorize the shipment of rejected material back to
the supplier and create a debit entry in accounts payable.
Shipping point
The location from which material is sent. Ant: receiving point.
Shipping tolerance
An allowable deviation that the supplier can ship over or under the contract
quantity.
Shojinka
Continually balancing the number of workers in a work center to meet demand
with a minimum number of workers. It requires a line design, such as U-shaped,
that supports varying the number of workers.
Shop calendar
Syn: manufacturing calendar.
Shop floor control
A system for using data from the shop floor to maintain and communicate
status information on shop orders (manufacturing orders) and on work centers.
Shop floor control can use order control or flow control to monitor material
movement through the facility. The major subfunctions of shop floor control
are (1) assigning priority of each shop order; (2) maintaining work-in-process
quantity information; (3) conveying shop order status information to the office;
(4) providing actual output data for capacity control purposes; (5) providing
quantity by location by shop order for work-in-process inventory and accounting
purposes; and (6) providing measurement of efficiency, utilization, and productivity
of the workforce and machines. The major subfunctions for flow control are based
primarily on production rates and feeding work into production to meet these
planned rates, then monitoring and controlling production. See: flow control, order control, production activity control.
Shop order
Syn: manufacturing order.
Shop order close-out station
A stocking point on the shop floor where completed production of components
is transacted (received) into and subsequently transacted (issued) to assembly
or other downstream operations. This technique is used to reduce material handling
by avoiding the need to move items into and out of stockrooms, while simultaneously
enabling a high degree of inventory record accuracy.
Shop order reporting
Syn: production reporting and status control.
Shop packet
A package of documents used to plan and control the shop floor movement
of an order. The packet may include a manufacturing order, operations sheets,
engineering blueprints, picking lists, move tickets, inspection tickets, and
time tickets.
Shop planning
The function of coordinating the availability of material handling, material,
resources, setup, and tooling so that an operation or job can be done on a particular
machine. Shop planning is often part of the dispatching function. The term shop
planning is sometimes used interchangeably with dispatching, although dispatching
does not necessarily include shop planning. For example, the selection of jobs
might be handled by the centralized dispatching function, while the actual shop
planning might be done by the foreman or a representative.
Shop scheduling
Syn: operations scheduling.
Shortage cost
The marginal profit that is lost when a customer orders an item that is
not immediately available in stock.
Short-cycle manufacturing
Syn: Just-in-Time.
Shortest processing time rule
(SPT)
A dispatching rule that directs the sequencing of jobs in ascending order
by processing time. If this rule is followed, the most jobs at a work center
per time period will be processed. As a result, the average lateness of jobs
at that work center is minimized, but some jobs will be very late. Syn: smallest
processing time rule.
Short-term planning
The function of adjusting limits or levels of capacity within relatively
short periods of time, such as parts of a day, a day, or a week.
Shrinkage
Reductions of actual quantities of items in stock, in process, or in transit.
The loss may be caused by scrap, theft, deterioration, evaporation, etc.
Shrinkage factor
A percentage factor used to compensate for the expected loss during the
manufacturing cycle of an item. This factor differs from the scrap factor in
that it affects all components of the item, where the scrap factor relates to
only one component’s usage. Syn: shrinkage rate.
Shrinkage rate
Syn: shrinkage factor.
SIC
Abbreviation for standard industrial classification.
Sigma
A Greek letter (Σ) commonly used to designate the standard deviation of
a population.
Signed message
In information systems, a message for which the sender can be authenticated.
Significant part number
A part number that is intended to convey certain information, such as the
source of the part, the material in the part, or the shape of the part. Using
numbers to represent this information usually makes these part numbers longer
than corresponding nonsignificant part numbers. Ant: nonsignificant part number.
Significant variances
Those differences between planned and actual performance that exceed established
thresholds and that require further review, analysis, and action.
Simple interest
1) Interest that is not compounded; i.e., is not added to the income-producing
investment or loan. 2) The interest charged under the condition that interest
in any time period is only charged on the principal.
Simple moving average
A moving average where the oldest data point is dropped and the newest data
point is included in the calculation. All data points are assigned equal weights.
See: moving average, weighted moving average.
Simplex algorithm
A procedure for solving a general linear programming problem.
