Safety Stock

The inventory a company holds above normal needs serves as a buffer against delays in receipt of supplies or changes in customer demand.

Salable Goods

Products that are available for sale to customers are differentiated from items that are parts or assemblies and are not generally sold independently. In the retail environment, 'salable' is differentiated from 'unsalable', which denotes goods that are damaged, spoiled, or past their expiration date.

Sales and Operations Planning (SOP)

A strategic planning process that reconciles conflicting business objectives and plans future supply chain actions, S&OP Planning usually requires various business functions such as sales, operations, and finance to work together to agree on a single plan/forecast that can be used to drive the entire business. Some organizations include suppliers and customers in their S&OP processes.

Sales Cycle Time

Measures the time required for a product to sell out completely from the store/shelf, i.e., beginning from the day it enters the floor.

Sales Forecast

A prediction of future sales is based on the past performance of a given time period (a five-month rolling average) and an analysis of current market conditions.

Sales Mix

The relative volumes of sales for a variety of products are expressed as a percentage of the total sales volume.

Sales Plan

This is composed of two primary sections - sales strategy (objectives, market position, competition, conversion methods, etc.) and tactics (implementation of the strategy, infrastructure, and projections). The sales plan projections are expressed in units and in sales dollars. They are necessary for production planning or the sales and operations planning process. Also, see aggregate planning, production planning, and sales and operations planning.

Sales Planning

The process of determining the level of sales necessary to meet general business objectives of profitability, productivity, competitive customer lead times, and so on, as expressed in the overall business plan. Also, see Production Planning, Sales, and Operations Planning.

Salvage Material

Unused materials in the form of waste or obsolete material that have a market value and can be sold.

Sarbanes-Oxley Public Accounting and Investor Protection Act

A United States federal law enacted on July 30, 2002, to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. The law is divided into 11 sections ranging from additional corporate board responsibilities to criminal penalties.

Saw-Tooth Diagram

An X/Y diagram shows quantity on one axis and time on the other, depicting the inventory level for a typical item in stock. The inventory level declines as it is consumed and rises as incoming orders are received.

SBT

A practice that uses point-of-sale scanner data to manage payment, promotion, and replenishment of products in a retail store. It is similar in nature to, and an enhanced version of, Vendor Managed/Owned Inventory where the retailer's POS data is used as the basis for transactions between the supplier and the retailer. It supplements the consumption/replenishment component of CPFR and ECR strategies.

SCAC/SCAC Code

A unique 2 to 4-letter code is assigned to transportation companies for identification purposes. SCAC codes are required for EDI and are printed on bills of lading and other transportation documents.

Scalability

1) How quickly and efficiently a company can ramp up to meet demand. See also uptime and production flexibility. 2) How well a solution to some problem will work when the size of the problem increases. The economies of scale don't really kick in until you reach the critical mass; then revenues start to increase exponentially.

Scan

A computer term referring to the action of scanning barcodes or RF tags.

Scan-Based Trading (SBT)

A practice that uses point-of-sale scanner data to manage payment, promotion, and replenishment of products in a retail store. It is similar in nature to, and an enhanced version of, Vendor Managed/Owned Inventory where the retailer's POS data is used as the basis for transactions between the supplier and the retailer. It supplements the consumption/replenishment component of CPFR and ECR strategies.

Scanlon Plan

A form of gainsharing that returns cost savings to the employees, usually as a lump-sum bonus, is a productivity measure. This program dates back to the 1930s and relies on committees to create cost-sharing ideas for labor costs. As a result, productivity has increased while unit cost has decreased. Profit-sharing, on the other hand, is a profitability measure.

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.

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.

Scenario Forecasts

A methodology is used to anticipate possible large-scale changes that could affect an organization, either positively or negatively. The organization would develop scenarios for how it will respond to different future situations it may encounter.

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.

SCM

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.

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.

Scorecard

A performance measurement tool used to capture a summary of the key performance indicators (KPIs)/metrics of a company. Metrics dashboards/scorecards should be easy to read and usually have 'red, yellow, green' indicators to flag when the company is not meeting its targets for its metrics. Ideally, a dashboard/scorecard should be cross-functional in nature and include both financial and non-financial measures. In addition, scorecards should be reviewed regularly – at least on a monthly basis and weekly for key functions such as manufacturing and distribution, where activities are critical to the success of a company. The dashboard/scorecard philosophy can also be applied to external supply chain partners, such as suppliers, to ensure that suppliers' objectives and practices align. Synonym: Dashboard.

