ERP Dictionary

ERP dictionary is having a one-line description on this page or link to the page which contains details about the topic.


ABC analysis
Acceptable quality level
Actual cost
advanced planning and scheduling (APS)
Aggregate planning
Andon board
Annual physical inventory
Application programming interface (API)
Application service provider (ASP)
Available capacity
Available to promise
Available-to-promise (ATP)


Back Scheduling

Back scheduling is a technique for calculating operation start dates and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation.

Backward Scheduling

Backward scheduling starts with the date the order is required and calculates the schedule back through the routing to determine the proper release date of the order.

Botton-up replanning

Bottom-up replanning is the process of replanning using pegging data to solve material shortage problems.

Bucketless MRP

Bucketless MRP is a material requirement planning system whereby the requirements for lower-level items can be specified on a daily basis.

Business intelligence (BI)

Sets of tools that provide graphical analysis of business information in multidimensional views thus enabling people to make better decisions and improve their business processes.

Base Inventory Level

Base inventory level is the inventory level made up of aggregate lot size inventory plus the aggregate safety stock inventory. 

Batch Splitting

Dividing a batch into two or more subbatches and simultaneously processing each on similar facilities as separate batches (usually to compress the lead time or expedite a small quantity).

Bill Of Distribution

Bill of distribution is BOM that shows the structure of the flow of material from its supply source to the distribution centers that stock the product.

Bill Of Resources

Bill of resources is a synonym for the rough cut capacity plan (RCCP).

Blanket Order

A blanket order is a longterm commitment to a supplier for material against short-term releases will be generated to satisfy requirements.

Block Scheduling

An operation scheduling technique where each operation is allowed a “block” of time, such as a day or a week.


capable-to-promise (CTP)

Capacity balance

Capacity balance is the process of balancing the required and available capacities by sub-contracting, overtime etc.

Capacity control report

Contains information used to control work centre capacity (work centre, planned week, hours of production)

Capacity planning

Capacity planning the process of determining the capacity required to produce in the future.

Capacity requirements planning
capacity requirements planning (CRP)

Cellular manufacturing

Cellular manufacturing is a manufacturing system that produces families of parts within a single line or cell of machines operated by operators who work only within the line or cell.

Changeover time

Changeover time is the time required for a specific machine, resource, work center, or line to convert from the production of the last good piece of lot A to the first good piece of lot B.

Closed-loop manufacturing system

Closed-loop manufacturing system: Manufacturing system in which feedback is provided by the manufacturing execution functions so that the planning can be kept valid at all times.

computer-assisted software engineering (CASE)

Computer-assisted software engineering (CASE) is the use of computerized tools to assist in the process of designing, developing, and maintaining software products and systems.

computerized maintenance management systems (CMMS)
conference room pilot (CRP)
corporate performance management (CPM)

Contact Management

Contact management is systems that track interaction between a sales force and customers or prospects, supply chain partners, or other relationships. Functions usually include call date tracking, notes files, follow-up reminders, birthday or anniversary date reminders, and other methods to provide systematic ways to initiate and track interaction over time.

cost of goods sold (COGS)

An accounting classification useful for determining the amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time.

Critical path method

A network planning technique for the analysis of a project`s completion time, used for planning and controlling the activities in a project.

Critical resources

Critical Ratio

Critical ratio is the number of days until the job is required divided by the number of days required to complete the job. The rule often used for production scheduling and finite capacity planning.

Cumulative gross requirements

The sum total of the gross requirements, over a period of time, for an item.

Customer order
Customer service level

What are customer complaints

Customer complaints are the grievances that customers air about an aspect/aspects of the goods/services they have been supplied. The number of complaints may be used to rate suppliers.


Data accuracy
data warehouse
database management system (DBMS)
Delivery performance
Demand management
Demonstrated capacity

Dependent demand

Dependent demand is, demand for lower-level items resulting from the demand for other items at a higher level in the BOM structure (this demand is calculated not forecasted).

