Strategic Alliance

Business relationships in which two or more independent organizations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives.

Strategic Planning

Looking one to five years into the future and designing a logistical system (or systems) to meet the needs of the various businesses in which a company is involved.

Strategic Profit Model

Visualization of an organization's finances provides the ability to understand and analyze financial performance and return on investment (ROI).

Strategic Sourcing

The process of determining long-term supply requirements, finding sources to fulfill those needs, selecting suppliers to provide the services, negotiating the purchase agreements, and managing the suppliers' performance focuses on developing the most effective relationships with the right suppliers to ensure that the right price is paid and that lifetime product costs are minimized. It also assesses whether services or processes would provide better value if they were outsourced to specialist organizations.

Strategic Variables

The variables that affect change in the environment and logistics strategy are the major strategic variables, including economics, population, energy, and government.

Strategy

A specific action to achieve an objective.

Stretch Hood

A form of pallet packaging similar to stretch wrap, the stretch hood method involves a machine that feeds a length of plastic sleeve over the pallet while simultaneously stretching it wide enough to fit. After the sleeve is placed, it is cut and sealed at the top, creating a watertight enclosure. The stretchers then release the film, allowing it to shrink and securely hold the pallet contents.

Stretch Wrap

Clear plastic film that is wrapped around a unit load or partial load of a product to secure it. The wrap is elastic.

Subcontracting

Sending work outside the enterprise to a third party typically involves specialized operations related to production.

Sub-Optimization

Decisions or activities in a part made at the expense of the whole. An example of sub-optimization is when a manufacturing unit schedules production to benefit its cost structure without regard to customer requirements or the effect on other business units.

Substance of Very High Concern (SVHC)

A chemical substance (or part of a group of chemical substances) for which it has been proposed that the use within the European Union be subject to authorization under the REACH Regulation. Indeed, the listing of a substance as an SVHC by the European Chemicals Agency (ECHA) is the first step in the procedure for authorization and restriction of the use of a chemical. The first list of SVHCs was published on October 28, 2008.

Substitutability

The ability of a buyer to substitute the products of different sellers.

Sub-Tier Suppliers

A successive supplier is someone who provides a product or service to a direct supplier, who ultimately provides that product or service to the customer.

Sunk Cost

In economics and business decision-making, sunk costs are costs that cannot be recovered once they have been incurred. Sunk costs are sometimes contrasted with variable costs, which are the costs that will change due to the proposed course of action, and prospective costs, which are costs that will be incurred if an action is taken.

Supermarket Approach

An inventory management and picking technique used in lean enterprises, this concept was conceived by Taiichi Ohno of Toyota after a visit to the US in 1956. He was impressed by how consumers could pick whatever they needed from the shelf, and the store would simply replenish what was taken. This became the basis for the 'pull system.

Supplemental carrier

A for-hire air carrier subject to economic regulations: the carrier has no time schedule or designated route. Service is provided under a charter or contract, per plane, per trip.

Supplier

An individual or an organization that supplies goods or services to the company. This is also sometimes referred to as a 'vendor.' In some settings, where a company provides goods through a distribution network, network members may be referred to as suppliers, even though they are the immediate customers of the company.

Supplier Capacity Analysis

An assessment of a supplier's available capacity and whether the available capacity will meet the investigating organization's requirements.

Supplier Certification

A process for ensuring that a supplier meets certain requirements, which may consist of elements such as cost, quality, delivery, and environmental standards.

Supplier Council

A council that develops and supports businesses by facilitating important connections between corporations and suppliers.

Supplier Criticality Assessment

This is a key component of a strategic sourcing program. Supplier criticality is based on factors such as the relationship to the customer's core mission, access to technology, switching costs, and the uniqueness of the product/service. To assess criticality, suppliers are grouped into four relationship categories: fundamental, preferred, technology, and mission.

Supplier Cycle Time

A key indicator of on-time product deliveries is whether the lead times are being met and the product is reaching the market at the right time. It refers to the time required for a supplier to complete a single cycle, beginning with the receipt of an order and ending with the fulfillment of the order.