Simulation
1) The technique of using representative or artificial data to reproduce in a model various conditions that are likely to occur in the actual performance of a system. It is frequently used to test the behavior of a system under different operating policies. 2) Within MRP II, using the operational data to perform what-if evaluations of alternative plans to answer the question, Can we do it? If yes, the simulation can then be run in the financial mode to help answer the question, Do we really want to? See: what-if analysis.
Simultaneous design/engineering
Syn: participative design/engineering.
Simultaneous engineering
Syn: participative design/engineering.
Single-card kanban system
Syn: one-card kanban system.
Single-digit setup (SDS)
The idea of performing setups in less than 10 minutes. See: single-minute
exchange of die.
Single exponential smoothing
Syn: first-order smoothing.
Single-factor productivity
The average amount of a given product (output) attributed to a unit of a
given resource (input). Factors include labor and capital. Syn: partial productivity
factor.
Single-level backflush
A form of backflush that reduces inventory of only the parts used in the
next level down in an assembly or subassembly.
Single-level bill of material
A display of components that are directly used in a parent item. It shows
only the relationships one level down.
Single-level where-used
Single-level where-used for a component lists each parent in which that
component is directly used and in what quantity. This information is usually
made available through the technique known as implosion.
Single-minute exchange of die
(SMED)
The concept of setup times of less than 10 minutes, developed by Shigeo
Shingo in 1970 at Toyota. See: single-digit setup.
Single-period inventory models
Inventory models used to define economical or profit maximizing lot-size
quantities when an item is ordered or produced only once, e.g., newspapers,
calendars, tax guides, greeting cards, or periodicals, while facing uncertain
demands. Syn: static inventory models.
Single smoothing
Syn: first-order smoothing.
Single-source supplier
A company that is selected to have 100% of the business for a part although
alternate suppliers are available. See: sole-source supplier.
Single sourcing
A method whereby a purchased part is supplied by only one supplier. Traditional
manufacturers usually have at least two suppliers for each component part they
purchase to ensure continuity of supply and (more so) to foster price competition
between the suppliers. A JIT manufacturer will frequently have only one supplier
for a purchased part so that close relationships can be established with a smaller
number of suppliers. These close relationships (and mutual interdependence)
foster high quality, reliability, short lead times, and cooperative action.
Ant: multisourcing. See: sole source.
SIPOC
An acronym for supplier, input, process, output—pronounced sye-pahk.
Six-sigma
A methodology that furnishes tools for the improvement of business processes.
The intent is to decrease process variation and improve product quality.
Six-sigma quality
The six-sigma approach is a set of concepts and practices that key on reducing
variability in processes and reducing deficiencies in the product. Important
elements are (1) Producing only 3.4 defects for every one million opportunities
or operations; (2) Process improvement initiatives striving for six sigma-level
performance. Six sigma is a business process that permits organizations to improve
bottom-line performance, creating and monitoring business activities to reduce
waste and resource requirements while increasing customer satisfaction.
Skew
The degree of nonsymmetry shown by a frequency or probability distribution.
Skill-based compensation
A method of employee compensation that bases the employee’s wage rate on
the number of skills the employee is qualified to perform. People who are qualified
to do a wider variety of skills are paid more. See: labor grade.
Skills inventories
An organized file of information on each employee’s skills, abilities, knowledge,
and experience, usually maintained by a personnel office. See: labor grade.
SKU
Abbreviation and acronym (pronounced skew) for stockkeeping unit.
Slack time
In project management, the amount of time that an activity may be delayed
from its early start without delaying the project finish date. Syn: slack.
Slack time rule
A dispatching rule that directs the sequencing of jobs based on slack time.
Slack time is equal to (days left until due date × hrs/day) minus standard hours
of work left on this specific job, e.g., (5 × 8) - 12 = 28 hours of slack. The
lower the amount of slack time, the higher the priority in sequencing of jobs.
Slow-moving items
Those inventory items with a low turnover, i.e., items in inventory that
have a relatively low rate of usage compared to the normal amount of inventory
carried.
Smallest processing time rule
Syn: shortest processing time rule.
Small group improvement activity
An organizational technique for involving employees in continuous improvement
activities. See: quality circle.
SMED
Acronym for single-minute exchange of die.
