Basic Supply Chain Terms

1. Supply Chain Management (SCM)

→ Managing the entire flow of goods and services—from raw
materials to delivering the final product.

2. End-to-End Supply Chain

→ Covers everything from sourcing raw material to the product
reaching the customer.

3. Value Chain
→ All the steps a company takes to add value to its product or
service.

4. Lead Time
→ Total time taken from the start of a process to its completion (like
placing an order to receiving it).

5. Cycle Time
→ Time taken to complete one full round of a specific operation or
process.

6. Turnaround Time (TAT)

→ The time it takes to complete a task or service (for example, time
from order placed to order shipped).

7. Just-in-Time (JIT)
→ Getting materials only when they’re needed in production to
reduce inventory costs.

8. Demand Forecasting
→ Predicting future customer demand using past data and market
trends.

9. Supply Planning
→ Figuring out how much stock, manpower, and materials are
needed to meet demand.

10. Capacity Planning

→ Planning how much production power (machines, people, etc.) is
needed to meet expected demand.

General Supply Chain Terms

11. Order Fulfilment – All steps from receiving an order to

delivering it.

12. Order-to-Cash (O2C) – Complete cycle from order received

to cash collected.
 13. Procure-to-Pay (P2P) – Entire flow from procurement to
payment to suppliers.

14. Supply Chain Visibility – Ability to track and monitor

product movement across the supply chain.

15. Control Tower – Centralized hub for real-time data and

decision-making in the supply chain.

16. Push vs Pull Strategy – Push = forecast-based production,

Pull = customer demand-based production.

17. Bullwhip Effect – Small demand changes at retail causing big

fluctuations upstream.

18. Bottleneck – The slowest part of a process that limits

capacity.

19. Traceability – Ability to track every step in the supply chain

for each product.

20. Agility – The speed and flexibility of a supply chain to respond

to changes.

21. Resilience – Ability to recover from supply chain disruptions.

📦 Procurement & Sourcing

22. Strategic Sourcing – Aligning sourcing with business goals

to reduce costs and risks.

23. Single Sourcing / Multi Sourcing – Buying from one

supplier vs. multiple.

24. Spend Analysis – Reviewing past purchases to find cost-

saving opportunities.

25. Supplier Relationship Management (SRM) – Managing

supplier performance and collaboration.

26. Request for Quotation (RFQ) – Asking suppliers for price

offers.

27. Request for Proposal (RFP) – Asking suppliers to propose

detailed solutions and pricing.

28. Vendor Managed Inventory (VMI) – Supplier takes care of

buyer’s inventory levels.
 29. Purchase Order (PO) – Document sent to suppliers to
confirm a purchase.

30. Blanket Order – Long-term agreement for repeated

purchases.

31. Incoterms – International terms defining shipping

responsibilities (like FOB, CIF).

32. Landed Cost – Total cost including purchase, shipping, taxes,

and duties.

🏭 Operations & Manufacturing

33. Material Requirements Planning (MRP) – Software to plan

raw materials and components needed.

34. Enterprise Resource Planning (ERP) – Integrated system

for managing core business processes.

35. Lean Manufacturing – Reducing waste while maintaining

productivity.

36. Six Sigma – Method to improve quality by minimizing

variation and defects.

37. Kaizen – Continuous improvement, typically involving small

incremental changes.

38. Kanban – Visual system for managing work and inventory

flow.

39. Batch Production – Making goods in groups or batches.

40. Continuous Flow – Ongoing production with no stops.

41. Intermittent Flow – Production that pauses between tasks.

42. Capacity Utilization – How much of the available production

capacity is being used.

43. OEE (Overall Equipment Effectiveness) – Measure of

equipment productivity (availability, performance, quality).

44. TPM (Total Productive Maintenance) – Preventive

maintenance to increase machine uptime.

🚚 Logistics & Transportation

 45. First Mile / Last Mile Delivery – First = supplier to
warehouse; Last = warehouse to customer.

46. 3PL / 4PL – 3PL = outsourced logistics; 4PL = manages

multiple 3PLs.

47. Freight Forwarder – Agent who arranges shipments on

behalf of importers/exporters.

48. Load Planning – Optimizing how goods are loaded into

transport vehicles.

49. Fleet Management – Overseeing vehicles used in

transportation.

50. Reverse Logistics – Handling returns, repairs, or recycling.

51. Cross-Docking – Moving goods directly from inbound to

outbound transport with minimal storage.

52. Milk Run – A route where one vehicle picks up or delivers to

multiple stops.

53. Hub and Spoke – Distribution system with a central hub

connected to branches.

54. Transportation Management System (TMS) – Software to

manage transportation operations.

📊 Inventory & Warehousing

55. SKU (Stock Keeping Unit) – Unique identifier for each

product.

56. ABC Analysis – Inventory classification method based on

value and usage.

57. Economic Order Quantity (EOQ) – Ideal order quantity to

minimize total cost.

58. Safety Stock – Extra inventory to prevent stockouts.

59. Reorder Point (ROP) – When new stock should be ordered.

60. Inventory Turnover – How often inventory is sold and

replaced.

61. Stockout – Running out of inventory.

62. Cycle Counting – Regular counting of portions of inventory

instead of full stocktaking.
 63. WMS (Warehouse Management System) – Software to
manage inventory and warehouse activities.

64. Cold Chain – Temperature-controlled supply chain for

perishable items.

65. Consignment Inventory – Supplier owns inventory stored at

buyer’s location.

📈 Analytics, KPIs & Metrics

66. On-Time In-Full (OTIF) – % of orders delivered correctly and

on time.

67. Fill Rate – % of customer demand met directly from available

stock.

68. Perfect Order Rate – % of orders delivered on time,

complete, damage-free, and accurate.

69. Cost to Serve – Cost involved in serving a customer

(including delivery, service, returns).

70. Forecast Accuracy – How close the forecast was to actual

demand.

71. Inventory Accuracy – Match between system-recorded

inventory and actual stock.

72. Logistics Cost as % of Sales – Transportation, warehousing,

etc. as a % of revenue.

73. SCOR Model Metrics – Performance measures based on the

SCOR model (like delivery reliability, cost, etc.).

74. Service Level – % of orders fulfilled without delay or

stockout.

75. Delivery Performance – How well actual deliveries match

planned schedules.

🌍 Emerging & Trendy Terms

76. Digital Twin – Virtual model of a supply chain or process for

simulation and analysis.

77. Blockchain in Supply Chain – Secure and transparent

tracking of products using blockchain.
78. Sustainable Supply Chain – Environmentally and socially
responsible supply chain.

79. Circular Economy – Reusing, recycling, and minimizing

waste.

80. Carbon Footprint – Total emissions caused by a process or

product.

81. Green Logistics – Eco-friendly logistics operations.

82. ESG (Environmental, Social, Governance) – Non-financial

metrics that measure ethical impact.

83. IoT in Supply Chain – Using smart sensors/devices to track

inventory and assets.

84. AI/ML in Demand Forecasting – Using algorithms to

improve forecast accuracy.

85. Real-Time Tracking – Monitoring product location instantly

during transit.

86. Smart Contracts – Self-executing digital contracts stored on

blockchain.