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Supply Chain Glossary: Key Terms You Need to Know about Software and Processes to Thrive in the Supply Chain World

We don’t have to tell you twice, the supply chain space is complicated and multi-faceted. Getting a handle on how your supply chain works, ensuring you’re collaborating with the right partners, and keeping distribution operations running takes a lot of work! And while keeping your business thriving is critical, so is your knowledge of certain key terms regarding software and processes. So here is your very own Supply Chain Glossary with detailed explanations to ensure you’re always in the know.  This glossary will set the stage for future discussions regarding software models, continuous improvement (CI) processes, and center of excellence (COE) concepts.

Software & Other Model Considerations

  • IAAS stands for Infrastructure as a Service, which is a kind of cloud computing service. It provides users with much-needed computing, storage, and networking resources as needed, with payments made as-you-go. 
  • PAAS stands for Platform as a Service. It is a comprehensive development and deployment environment hosted on the cloud that provides users with a variety of resources, like delivering simple cloud-based apps to more complicated enterprise applications. 
  • SAAS stands for Software as a Service. SAAS is a way of delivering software without the need for installation or maintenance. Instead, the software is housed in the cloud and can be accessed via an internet connection.
  • RAAS stands for Robot as a Service. With RAAS, users can employ robotics within their operations without the infrastructure needed for traditional robotic implementations. RAAS is like giving users access to a cloud-based robotic rental system. 

These are terms you are likely very familiar with, but it never hurts to refresh your memory. Though most glossaries focus on single terms, this supply chain glossary will also go over larger concepts that are frequently highlighted in the supply chain space. Read on for details on Continuous Improvement and Center of Excellence, both terms you’ll want to be acquainted with.

Continuous Improvement (CI)

CI, also known as Kaizen, is an ongoing process focused on the daily practice of making small changes to achieve improvements. Low-cost, common-sense solutions are implemented to generate change. The first step to success lies in standardizing processes. With standardization it becomes easier to see if anything stands out, allowing you to root out problems early on so they can be addressed swiftly. 

The five main elements of Kaizen are

  • Discipline
  • Teamwork
  • Morale
  • Quality Circle
  • Improvement Suggestions

The goal is to use these elements to help improve a company’s performance by having all employees participate. CI can be used to help operations set up new habits easily, simplify workflows, improve accuracy, and eliminate risk factors and waste while motivating employees to do their best work. There are six steps to the Kaizen approach:

  • Identify an opportunity
  • Explore new ideas
  • Organize the objective into separate deliverables
  • Plan for each deliverable
  • Test, monitor, and adjust
  • Move on to the next objective

By breaking out an objective into small digestible steps and involving the entire staff, you can implement changes that will revolutionize your productivity and output. 

Center of Excellence (COE)

COE can be a team, shared facility, or an entire entity that provides leadership, best practices, research, support, and training in a predetermined focus area. COEs bring in expertise that can be shared via different partnerships as well as with long-term employees. In the supply chain space, one of the tenets of COE lies in having flexibility within your operations so that you may adapt to the ever-changing landscape without falling behind. COE can provide operations with:

  • Dedicated lean warehouse and small and medium-sized enterprises (SMEs) resources
  • Data accuracy and control
  • Lean training as needed
  • Expert facilitation of SMEs in lean tools
  • Continuous Improvement as a rule

Taking these concepts to determine what to outsource vs. manage in-house is important to consider as we evaluate cost structures, internal strengths, and the long-term success of your supply chain operation.  Also, having these tools in your toolbox will help determine how to implement and maintain success in your supply chain.

As you can see from this supply chain glossary, some terms are interconnected. That is why a thorough understanding of each one is so important. Are your operations functioning under the best conditions? Are your practices lean and efficient? If you’re not sure, or if you know they aren’t, we can help. Reach out for a supply chain evaluation and let’s see if together we can make your supply chain your differentiator. 


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