Warehouse Dictionary

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M

Machine Downtimes

Time during which a machine cannot be utilized. Machine downtimes may occur during breakdowns, maintenance, changeovers, etc.

Maintenance, Repair, and Operating Supplies (MRO)

Items used in support of general operations and maintenance, such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations.

Major Carrier

A for-hire certificated air carrier that has annual operating revenues of $1 billion or more; the carrier usually operates between major population centers.

Make-or-Buy Decision

The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.

Make-to-order

a manufacturing strategy where you do not manufacture your product until after you receive actual orders from your customers. The primary advantage to this strategy is that you do not have to carry finished goods inventory. This strategy does not necessarily result in zero inventories. Many make-to-order manufactures will forecast and procure some raw materials and components in advance of receiving orders in an effort to reduce the lead time to their customers.

Make-to-stock

manufacturing strategy where you must carry adequate finished goods inventory to meet upcoming forecasted demand. The reason this stocking strategy is so common is not that it is the most cost-effective inventory strategy overall, but rather it is a necessary strategy when market conditions require shipment of goods quicker than you can manufacture them.

Management information system (MIS)

system that controls the flow of information throughout an organization and makes sure that everyone has the information they need to work properly

Management of All Logistics

The effective management of all costs associated with logistics functions and activities so as to minimize their sum across the product supply chain.

Manifest

A document which describes individual orders contained within a shipment.

Manufacture Cycle Time

The average time between commencement and completion of a manufacturing process, as it applies to make-to-stock products.Calculation: [Average # of units in WIP]/[Average daily output in units]

Manufacturer’s Representative

One who sells goods for several firms but does not take title to them.

Manufacturing Calendar

A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available.

Manufacturing Execution Systems (MES)

Programs and systems that participate in shop-floor control, including programmed logic controllers and process control computers for direct and supervisory control of manufacturing equipment; process information systems that gather historical performance information, then generate reports; graphical displays; and alarms that inform operations personnel what is going on in the plant currently and a short history into the past. Quality control information is also gathered – a laboratory information management system may be part of this configuration to tie process conditions to the quality data that are generated. Thereby, cause-and-effect relationships can be determined. The quality data at times affect the control parameters that are used to meet product specifications, either dynamically or offline.

Manufacturing Lead Time

The total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it’s the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it’s the length of time between the release of an order to the production process and receipt into finished goods inventory. Included are order preparation time, queue time, set-up time, run time, move time, inspection time, and put-away time.

Manufacturing Resource Planning (MRP-II)

A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer what-if questions. It consists of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports, such as business plan, purchase commitment report, shipping budget, and inventory projections in dollars. Manufacturing resource planning is a direct outgrowth and extension of closed-loop MRP.

Marginal Cost

The cost to produce one additional unit of output. The change in total variable cost resulting from a one-unit change in output.

Market Demand

In marketing, the total demand that would exist within a defined customer group in a given geographical area during a particular time period given a known marketing program.

Market Dominance

The absence of effective competition for railroads from other carriers and modes for the traffic to which the rail rate applies. The Staggers Act stated that market dominance does not exist if the rate is below the revenue-to-variable-cost ratio of 160 percent in 1981 and 170 percent in 1983.

Market-Positioned Warehouse

Warehouse positioned to replenish customer inventory assortments and afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.

Market Segment

A group of potential customers sharing some measurable characteristics based on demographics, psychographics, lifestyle, geography, benefits, etc.

Marks and Numbers

Marks and numbers placed on goods used to identify a shipment or parts of a shipment.

Mass Customization

The creation of a high-volume product with large variety so that a customer may specify his or her exact model out of a large volume of possible end items, while manufacturing cost is low because of the large volume. An example is a personal computer order in which the customer may specify processor speed, memory size, hard disk size and speed, removable storage device characteristics, and many other options when PCs are assembled on one line and at a low cost.

Master Air Waybill (MAWB)

The bill of lading issued by air carriers to their customers.

Master schedule

detailed timetable for production of individual products, typically by week

Material

anything that is kept in stock

Material Acquisition Costs

One of the elements comprising a company’s total supply chain management costs. These costs consist of the following:

1. Materials (Commodity) Management and Planning: All costs associated with the supplier sourcing, contract negotiation and qualification, and the preparation, placement, and tracking of a purchase order – including all costs related to buyer/planners.

