Obeya

The Japanese word for 'big room' is similar in concept to a traditional 'war room' and contains charts and graphs that show milestones and progress to date, problem resolution activities, etc. It creates a command center-type atmosphere.

Object Linking and Embedding (OLE)

An object system created by Microsoft, OLE allows an author to invoke different editor components to create a compound document.

Obsolescence

A loss in the utility or value of property that results over time from intrinsic limitations, such as outmoded facilities, or external circumstances.

Obsolete Inventory

Inventory for which there is no forecasted demand expected, is a condition of being out of date. It is a loss of value occasioned by new developments that place the older property at a competitive disadvantage.

Occupational Safety and Health Administration (OSHA)

A United States Department of Labor agency whose mission is the prevention of work-related injuries, illnesses, and death.

Ocean Bill of Lading

The bill of lading is issued by the ocean carrier to its customer.

OE

Order Exchange System

OEE

Overall Equipment Effectiveness.

OEM

Original Equipment Manufacturer

Offer

Tender

Offline

A computer term that describes work done outside of the computer system or outside of a main process within the corporate system. In general usage, this term describes any situation where equipment is not available for use or individuals cannot be contacted.

Offshore

Utilizing an outsourcing service provider (manufacturer or business process) located in a country other than where the purchasing enterprise is located.

Offshoring

The practice of moving domestic operations, such as manufacturing, to another country.

OLE

Object Linking and Embedding

On-Demand

Pertaining to work performed when demand is present, this term is typically used to describe products that are manufactured or assembled only when a customer order is placed. It may also refer to computer applications that are accessed remotely via a subscription service, where charges for use are incurred instead of paying a set period fee.

One Piece Flow

Moving parts through a process in batches of one.

One Up/One Down

A new International Standards Organization (ISO) Food Traceability Standard requires each company to know who their immediate supplier is and to whom the product is being shipped. Additionally, the Bioterrorism Act of 2002 requires One Up/One Down traceability for each link in the supply chain.

One-Way Networks

The advantages generally lie with either the seller or the buyer, but not both. B2C websites are one-way networks.

On-Hand Balance

1) The 'book' quantity recorded in the inventory records. 2) The 'physical' quantity, as can actually be counted in the storage location(s).

Online

A computer term that describes activities performed using computer systems.

On-Line Receiving

A system in which computer terminals are available at each receiving bay, and operators enter items into the system as they are unloaded.

On Order

The amount of goods that have yet to arrive at a location or retail store includes all open purchase orders, including but not limited to orders in transit, orders being picked, and orders being processed through customer service.

On Time Delivery

A metric defined as the percentage of orders received on time by the company (inbound) or its customers (outbound).

On Time In Full (OTIF)

Sales order delivery performance measure can be expressed as a target, for example, achieving 98% of orders delivered in full with no partial shipments on the requested date.

Open-to-Buy

A retail category management technique that identifies merchandise budgeted for purchase during a certain time period but has not yet been ordered. It is also the process of planning merchandise sales and purchases. OTB budgets are typically set by commodity group rather than supplier. Also, see Open-to-Receive. OTB = Planned Sales + Planned Markdowns + Planned Inventory - Actual Inventory - On Order - Actual Sales.

Open to Buy(OTB)

A budgeting and procurement guide used by many retailers to establish appropriate procurement and inventory levels based on projected sales.

Open-to-Receive

A retail category management technique that identifies how much merchandise you can receive based on inventory levels and sales for a period. It tells you how much inventory should be on hand at the beginning of any given period and how much new merchandise should be received during the period. Also, see Open-to-Buy.

Operating ratio

A measure of operational efficiency is defined as (Operating expenses / Operating revenues) x 100.

Operational Availability

The percentage of time that a system is available for a mission, or the ability to sustain operational tempo.

Operational Performance Measurements

The set of performance measures (metrics) used to monitor activity in the operational area of the business includes those related to employee and machine productivity in the areas of receiving, warehouse management, manufacturing and assembly, and inventory management. Additionally, it encompasses fulfillment. Also, see Performance Measures.

Optimization

The process of making something as good or as effective as possible with given resources and constraints.

Option

In the area of product management, an option is a functional capability of the product that can be included at the discretion of the buyer. The option could be a physical component, a color choice, or a software feature. Options can be related in such a way that if 'A' is chosen, then 'B' must be chosen as well, or if 'A' is chosen, 'B' cannot be chosen.

Optional Replenishment Model

An optional replenishment model, similar to the fixed order period model, is used in this model. In this model, no order is placed unless the inventory has dropped below a prescribed level when the order period has elapsed. This model is intended to protect against placing very small orders and is attractive when review and ordering costs are large. Also, see the Fixed Reorder Cycle Inventory Model, Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, and Independent Demand Item Management Models.

Order

A type of request for goods or services, such as a purchase order, sales order, work order, etc.