Smoothing
The process of averaging data by a mathematical process or by curve fitting,
such as the least-squares method or exponential smoothing.
Smoothing constant
In exponential smoothing, the weighting factor that is applied to the most
recent demand, observation, or error. In this case, the error is defined as
the difference between actual demand and the forecast for the most recent period.
The weighting factor is represented by the symbol α. Theoretically, the range
of α is 0.0 to 1. Syn: alpha factor, smoothing factor.
Smoothing factor
Syn: smoothing constant.
Software
The programs and documentation necessary to make use of a computer.
Sole proprietorship
A form of business in which one person has ownership and control. See: corporation,
partnership.
Sole source
The situation where the supply of a product is available from only one organization.
Usually technical barriers such as patents preclude other suppliers from offering
the product. See: single sourcing.
Sole-source supplier
The only supplier capable of meeting (usually technical) requirements for
an item. See: single-source supplier.
Sorting
The function of physically separating a homogeneous subgroup from a heterogeneous
population of items.
Source document
An original written or printed record of some type that is to be converted
into machine-readable form.
Source inspection
Inspection at the source of supply or of production, e.g., the supplier
or the work center, as opposed to inspection following receipt from the supplier
or following transfer of the items from one work center to another.
Sourcing
The process of identifying a company that provides a needed good or service.
Space buffer
A physical space allocated to prevent a bottleneck work center from stopping
production because no more room exists to offload finished material from that
work center.
Spare parts
Syn: service parts.
Spare parts demand
Syn: service parts demand.
SPC
Abbreviation for statistical process control.
Special cause
Syn: assignable cause.
Special warranty
An assurance that the product is fit for the specific purpose for which
the product will be used. See: general warranty, warranty.
Specification
A clear, complete, and accurate statement of the technical requirements
of a material, an item, or a service, and of the procedure to determine if the
requirements are met.
Specific performance
A contract remedy requiring defendants to do what they have contracted to
do.
Split delivery
A method by which a larger quantity is ordered on a purchase order to secure
a lower price, but delivery is divided into smaller quantities and spread out
over several dates to control inventory investment, save storage space, etc.
Split lot
A manufacturing order quantity that has been divided into two or more smaller
quantities, usually after the order has been released. The quantities of a split
lot may be worked on in parallel, or a portion of the original quantity may
be sent ahead to a subsequent operation to be worked on while work on the remainder
of the quantity is being completed at the current operation. The purpose of
splitting a lot is to reduce the lead time of the order.
Spoiled work order
Syn: rework order.
Spot buy
A purchase made for standard off-the-shelf material or equipment, on a one-time
basis.
Spot demand
Demand, having a short lead time, that is difficult to estimate. Usually
supply for this demand is provided at a premium price.
SPT
Abbreviation for shortest processing time rule.
SQC
Abbreviation for statistical quality control.
SQL
Abbreviation for structured query language.
Stabilization stock
An inventory that is carried on hand above the base inventory level to provide
protection against incurring overtime or downtime.
Stacked lead time
Syn: cumulative lead time.
Staging
Pulling material for an order from inventory before the material is required.
This action is often taken to identify shortages, but it can lead to increased
problems in availability and inventory accuracy.
Staging and consolidation
Physically moving material from the packing area to a staging area, based
on a prescribed set of instructions related to a particular outbound vehicle
or delivery route, often for shipment consolidation purposes.
Stakeholders
People with a vested interest in a company, including managers, employees,
stockholders, customers, suppliers, and others.
Standard
1) An established norm against which measurements are compared. 2) An established
norm of productivity defined in terms of units of output per set time (units/hour)
or in standard time (minutes per unit). 3) The time allowed to perform a specific
job including quantity of work to be produced. See: standard time.
Standard allowance
The established or accepted amount by which the normal time for an operation
is increased within an area, plant, or industry to compensate for the usual
amount of personal, fatigue, and unavoidable delay times.
Standard batch quantity (SBQ)
The quantity of a parent that is used as the basis for specifying the material
requirements for production. The quantity per is expressed as the quantity to
make the SBQ, not to make only one of the parent. Often used by manufacturers
that use some components in standard quantities or by process-related manufacturers.
Syn: run size.
