If you’re new to the world of manufacturing and supply chain processes, the endless sea of acronyms can be intimidating. (Just know BOM and SCAR are far less threatening than they sound.)
For those of you struggling to keep up, bookmark this glossary with more than 100 day-to-day acronyms from the world of supply chain management. It may come in handy!
Supply Chain Acronyms Glossary
4PL = Fourth-Party Logistics
A 4PL provider manages a company's entire supply chain by overseeing logistics operations, including coordination of multiple third-party logistics providers (3PLs). They act as an intermediary to streamline and optimize logistics services and processes from procurement to final delivery.
ABC = Activity-Based Costing
Activity-Based Costing (ABC) is a cost accounting method that assigns overhead and indirect costs to products and services based on the activities they require. Unlike traditional cost models that spread expenses evenly, ABC traces costs with surgical precision—linking them to actual consumption of resources. The result: clearer profitability analysis, smarter pricing decisions, and sharper operational focus.
AQL = Acceptable Quality Level
This is the maximum allowable number of defective units in a sample batch of products. Companies use AQL to determine whether a product batch meets quality standards. It sets the threshold for acceptable product defects, balancing cost and customer expectations.
AVL = Approved Vendor List
Also known as the Approved Manufacturer List (AML), an Approved Vendor List (AVL) is the official register of third-party suppliers approved by the company, indicating that those suppliers comply with all the corporate requirements and specifications for the company’s products.
B2B = Business to Business
B2B refers to transactions between two businesses, such as a wholesaler selling raw materials to a manufacturer. Unlike B2C, where businesses sell directly to consumers, B2B transactions involve larger volumes, longer sales cycles, and often more complex agreements.
B2C = Business to Consumer
In a B2C model, businesses sell products or services directly to individual consumers. This is the most common model for retail businesses, e-commerce platforms, and service providers, where the aim is to meet the needs of the end customer.
BOL = Bill of Lading
The Bill of Lading (BoL) is a legally binding document issued by a carrier to a shipper, detailing the type, quantity, and destination of goods being transported. It serves as both a shipment receipt and a contract for carriage. Without a BoL, you don’t just lose visibility—you lose the ability to prove ownership, accept delivery, or file a claim.
BOM = Bill of Materials
One of the most commonly used acronyms in day-to-day operations, Bill of Materials (BOM) is the list of all raw materials that go into the final assembly of a product. Think of it more like the recipe of the product, rather than a bill you get at the end of a meal.
CAD = Computer-Aided Design
Computer-aided design (CAD) replaces traditional drafting methods with a software that can design and render 2D and 3D models, increasing efficiency in the design phase and ultimately reducing lead time.
CAM = Computer-Aided Manufacturing
While CAD focuses on the design of the product, Computer-Aided Manufacturing (CAM) focuses on how it is made. Primarily utilized for the outcome of maximizing efficiency and decreasing inconsistency, Computer-Aided Manufacturing automates any step of the manufacturing process that uses computer-controlled machinery and software.
CAPA = Corrective Action Preventive Action
Corrective Action, Preventive Action (CAPA) is an investigative and problem-solving method used to address any issues in the product manufacturing process, ideally discovered via internal audits but also (less ideally) from customer complaints.
CAR = Corrective Action Request
A Corrective Action Request (CAR) is a request sent to a supplier or manufacturer when a nonconformity or defect is discovered in a product and an investigation is required to prevent future issues.
CFM = Continuous-Flow Manufacturing
Continuous-Flow Manufacturing (CFM) is exactly as it sounds—a manufacturing method wherein materials being processed are constantly moving through the production line. CFM is the opposite method of batch production, wherein materials only move through the production line at specified times or in specified amounts.
CIM = Computer-Integrated Manufacturing
CIM is the use of computer and control systems to automate the manufacturing process, from product design to production and logistics. This integration improves efficiency, reduces errors, and allows for real-time decision-making across the entire manufacturing system.
CM = Contract Manufacturer
A Contract Manufacturer (CM) is an outside firm that specializes or focuses on the manufacturing or assembly of a part or all of a product, often hired by a company as a cost-saving measure.
CNC = Computer Numerical Control
CNC is a manufacturing process where machines, such as lathes or mills, are controlled by computers. This automation increases precision, reduces human error, and improves efficiency, especially in high-volume production.
COGS = Cost of Goods Sold
Cost of Goods Sold (COGS) refers to the direct costs involved in producing a product—think raw materials, labor, and manufacturing overhead. It’s a key financial metric that affects everything from pricing strategy to profitability analysis. Keeping COGS under control without sacrificing quality is the tightrope every operations and finance team must walk.
