Supply Chain Glossary

• Consignment Inventory (CI) Are goods owned by the Supplier but held at the Customer premises for use/sale by the Customer at the Customer’s convenience. Generally, it is only when the goods are used/sold that the ownership of the goods transfers to the customer.

• Customer Managed Inventory (CMI) Is the conventional model where a customer places orders on its suppliers for goods. Ordering decisions are made by the customer.

• Concession Model Inventory (CmI) Are goods owned by the Supplier that are held at the Customer premises but, rather than a traditional transfer of ownership at the time of sale, an agreed concessionary revenue is taken by the customer.

• Customer Planned Inventory (CPI)^{©Total APS Limited 2012} Is where a Customer creates and manages purchase orders and retains ownership & control of the planning, forecasting and replenishment processes, but the vendor distributes and owns the inventory until sold.

• Demand Forecasting: Is generally considered part of Demand Planning and focuses on creation of unconstrained demand forecast using qualitative or quantitative methods.

• Demand Management: Is a broad process where we forecast demand and also influence demand (e.g. price reduction). It needs management coordination between Demand and Supply teams to ensure that activities of demand generation do not disrupt the supply operations.

• Demand Planning: Is collaborating with markets to forecast unconstrained demand which is then aligned with supply capabilities to produce a realistic forecast. The creation of forecasts can be based on manual judgment or using statistical techniques or a combination of the two.

• Enterprise Planning: Is often a company-wide planning activity that matches supply resources with Demand across different enterprises of an organization (e.g. different manufacturing plants) to achieve optimum inventory levels while attaining the desired customer service level at a minimum cost. This is an integrated activity between various functions of Demand and Supply wherein the entire network is used to achieve the objectives.

• Fulfillment Planning: Is similar to Supply Planning but also includes deciding the requirement of manufacturing orders at the factory. However this does not include scheduling of the orders at the factory.

• Manufacture Planning: Is the scheduling of the orders at the factory to meet the Fulfillment requirements.

• Supply Planning: Is the planning process which aims to distribute products to a distribution center or end customer(s) in order to meet the demand such that customer service level and inventory level targets are achieved.

• Vendor Managed Inventory (VMI) Is where a Supplier creates and manages purchase orders and retains ownership and control of the planning, forecasting and replenishment processes.