Supplier Management Program

A defined policy regarding how suppliers are governed with respect to overall material planning, procurement staff planning, supplier negotiation, and qualification, etc.

Supplier On-Time Delivery

A metric that measures the performance of a supplier/vendor on their delivery commitment and to what extent they are matching the lead times, expressed in percentage terms. Calculation: [Number of orders received on time] / [number of total orders received].

Supplier-Owned Inventory (SOI)

A variant of vendor-managed inventory is consignment inventory. In this case, the supplier not only manages the inventory but also owns the stock close to or at the customer's location until the point of consumption or usage by the customer.

Supplier Scorecards

Assessment of suppliers is based on performance benchmarks in several key areas. Some examples include manufacturing Critical Path Time (MCT), on-time delivery, quality parts per million, cost of poor quality, inventory turns, and productivity gains. A supplier's rank can then be established, and the data can be used to measure the relative performance of a supplier within the supply base and track improvement in the supplier's quality over time.

SupplierServiceLevel

A metric that helps measure the overall performance of a supplier, it measures the ability of the business suppliers to provide their goods at the agreed times, quantity, and quality.

Supply Chain

1) Starting with unprocessed raw materials and ending with the final customer using the finished goods, the supply chain links many companies together. 2) The material and informational interchanges in the logistical process stretch from the acquisition of raw materials to the delivery of finished products to the end user. All vendors, service providers, and customers are links in the supply chain.

Supply Chain Council

A non-profit organization dedicated to improving the supply chain efficiency of its members, the Supply-Chain Council's membership consists primarily of practitioners representing a broad cross-section of industries, including manufacturers, services, distributors, and retailers. It is the organization responsible for the SCOR standards.

Supply Chain Design

The process of designing an efficient supply chain includes elements such as partners, location, capacity, capability, transportation, and information systems integration.

Supply Chain Event Management (SCEM)

SCEM is an application that supports control processes for managing events within and between companies. It consists of integrated software functionality that supports five business processes: monitoring, notifying, simulating, controlling, and measuring supply chain activities.

Supply Chain Execution (SCE)

The ability to move the product out of the warehouse door is a critical capacity and one that only brick-and-mortar firms bring to the B2B table. Dot-coms have the technology, but that's only part of the equation. The need for Supply Chain Execution (SCE) is what is driving the Dot-coms to offer equity partnerships to the wholesale distributors.

Supply Chain Integration (SCI)

Likely to become a key competitive advantage of selected e-marketplaces, this concept is similar to Back-End Integration but with a greater emphasis on the movement of goods and services.

Supply Chain Inventory Visibility

The ability to visualize the status of inventory in the supply chain from some point upstream—beginning with the various tiers of suppliers—on to downstream—through distribution and retail channels is crucial. In most cases, this will only be one level in each direction; however, it may include the ability to access supply and demand information at those points as well.

Supply Chain Management (SCM) as defined by the Council of Supply Chain Management Professionals (CSCMP )

Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.

Supply Chain Network Design Systems

The systems employed in optimizing the relationships among the various elements of the supply chain include manufacturing plants, distribution centers, points-of-sale, as well as raw materials. These systems also consider the relationships among product families and other factors in order to synchronize supply chains at a strategic level.

Supply Chain Operations Reference Model (SCOR)

This is the model developed by the Supply-Chain Council (SCC) and is built around six major processes: plan, source, make, deliver, return, and enable. The aim of the SCOR is to provide a standardized method of measuring supply chain performance and to use a common set of metrics to benchmark against other organizations.

Supply Chain-Related Finance and Planning Cost Element

One of the elements comprising a company's total supply chain management costs are as follows: 1. Supply Chain Finance Costs: These costs are associated with paying invoices, auditing physical counts, performing inventory accounting, and collecting accounts receivable. They do NOT include customer invoicing/accounting costs (see Order Management Costs). 2. Demand/Supply Planning Costs: These costs are associated with forecasting, developing finished goods, intermediate, subassembly, or end item inventory plans, and coordinating demand/supply.