COO = Chief Operating Officer
The COO oversees the daily operations of a company, ensuring that all aspects of the business, such as production, manufacturing, and logistics, run smoothly. This role is pivotal for streamlining operations and aligning them with the company's strategic goals.
CRM = Customer Relationship Management
Customer Relationship Management (CRM) refers to both the strategy and the system for managing a company’s interactions with current and potential customers. CRM platforms centralize sales, service, and marketing data, enabling businesses to build stronger relationships, drive customer loyalty, and make data-informed decisions. It’s the operational heartbeat of any customer-centric organization.
CTQ = Critical to Quality
These are the key characteristics of a product or process that must meet customer expectations. CTQs guide the design and manufacturing phases to ensure that products are delivered with the desired performance, reliability, and customer satisfaction.
DAM = Digital Asset Management
A digital asset management (DAM) system is a digitally based hub for all of an organizations media assets, including branding graphics and product images. DAMs are most commonly used by branding, marketing, sales, and other commercialization teams in their customer-facing efforts.
DCR = Document Change Request
A document change request (DCR) functions as part of the change management process as the official signal to make adjustments where a problem in the product manufacturing procedure has occurred.
DHF = Design History File
A Design History File (DHF) contains all the records of the design phase of a product, encompassing every stage of the design, such as prior drafts, notes, data, and reports.
DHR = Device History Record
A collection of records containing a product’s full production history, the Device History Record (DHR) includes the serial and lot numbers of the products produced, and any complaints or issues that are lodged against the product.
DMR = Device Master Record
An important reference for quality management, a Device Master Record (DMR) contains all the records regarding procedures and specifications for manufacturing a finished product used, including the bill of materials, design drafts, packaging and assembly instructions, source codes, and more.
DPM = Direct Part Marking
Direct Part Marking (DPM) involves permanently marking a part or component with essential information such as serial numbers or part numbers. This facilitates traceability and helps with inventory management, quality control, and compliance during the product lifecycle.
DPMO = Defects Per Million Opportunities
DPMO is a quality metric that measures the number of defects in a product or process per one million opportunities. It helps companies gauge the precision of their manufacturing processes and the quality of their output, aiming for continuous improvement.
ECN = Engineering Change Notice
An Engineering Change Notice (ECN) documents the official approval of a requested change as part of the change management process, authorizing the manufacturer to implement the change to the production.
ECO = Engineering Change Order
The Engineering Change Order (ECO) outlines a proposed change to the design in the engineering phase of a product, listing the parts affected and requesting review and approval from the manufacturers. Reasons include a problem that requires fixing, a part that becomes obsolete, or a replacement that could lower costs.
ECR = Engineering Change Request
As the first step in taking corrective action in the manufacturing process, an Engineering Change Request (ECR) is a request to propose improvements or problems with components or assemblies.
EDA = Electronic Design Automation
Used frequently by computer chip manufacturers, Electronic Design Automation (EDA), also known as electronic computer-aided design (ECAD), is software or a series of software tools used to design, develop, and render integrated circuit systems and printed circuit boards.
EDI = Electronic Data Interchange
EDI enables the exchange of documents like orders, invoices, and shipping notices between businesses using standardized electronic formats. This technology automates data exchange, reducing errors, speeding up transactions, and improving supply chain efficiency.
eIFU = Electronic Instructions for Use
Relating most commonly to medical device or medical technology products, Electronic Instructions for Use (eIFU) are digitally accessible Instructions for Use—a set of written guidelines or user manual for the patient or distributor.
EOQ = Economic Order Quantity
Economic Order Quantity (EOQ) is a formula used to determine the ideal order size that minimizes total inventory costs—specifically, the trade-off between ordering costs and holding costs. When calculated correctly, EOQ helps companies avoid the hidden costs of overstocking and underordering, unlocking leaner, more responsive supply chains.
ERP = Enterprise Resource Planning
Often thought of as the hub of business processes for product companies, Enterprise Resource Planning (ERP) is a method of business management that tracks activities like purchasing, inventory, and orders and effectively models and analyzes data across departments including finance, HR, distribution, manufacturing and the supply chain.
ESG = Environmental, Social, & Governance
An increasingly prevalent factor in decision making, Environmental, Social, and Governance (ESG) is an approach to supply chain management that considers the non-financial impact of production processes. With encroaching pressures from investors and consumers, leadership at product companies are integrating potential impact to climate change and sociopolitical issues into their supply chain analysis and overall governance.
