Days of Supply

A measure of the quantity of inventory on hand, in relation to the number of days for which usage will be covered. For example, if a component is consumed in sales or manufacturing at a rate of 100 per day, and there are 1,585 units available on hand, this represents 15.85 days' supply. The goal, in most cases, is to demonstrate efficiency by having a high turnover rate and therefore a low days' inventory. However, it should be realized that this ratio can be unfavorable if it is either too high or too low. A company must balance the cost of carrying inventory with its unit and acquisition costs, considering the potential for lost business and ultimately lost customers if shortages are pervasive.

Days Payable Outstanding (DPO)

DPO is an estimate of the length of time the company takes to pay its vendors after receiving inventory. If the firm receives favorable terms from suppliers, it has the net effect of providing the firm with free financing. If terms are reduced and the company is forced to pay at the time of receipt of goods, it reduces financing by the trade and increases the firm's working capital requirements. It is calculated as Days Payable Outstanding = 365 / Payables Turnover (Payables Turnover = Purchases / Payables).

Days Sales Outstanding (DSO)

DSO, also known as the Collection Period (period average), is a financial indicator that shows both the age, in terms of days, of a company's accounts receivable and the average time it takes to turn the receivables into cash. It is compared to company and industry averages, as well as company selling terms (e.g., Net 30), for determination of acceptability by the company. DSO is calculated as follows: DSO = (Total Receivables / Total Credit Sales in the Period Analyzed) x Number of Days in the Period Analyzed. Note that only credit sales should be used; cash sales are excluded.

DBR

A manufacturing execution methodology, named for its three components, is the drum, the work center or machine, or operation that limits the ability of the entire system to produce more. The rest of the plant follows the beat of the drum. They make sure the drum has work and that anything the drum has processed does not get wasted.

DC

The warehouse facility holds inventory from manufacturing, pending distribution to the appropriate stores.

DC Bypass

Also known as 'Direct to Store', this practice occurs when vendors ship goods directly to the retail store instead of to the retailer's distribution center (DC).

Deadhead

The return of an empty transportation container back to a transportation facility is commonly referred to as the empty backhaul. It is a commonly used description for backhauling.

Dead on Arrival (DOA)

A term used to describe products that are not functional when delivered. Synonym: Defective.

Deadweight

The total lifting capacity of a ship is expressed in tons of 2,240 lbs. It is the difference between the displacement light (without cargo, passengers, fuel, etc.) and the displacement when loaded.

Decentralized Authority

A situation in which management decision-making authority is given to managers at many levels in the organizational hierarchy.

Decision Support System (DSS)

Software that speeds up access and simplifies data analysis, queries, etc., within a database management system.

Declaration of Dangerous Goods

To comply with U.S. regulations, exporters are required to provide special notices to inland and ocean transport companies when goods are hazardous.

Declared Value

The value of the goods, declared by the shipper on a bill of lading, is used for the purpose of determining a freight rate or the limit of the carrier's liability. It is also used by customs as the basis for calculation of duties, etc.

Decomposition

A forecasting practice which separates time series data is separated into two or more component series, each of which is forecasted individually and then re-composited to produce a final forecast. This method is useful when the individual components are subject to varying trends.

Dedicated Contract Carriage

A third-party service that dedicates equipment (vehicles) and drivers to a single customer for exclusive use on a contractual basis.

Defect Analysis

A combination of flaw detection—so they may be removed from the product or process—and analysis of defects and errors received—to prevent future defects in the product or process.

Defective Goods Inventory (DGI)

Those items that have been returned have been delivered damaged and have a freight claim outstanding or have been damaged in some way during warehouse handling.

Defense Acquisition Executive: DAE

Defense Automatic Addressing System: DAAS

Defense Federal Acquisition Regulation Supplement: DFARS

Defense Finance and Accounting Service: DFAS

Defense Logistics Agency(DLA): A possible source of supply

Defense Working Capital Fund(DWCF)

Funding for PBL programs.

Delimiters

1) ASCII characters are used to separate data elements within a data stream. 2) EDI has two levels of separators and a terminator that are integral parts of a transferred data stream. Delimiters are specified in the interchange header. From the highest to the lowest level, the separators and terminator are segment terminator, data element separator, and component element separator (used only in EDIFACT).

Delivery Appointment

The time agreed upon between two enterprises for goods or transportation equipment to arrive at a selected location is typically used to help plan warehouse and receiving/inspection operations and to manage the backup of carriers at loading docks.

Delivery-Duty-Paid

Supplier/manufacturer arrangement in which suppliers are responsible for the transport of the goods they have produced, which are being sent to a manufacturer. This responsibility includes tasks such as ensuring products get through customs.

