Supply Chain Logistics Glossary
C
CARRYING COST
Set of charges related to inventory financing and storage (insurance and miscellaneous taxes, etc.) and to storage risks (spoilage, thefts, etc.).
CATEGORY MANAGEMENT
Developed initially by distributors to improve management of their sales outlets (marketing aspects), Category Management today designates a collaborative approach between a manufacturer and a distributor to manage an overall heterogeneous set of products an/or services that consumer sees as complementary (the baby category for example includes baby food and child care articles).
CLASSIFICATION 20/80
Method of product classification used in inventory management based on the definition of two classes. The first group includes 20% of the items representing about 80% of the inventory value. The most refined methods of inventory management will be used for this class.
CO-MANAGED INVENTORY (CMI)
Procurement management mode in which the distributor agrees to transmit warehouse issues and stock levels to the producer in real time (generally by EDI) so that the producer can make a replenishment proposal according to the rules previously established in the specifications. This proposal is considered either as firm (Vendor Managed Inventory or VMI) or submitted for validation by the distributor (Co-Managed Inventory or CMI)
CO-MANUFACTURING, CO-PRODUCTION
Collaboration between several companies exploiting the specific competencies of each company to create a common final product. This covers everything from product development to manufacturing and assembly. These value-added operations are sometimes allocated to Logistics Service Providers in particular when they are part of the flows handled by them. Examples are pre-manufacturing as part of procurement operations or post-manufacturing during the product shipping or distribution phases.
CO-PACKING
Packaging operation, often performed by the Logistics Service Provider in a dedicated zone of the warehouse, consisting of wrapping different products together (for example to bundle a sample of new product with an old product), or identical products (in the case of promotional offers, for example).
COLLABORATIVE PLANNING AND FORECASTING REPLENISHMENT (CPFR)
Trademark registered by the VICS (Voluntary Interindustry Commerce Standards) in 1996 designating an approach of collaboration and integration of the forecasting and planning processes between customers and suppliers. A certain number of test operations have been conducted between manufacturers and distributors in the area of mass consumer products, but it is also starting to be used between manufacturing companies. Partner companies (distributors, manufacturers, suppliers, etc.) exchange information on product sales and forecasts in order to synchronize their operational plans. This approach also integrates the downstream information flow to take account of manufacturing constraints.
COMPUTER AIDED ACQUISITION AND LOGISTICS SUPPORT now
CONTINUOUS ACQUISITION AND LIFE SUPPORT (CALS)
Approach developed by the American Defense Department and transferred to the business world, including rules, modeling tools and computer application (ERP for example) for tracking and optimizing product flows from development to end of life.
CONTINUOUS IMPROVEMENT (KAIZEN)
From the Japanese “Kai” change and “Zen” good (for better). Applied to a company, Kaizen is an approach of encouraging participation of all employees, whatever their hierarchical level, for the maintenance of work standards and for their progressive and continuous improvement.
CONTINUOUS REPLENISHMENT PROGRAM (CRP)
Inventory management approach based on collaboration between manufacturers and distributors developed as part of ECR. Based on a defined continuous restocking plan, the two partners use EDI to exchange information concerning orders and stock movements so the supplier can replenish distributor warehouses. In the same model, inventory management can be assigned to a third party, that is, a Logistics Service Provider.
CROSS-DOCKING
Stock reduction approach for assuring availability of products on retail shelves through breaking up of batches on the distributor receiving dock (intermediate handling cross-docking) or the creation of retail packages by the manufacturer (pre-packed cross-docking) before a re-consolidation by the retail store.
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
Marketing approach to maintain loyalty of a company's customers by means of human resources (call center, etc.), technological resources (electronic mail, etc.) and financial resources in order to maintain, update and interpret all data related to a customer or a prospect, and automate marketing tasks (mass mailing, etc.) and manage relations with consumers (customer clubs, loyaltycards etc.).
