Aligning your metrics with your Customers and Suppliers As a second part to the article on aligning...
Acronyms in Supply Chain
API : Active Pharmaceutical Ingredient(s)
DRP: Distribution Requirement Planning
ERP: Enterprise Resource(s) Planning
MES: Manufacturing Execution System
MPS: Master Production Schedule
MRP: Material Requirements Planning
QMS: Quality Management System
RCCP: Rough Cut Capacity Planning
S&OP: Sales and Operations Planning
TMS: Transportation Management System
WMS: Warehouse Management System
S&OP
Sales & Operations Planning
Process to support business leaders making decisions on topics such as balancing demand plans with supply plans, making adjustments in execution, introducing new products and phasing out of old products, and so on.
O2C
Order to Cash (Cycle)
Time from order receipt to fulfillment and cash inflow. Shortening cycle aims at improving cash flow position and usage, increasing customer satisfaction and overall operational efficiency.
C2C
Cash to Cash (Cycle)
Time period spanning over cash out to suppliers to cash in from customers, thus measuring how cash is tied from production into sales.
RCCP
Rough Cut Capacity Planning
Planning over longer term in order to balance required and available capacity.
E2E
End to End (Planning)
Involving the entire supply chain processes, information flows and execution activities. Such visibility avoids siloes and spans over demand and design, through production and distribution, to delivery and after sales service.
MRP
Material Requirements Planning
Plan and manage procurement and scheduling of materials needed for production; ensure material availability in quantity and timing, optimize inventory levels, reduce stockouts.
OTIF
On Time (and) In Full
Measure the ability to fulfill delivery promises made to customers, simultaneously supplying what they required and when they required it.
VMI
Vendor Managed Inventory
Inventory management technique where supplier of goods takes responsibility to manage and optimize downstream inventory holdings.
FTL
Full Truck Load (or Truckload)
Transportation of goods in a fully loaded trailer in order to carry as much load as available space to increase efficiency and reduce item cost when moving goods, while tending to a sustainable footprint.
MPS
Master Production Schedule [or Scheduling]
Medium term horizon, aggregate and optimize production plan to fulfill demand, leveling and smoothing load with available capacity.
APS
Advanced Planning System
Streamline demand forecasting, supply planning, production planning, inventory management, distribution and logistics execution; improve planning efficiency and effectiveness to optimize resource utilization.
MES
Manufacturing Execution System
Capture and process real time data to monitor and control production activities at shopfloor; bridge gaps between enterprise level systems and shopfloor, provide real time visibility and control.
ERP
Enterprise Resource(s) Planning
Automate business processes e.g. finance, accounting, purchasing, sales, distribution, human resources, customers; record transaction unified and centralized, facilitate data flow and communication, data repository.
LIFO
Last In First Out
Account for inventory so that cost of most recently item put into stock is expensed first.
FIFO
First In First Out
Account for inventory so that cost of item put into stock first is expensed first.
QMS
Quality Management System
Method and system to formally document processes, procedures, responsibilities and accountability for quality assurance and quality control.
JIT
Just In Time
Inventory management strategy where goods are received as closely as possible to timing when they are actually needed.
MTS
Make to Stock
Production approach where goods are manufactured on a larger scale along anticipated consumer demand. It requires to keep finished goods as stock on-hand in order to deliver at the time of their purchase.
MTO
Make to Order
Production approach where goods are manufactured once customer places the order, generating additional delivery leadtime to customer while enabling customization.
PO
Purchase Order
Commercial document issued, usually after quotation, by buyer of goods to its seller specifying which goods, which quantities, which unit price and which delivery time.
MOQ
Minimum Order Quantity
Lowest quantity of goods a buyer must purchase at seller’s in order to complete such order.
API
Active Pharmaceutical Ingredient(s)
Component of a drug product, such as tablets, capsules, injectables, or cream, that provides the intended effect and treatment.
OPEX
OPerating EXpenses (or EXpenditure)
Costs incurred for the production of goods and services, which include among others materials, labour, packaging, maintenance, transportation and shipping, warehousing.
DP
Drug Product
Finished dosage form of a drug, that is in its final form and ready for consumption by patients
FP
Finished Product
Goods having completed the production flow, that is a the finished dosage form of a drug packaged into its required form for sales, handling and distribution.
SO
Sales Order
Commercial document issued, usually after purchase order, by seller of goods to buyer to confirm delivery of items, quantity unit price and timing.
SFP
Semi-Finished Product
Goods having completed part of the production process, then put into subsequent steps until completion into finished produce.
GxP
Good … Practice(s)
Guidelines and regulations applied in pharmaceutical industry to foster patient safety as well as product quality and compliance.
GMP Good Manufacturing Practice. GDP Good Distribution Practice. GLP Good Laboratory Practice. GCP Good Clinical Practice
DS
Drug Substance
Drug Substance refers to the active pharmaceutical ingredient (API) in a Drug Product. It is the biologically active component that provides the intended therapeutic effect. Within the life science supply chain, the Drug Substance is manufactured, tested, and transported before being formulated into the Finished Product (FP), which is then packaged and distributed for patient use.
DRP
Distribution Requirement Planning
Distribution Requirements Planning (DRP) is a systematic approach to managing inventory levels and distribution logistics across the supply chain. In the Life Sciences industry, DRP ensures that the right products are available at the right locations to meet patient and customer needs. It integrates demand forecasts, inventory data, and transportation schedules to optimize stock replenishment and distribution efficiency. DRP is critical for minimizing delays, reducing costs, and ensuring the timely delivery of high-quality, compliant products to healthcare providers and end users.
LRP
Long Range Plan
Long Range Planning (LRP) is a strategic process that defines an organization's vision, goals, and resource allocation over an extended time horizon, typically 3 to 10 years. In the Life Sciences industry, LRP focuses on forecasting market trends, anticipating regulatory changes, and aligning investments in R&D, manufacturing, and commercialization with long-term objectives. It provides a framework for making informed decisions on product pipelines, manufacturing capacity expansion, and innovation priorities. Effective LRP ensures the organization remains agile, competitive, and prepared to meet future healthcare challenges and opportunities. Once again, projected demand is at the center.
WMS
Warehouse Management System
WMS is a software solution designed to optimize and manage warehouse operations, from receiving and storing inventory to picking, packing, and shipping orders. In the Life Sciences industry, WMS ensures compliance with stringent regulatory requirements by providing traceability, accurate inventory tracking, expiry date management and quality control. It integrates with other supply chain systems to streamline workflows, enhance efficiency, and reduce errors. A robust WMS is essential for maintaining the integrity of temperature-sensitive products, ensuring timely deliveries, and supporting patient safety.
TMS
Transportation Management System
TMS is a software platform that helps plan, execute, and optimize the movement of goods across the supply chain. In the Life Sciences industry, TMS ensures the safe and efficient transportation of products, including temperature controlled and regulated items, while maintaining compliance with stringent quality standards. It provides visibility into shipping processes, streamlines carrier selection, and enables real-time tracking. A well-implemented TMS reduces costs, minimizes transit times, and ensures critical products reach their destination safely and on time to support patient needs.