Supply Chain-Related IT Costs

Information Technology (IT) costs (in US dollars) associated with major supply chain management processes are described below. These costs should include: development costs (costs incurred in process reengineering, planning, software development, installation, implementation, and training associated with new and/or upgraded architecture, infrastructure, and systems to support the described supply chain management processes), execution costs (operating costs to support supply chain process users, including computer and network operations, EDI and telecommunications services, and amortization/depreciation of hardware), maintenance costs (costs incurred in problem resolution, troubleshooting, repair, and routine maintenance associated with installed hardware and software for described supply chain management processes. Include costs associated with database administration, systems configuration control, release planning, and management). These costs are associated with the following processes: PLAN - 1. Product Data Management - Product phase-in/phase-out and release; post introduction support and expansion; testing and evaluation; end-of-life inventory management. Item master definition and control. 2. Forecasting and Demand/Supply Management and Finished Goods - Forecasting; end-item inventory planning, DRP, production master scheduling for all products, all channels. SOURCE - 1. Sourcing/Material Acquisition - Material requisitions, purchasing, supplier quality engineering, inbound freight management, receiving, incoming inspection, component engineering, tooling acquisition, accounts payable. 2. Component and Supplier Management - Part number cross-references, supplier catalogs, approved vendor lists. 3. Inventory Management - Perpetual and physical inventory controls and tools. MAKE - 1. Manufacturing Planning - MRP, production scheduling, tracking, manufacturing engineering, manufacturing documentation management, inventory/obsolescence tracking. 2. Inventory Management - Perpetual and physical inventory controls and tools. 3. Manufacturing Execution - MES, detailed and finite interval scheduling, process controls and machine scheduling. DELIVER - 1. Order Management - Order entry/maintenance, quotes, customer database, product/price database, accounts receivable, credits and collections, invoicing. 2. Distribution and Transportation Management - DRP shipping, freight management, traffic management. 3. Inventory Management - Perpetual and physical inventory controls and tools. 4. Warehouse Management - Finished goods, receiving and stocking, pick/pack. 5. Channel Management - Promotions, pricing and discounting, customer satisfaction surveys. 6. Field Service/Support - Field service, customer and field support, technical service, service/call management, returns and warranty tracking. EXTERNAL ELECTRONIC INTERFACES - Plan/Source/Make/Deliver - Interfaces, gateways, and data repositories created and maintained to exchange supply chain related information with the outside world. E-Commerce initiatives. Includes development and implementation costs. Accurate assignment of IT-related cost is challenging. It can be done using Activity-Based Costing methods or using other approaches such as allocation based on user counts, transaction counts, or departmental headcounts. The emphasis should be on capturing all costs. Costs for any IT activities that are outsourced should be included.

Supply Chain Resiliency

A term describing the level of hardening of the supply chain against disasters is resilience.

Supply Chain Strategy Planning

The process of analyzing, evaluating, and defining supply chain strategies includes network design, manufacturing and transportation strategy, and inventory policy.

Supply Chain Vulnerability

Of equal importance are Variability, Velocity, and Volume in the elements of the Supply Chain. The term evaluates the supply chain based on the level of acceptance of the five steps of disaster logistics: planning, detection, mitigation, response, and recovery.

Supply Planning

The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon, and interval.

Supply Planning Systems

The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon, and interval.

Supply Warehouse

A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, and sequenced at the warehouse to assemble plant orders.

Supportability

The inherent quality of a system – including design, technical support, date, and maintenance procedures – is to facilitate the detection, isolation, and timely repair/replacement of system anomalies. This includes factors such as diagnostics, prognostics, real-time maintenance data collection, 'design for support', and 'support the design' aspects, corrosion protection and mitigation, reduced logistics footprint, and other factors that contribute to an optimum environment for developing and sustaining a stable, operational system.

Support Costs

Costs of activities not directly associated with producing or delivering products or services include the costs of information systems, process engineering, and purchasing. Also, see Indirect Cost.

Surcharge

An add-on charge to the applicable charges: motor carriers have a fuel surcharge, and railroads can apply a surcharge to any joint rate that does not yield 110% of variable cost.