Standard containers
Predetermined, specifically sized containers used for storing and moving
components. These containers protect the components from damage and simplify
the task of counting components.
Standard cost accounting system
A cost accounting system that uses cost units determined before production
for estimating the cost of an order or product. For management control purposes,
the standards are compared to actual costs, and variances are computed.
Standard costs
The target costs of an operation, process, or product including direct material,
direct labor, and overhead charges.
Standard deviation
A measurement of dispersion of data or of a variable. The standard deviation
is computed by finding the differences between the average and actual observations,
squaring each difference, adding the squared differences, dividing by n – 1
(for a sample), and taking the square root of the result. See: estimate of error.
Standard error
A measurement of the variability of statistics such as the sample mean.
See: estimate of error.
Standard hours
Syn: standard time.
Standard industrial classification
(SIC)
Classification codes that are used to categorize companies into industry
groupings.
Standardization
1) The process of designing and altering products, parts, processes, and
procedures to establish and use standard specifications for them and their components.
2) Reduction of the total numbers of parts and materials used and products,
models, or grades produced. 3) The function of bringing a raw ingredient into
standard (acceptable) range per the specification before introduction to the
main process.
Standardized ingredient
A raw ingredient that has been preprocessed to bring all its specifications
within standard ranges before it is introduced to the main process. This preprocessing
minimizes variability in the production process.
Standard ratio
A relationship based on a sample distribution by value for a particular
company. When the standard ratio for a particular company is known, certain
aggregate inventory predictions can be made, e.g., the amount of inventory increase
that would be required to provide a particular increase in customer service.
Standard time
The length of time that should be required to (1) set up a given machine
or operation and (2) run one batch or one or more parts, assemblies, or end
products through that operation. This time is used in determining machine requirements
and labor requirements. Standard time assumes an average worker following prescribed
methods and allows time for personal rest to overcome fatigue and unavoidable
delays. It is also frequently used as a basis for incentive pay systems and
as a basis of allocating overhead in cost accounting systems. Syn: standard
hours. See: standard.
Standing capacity
Syn: rated capacity.
Standing order
Syn: blanket purchase order.
Star
A slang term used to refer to a high-growth, high-profit-margin product.
See: growth share matrix.
Start date
In project management, the time an activity begins; this may be defined
as an actual start date or a planned start date.
Start-to-finish
In project management, a network requirement that activity A must start
before subsequent activity B can finish. See: logical relationship.
Start-to-start
In project management, a network requirement that activity A must start
before subsequent activity B can start. See: logical relationship.
Startup
That period starting with the date of initial operation during which the
unit is brought up to acceptable production capacity and quality within estimated
production costs. Startup is the activity that commences on the date of initial
activity and has significant duration on most projects, but is often confused
(used interchangeably) with date of initial operation.
Startup audit
The technique of having an implementation team tour or visit the implementation
site on a frequent basis and use the management by walking around technique
to identify problems and solutions.
Startup costs
The extra operating costs to bring the plant or product on-stream incurred
between the completion of construction and the start of normal operations. In
addition to the difference between actual operating costs during that period
and normal costs, they include employee training, equipment tests, process adjustments,
salaries and travel expense of temporary labor staff and consultants, report
writing, post-startup monitoring, and associated overhead. Additional capital
required to correct plant problems may be included. Startup costs are sometimes
capitalized.
Statement of cash flows
Syn: funds flow statement
Statement of work
1) A description of products to be supplied under a contract. 2) In projection
management, the first project planning document that should be prepared. It
describes the purpose, history, deliverables, and measurable success indicators
for a project. It captures the support required from the customer and identifies
contingency plans for events that could throw the project off course. Because
the project must be sold to management, staff, and review groups, the statement
of work should be a persuasive document.
Static budget
Syn: master budget.
Static inventory models
Syn: single-period inventory models.
Statistical control
The situation where variations among the observed samples can be attributed
to a constant system of chance causes.
Statistical inventory control
The use of statistical methods to model the demands and lead times experienced
by an inventory item or group of items. Demand during lead time and between
reviews can be modeled, and reorder points, safety stocks, and maximum inventory
levels can be defined to strive for desired customer service levels, inventory
investments, manufacturing and distribution efficiency, and targeted returns
on investments. Syn: scientific inventory control. See: fixed reorder quantity
inventory model.