ETA = Estimated Time of Arrival
Estimated Time of Arrival (ETA) is the projected date and time when a shipment or delivery is expected to reach its destination. It’s a critical metric for supply chain coordination, customer communication, and inventory planning. While ETAs are often treated as static, smart businesses use real-time tracking data to dynamically update expectations and manage risk.
FAT = Factory Acceptance Test
A FAT is conducted at the manufacturer's site to verify that equipment or systems meet the required specifications before shipment. It allows customers to assess performance, quality, and functionality prior to delivery, ensuring the equipment operates as expected.
FCL = Full Container Load
Full Container Load (FCL) refers to a shipping arrangement where one shipper utilizes the entire space of a shipping container for a single consignment. FCL is often more cost-effective per unit than shared alternatives, especially when dealing with high-volume or high-value shipments. It offers better security, faster transit times, and reduced risk of cross-contamination.
FFF = Form, Fit and Function
Engineers use the Form, Fit and Function (FFF) framework to look up an item’s identifying characteristics and match parts to the needs of the products. The FFF framework enables flexibility by allowing changes to be made without requiring documentation as long as the changes align with the form, fit, and function of the product.
FFR = Field Failure Request
A Field Failure Request (FFR) is a particular type of change request detailing a problem or non-conformity with the product that comes directly from the field management service, or a member of the field service team, in direct contact with the end users.
FIFO = First In, First Out
FIFO is an inventory management strategy where the oldest stock is sold or used first. This approach helps prevent inventory from becoming obsolete or expired, especially for products with a limited shelf life, ensuring smooth and cost-effective stock rotation.
FMEA = Failure Modes and Effects Analysis
FMEA is a structured approach for identifying potential failures in a product or process and assessing their impact. By addressing failure risks early in the design or production phase, organizations can implement preventative actions, improving product reliability.
FOB = Free On Board
Free On Board (FOB) is a shipping term that defines when ownership and liability of goods transfer from seller to buyer. The specific FOB point—such as FOB Origin or FOB Destination—determines who pays for freight and who bears the risk during transport. In global trade, understanding FOB isn’t just about logistics; it’s about knowing who’s on the hook when things go sideways.
FTL = Full Truckload
Full Truckload (FTL) is a freight shipping method in which a single shipment occupies the entire capacity of a truck. Unlike Less Than Truckload (LTL) shipments, FTL provides direct, point-to-point transit with minimal handling, reducing risk and improving delivery speed. It’s the go-to option for large-volume or high-value shipments where security, timing, and cost-efficiency are paramount.
GDSN = Global Data Synchronization Network
GDSN facilitates the exchange of accurate product data between businesses worldwide. By providing standardized data formats, it ensures consistency and real-time sharing of product information, enhancing supply chain collaboration and reducing errors.
GMP = Good Manufacturing Practices
As part of quality assurance, Good Manufacturing Practices (GMP) is a set of guidelines and best practices for managing each aspect of production to ensure that standards and regulations are met.
GSCM = Green Supply Chain Management
GSCM focuses on reducing the environmental impact of the supply chain by incorporating sustainable practices such as minimizing waste, using renewable resources, and reducing energy consumption. It aligns environmental responsibility with operational efficiency.
HACCP = Hazard Analysis Critical Control Point
HACCP is a systematic approach used to identify and control potential hazards during food production. By focusing on critical points where contamination could occur, this method ensures food safety and compliance with health regulations throughout the manufacturing process.
IoT = Internet of Things
The internet of things (IoT) refers to an interrelated set of computing devices, machines, and technologies comprising a system that shares and transfers product data without requiring manual inputs or implementation, thereby increasing efficiency and reducing development time.
IPQC = In-Process Quality Control
In-process quality control involves monitoring and verifying quality at various stages of the manufacturing process. By inspecting materials, components, and processes during production, this method ensures defects are caught early, preventing costly rework or waste.
ISO = International Organization for Standardization
The International Organization for Standardization (ISO) is an independent, non-governmental body that develops and publishes international standards across global industries—from quality management (ISO 9001) to medical devices (ISO 13485). Compliance with ISO standards isn’t just a checkbox—it’s a signal to customers, regulators, and partners that your processes are structured, repeatable, and continuously improving.
