Certified Supplier -  Materials Management Vocabulary

 

 

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Carrying Cost
It is the per unit cost of holding inventory for a certain period of time. Usually, it is expressed in terms of percentage of the average inventory
Cartage
A charge made for hauling and transferring goods, on a local basis. It also denotes the physical movement of the goods

Cartel
An association , formal or otherwise of producers of the same commodity to control the market. 
Cash Discount
In order to encourage quick payment by the buyer it is a percentage discount allowed on the invoiced amount
Cash On Delivery
Prior to release of the goods by the carrier , payment through cash mode for goods and transportation cost (total invoiced amount) asked by the seller from the buyer
Categorical Method
A method of rating supplier performance usually on a scale of plus, minus and neutral w.r.t. a list of evaluation factors.
Caveat Emptor
Any purchase is done at the buyer's risk who has to beware ("Let the buyer beware"--Latin)
Centralised Purchasing
When Purchasing for the most of the organisational  requirement  is done by one agency, often called Purchasing department.

Certificate of origin
A document required by customs officials ,identifying the country of origin of imported materials 
Certified Purchasing Supply Manager (CPSM)
A world wide recognised certification program for the purchasing and supply professional conducted by the ISM, USA 
Certified Supplier
A supplier whose Quality assurance system producing reliable product / service are accepted by the buyer. Inspection may not be done for this supplier's product 
Change Order
A written authorization from the purchaser to the supplier on an existing order to change it. It is also called amendment to order
Class Freight Rate
Commodity rates are available only on selected commodities, a class rate can be found for all items shipped. It helps in simplifying the process of providing a specific rate for each commodity being shipped. It's thus a rate resulting from classification rating of the freight.
Coincident Indicator
A measure of economic activity that changes concurrently with changes in the business cycle
Collusion
A secret agreement or cooperation between two or more parties in which parties act in collusion to fix their bids in an advantageous manner eliminating the scope for genuine competitive bidding.
Collusive Bidding
An unholy and illegal practice in which suppliers act in collusion to fix their bids eliminating genuine competition in bidding. It's also known as formation of syndicate or cartel.
Commodity Council
Cross-functional teams and/or multi-division teams are responsible for selecting suppliers, negotiating contracts and monitoring supplier performance including quality and delivery performance
Commodity Freight Rate
It's a transportation rate for a specific commodity, moving between specified points, in a certain direction and for a specific minimum quantity.
The purpose of the commodity rate is to provide a lower rate to reflect the economic benefits to the carrier resulting from more predictable and larger quantity movements over certain routes.
Commodity Segmentation
It refers to dividing a firm's total spending into categories of goods and services in order to leverage spending and increase purchasing efficiency. Common practice involves using a matrix to divide the commodities into four quadrants : Acquisition - low risk, low value items, Critical - high risk, low value, Leverage- low risk, high value and Strategic-high risk, high value items
Common Carrier
A carrier that serves all kinds of customers but carries only the types of freight for which it holds itself out to carry. It helps in enabling transportation to the needy, knowledge of rates, provision of service on a schedule, service availability in a designated area and most importantly service for a given class of commodity and movement
Common Market
A market with no internal tariffs, common external tariffs and free flow of labour and capital
Comparative Advantage
A competitive strength that a country enjoys in producing a product more efficiently than other countries
Competent Parties
Parties entering into a contract must be in a position to enter into contract and execute it
Competitive Bidding
It's a method of awarding a contract in which bids are invited from competing vendors through a notice inviting bids. Usually , the award is made on the lowest price offering bidder.
Competitive proposals
A proposal , in response to the bidding invitation by a vendor in the face of other bidders proposal out of which one or more may enter into contract is a competitive proposal
Concealed Damage
Damage to the contents of a package that seems to in good condition externally
Consequential Damages
Loss of profit / earning incurred by purchaser as a result of a seller's breach
Consideration
An exchange of value for value, required to form a valid contract
Consignee
The person or organisation to whom a shipper directs the carrier to deliver the goods, generally the purchaser of the goods
Consignment Buying
A method of procurement in which a supplier maintains inventory on the premises of the purchaser. The purchaser pays for the goods only when goods are used or issued from the stock
Consignor
The shipper of a specified quantity of goods
Consolidation
Combining less than truck load shipments from various facilities at a centrally located point and transporting them as a large shipment, generally at a lower freight rate
Consortium
A small group of businesses that join forces in purchasing selected products
Containerization
Prevalence of utilizing sealed, standard size containers for safe keeping of materials during transportation. Containers can be used for rail, motor and water transportation with efficiency
Contract
A written or oral between two or more competent parties that defines a job or service to be performed and which is legally enforceable
Contract Administration
The management and overall monitoring of  all the facets of a contract to ensure that the performance of the contract is in accordance with the contractual commitments
Contract Career
A carrier that provides transportation and/or related services to selected shippers according to a contractual agreement.
Contract Type
Determined by the pricing term the types can include Fixed price contracts, cost based contracts, Incentive contracts.
Cooperative Buying
An approach in which several organisations jointly buy selected items. They may utilize a centralised buying service
Cost & Freight
Usually done in international trade where a supplier quotes a price that includes the cost of the goods and the cost of transportation to the indicated point of destination
Cost containment
A detailed plan to restrict costs and purchased prices within certain target limits over a period of time
Cost reduction
An effort to trim the costs associated with acquiring a certain product or service
Cost,Insurance,Freight
Also referred as Landed price, the CIF value is an international shipping term that obligates a seller to transport the goods to the destination country, insure them to the benefit of the buyer, pay the freight charges and provide documents necessary to clear the import of the goods.
Cost -Ratio method
A method of supplier performance evaluation that measures the cost of quality, delivery, and service separately for each supplier
Cost Reimbursement Contracts
A type of contract that allows for payment of permissible , allocable and reasonable costs incurred in the execution of a contract in a way that such costs are permissible under the contract These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed without the approval of the purchaser. The contracts include i) cost without fee ii) cost sharing iii) cost plus incentive fee iv) cost plus award fee and v) cost plus fixed fee
Council of Logistics Management (CLM)
A professional body engaged in promoting the understanding and development of the logistics concepts
Counter Offer
An offer to enter into a transaction on terms other than those originally proposed
Counter Purchase
A form of counter trade that takes place  when an organisation agrees to purchase a specified volume of materials from a country in return for sale made to that country
Counter Trade
A transaction under which an organisation buys goods from a country in exchange of the sales made to that country
Cover
An alternative available to a purchaser in the event of a breach of contract by the seller. Purchaser is entitled to get the  material from the open market at the risk and cost of the seller
Cross Docking
A logistic distribution system in which freight moves in and out of a distribution center or point without ever being stored there

 

 

 

 

 

 

 

 

 
 
 

 

 

 

 
 

Cumulative discount
A discount on price based on the quantities of an item purchased over a period of time rather than one time


Customs Broker
An individual or an organisation licensed by a government to assist in processing incoming shipments through customs and receives commission
Customs Invoice
A pro forma invoice used by the customs service of a country  to determine the source , classification and value of goods being imported to compute duties
Cycle Counting
A physical stock checking system in which the whole inventory is divided into groups and items under each group are counted physically according to certain fixed calendar schedule. Counting goes on continuously without interruptions
Cycle Stock
The moving portion of an inventory that's that part of inventory for which there is regular withdrawal and replenishment
Cycle Time
The time required to complete a process, such as replenishing inventory

 

 

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