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Here is a compilation of popular acronyms and
abbreviations in demand forecasting and supply chain management.
ABF
- Account Based Forecasting, also known as Customer Planning or
Customer Specific Forecasting (CSF), refers to a bottom up demand
forecasting process which starts with customer retail forecast,
then arrives at a customer shipment forecast to be aggregated
into a supply chain forecast.
APICS - The
Association for Operations Management.
APO - Advanced
Planner and Optimizer, the planning software from SAP
AG.
BOM - Bill of Materials
CPFR - Collaborative,
Planning, Forecasting and Replenishment is a concept popularized
and institutionalized by the VICSorganization
to enable manufacturers and retailers to better collaborate on
forecasting and promotional planning to achieve supply chain efficiencies.
CPG - Consumer Packaged
Goods, refers to the manufacturers and supplies in the Packaged
Goods industry, a very specific reference to companies that manufacture
or distribute Consumer Packaged Goods to the retail environment.
CPIM - Certified in Production
and Inventory Management, a certification offered by the APICS,
the Association for Operations Management.
CRM - Customer Relationship Management;
the process and discipline to analyze the trade funds, promotional
planning and execution and evaluating the effectiveness of promotions.
Oracle CRM, Siebel, and SAP CRM are the dominant players in this
space. Siebel and Demantra have been acquired by Oracle.
CRP - Continuous Replenishment Program,
another term to denote VMI or Vendor Managed Inventories, where
the supplier or manufacturer monitors the inventory at the customer
warehouse on a continuous basis and writes the orders on behalf
of the customer to ensure warehouses are adequately stocked.
DC -Distribution Center
DP -Demand Planning, a functional and
subject reference to the forecasting group and role
DDSN -Demand Driven Supply Networks
DRP - Distribution Requirements Planning
EDI -Electronic Data Interchange
EOQ - Economic Order Quantity
FG -Finished Goods
JIT - Just In Time
KPI - Key Performance Indicator
LTL - Less than Truck Load
MAPE - Mean
Absolute Percent Error a cross-sectional measure to calculate
the demand forecast error across products, customers, divisions
etc.
MAD - Mean Absolute Deviation,
similar to MAPE before it becomes a percentage error. Academics
respect this measure, largely due to confusion and mis-interpretations
around the MAPE.
MRP - Materials Requirements Planning
MTO - Made to Order, a
type of production and inventory strategy that starts the manufacturing
process only on receipt of the customer order. The manufacturer
has the luxury of making the customer order, (and perhaps pay)
and wait. Dell is a classic
example of a MTO business model.
MTS - Made to Stock, a production and replenishment
model that keeps inventory of products, anticipating customer
orders.
OLS - Ordinary Least Squares,
the most basic methodology for model fitting by choosing the model
that minimizes the residual error.
PMAD - Percent Mean Absolute Deviation
RMSE - Root Mean Squared
Error, a measure of model diagnostic and with more application
in inventory management to set parameters for safety stock calculations.
SCOR - Supply Chain Operations Reference
Model
S&OP -Sales and Operations Planning
SIOP -Sales, Inventory and Operations Planning
SNP -Supply Network Planning
SMR -Supplier Managed Inventory,
very similar to VMI except here the manufacturer lets their inventories
be managed by a supplier of key components and input products.
VMI -Vendor Managed Inventories,
where the supplier or manufacturer monitors the inventory at the
customer warehouse on a continuous basis and writes the orders
on behalf of the customer to ensure warehouses are adequately
stocked.
WIP - Work in Process
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