JIT = Just-In-Time
For the purpose of reducing production time and improving efficiency, Just-in-Time (JIT) manufacturing is a supply chain strategy wherein raw materials are ordered to coincide with the production schedule minimizing inventory on hand.
KPI = Key Performance Indicator
KPIs are measurable metrics used to evaluate the success of a company or its departments in achieving objectives. In manufacturing, KPIs track performance in areas like production efficiency, quality, and lead time, helping to improve decision-making and operational performance.
LCL = Less Than Container Load
Less Than Container Load (LCL) is a shipping method in which multiple shippers share space within a single container, each paying only for the portion they use. LCL offers flexibility and cost-efficiency for lower-volume shipments but comes with added handling time and higher risk of delays. It’s the trade-off between speed, scale, and spend in global logistics.
LIFO = Last In, First Out
LIFO is an inventory management method where the most recently acquired goods are the first to be used or sold. This can be beneficial in certain industries, particularly when inventory costs are rising and companies want to match current costs with revenue.
LTL = Less than Truckload
LTL refers to shipping freight that does not fill an entire truck, meaning multiple customers share the truck space. This option is cost-effective for smaller shipments, but can result in longer transit times due to stops at multiple destinations.
MCO = Manufacturing Change Order
Going hand-in-hand with an Engineering Change Order (ECO), a Manufacturing Change Order (MCO) is a change order used specifically to make a manufacturing change to a product, as opposed to a change in design.
MCR = Manufacturing Change Request
A Manufacturing Change Request (MCR) is used to propose a change to the manufacturing process without requiring a change in the design of the product.
MDR = Medical Device Reporting
Medical Device Reporting (MDR) is a procedure implemented by the FDA to perform benefit-risk assessment and continually monitor the performance of medical devices and technologies after they have launched to market. The process requires mandatory reporting from manufacturers, including any product defects, adverse issues, nonconformities, or other problems with devices.
MES = Manufacturing Execution System
Important to the decision making and optimization of the production process, manufacturing execution systems (MES) are digital manufacturing programs used to document and trace the conversions of raw materials into finished products.
MPS = Master Production Schedule
The MPS is a plan for the production of finished goods, detailing what to produce, in what quantity, and when. It helps coordinate raw material procurement, labor, and manufacturing processes to meet customer demand and production targets.
MRO = Maintenance, Repair, and Overhaul
MRO refers to the processes involved in maintaining and repairing equipment or machinery to ensure it remains operational. These activities are critical for minimizing downtime and ensuring the continuous production flow in manufacturing environments.
MRP = Material Requirements Planning
Typically implemented in a computer-based platform using demand forecasts and other data points, material requirements planning (MRP) is the process of preparing, scheduling, and controlling inventory and raw materials to be purchased for use in the manufacturing process.
MTBF = Meantime Between Failure
A critical maintenance metric for optimizing performance, meantime between failures (MTBF) refers to the average duration of time between mechanical or whole system breakdowns. MTBF factors into the safety, reliability, and efficiency of a particular piece of equipment and how it affects the production process as a whole.
NCMR = Non-Conformance Material Report
A Non-Conforming Material Report (NCMR) is submitted in the event that a raw material is found to be in some way noncompliant with the predetermined specifications required for the product. These reports can be submitted at any time throughout the material’s life cycle in the production process, from receiving to final inspection.
NPD = New Product Development
Enacted to leverage a market opportunity into a sellable product, New Product Development (NPD) encompasses all the phases of conceptualizing, research, designing, planning, supplier management, and manufacturing a new product to be brought to market.
NPI = New Product Introduction
Though the two often get confused, New Product Introduction (NPI) works in direct conjunction with New Product Development (NPD), except NPI refers specifically to the marketing, selling, and commercialization of a new product being brought to market. In a cohesive product value management approach, these two processes—NPD and NPI—would be fully integrated and occur simultaneously by building a single source of product information.
ODM = Original Design Manufacturer
Typically employed as a means of efficiency and reduced costs, an original design manufacturer (ODM) is a third-party company that will design and manufacture a product based on another firm’s specifications, which the latter will then rebrand for sale to their consumers.
OEE = Overall Equipment Effectiveness
Overall Equipment Effectiveness (OEE) is a best practice that measures the utilization of raw materials, time, and machinery in the overall manufacturing process, offering a percentage score where 100% indicates each step of the production process is operating as efficiently and effectively as possible.
OEM = Original Equipment Manufacturer
The Original Equipment Manufacturer (OEM) is another company that produces a product or part used by the secondary seller, who adds value by adjusting the product or adding a service to the original product for the consumer.