Statistical order point
Syn: order point.
Statistical order point system
Syn: order point system.
Statistical process control (SPC)
The application of statistical techniques to monitor and adjust an operation. Often the term statistical process control is used interchangeably with statistical quality control.
Statistical quality control (SQC)
The application of statistical techniques to control quality. Often the
term statistical process control is used interchangeably with statistical quality
control, although statistical quality control includes acceptance sampling as
well as statistical process control.
Statistical safety stock
calculations
The mathematical determination of safety stock quantities considering forecast
errors, lot sizes, desired customer service levels, and the ratio of lead time
to the length of the forecast period. Safety stock is frequently the product
of the appropriate safety factor and the standard deviation or mean absolute
deviation of the distribution of demand forecast errors.
Statute of limitations
A statute restricting the length of time in which a lawsuit may be filed.
Step budget
A budget that establishes anticipated targets at which an operation will
perform for each step or level of production. A step budget can be likened to
several different fixed budgets. This method of budgeting is useful because
most of the manufacturing overhead expenditures vary in steps, not as a straight
line. See: flexible budget.
Step-function scheduling
Scheduling logic that recognizes run length to be a multiple of the number
of batches to be run rather than simply a linear relationship of run time to
total production quantity.
Stochastic models
Models where uncertainty is explicitly considered in the analysis.
Stock
1) Items in inventory. 2) Stored products or service parts ready for sale,
as distinguished from stores, which are usually components or raw materials.
Stock dividend
A dividend paid to shareholders in stock rather than cash.
Stockkeeping unit (SKU)
1) An inventory item. For example, a shirt in six colors and five sizes
would represent 30 different SKUs. 2) In a distribution system, an item at a
particular geographic location. For example, one product stocked at the plant
and at six different distribution centers would represent seven SKUs.
Stockless production
Syn: Just-in-Time.
Stockless purchasing
Buying material, parts, supplies, and so on, for direct use by the departments
involved, as opposed to receiving them into stores and subsequently issuing
them to the departments. The intent is to reduce inventory investment, increase
cash flow, reduce material handling and storage, and provide better service.
See: dock-to-stock inventory.
Stock number
Syn: item number.
Stock order
An order to replenish stock, as opposed to a production order to make a
particular product for a specific customer.
Stockout
A lack of materials, components, or finished goods that are needed. See: backorder.
Stockout costs
The costs associated with a stockout. Those costs may include lost sales, backorder
costs, expediting, and additional manufacturing and purchasing costs.
Stockout percentage
A measure of the effectiveness with which a company responds to actual demand
or requirements. The stockout percentage can be a measurement of total orders
containing a stockout to total orders, or of line items incurring stockouts
to total line items ordered during a period. One formula is
stockout percentage = (1 – customer service ratio) × 100%.
Ant: customer service ratio.
Stockpoint
A designated location in an active area of operation into which material
is placed and from which it is taken. Not necessarily a stockroom isolated from
activity, it is a way of tracking and controlling active material.
Stock record card
A ledger card that contains inventory status for a given item.
Stock split
The issuance of new shares to stockholders without requiring additional
equity.
Stock status
A report showing the inventory on hand and usually showing the inventory
on order and some sales or usage history for the products that are covered in
the stock status report.
Stop work order
Syn: hold order.
Storage
The retention of parts or products for future use or shipment.
Storage costs
A subset of inventory carrying costs, including the cost of warehouse utilities,
material handling personnel, equipment maintenance, building maintenance, and
security personnel.
Stores
1) Stored materials used in making a product. 2) The room where stored components,
parts, assemblies, tools, fixtures, etc., are kept.
Stores issue order
Syn: picking list.
Stores ledger card
A card on which records of the items on hand and on order are maintained.
Stores requisition
Syn: picking list.
Straight-line depreciation
A method of depreciation whereby the amount to be recovered (written off
as an expense) is spread uniformly over the estimated life of the asset in terms
of time periods. See: depreciation.
Straight-line schedule
Syn: gapped schedule.
Strategic alliance
A relationship formed by two or more organizations that share information
(proprietary), participate in joint investments, and develop linked and common
processes to increase the performance of both companies. Many organizations
form strategic alliances to increase the performance of their common supply
chain.