Scrap Material

Unusable material that has no market value and must generally be disposed of at a cost.

Seasonality

A factor used in forecasting to reflect the seasonal variability in demand for certain products, seasonality explains the fluctuation in demand for various recreational products that are used during different seasons. Also, see Base Series.

Secondary Highways

Highways that primarily serve rural areas.

Secure Electronic Transaction (SET)

An early standard protocol for securing credit card transactions over insecure networks, specifically the Internet.

Segmentation

In marketing, it is the identification and classification of groups of buyers within a market who share similar needs and demonstrate similar buyer behavior.

Seiketsu (Standardize)

Refers to standardized work practices, it is more than standardized cleanliness. This means operating in a consistent and standardized fashion; everyone knows exactly what his or her responsibilities are.

Seiri (Sort)

A Lean 5S term refers to the practice of sorting through all the tools, materials, etc., in the work area and keeping only essential items. Everything else is stored or discarded. This leads to increased safety and less clutter that interferes with productive work.

Seiso (Shine)

Indicates the need to keep the workplace clean as well as neat by making cleaning a daily activity. At the end of each shift, the work area is cleaned up, and everything is restored to its place. The key point is that maintaining cleanliness should be part of the daily work - not an occasional activity initiated when things get too messy.

Seiton (Straighten)

Focuses on the need for an orderly workplace. 'Orderly' in this sense means arranging the tools and equipment in an order that promotes workflow. Tools and equipment should be kept where they will be used, and the process should be ordered in a manner that eliminates extra motion.

Self Billing

A transportation industry strategy prescribes that a carrier will accept payment based on the tender document provided by the shipper.

Self Correcting

A computer term for an online process that validates data, allowing the data to enter the system only after all errors are corrected.

Sell In

Units that are sold to retail stores by the manufacturer or distributor for resale to consumers. The period of time in a product life cycle where the manufacturer works with its resellers to market and build inventory for sale. Also, see Sell Through.

Selling, General and Administrative (SG&A) Expenses

Includes marketing, communication, customer service, sales salaries, and commissions; occupancy expenses; unallocated overhead, etc. Excludes interest on debt; domestic or foreign income taxes; depreciation and amortization; extraordinary items; equity gains or losses; gain or loss from discontinued operations; and extraordinary items.

Sell Through

Units sold from retail stores to customers. The point in a product life cycle where initial consumption rates are developed and demand is established. Also, see Sell In.

Sensitivity Analysis (SA)

The study of how the variation (uncertainty) in the output of a mathematical model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of a model.

Separable Cost

A cost that can be directly assigned to a particular segment of the business.

Serial Number

A serial number is a unique number assigned for identification, which varies from its successor or predecessor by a fixed discrete integer value. Common usage has expanded the term to refer to any unique alphanumeric identifier for one of a large set of objects. However, in data processing and allied fields in computer science, not every numerical identifier is a serial number. Identifying numbers that are not serial numbers are sometimes called nominal numbers.

Serial Shipping Container Code (SSCC)

An 18-character identification number is used to identify containers, including pallets and boxes, primarily for containers that are part of a shipment covered by an Automated Shipment Notice (ASN).

Serpentine Picking

A method used for picking warehouse orders, wherein the pickers are directed to pick from racks on both sides of an aisle as they move from one end to the other. A different method would be to pick from one side (front to back), and then from the opposite side (back to front). When used, serpentine picking can halve travel time and improve traffic flow down the aisles.

Service Level

A metric, shown as a percentage, that captures the ability to satisfy demand or responsiveness. Order fill rate and machine or process uptime are examples of service level measures.

Service Level Agreement (SLA)

May be used in lieu of a contract to represent and document the terms of the performance-based agreement for organic support.

Service Oriented Architecture (SOA)

A computer system term that describes a software architectural concept that defines the use of services to support business requirements. In an SOA, resources are made available to other participants in the network as independent services that are accessed in a standardized way. Most definitions of SOA identify the use of web services (using SOAP and WSDL) in its implementation; however, it is possible to implement SOA using any service-based technology.

Service Parts Revenue

The sum of the value of sales made to external customers and the transfer price valuation of sales within the company, of repair or replacement parts and supplies, net of all discounts, coupons, allowances, and rebates.

SET: See

Secure Electronic Transaction