Direct numerical control
Discounting procedure
discrete manufacturing
Dispatch list

Distribution Resource Planning

Distribution resource planning is time phasing of demand from warehouses or distribution centres on the factory.


engineer-to-order (ETO)

Engineer-to-order (ETO) is products whose customer specifications require unique engineering design, significant customization, or newly purchased materials.

Engineering change order

Engineering change order is the order which is issued which details an engineering change (see Engineering change).

Engineering change request

Engineering change request is a request for an engineering change, this can be originated from any department.

enterprise application integration (EAI)


Facility Layout

Facility layout is the arrangement style of the production facilities.

Final assembly schedule

Final assembly schedule is a schedule of end items to finish the product for specific customer`s orders in a make-to-order or assemble-to-order environment.

Finite capacity loading

Finite capacity loading is assigning of work to the actual capacity of a work centre in a given time period. Usually refers to a computer technique that involves calculating shop priority revisions in order to level load operation by operation.

Finite capacity planning

Finite capacity planning is the planning of capacity requirements taking into consideration the various capacity restrictions that (will) exist.

finite scheduling

Finite scheduling is a scheduling methodology where work is loaded into work centers such that no work center capacity requirement exceeds the capacity available for that work center.

Firm Planned Order

Firm planned order is a planned order that can be frozen in quantity and time.


A dispatching/stock issuing rule under which the jobs/stock items are sequenced by their arrival times.

Focused factory

Focusing the manufacturing system on a limited range of products precisely defined by the company`s competitive strategy AND the realities of its technology AND economics

Forward Scheduling

Forward scheduling is a scheduling technique where the scheduler proceeds from a known start date and computes the completion date for an order, usually proceeding from the first operation to the last.

fourth-generation LANGUAGE (4GL)

A general term FOR a series of high-LEVEL nonprocedural languages that ENABLE users OR programmers TO prototype AND TO CODE NEW systems. Nonprocedural languages USE menus, question-AND-answer combinations, AND a simpler, English-LIKE wording TO design AND implement systems, UPDATE DATABASES, generate reports, CREATE graphs, AND answer inquiries.

Frozen zone


Gross requirements


Hybrid Architecture

A hybrid architecture is systems containing elements of more than one manufacturing control system approach.


Independent demand

Independent demand IS demand FOR an item which IS unrelated TO the demand FOR other items.

Infinite Capacity Planning

Infinite capacity planning is the planning of capacity requirements assuming there are no restrictions on capacity level (See Capacity planning).

infinite loading

Inventory DATA accuracy

The percentage of inventory records which DO NOT contain ANY errors.

Inventory records
Islands of automation

item master record

Item master record is the record for an item containing descriptive data, control values (lead times, order quantities, etc.) and other information. Synonym- part master record.



Just-in-time is a manufacturing philosophy whose aim is to produce the required items at the right quality in the right numbers and at the exact time they are needed, thereby minimizing nonvalue adding activities.



PROCESS of issuing components TO the production FLOOR ON a job BY job basis


labour loading

Labour loading is the process of assigning labour to particular tasks.

Line balancing

The PROCESS of balancing an assembly line TO ensure that ALL WORK stations have an equal amount of WORK TO perform

Line STOP authority

Individual operators have the authority TO STOP the line TO ensure compliance WITH standards.

LONG RANGE planning

LONG RANGE planning IS business planning that addresses the strategic needs of the organization.

Lot FOR lot

A lot sizing technique that generates planned orders IN quantities equal TO the net requirements IN EACH period.


manufacturing execution system (MES)

manufacturing instructions

Manufacturing instructions is the detailed process parameters and operating data required for a specific production operation, which may include both basic production rate data and detailed engineering specifications and notes.

Manufacturing ORDER
manufacturing resource planning (MRP II)

mass production

Mass production IS the high-quantity production characterized BY specialization of equipment AND labor.

Master production Schedule

Mixed model production

Mixed model production IS manufacturing AND assembling of different products ON the same manufacturing facility, over a relatively short period of time.