PDM = Product Data Management system
A fixture of product management databases, the Product Data Management System (PDM system) is used in product value management to house all current and approved CAD files, parts and assembly, models, and product drawings.
PIM = Product Information Management
A product information management (PIM) platform is a critical facet of product value management software that provides a single source for product information to be collected, maintained, and enriched. Product companies can create a full product catalog directly in a PIM platform as well as distribute product information and assets to multiple eCommerce and sales channels.
PLM = Product Lifecycle Management
From the initial design and prototype to the end-of-life delivery and service, product lifecycle management (PLM) is an application or software platform that manages product records, such as bills of materials, specifications, CAD files, revisions, and changes. PLM integrates people and business processes into the core development of a product.
PO = Purchase Order
A Purchase Order (PO) is a formal, legally binding document issued by a buyer to a supplier, outlining the products, quantities, and agreed prices for goods or services. It initiates the procurement process and serves as a reference point for order fulfillment, invoicing, and audit trails. POs aren’t just paperwork—they’re contractual anchors that ensure accountability across supply and demand.
POD = Proof of Delivery
Proof of Delivery (POD) is the final checkpoint in the logistics lifecycle, confirming that goods have been delivered to the intended recipient. Whether in digital form or as a signed paper document, POD is critical for triggering billing processes, managing customer satisfaction, and reducing disputes over shipment accuracy.
PVM = Product Value Management
Originally developed by Propel Software as a new approach to product strategy, a product value management (PVM) platform is designed to connect commercial and product teams in one shared application space. A PVM platform such as Propel's optimizes the inherent value of a product by sharing insights across front office and back office teams, driving process efficiencies with contextualized collaboration, and engaging customers with compelling products and experiences.
QA = Quality Assurance
Quality assurance (QA) refers to any system or business process performed to determine whether a product meets specified requirements or complies with regulations in order to maintain standards set by the company and by governing bodies.
QC = Quality Control
Not to be confused with quality assurance (QA), quality control (QC) refers to the inspection process of a product or production process to determine whether it fulfills specifications and complies with regulations.
QFD = Quality Function Deployment
QFD is a tool used to translate customer needs and desires into engineering characteristics for a product. This process ensures that the final product meets customer expectations and aligns with design and manufacturing requirements.
QMS = Quality Management System
Critical for both safety as well as customer satisfaction, a quality management system (QMS) is a collection of business processes and applications that maintain the standards and specifications of the production process through a series of policies, procedures, and controls.
R&D = Research & Development
Research and development (R&D) is a phase of the product development process that focuses on product innovation based on data from market research, product data, and consumer feedback. R&D is considered the driving force behind advancements in product development as well as an integral player in determining project budget and financial projections of the product’s performance.
RFID = Radio Frequency Identification
Radio Frequency Identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. Unlike barcodes, RFID doesn’t require line-of-sight, allowing for real-time, hands-free inventory tracking across warehouses and supply chains. It’s a foundational technology for smart logistics and next-generation inventory visibility.
RFQ = Request for Quote
A Request for Quote (RFQ) is a formal document sent by a company to suppliers, inviting them to submit pricing proposals for specific products or services. RFQs help businesses evaluate costs, compare suppliers, and make informed purchasing decisions.
RMA = Return Material Authorization
Return Material Authorization (RMA) is a financial work order for the supplier or manufacturer initiated when a customer returns their product, whether due to damage or any other reason, in exchange for a refund, replacement, or credit to the consumer's account.
RoHS = Restriction of Hazardous Substances
Relating to quality management especially, Restriction of Hazardous Substances (RoHS) is a mandate issued by the European Union for products sold within the EU, restricting the usage of six hazardous substances: lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and polybrominated diphenyl ethers.
ROI = Return on Investment
ROI measures the profitability of an investment by comparing the net benefit to the initial cost. It is a critical metric for assessing whether a manufacturing project or equipment purchase is financially worthwhile, helping businesses prioritize their spending.
SAT = Site Acceptance Test
SAT is performed at the customer's facility to confirm that systems and equipment meet specified requirements under real-world conditions. This test ensures that the equipment is fully functional and ready for use before it goes into operation.
SCAR = Supplier Corrective Action Request
Supplier Corrective Action Request (SCAR) is a change request directed towards a supplier from a manufacturer requiring a resolution to an issue with a part, process, or component of a product.