2. Supplier Quality Engineering: The costs associated with the determination, development/certification, and monitoring of suppliers’ capabilities to fully satisfy the applicable quality and regulatory requirements.

3. Inbound Freight and Duties: Freight costs associated with the movement of material from a vendor to the buyer, including all associated administrative tasks. Duties are those fees and taxes levied by government for moving purchased material across international borders. Customs broker fees should also be included in this category.

4. Receiving and Put Away: all costs associated with taking possession of material and storing it. Note – inventory-carrying costs are normally covered in a separate worksheet.

5. Incoming Inspection: All costs associated with the inspection and testing of received materials to verify compliance with specifications.

Materials Handling

The physical handling of products and materials between procurement and shipping.

Material Index

The ratio of the sum of the localized raw material weights to the weight of the finished product.

Materials Management

Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production.

Materials Planning

The materials management function that attempts to coordinate materials supply with materials demand.

Maximum Order Quantity

An order quantity modifier applied after the lot size has been calculated that limits the order quantity to a pre-established maximum.

m-Commerce

Mobile commerce applications involve using a mobile phone to carry out financial transactions. This usually means making a payment for goods or transferring funds electronically. Transferring money between accounts and paying for purchases are electronic commerce applications. An emerging application, electronic commerce has been facilitated by developments in other areas in the mobile world, such as dual slot phones and other smarter terminals, and more standardized protocols which allow greater interactivity and therefore, more sophisticated service.

Mean absolute deviation

the average of the absolute values of a series of variances. MAD is used in forecast error measurement, safety stock calculations, and other applications of statistics.

Mean error

a measure of bias in a forecast

Mean squared error

a measure of the error in a forecast, which does not have a precise meaning, but is useful for other analyses

Measurement Ton

Forty cubic feet; used in water transportation ratemaking.

Merge In Transit

The process of “merging” shipments from suppliers and going directly to the buyer or to the store, bypassing the seller. A “drop shipment” from several vendors to one buyer.

Micro-Land Bridge

An intermodal movement in which the shipment is moved from a foreign country to the U.S. by water and then moved across the U.S. by railroad to an interior, non-port city, or vice versa for exports from a non-port city.

Middleware: Connectivity software, enabling an enterprise-wide range of data sources to be integrated into the decision-making database of the common reference model, is a strong requirement for success.  Interfaces to various ERP, MRP, databases and specialized software are required for these translators between IT applications.

Mileage Allowance

An allowance, based upon distance, which railroads give to shippers using private railcars.

Mileage Rate

A rate based upon the number of miles the commodity is shipped.

Minimum Weight

The shipment weight the carrier’s tariff specifies as the minimum weight required to use the TL or CL rate; the rate discount volume.

Mixed Loads

The movement of both regulated and exempt commodities in the same vehicle at the same time.

Modal Split

The relative use that companies make of transportation modes; the statistics include ton-miles, passenger-miles, and revenue.

Movable unit

A single identifiable unit load (e.g. carton, pallet, trailer, etc.) that is moved between and stored at a location.

Move time

the time it takes to physically relocate materials from one manufacturing operation (step in manufacturing process) to the next.

Moving average

forecasting method that calculates the average demand over a fixed number of time periods relative to the date the forecast is generated, and uses that as the forecast for subsequent periods. For example, if I am calculating a three-month moving average on July 1st, I will calculate the average demand over April, May, and June. Subsequently, on August 1st, I would use May, June, and July demand for the calculation.

Multi-Channel: Multi-channel was a term used to refer to how retailers offered their products to their customers across many sales channels, i.e. Store Catalogue, Web or Call Centre. This has now evolved into Omni-channel.

Multi-Currency

The ability to process orders using a variety of currencies for pricing and billing.

Multi-Language

Pertaining to the ability to process orders in many different country-specific languages using voice and text.

Multi-level bill of materials

a bill-of-materials structure where components on one BOM have their own BOMs below them. Technically, a multi-level bill does not actually exist. Instead, you just have numerous single-level bills and your computer software figures out that if an item on one bill has its own bill; it can logically link these together for planning purposes.

Multiple-Car Rate

A railroad rate that is lower for shipping more than one carload at a time.