Strategic business unit (SBU)
An approach to strategic planning that develops a plan based on products.
A company’s products are typically grouped into strategic business units (SBUs)
with each SBU evaluated in terms of strengths and weaknesses vis-à-vis similar
business units made and marketed by competitors. The units are evaluated in
terms of their competitive strengths, their relative advantages, life cycles,
and cash flow patterns.
Strategic drivers
Factors that influence business unit and manufacturing strategies.
Strategic mission
A statement of the future business scope of an enterprise. The statement
incorporates what is being satisfied (customer needs), who is being satisfied
(customer groups), and how the company creates value for the customer (processes,
technologies, and core competencies).
Strategic performance measurements
Measurements that relate to the long-term goals of a business. Examples
include profitability, market share, growth, and productivity. See: global performance
measurements, operational performance measurements.
Strategic plan
The plan for how to marshal and determine actions to support the mission,
goals, and objectives of an organization. Generally includes an organization’s
explicit mission, goals, and objectives and the specific actions needed to achieve
those goals and objectives. See: business plan, operational plan,
strategic planning, strategy, tactical plan.
Strategic planning
The process of developing a strategic plan. See: operational planning, strategic
plan, tactical planning.
Strategic sourcing
The development and management of supplier relationships to acquire goods
and services in a way that aids in achieving the immediate needs of a business.
It is entirely aligned with the sourcing portion of managing the procurement
process. See: tactical buying.
Strategy
The strategy of an enterprise identifies how a company will function in
its environment. The strategy specifies how to satisfy customers, how to grow
the business, how to compete in its environment, how to manage the organization
and develop capabilities within the business, and how to achieve financial objectives.
See: strategic plan.
Stratification analysis
A statistical tool for determining root causes in which observed historical
data are separated by particular characteristics to determine the effect of
each characteristic upon the observed results. See: root cause analysis.
Strict liability
A tort doctrine requiring those engaging in very hazardous activities or
those manufacturing very hazardous items be held to a high standard of conduct.
Strict performance
The performance of a contract good enough for the contractor to be paid
full price less the other party’s losses.
Structured query language (SQL)
A computer language that is a relational model database language. Such a
language has an English vocabulary, is nonprocedural, and provides the ability
to define tables, screen layouts, and indices.
Subassembly
An assembly that is used at the next level of the bill of material to build
another assembly.
Subcontracting
Sending production work outside to another manufacturer. See: outsourcing.
Suboptimization
A solution to a problem that is best from a narrow point of view but not
from a higher or overall company point of view. For example, a department manager
who would not have employees work overtime to minimize the department’s operating
expense may cause lost sales and a reduction in overall company profitability.
Subplant
An organizational structure within a factory, consisting of a compact entrepreneurial
unit, either process-oriented or product-oriented and structured to achieve
maximum productivity.
Substitution
The use of a nonprimary product or component, normally when the primary
item is not available.
Successor activity
1) In project management, in an activity-on-arrow network, the activity
(arrow) that departs a node. 2) In project management, in an activity-on-node
network, the activity at the tip of the arrow.
Summarized bill of material
A form of multilevel bill of material that lists all the parts and their
quantities required in a given product structure. Unlike the indented bill of
material, it does not list the levels of manufacture and lists a component only
once for the total quantity used.
Summarized where-used
A form of an indented where-used bill of material that shows all parents
in which a given component is used, the required quantities, and all the next-level
parents until the end item is reached. Unlike the indented where-used, it does
not list the levels of manufacture.
Summary judgment
A judicial ruling that no essential facts are in dispute and that one party
to the suit merits judgment as a matter of law.
Sum of deviations
Syn: cumulative sum.
Sunk cost
1) The unrecovered balance of an investment. It is a cost, already paid,
that is not relevant to the decision concerning the future that is being made.
Capital already invested that for some reason cannot be retrieved. 2) A past
cost that has no relevance with respect to future receipts and disbursements
of a facility undergoing an economic study. This concept implies that since
a past outlay is the same regardless of the alternative selected, it should
not influence the choice between alternatives.
Super bill of material
A type of planning bill, located at the top level in the structure, that
ties together various modular bills (and possibly a common parts bill) to define
an entire product or product family. The quantity per relationship of the super
bill to its modules represents the forecasted percentage of demand of each module.
