ERP Definitions

This glossary explains the meaning of key words and phrases that information technology (IT) and business professionals use when discussing ERP and related software products. You can find additional definitions by visiting WhatIs.com or using the search box below.

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  • R

    reverse logistics

    Reverse logistics is the set of activities that is conducted after the sale of a product to recapture value and end the product's lifecycle.

  • RFI (request for information)

    An RFI (request for information) is a formal process for gathering information from potential suppliers of a good or service.

  • S

    SaaS ERP

    SaaS ERP is a type of cloud-based enterprise resource planning (ERP) software that runs on the vendor's or cloud provider's servers, is sold through subscription and delivered as a service over the internet.

  • sales and operations planning (S&OP)

    Sales and operations planning (S&OP) is a process for better matching a manufacturer's supply with demand by having the sales department collaborate with operations to create a single production plan.

  • service lifecycle management (SLM)

    Service lifecycle management (SLM) describes the strategy and software for managing the maintenance and repair of products and maximizing the profit opportunities from these activities.

  • service supply chain

    The service supply chain is the part of the supply chain dedicated to providing service on products.

  • smart factory

    A smart factory is a highly digitized and connected production facility that relies on smart manufacturing.

  • strategic sourcing

    Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace.

  • supplier relationship management (SRM)

    Supplier relationship management (SRM) is the systematic approach to evaluating vendors that supply goods, materials and services to an organization, determining each supplier's contribution to success and developing strategies to improve their performance.

  • supplier risk management

    Supplier risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings that are caused by the organization's supply chain. 

  • supply chain analytics

    Supply chain analytics refers to the processes organizations use to gain insight and extract value from the large amounts of data associated with the procurement, processing and distribution of goods.

  • supply chain execution (SCE)

    Supply chain execution (SCE) is the flow of tasks involved in the supply chain, such as order fulfilment, procurement, warehousing and transporting.

  • supply chain finance

    Supply chain finance is a set of technology-enabled business and financial processes that provides flexible payment options for a buyer and one of their suppliers at lower financing costs.

  • supply chain management (SCM)

    Supply chain management (SCM) is the optimization of a product's creation and flow from raw material sourcing to production, logistics and delivery to the final customer.

  • Supply Chain Operations Reference (SCOR)

    Supply Chain Operations Reference (SCOR) is the process reference model used across industries as a supply chain management diagnostic tool.

  • Supply Chain Planning (SCP)

    Supply chain planning (SCP) is the process of anticipating the demand for products and planning their materials and components, production, marketing, distribution and sale.

  • supply chain security

    Supply chain security is the part of supply chain management that focuses on the risk management of external suppliers, vendors, logistics and transportation.

  • supply chain sustainability (SCS)

    Supply chain sustainability (SCS) is a holistic view of supply chain processes, logistics and technologies that affect the environmental, social, economic and legal aspects of a supply chain's components.

  • supply chain transformation

    Supply chain transformation is the addition and integration of technology to improve supply chain performance.

  • supply chain visibility (SCV)

    Supply chain visibility (SCV) is the ability of parts, components or products in transit to be tracked from manufacturer to final destination.

  • SWIFT FIN message

    SWIFT FIN is a message type (MT) that transmits financial information from one financial institution to another.

  • T

    tooling

    Tooling, also known as machine tooling, is the process of acquiring the manufacturing components and machines needed for production. 

  • traceability

    Traceability, in supply chain traceability, is the ability to identify, track and trace elements of a product or substance as it moves along the supply chain from raw goods to finished products.

  • transportation management system (TMS)

    A transportation management system (TMS) is specialized software for planning, executing and optimizing the shipment of goods.

  • two-tier ERP

    Two-tier ERP is a technology strategy taken by large, multinational enterprises that uses tier 1 ERP for financials and other core common processes at the corporate level and tier 2 ERP for divisions, subsidiaries and smaller locations of the company to address specific needs.

  • U

    upcharge

    An upcharge is an additional fee that is added to a bill after a contract has already been negotiated.

  • V

    value driver

    A value driver is an activity or capability that adds worth to a product, service or brand. One of the key ideas in defining value drivers is determining which factors provide the organization in question with a competitive edge.

  • value stream mapping

    Value stream mapping is a Toyota lean manufacturing visualization tool for documenting all the processes that are required to bring a product to market.

  • vendor-managed inventory (VMI)

    Vendor-managed inventory (VMI) is an inventory management technique in which a supplier of goods, usually the manufacturer, is responsible for optimizing the inventory held by a distributor.

  • voice user interface (VUI)

    Voice user interface (VUI) is speech recognition technology that allows people to interact with a computer, smartphone or other device through voice commands. Apple's Siri, Amazon's Alexa, Google's Assistant and Microsoft's Cortana are prime examples of VUIs.

  • W

    Warehouse control system (WCS)

    Warehouse control system (WCS) is a software application for orchestrating activity flow within a warehouses and distribution center.

  • warehouse management system (WMS)

    A warehouse management system (WMS) consists of software and processes that allow organizations to control and administer warehouse operations from the time goods or materials enter a warehouse until they move out.

  • work in progress (WIP)

    Work in progress (WIP), also called work in process, is inventory that has begun the manufacturing process and is no longer included in raw materials inventory but is not yet a completed product.

  • working capital

    Working capital is the difference between a business's current assets and current liabilities.

  • Y

    yard management system (YMS)

    A yard management system (YMS) is a software system designed to oversee the movement of trucks and trailers in the yard of a manufacturing facility, warehouse, or distribution center.

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