Multi-model production

A variety of models, are produced but NOT simultaneously, over a period of time.


negative inventory

An error CONDITION resulting FROM a TRANSACTION that drives the perpetual inventory below zero. Systems that allow negative inventory usually provide exception reports FOR cycle counting AND analysis, AND specify how the negative IS handled IN modules such AS MPS AND MRP.


Net CHANGE MRP IS the material requirements plan IS continually retained IN the computer. Whenever a CHANGE IS needed IN the requirements, OPEN ORDER inventory STATUS, OR BOM, a PARTIAL explosion AND netting are made FOR only those parts affected BY the change.

net requirements

nominal RANGE

Nominal RANGE IS the distance that a system that transmits signals, such AS a network OR RFID device, can reliably complete transmission.


Non VALUE-added IS the activities AND costs that can be eliminated without reducing performance, FUNCTION OR VALUE AS perceived BY the customer.

non-stationary demand

A pattern IN which demand IS NOT constant FOR EACH TIME frame but varies due TO seasonality, trend OR other factors.

numerical control (NC)

A machine tool that uses machine-readable sets of NUMERIC codes that control the activities used IN its operation.


online analytical processing (OLAP)


OPEN ORDER IS an active manufacturing ORDER OR purchasing order.

Operations sequencing

Simulation, manual OR computerised, PROCESS used TO decide the ORDER IN which the required operations should be carried out.

Optimized production technology

Optimized production technology IS an MPC system which assumes that the PRIMARY goal of ANY manufacturing business IS TO make money. Bottom line financial measures which are used are- net profit, ROI AND cash flow. WORK IS scheduled around bottlenecks.

ORDER Action report

ORDER ACTION report IS an MRP report which details ORDER actions which need TO be taken. The report answers the questions of what TO ORDER, how much TO ORDER AND WHEN TO ORDER it.

Order Entry

Process of accepting and translating what a customer wants into terms used by the vendor (order entry , The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. The commitment should be based on the available-to-promise line (ATP) in the master schedule. This can be as simple as creating shipping documents for finished goods in a make-to-stock environment, or it might be a more complicated series of activities, including design efforts for make-to-order (MTO) products.)

Output control

Overdue Work

Overdue work is work which has not been completed by the required date.


p chart

An attribute control chart showing the fraction OR percent of nonconforming DATA OUT of a given population.

packing department

Parallel Conversion

A project implementation technique in which an existing system is run in parallel with the new system, with the comparison of operations and results to verify that the new system will properly replace the functions of the old. Parallel conversions are often difficult due to the time, expense and viability of operating two systems and problems in comparison and verification when functions have changed significantly. A parallel is often not necessary when the conference room pilot and issue identification and resolution phases are done well, and adequate resources are made available at cutover time.

Part family

Part family IS a SET of parts that REQUIRE similar machinery, tooling, machining operations, AND jigs AND fixtures.

Part MASTER record

Part MASTER record IS the record FOR an item containing descriptive DATA, control VALUES (lead times, ORDER quantities) AND other information. Synonym- Item MASTER record.

part number

Part number IS the SET of characters, normally alphanumeric, that identifies a SPECIFIC manufactured-item OR purchased-item AND IS used IN ALL DATABASE, ORDER, inventory, AND other functions. (Part number, A number which serves TO uniquely identify a part. )

part period balancing (PPB)

parts LIST

A listing of ALL components used IN the production of a parent item that does NOT reflect its structure OR intermediate levels, AND IS NOT useful IN TIME-phasing requirements based ON lead TIME offsets.

parts per million (PPM)

Parts per million (PPM) IS a quality measure of the number of defective items observed OR projected OUT of a population of ONE million.


PayPoint IS the operations IN a routing used TO report production AND/OR labor. Quantities reported AT pay points are backflushed INTO previous non-PayPoint operations, which may be listed ON routing but are NOT used FOR reporting due TO PROCESS limitations OR a condensed TIME frame that does NOT REQUIRE a REAL-TIME STATUS UPDATE of EACH individual step.