The master-scheduled quantities of the super bill explode to create requirements
for the modules that also are master scheduled. See: pseudo bill of material.
Superflush
A technique to relieve all components down to the lowest level using the
complete bill of material, based on the count of finished units produced or
transferred to finished goods inventory.
Supplier
1) Provider of goods or services. See: vendor. 2) Seller with whom the buyer
does business, as opposed to vendor, which is a generic term referring to all
sellers in the marketplace.
Supplier alternate
A seller other than the primary one. The supplier alternate may or may not
supply the items purchased, but is usually approved to supply those items.
Supplier certification
Certification procedures verifying that a supplier operates, maintains,
improves, and documents effective procedures that relate to the customer’s requirements.
Such requirements can include cost, quality, delivery, flexibility, maintenance,
safety, and ISO quality and environmental standards.
Supplier clustering
Deliberately sole sourcing remote suppliers within a small geographical
area to facilitate joint shipments of what would otherwise be less-than-truckload
quantities.
Supplier-input-process-output-customer
(SIPOC) diagram
A high-level process map that shows substantial subprocesses in an organization's
process together with the structure of the process represented by the suppliers,
inputs, outputs, and customers. A SIPOC diagram defines the critical aspects
of a process without losing the overall perspective.
Supplier lead time
The amount of time that normally elapses between the time an order is received
by a supplier and the time the order is shipped. Syn: vendor lead time. See:
purchasing lead time.
Supplier measurement
The act of measuring the supplier’s performance to a contract. Measurements
usually cover delivery reliability, lead time, and price. Syn: purchasing performance
measurements. See: vendor measurement.
Supplier number
A numerical code used to distinguish one supplier from another.
Supplier partner
A supplier organization with which a company has formed a customer-supplier
partnership. See: outpartnering.
Supplier partnership
The establishment of a working relationship with a supplier organization
whereby two organizations act as one. Syn: collaborative supply relationship.
Supplier performance evaluation
Monitoring and evaluating key suppliers on cost, quality, engineering, purchasing,
and so on, based on an agreed set of measurements.
Supplier quality assurance
The confidence that a supplier’s goods or services will fulfill its customers’
needs. This confidence is achieved by creating a relationship between the customer
and supplier that ensures that the product will be fit for use with minimal
corrective action and inspection. According to J.M. Juran, nine primary activities
are needed: (1) define product and program quality requirements, (2) evaluate
alternative suppliers, (3) select suppliers, (4) conduct joint quality planning,
(5) cooperate with the supplier during the execution of the contract, (6) obtain
proof of conformance to requirements, (7) certify qualified suppliers, (8) conduct
quality improvement programs as required, and (9) create and use supplier quality
ratings.
Supplier scheduler
A person whose main job is working with suppliers regarding what is needed
and when. Supplier schedulers are in direct contact with both MRP and the suppliers.
They do the material planning for the items under their control, communicate
the resultant schedules to their assigned suppliers, do follow-up, resolve problems,
and advise other planners and the master scheduler when purchased items will
not arrive on time to support the schedule. The supplier schedulers are normally
organized by commodity, as are the buyers. By using the supplier scheduler approach,
the buyers are freed from day-to-day order placement and expediting, and therefore
have the time to do cost reduction, negotiation, supplier selection, alternate
sourcing, etc. Syn: planner/buyer, vendor scheduler.
Supplier scheduling
A purchasing approach that provides suppliers with schedules rather than
with individual hard-copy purchase orders. Normally, a supplier scheduling system
will include a business agreement (contract) for each supplier, a weekly (or
more frequent) schedule for each supplier extending for some time into the future,
and individuals called supplier schedulers. Also required is a formal priority
planning system that works well, because it is essential in this arrangement
to provide the supplier with valid due dates. Syn: vendor scheduling.
Supplies
Materials used in manufacturing that are not normally charged to finished
production, such as cutting and lubricating oils, machine repair parts, glue,
or tape. Syn: general stores, indirect materials.
Supply
1) The quantity of goods available for use. 2) The actual or planned replenishment
of a product or component. The replenishment quantities are created in response
to a demand for the product or component or in anticipation of such a demand.