Delivery Performance to Commit Date

The percentage of orders that are fulfilled on or before the internal commit date is used as a measure of the effectiveness of internal scheduling systems. Delivery measurements are based on the date a complete order is shipped or the ship-to date of a complete order. A complete order is one that has all items delivered in the requested quantities. An order must be complete to be considered fulfilled. Multiple line items on a single order with different planned delivery dates constitute multiple orders, and multiple planned delivery dates on a single line item also constitute multiple orders. The calculation is as follows: [Total number of orders delivered in full and on time to the scheduled commit date] / [Total number of orders delivered].

Delivery Performance to Request Date

The percentage of orders that are fulfilled on or before the customer's requested date is used as a measure of responsiveness to market demand. Delivery measurements are based on the date a complete order is shipped or the ship-to date of a complete order. A complete order has all items on the order delivered in the quantities requested. An order must be complete to be considered fulfilled. Multiple line items on a single order with different planned delivery dates constitute multiple orders, and multiple planned delivery dates on a single line item also constitute multiple orders. Calculation: [Total number of orders delivered in full and on time to the customer's requested date] / [Total number of orders delivered].

Delphi Method

A systematic forecasting method relies on a panel of independent experts providing answers to questionnaires in two or more rounds in an effort to gain a consensus opinion.

Delta Nu Alpha

A professional association of transportation and traffic practitioners.

Demand

What customers or users actually want is typically associated with the consumption of products or services, as opposed to a prediction or forecast.

Demand Based Production

When inventory is 'pulled' through production, it is moved to a work center only when needed to satisfy a customer requirement.

Demand Chain

Another name for the supply chain, but emphasizing customer or end-user demand pulling materials and products through the chain.

Demand Chain Management

Same as supply chain management, but emphasizing consumer pull rather than supplier push.

Demand-Driven Supply Network (DDSN)

A system of technologies and processes that sense and react to real-time demand across a network of customers, suppliers, and employees. In other words, a consumer purchase triggers real-time information movement throughout the supply network, which then initiates the movement of products through the network.

Demand Management

The proactive compilation of requirements information regarding demand (i.e., customers, sales, marketing, finance) and the firm's capabilities from the supply side (i.e., supply, operations, and logistics management); the development of a consensus regarding the ability to match the requirements and capabilities; and the agreement upon a synthesized plan that can most effectively meet the customer requirements within the constraints imposed by the supply chain capabilities.

Demand Planning

The process of identifying, aggregating, and prioritizing all sources of demand for the integrated supply chain of a product or service at the appropriate level, horizon, and interval is called sales forecasting. The sales forecast is comprised of the following concepts: 1. The sales forecasting level is the focal point in the corporate hierarchy where the forecast is needed at the most generic level (i.e., corporate forecast, divisional forecast, product line forecast, SKU, and SKU by location). 2. The sales forecasting time horizon generally coincides with the time frame of the plan for which it was developed (i.e., annual, 1-5 years, 1-6 months, daily, weekly, and monthly). 3. The sales forecasting time interval generally coincides with how often the plan is updated (i.e., daily, weekly, monthly, and quarterly).

Demand Planning Systems

The systems that assist in the process of identifying, aggregating, and prioritizing all sources of demand for the integrated supply chain of a product or service at the appropriate level, horizon, and interval.

Demand Pull

The concept defined in lean theory triggers the production of materials only upon receipt of an actual customer order and aligns the production capacity of the supply chain to external customer demand patterns.

Demand Sensing

Using channel data to reduce latency in sensing customer buying trends.

Demand Shaping

Using programs, including pricing, new product launches, trade and sales incentives, promotions, and marketing programs, to increase what customers want to buy.

Demand-Side Analysis

A system based on economic, geographic, and demographic trends offers planners an opportunity to gain an accurate perspective on future demand for products or services.

Demand Signal

A signal from a consumer, customer, or using operation that triggers the issue of a product or raw material. The demand signal is most efficiently an electronic data transmission, but it could be a physical document, kanban, or telephone call.

Demand Supply Balancing

The process of identifying and measuring the gaps and imbalances between demand and resources in order to determine how to best resolve the variances through marketing, pricing, packaging, warehousing, outsourcing plans, or some other action that will optimize service, flexibility, costs, assets (or other supply chain inconsistencies) in an iterative and collaborative environment.

Demand Time Fence (DTF)

A feature of MRP-type systems allows for defining the point in time, from the current date, where all forecasted orders should be discarded in favor of actual customer orders. There may be a blend of actual and forecast orders beyond the time fence. See consuming the forecast, planning time fence, and time fence.

De-manufacturing

Refers to the process of retrieving assets, harvesting their components and parts. After the components are tested, they may be sold in the secondary market or upgraded to 'as new' and used in production again.

Deming Circle

An iterative four-step problem-solving process typically used in business process improvement is known as the Shewhart cycle, Deming Wheel, or Plan-Do-Study-Act. It is also referred to as Plan-Do-Check-Action.

Demographic Segmentation

A market segmentation strategy where the intended audience for a given product is divided according to geographic units, such as nations, states, regions, counties, cities, or neighborhoods.