SCM = Supply Chain Management
SCM involves the coordination and management of all activities involved in sourcing, procurement, production, and logistics. Efficient SCM minimizes costs, ensures product availability, and improves customer satisfaction by optimizing the flow of goods and information.
SCO = Supply Chain Operations
Supply Chain Operations encompass the end-to-end execution of processes that move a product from raw material to end customer—including procurement, production, logistics, inventory management, and fulfillment. It’s the connective tissue of any manufacturing or distribution business, where strategic efficiency and real-time coordination determine your ability to deliver on customer promises, control costs, and respond to disruption.
SKU = Stock Keeping Unit
A Stock Keeping Unit (SKU) is a unique identifier assigned to each product and its variants (e.g., size, color, configuration). SKUs are essential for inventory management and warehousing, enabling businesses to track availability, forecast demand, and streamline reordering. Without SKU-level granularity, chaos quickly replaces control in any warehouse or storefront.
SLA = Service Level Agreement
An SLA is a contract between a service provider and a customer that defines the level of service expected. In manufacturing, SLAs often cover production timelines, quality standards, and performance expectations, ensuring alignment between providers and customers.
SMED = Single-Minute Exchange of Die
Critical for reducing downtime and smoothing out production processes, Single-minute exchange of die (SMED) is a method of lean manufacturing to reduce waste during the manufacturing cycle by providing efficient ways of converting from one product to the next.
SOP = Standard Operating Procedure
Necessary for increased efficiency and quality assurance, the Standard Operating Procedure (SOP) is a written record documenting and providing instruction for the steps included in a process or procedure.
SOW = Statement of Work
Part of the day-to-day routine of field service management, a statement of work (SOW) documents a given project’s requirements, including activities, conditions, deliverables, timelines, and payment terms detailing a vendor’s services provided for the end-user such as a consumer or patient.
SPC = Statistical Process Control
SPC involves using statistical methods to monitor and control the manufacturing process. By identifying and correcting variations early, SPC helps improve product quality, minimize waste, and enhance consistency.
TEEP = Total Effective Equipment Performance
A key production performance metric, TEEP (Total Effective Equipment Performance) is used to determine how much potential a production environment has based on the performance level of its current equipment.
TEU = Twenty-foot Equivalent Unit
A Twenty-foot Equivalent Unit (TEU) is the standard unit of measure for containerized cargo, representing the capacity of a 20-foot-long shipping container. It’s a foundational metric for comparing freight volumes, terminal capacity, and shipping costs across routes. Whether planning global transport or analyzing trade flows, TEU is the universal language of container logistics.
TMS = Transportation Management System
A Transportation Management System (TMS) is a digital platform used to plan, execute, and optimize the physical movement of goods—whether inbound or outbound, domestic or international. Think of it as the command center for your logistics network, helping companies streamline carrier selection, track shipments in real time, and reduce freight costs while ensuring delivery performance.
TQM = Total Quality Management
TQM is a comprehensive approach to improving product and process quality across an organization. It involves continuous improvement, employee involvement, and customer feedback to enhance all aspects of production and ensure consistent quality outcomes.
UPC = Universal Product Code
The Universal Product Code (UPC) is a standardized barcode used to identify retail products and track them through the supply chain. Scannable and unique, each UPC links customer orders to product information in inventory and point-of-sale systems. In a world where speed and accuracy matter, UPCs are the bridge between physical goods and digital traceability.
VMI = Vendor Managed Inventory
VMI is an inventory management strategy where the supplier is responsible for managing and replenishing stock at the customer’s location. This reduces stockouts, optimizes inventory levels, and fosters closer supplier-customer relationships.
VOC = Voice of Customer
Voice of the Customer (VoC) is a term used by marketing and commercialization teams as a catchall to describe the overall feedback from customers about a product. VoC includes customers’ experiences with the product as well as expectations for improvement.
WIP = Work in Progress
WIP refers to products that are in the production process but are not yet completed. Effective WIP management helps monitor throughput, identify bottlenecks, and optimize the flow of materials to ensure timely delivery.
WMS = Warehouse Management System
WMS is a software system used to manage and optimize warehouse operations. It helps track inventory in various distribution centers, streamline order fulfillment and replenishment, improve storage utilization, and enhance overall efficiency in the warehouse.
ZBB = Zero-Based Budgeting
ZBB is a budgeting method where every expense must be justified for each new period, starting from zero. This ensures that only necessary and value-driven activities are funded, making it an effective way to control costs in manufacturing.
Looking for more detailed definitions? Check out Propel Software's complete glossary of supply chain terms.