Supply chain
The global network used to deliver products and services from raw materials
to end customers through an engineered flow of information, physical distribution,
and cash.
Supply chain community
The set of trading partners and nominal trading partners that define a complete
supply chain.
Supply chain design
The determination of how to structure a supply chain. Design decisions include
the selection of partners, the location and capacity of warehouse and production
facilities, the products, the modes of transportation, and supporting information
systems.
Supply chain execution
Execution-oriented software applications for effective procurement and supply
of goods and services across a supply chain. It includes manufacturing, warehouse,
and transportation execution systems, and systems providing visibility across
the supply chain.
Supply chain inventory visibility
Software applications that permit monitoring events across a supply chain.
These systems track and trace inventory globally on a line-item level and notify
the user of significant deviations from plans. Companies are provided with realistic
estimates of when material will arrive.
Supply chain management
The design, planning, execution, control, and monitoring of supply chain
activities with the objective of creating net value, building a competitive
infrastructure, leveraging worldwide logistics, synchronizing supply with demand,
and measuring performance globally.
Supply chain planning
The determination of a set of policies and procedures that govern the operation
of a supply chain. Planning includes the determination of marketing channels,
promotions, respective quantities and timing, inventory and replenishment policies,
and production policies. Planning establishes the parameters within which the
supply chain will operate.
Support costs
In activity-based cost accounting, activity costs not directly related with
producing a product, such as the cost of the information system.
Support functions
Activities such as accounting and information systems that do not directly
participate in production but that are nevertheless essential.
Surge capacity
The ability to meet sudden, unexpected increases in demand by expanding
production with existing personnel and equipment.
Surge tank
A container to hold output from one process and feed it to a subsequent
process. It is used when line balancing is not possible or practical or only
on a contingency basis when downstream equipment is nonoperational.
Surplus
A situation in which an oversupply exists at a given price and a decline
in price would eliminate the surplus.
Surrogate driver
In activity-based cost accounting, a substitute for the best possible driver
which is useful because it is less costly and almost as accurate.
Survey research
A form of research (frequently used in marketing research) where data are
collected by mailing questionnaires to a group of people within a target audience.
See: marketing research.
Sustaining activity
In activity-based cost accounting, an activity that is not directly beneficial
to any specific cost object but does benefit the organization as a whole.
Sweepstakes
A marketing promotion in which prizes are awarded, usually by chance.
SWOT
Acronym for strengths, weaknesses, opportunities, and threats.
SWOT analysis
An analysis of the strengths, weaknesses, opportunities, and threats of
and to an organization. SWOT analysis is useful in developing strategy.
Synchronized production
A manufacturing management philosophy that includes a consistent set of
principles, procedures, and techniques where every action is evaluated in terms
of the global goal of the system. Both kanban, which is a part of the JIT philosophy,
and drum-buffer-rope, which is a part of the theory of constraints philosophy,
represent synchronized production control approaches. Syn: synchronous manufacturing.
See: drum-buffer-rope, kanban, synchronous scheduling.
Synchronous control
A pull-type production control system that is based on setting production
rates and feeding work into production to meet the planned rates, then monitoring
and controlling production.
Synchronous manufacturing
Syn: synchronized production.
Synchronous scheduling
Scheduling processes (kanban in Just-in-Time and drum-buffer-rope in theory
of constraints environments) that focus on synchronizing all operations to the
constraint of the system. See: synchronized production.
Synthetic time standard
Syn: predetermined motion time.
System
A regularly interacting or interdependent group of items forming a unified
whole toward the achievement of a goal.
System constraint
In supply chain management, the supply chain is viewed as the complete system.
The system constraint is the resource at any one of the trading partners that
is most limiting the end-to-end throughput of the supply chain.
Systems analysis
1) The analyzing in detail of the information needed for an organization,
the characteristics and components of the current information system, and the
requirements of any proposed changes to the information system. 2) A method
of problem solving that encompasses the identification, study, and evaluation
of interdependent parts and their attributes that function in an ongoing process
and that constitute an organic whole.
Systems audit
The audit of any activity that can affect final product quality.
Systems network
A group of interconnected nodes. This implies redundancy in connections
and some means (e.g., machines) for implementing the connection.