Pegged requirements


Pegging in MRP and MPS, the capability to identify for a given item the sources of its gross requirements and/or allocations. Pegging can be thought of as active where-used information. (pegging, Tracing the source of requirements in a materials plan, caused by dependent demand from an upper-level item, independent demand from a customer or interplant order, or to replenish a desired inventory stock level.)

Period ORDER quantity


An item WITH an identifying product number that IS NOT normally built AND THEN stocked, but IS immediately used IN the NEXT stage of production. MRP processing logic will blow through a phantom down TO the NEXT LEVEL (AND NOT generate planned orders FOR the phantom) but will net AGAINST its ON-hand inventory IF it does occasionally exist. A phantom bill of material IS sometimes used TO ease maintenance WHEN a SET of parts consumed IN production has identical USAGE across many bills of material.

Pick list

Pick list is a list of all components and materials required to fill a specific production, sales or interplant order. It often specifies the warehouse locations to pick from, and sometimes consolidates requirements from more than one order.

Picking LIST

A document used TO pick manufacturing OR shipping orders, listing the components AND quantities required.

piece part

Piece part IS a discrete component item such AS nuts, bolts OR screws used IN an UPPER-LEVEL assembly.


A four step quality improvement cycle, based ON a PROCESS described BY Walter Shewhart, that involves continuous improvement based ON analysis, design, execution AND evaluation. Sometimes referred TO AS plan/DO/study/act, it emphasizes the constant attention AND reaction TO factors that affect quality.

Planned cost
planned ORDER
planned ORDER receipt

planned order release

Planned order release is the date required to firm, or release, a planned order based on the specified lead time until the planned receipt date. Many systems allow the selection and review of planned orders based on specifying a release date time frame.

Planned orders

Planned orders IS a suggested ORDER quantity, RELEASE DATE, AND due DATE created BY the planning system`s logic when it encounters net requirements in processing MRP.

Planned receipts
Planning BOM

planning horizon

The amount of time the master schedule extends into the future.

Planning yield

An MRP / MPS planning parameter used to adjust requirements to take account of the expected yield (See Yield).

post-implementation audit

Post-implementation audit is a review process that takes place after the installation of a new system to determine status, level of user satisfaction, the accomplishment of stated goals and further action items required. It is usually timed to allow the new system to operate for a given period, such as a quarter, to concentrate on ongoing issues rather than those generated and resolved at the cutover time.

premium freight

prerequisite tree

A logic tree used in the theory of constraints that identifies and time phases obstacles associated with the intermediate objectives that must be accomplished to achieve an overall goal.

primary location

The primary location is the default stock location used for receipts and picks of a given item, which may be supplemented by other locations if full or overstocked.

Primary Operation

Primary operation is a routing operation used unless an alternate is selected when opening production orders, and the normal basis for MRP processing, capacity planning, and standard cost estimation.

Priority control

process manufacturing

A manufacturing environment often characterized by a batch or continuous transformation of a gas, liquid or powder, low product complexity and manufacturing variations, fixed or dedicated facilities, a flat bill of material and relatively few transactions. (Process manufacturing , Continuous, dedicated production of large amounts of bulk product, for example, paint, chemicals etc. )

process sheet

process view

process view: A diagram or flow chart that graphically represents the activities, resources and timing of a given process.

product acceptance

product code

Synonymous with part number, although sometimes used to represent only finished items.

product data management (PDM)

product lifecycle management (PLM)

Product lifecycle management (PLM) is a process for guiding products from idea through retirement to deliver the most business value to an enterprise and its trading partners. The applications that support the business activities enabled through PLM includes product ideation, design, engineering, manufacturing process management, product data management, and product portfolio management.

Product load profile

Product load profile is a listing of the required capacity and key resources needed to manufacture one unit of a selected item or family.

The resources requirements are further defined by a lead-time offset to predict the impact of the product on the load of the key resources by the time period.