Order Batching

The practice of compiling and collecting orders before they are sent to the manufacturer.

Order Complete Manufacture to Customer Receipt of Order

Average lead time from when an order is ready for shipment to customer receipt of the order, including the following sub-elements: pick/pack time, preparation for shipment, total transit time for all components to the consolidation point, consolidation, queue time, and additional transit time to customer receipt (an element of Order Fulfillment Lead-Time). Note: Determined separately for Make-to-Order, Configure/Package-to-Order, Engineer-to-Order, and Make-to-Stock products.

Order Consolidation Profile

The activities associated with filling a customer order by bringing together, in one physical place, all of the line items ordered by the customer. Some of these may come directly from the production line, while others may be picked from stock.

Order Cycle

The time and process involved in the placement of an order to the receipt of the shipment.

Order Entry and Scheduling

The process of receiving orders from the customer and entering them into a company's order processing system includes activities such as technically examining orders to ensure an orderable configuration and provide accurate pricing, checking the customer's credit, accepting payment (optionally), identifying and reserving inventory (both on hand and scheduled), and committing and scheduling a delivery date. Orders can be received through phone, fax, or electronic media.

Order Entry Complete to Start Manufacture

Average lead time from completion of customer order to the time manufacturing begins, including the following sub-elements: order wait time, engineering, and design time (an element of Order Fulfillment Lead Time). Note: determined separately for Make-to-Order, Configure/Package-to-Order, and Engineer-to-Order products. Does not apply to Make-to-Stock products.

Order Exchange (OE) System

A system is designed to transfer orders to a more applicable area or department within a company or store. For returns, this process would update the system to acknowledge that the product needs to be restocked (if the product is not defective), and a credit is processed to the customer.

Order Fulfillment Lead Times

Average, consistently achieved lead time from customer order origination to customer order receipt for a particular manufacturing process strategy (Make-to-Stock, Make-to-Order, Configure/Package-to-Order, Engineer-to-Order) is calculated. Excess lead time created by orders placed in advance of typical lead times (Blanket Orders, Annual Contracts, Volume Purchase Agreements, etc.) is excluded. This calculation is an element of Total Supply Chain Response Time. The calculation includes the total average lead time from customer signature/authorization to order receipt, order receipt to completion of order entry, completion of order entry to start manufacture, start manufacture to complete manufacture, complete manufacture to customer receipt of order, and customer receipt of order to installation complete. Note that the elements of order fulfillment lead time are additive, and not all elements apply to all manufacturing process strategies. For example, for Make-to-Stock products, the lead time from start manufacture to complete manufacture equals 0.

Order Interval

The set period of time that controls order placement in a fixed order point model. Also, see Fixed Reorder Cycle Inventory Model, Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, Independent Demand Item Management Models.

Order Level System

A reordering strategy is implemented where orders are placed on a fixed order schedule, and the order quantity is adjusted from order to order to accommodate actual consumption or forecast requirements.

Order Management

The process of managing activities involved in customer orders, manufacturing orders, and purchase orders includes order entry, picking, packing, shipping, and billing for customer orders. For manufacturing, it includes order release, routing, production monitoring, and receipt to inventory. For purchase orders, the activities are order placement, monitoring, receiving, and acceptance.

Order Management Costs

One of the elements comprising a company's total supply chain management costs are as follows: 1. New Product Release Phase-In and Maintenance: Costs associated with releasing new products to the field, maintaining released products, assigning product IDs, defining configurations and packaging, publishing availability schedules, release letters and updates, and maintaining product databases. 2. Create Customer Order: Costs associated with creating and pricing configurations for orders and preparing customer order documents. 3. Order Entry and Maintenance: Costs associated with maintaining the customer database, conducting credit checks, accepting new orders, adding them to the order system, and making later order modifications. 3. Contract/Program and Channel Management: Costs related to contract negotiation, monitoring progress, and reporting against the customer's contract, including administration of performance or warranty-related issues. 5. Installation Planning: Costs associated with installation engineering, scheduling and modification, handling cancellations, and planning the installation. 6. Order Fulfillment: Costs associated with order processing, inventory allocation, ordering from internal or external suppliers, shipment scheduling, order status reporting, and shipment initiation. 7. Distribution: Costs associated with warehouse space and management, receiving and stocking finished goods, processing shipments, picking and consolidating items, selecting carriers, and staging products/systems. 8. Transportation, Outbound Freight, and Duties: Costs associated with all company-paid freight duties from the point of manufacture to the end customer or channel. 9. Installation: Costs associated with verification of site preparation, installation, certification, and authorization of billing. 10. Customer Invoicing/Accounting: Costs associated with invoicing, processing customer payments, and verifying customer receipt.

Order management system (OMS)

This is software that tracks and coordinates orders across an organization's various channels.

Order Picking

The function of gathering the items associated with an order from their storage locations is to make them available to be included in production processes or to be delivered to customers.