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Updated October 2006
Statement of Work (SOW): 1) A description of products to be supplied under a contract. A good
practice is for companies to have SOWs in place with their trading partners especially for all top
suppliers. 2) In projection management, the first project planning document that should be prepared.
It describes the purpose, history, deliverables, and measurable success indicators for a project. It
captures the support required from the customer and identifies contingency plans for events that
could throw the project off course. Because the project must be sold to management, staff, and
review groups, the statement of work should be a persuasive document.
Statistical Process Control (SPC): A visual means of measuring and plotting process and product
variation. Results are used to adjust variables and maintain product quality.
Steamship Conferences: Collective rate-making bodies for liner water carriers.
Stickering: Placing customer-specific stickers on boxes of product. An example would be where Wal-
Mart has a request for their own product codes to be applied to retail boxes prior to shipment.
Stochastic Models: Models where uncertainty is explicitly considered in the analysis.
Stock Keeping Unit (SKU): A category of unit with unique combination of form, fit, and function (i.e.
unique components held in stock). To illustrate: If two items are indistinguishable to the customer, or
if any distinguishing characteristics visible to the customer are not important to the customer, so that
the customer believes the two items to be the same, these two items are part of the same SKU. As a
further illustration consider a computer company that allows customers to configure a product from a
standard catalogue components, choosing from three keyboards, three monitors, and three CPUs.
Customers may also individually buy keyboards, monitors, and CPUs. If the stock were held at the
configuration component level, the company would have nine SKUs. If the company stocks at the
component level, as well as at the configured product level, the company would have 36 SKUs. (9
component SKUs + 3*3*3 configured product SKUs. If as part of a promotional campaign the
company also specially packaged the products, the company would have a total of 72 SKUs.
Stock Out: A term used to refer to a situation where no stock was available to fill a request from a
customer or production order during a pick operation. Stock outs can be costly, including the profit
lost for not having the item available for sale, lost goodwill, substitutions. Also referred to Out of
Stock (OOS)
Stockchase: Moving shipments through regular channels at an accelerated rate; to take
extraordinary action because of an increase in relative priority. Synonym: Expediting
Stockless Purchasing: A practice whereby the buyer negotiates a price for the purchases of annual
requirements of MRO items and the seller holds inventory until the buyer places an order for individual
items.
Stockout Cost: The opportunity cost associated with not having sufficient supply to meet demand.
Stovepipe: See Silo
Straight Truck: A truck which has the driver s cab and the trailer combined onto a single frame.
Straight trucks do not have a separate tractor and trailer. The driving compartment, engine and trailer
are one unit.
Definitions compiled by:
Kate Vitasek
Supply Chain Visions
www.scvisions.com
Bellevue, Washington
Please note: The Council of Supply Chain Management Professionals (CSCMP) does not take responsibility for the content of these definitions,
nor does CSCMP endorse these as official definitions except as noted.
Page 136 of 167
SUPPLY CHAIN and LOGISTICS
TERMS and GLOSSARY
Updated October 2006
Strategic Alliance: Business relationship in which two or more independent organizations cooperate
and willingly modify their business objectives and practices to help achieve long-term goals and
objectives. Also see: Marquee Partners
Strategic Planning: Looking one to five years into the future and designing a logistical system (or
systems) to meet the needs of the various businesses in which a company is involved.
Strategic Sourcing: The process of determining long-term supply requirements, finding sources to
fulfill those needs, selecting suppliers to provide the services, negotiating the purchase agreements
and managing the suppliers' performance. Focuses on developing the most effective relationships with
the right suppliers, to ensure that the right price is paid and that lifetime product costs are minimized.
It also assesses whether services or processes would provide better value if they were outsourced to
specialist organizations.
Strategic Variables: The variables that effect change in the environment and logistics strategy. The
major strategic variables include economics, population, energy, and government.
Strategy: A specific action to achieve an objective.
Stretch Wrap: Clear plastic film that is wrapped around a unit load or partial load of product to
secure it. The wrap is elastic.
Stores: The function associated with the storage and issuing of items that are frequently used. Also
frequently seen as an alternative term for warehouse.
Sub-Optimization: Decisions or activities in a part made at the expense of the whole. An example of
sub-optimization is where a manufacturing unit schedules production to benefit its cost structure
without regard to customer requirements or the effect on other business units.
Subcontracting: Sending production work outside to another manufacturer. This can involve
specialized operations such as plating metals, or complete functional operations. Also see: Outsource
Substitutability: The ability of a buyer to substitute the products of different sellers.
Sunk Cost: 1) The unrecovered balance of an investment. It is a cost, already paid, that is not
relevant to the decision concerning the future that is being made. Capital already invested that for
some reason cannot be retrieved. 2) A past cost that has no relevance with respect to future receipts
and disbursements of a facility undergoing an economic study. This concept implies that since a past
outlay is the same regardless of the alternative selected, it should not influence the choice between
alternatives.
Surrogate [item] Driver: A substitute for the ideal driver, but is closely correlated to the ideal
driver, where [item] is Resource, Activity, Cost Object. A surrogate driver is used to significantly [ Pobierz całość w formacie PDF ]