Product specification

A statement of acceptable characteristics that distinguish one product from another.

Product structure file

Containing BOM data for products.

product structure

product structure is the bill of material.

Production activity control

Production activity control is a system for utilizing data from the shop floor to maintain status information on shop orders and work centers (production activity control (PAC), The activities related to scheduling, releasing and tracking production orders and schedules, and reporting the materials and resources used and the results of the production process.)

production order

Production order is an order that authorizes the manufacture of a specific quantity of an item or group of items, contains the release and due dates, and documents requirements for the materials and resources used.

It is assigned a separate number or identifier used in reporting material and labor transactions.

Production plan
production planning

production schedule

A prioritized report of released production orders for a manufacturing facility or specific department.

program evaluation and review technique (PERT)

A project management system that determines the project finish date by estimating best (shortest), worst (longest) and most likely duration times for activities on the critical path. (Program evaluation and review technique (PERT) , A network planning technique for the analysis of a project`s COMPLETION time. )

programmable logic controller (PLC)

A device USING programmed, custom instructions TO provide automated monitoring AND control functions BY evaluating a SET of inputs. Used TO automate complex functions IN machining, packaging, materials handling OR other applications.

Projected available balance

projected balance

Projected balance IS a future estimated inventory balance calculated BY taking the current ON-hand inventory, adding scheduled receipts AND subtracting requirements OR allocations. IN planning systems, a projected balance IS compared TO the ORDER POINT OR safety stock LEVEL TO determine the need TO reorder. 

promise DATE

Pseudo BOM

Pseudo BOM IS an artificial grouping of items that facilitates planning.

pull system

A system WHERE the production OR movement of inventory items IS initiated AS required BY the USING department OR location, OR TO REPLACE items removed FROM an authorization queue. Production AND inventory moves are NOT done based ON a predetermined SCHEDULE, but only WHEN consumed OR signaled BY the POINT of usage.

purchase ORDER

Purchase ORDER IS the contractual agreement WITH a supplier of goods OR services that specifies payment terms, delivery dates, item identification, quantities, freight terms, AND ALL other obligations AND conditions.

The ORDER may specify multiple items AND delivery dates but IS always generated FOR a single vendor. (Purchase ORDER, The purchaser`s authorization used to formalize a purchase transaction with a supplier.)

purchase price variance (PPV)

Purchase price variance (PPV) is the variance created by the actual price paid to a vendor for material as compared to the standard cost, sometimes separated into the variance created by the specified purchase order price vs. the standard, and the actual vendor invoice cost vs. the specified purchase order price.

Purchase requisition

An authorisation to the purchasing department to purchase specified materials in specified quantities within a specified time.

purchase to order (PTO)

Purchase to order (PTO) is the method used to respond to demand in which an item is purchased only when required by a customer order that specifies that item, and not for processing or assembling into a different item number.

purchase to stock (PTS)

Purchase to stock (PTS) is the demand response method where an end item or service part required as is for an expected customer order is purchased and stocked against a forecast.

The forecast represents an independent customer or interplant demand, and not the usage in an upper-level item.

purchase-to-pay cycle

purchasing lead time

Purchasing lead time is the total time required to place and receive purchased items, which includes internal review and placement time (order release), vendor transportation time, and the dock to stock activities to receive and store.

push System

Push system is a system where the production and movement of inventory items are determined by a preexisting schedule that authorizes a material issue or transfer, or the start of a production operation.

The using department or location receives material when determined by the feeder location and not based on their own generation of a replenishment signal.push-systemThe using department or location receives material when determined by the feeder location and not based on their own generation of a replenishment signal.



Regression analysis
Reorder point
reorder point (ROP) system

Resource planning

Represents the process of determining the long range capacity needs of the business

Resource profile
Rough cut capacity planning


Document detailing the manufacture of a particular item (includes operations to be performed, their sequence, work centres used etc.)


Safety Time

Safety time is material is planned to arrive ahead of its requirement date.

Schedule adherence

Schedule adherence is the ability of a work center to follow the work schedule which it has been assigned.

Scheduled receipt

Scrap factor

Scrap factor is a percentage factor in the product structure used to increase gross requirements to account for anticipated loss within the manufacture of a particular item. Synonym – scrap rate.

Shop floor control

A system for using data from the shop floor to maintain and communicate status information on shop orders and on work centres.

Shop order

Shop Packet

Shop packet is the paperwork (routing sheets, material requisitions) associated with an order released by production control.

Slack time

Slack time is the amount of time by which the expected finish date precedes the due date

Standing orders

Standing orders are the firm customer orders covering long periods in the manufacturing cycle (enables planners to assign manpower to a core of work).

Stockout costs

Stockout costs: The costs associated with a stockout. Those costs may include lost sales, backorder costs, expediting, and additional manufacturing and purchasing costs.

Stock status
Storage costs

supplier performance

Supplier performance is an evaluation of suppliers usually with respect to delivery, quality and price.

supplier relationship management (SRM)

Supplier relationship management (SRM) is an evolving set of applications enabling enterprises to create a more comprehensive lifecycle view of suppliers` operational contribution TO the top AND bottom lines. Strategic sourcing AND spend management would be SOME of SRM parts.

supply CHAIN execution (SCE)

supply CHAIN management (SCM)

Supply CHAIN management (SCM) IS the design, planning, execution, control, AND monitoring of supply CHAIN activities WITH the objective of creating net VALUE, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply WITH demand, AND measuring performance globally.

supply CHAIN planning (SCP)

Supply CHAIN planning (SCP) IS the determination of a SET of policies AND procedures that govern the operation of a supply chain. Planning includes the determination of marketing channels, promotions, respective quantities AND timing, inventory AND replenishment policies, AND production policies. Planning establishes the parameters WITHIN which the supply CHAIN will operate.


A computer, or softtware package, that provides a specific kind of service to client software running on other computers. The term can refer to a particular piece of software, for example a Web server, or to the machine on which the software is running. A single server machine could have several different server software packages running on it, thus providing many different servers to clients on the network.


Are expense items or non-productive materials (they do not become part of the end product).


Target inventory LEVEL

Total quality control

Total Quality Control – the objective of eliminating ALL possible sources of defects FROM the manufacturing process.

Tracking signal

The ratio of the cumulative algebraic SUM of the deviations BETWEEN the forecasts AND the actual VALUES TO the mean absolute deviation.


Unconsumed forecast

The unconsumed forecast IS planned items which are NOT assigned TO a particular order.

Universal product CODE


Vendor capacity planning

Vendor capacity planning is the process of assessing and allocating the capacity earmarked by the vendors.

Vendor rating
Vendor scheduling



same AS idle time.

Wand readers

Devices used FOR reading bar codes.

warehouse management system (WMS)
warehouse zone

wave picking

Wave picking IS a warehouse ORDER picking scheme IN which ALL zones are picked AT the same TIME AS required TO fill multiple item requirements FOR a given ORDER OR destination.

what-IF analysis

The simulation of the outcome of various scenarios AND alternatives WHEN changes TO the inputs AND parameters IS done.


A listing of EVERY parent item that calls FOR a given component, AND the respective quantity required, FROM a BOM file.

WORK assignment

WORK breakdown structure

WORK breakdown structure IS a hierarchical Definition of the tasks AND activities of a project that normally begins WITH the highest-LEVEL activities AND works downward INTO the individual tasks AND components.

WORK center

WORK center scheduling

WORK centre scheduling the PROCESS of scheduling the operations which are TO be carried OUT IN a particular WORK centre.

WORK instructions

WORK instructions are same AS – manufacturing instructions.

Work-to list

Work-to list is a sequence of work to be completed by a particular work center.




Zero Defects
zero inventory
zone picking

Please share and let people know about ERP Dictionary.


Subscribe to our Email Newsletter