3D Printing

3D Printing (also known as additive manufacturing) emerged as a technology in the 1980s, and continues to make progress as a viable industrial production process.

Before 3D printing, most component parts started as solid blocks of material, and a traditional manufacturing technique such as milling or turning would cut (or ‘subtract’) material. In contrast, 3D printing creates objects by adding successive amounts (usually layers) of material until a fully formed object exists. 3D printing technology continues to advance in many areas for example, more printable materials, higher precision, better repeatability, faster printers, lower cost machines. These advances accelerate the uptake of 3D printing.

4th Party Logistics Provider


A 4PL (Fourth Party Logistics Provider, sometimes also referred to as an LLP or Lead Logistics Provider) is a type of supply chain services company. A 4PL adds additional services compared to a 3PL. A 4PL will take over all the management of a company’s supply chain process, including acting as point of contact for customers. A 4PL will usually offer strategic level supply chain expertise as well as capacity to manage, monitor and improve operations.


Abandonment means stopping, often before completion. In the oil and gas sector, abandonment is the name of an end of life process for an uneconomical reserve. This includes elimination of the extraction capability that removes the oil or gas from the field, attention to environmental and clean-up requirements, and disposal of the residual property and/or resource.

Acetic Acid

A basic chemical building block, acetic acid is liquid at room temperature, and familiar in the home as vinegar. It is manufactured from methanol and used in a variety of applications including the foodstuffs industries, manufacture of paints, dyes and pharmaceuticals, and the production of PET.

Activity Based Costing


This costing method identifies and estimates the cost of each activity (including use of resources), and allocates costs to each product and service as a direct consumed cost. This enables companies to identify non value-add costs, the profitability for each product and service, and areas for process improvements.


A motor for inducing movement in a mechanism or system. An electronic control system uses actuators to adjust a device or machine, for example, to open or close a valve.

Added Value

The difference between a product’s final selling price and the costs involved in making the particular product. For a business to survive, the added value of a product or service must be more than the cost. Examples of the expertise which allows companies to make a profit in this way include innovative design, new production processes, efficient ordering and delivery processes, using new technologies or materials, or supplying complementary services.

Advanced Metering Infrastructure


A integrated network of devices that allow two-way automated communication between a utility smart meter (located at the customer site) and a utility company. Information allows both provider and customer access to real-time data about how much power is being used and at what time of the day. The system also communicates pricing and energy information from the utility company to the consumer.

Advanced Planning and Scheduling


In manufacturing environments that are subject to fluctuations of demand and supply the APS modules enable companies to better tune their production and distribution facilities to better meet the demands of customers.

Advanced Planning System

Also referred to as Advanced Planning Engines, Advanced Planning Systems are a new generation of planning and scheduling tools, which unlike MRP II, includes constraint models that deal with both materials and capacity. These technologies can be applied along a continuum extending from short-term plant-floor scheduling to strategic planning of supply chains.

Advanced Product Quality Planning

A structured method of defining and establishing the steps necessary to ensure that a product satisfies the customer. By moving quality efforts into planning and prevention, this multistage process identifies and anticipates potential problem areas.


The aftermarket is the market for parts used to maintain, repair or enhance purchased goods. For example, accessories such as windscreen wipers or exhaust pipes for cars.

Agile manufacturing


AM shares some concepts with the agile development methods common in high tech industries, such as flexibility and rapid iterations. But AM must also equip and operate production facilities with tools, techniques, and initiatives that enable it to thrive under conditions of unpredictable change. AM enables a plant to achieve rapid response to customer needs, and quickly reconfigure operations  and supply chain relationships to respond rapidly to unforeseen shifts in the marketplace.

Aircraft on Ground


AOG is a term in aviation maintenance indicating that a problem is serious enough to prevent an aircraft from flying.


Airworthiness defines whether an aircraft is capable of safe flight. When registered, an airworthy aircraft receives a certificate of airworthiness from its national registration authority. This certificate remains valid if specified maintenance procedures are followed. It is illegal to fly an aircraft without an airworthiness certificate.


The albedo is the fraction of light that is reflected by a body or surface, commonly used to describe the reflective properties of planets, satellites, and asteroids. The normal albedo of snow is nearly 1.0 whereas that of charcoal is about 0.04.

American Petroleum Institute

The American Petroleum Institute is an organization whose members have a common interest in the Oil & Gas sector, and which provides information on a wide range of environmental, performance, health and safety and other matters of interest to that industry.

Analog signal

An analog signal is any form of data transmission where the pneumatic, mechanical, or electrical energy signal varies continuously in direct proportion to the intensity of the physical quantity, property, or condition represented. This is typical of process Industries like Oil/Gas, Pharma, Food and Chem. Many sensors create analog signals. If required, conversion from analog to digital usually possible.


Analytics is a short form of ‘Data Analytics’. Analytics means the use of data warehousing, data mining and online analytical processing to rapidly analyze large volumes of structured and unstructured data from multiple types of systems. Data analytics is used to interpret data and identify meaningful insights, trends, patterns and information for example, relationships between production machine settings and the quality and quantity of output; or customer buying patterns by category.

Application-Specific Standard Products


An ASSP is an ASIC which has sufficiently widespread application that it can be sold as a standard product. Examples include chips to drive USB or Bluetooth interfaces, and chips used to run digital communications inside an automobile.


Association of Southeast Asian Nations. Created in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand, by 2021 ASEAN had grown to include Brunei, Vietnam, Laos, Myanmar and Cambodia, representing nearly 700 million people.  Extended groups have been used for economic development discussions –  ‘ASEAN plus 3’ adds China, Japan, South Korea;  ‘ASEAN plus 6’ further adds India, Australia and New Zealand.

Assemble to Order


Assemble to order is a production method that occurs when an item is assembled after receipt of a customer’s order. The key items used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product.

Asset turnover

Asset turnover measures the efficiency of the use of assets to produce sales. It is a ratio which shows how many dollars of sales were generated by each dollar of assets. Calculate by dividing net sales by average total assets.


(1) Use of devices, especially mechanical and electronic, to reduce human activity required for procedures, processes, or operation of equipment. (2) The entire field of investigation, design, development, application, and methods to render or make manual processes or operations partially or fully automatic.


Strictly an Airborne Warning and Control System, the term AWACS is widely used to include the aircraft which carry the radar and control systems, and provide the capability to direct military operations from high altitude hundreds of miles away.


(1) in logistics, backhaul refers to the practice of maximising efficiencies through the use of return truck loads. For example, a factory might use a truck to collect new parts from a supplier after it has completed delivery of a batch of finished products to a distribution center. (2) in telecoms, the backhaul network is the part of the network which connects the ‘core’ (or ‘backbone’) network to the edge networks.

Balanced Scorecard

The balanced scorecard is a widely used strategic planning and management system. The original concept identified four perspectives (Customer, Process, Financial, Learning&Growth) as a structure for strategic metrics to cover an entire business. Balanced scorecard systems have built on this concept to help align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

Bar Coding

Bar Coding uses machine readable patterns to label items. The first barcodes, consisting of varying width bars and spaces, remain very significant in the market, even though new formats have been proposed.


A volumetric unit of measure which when applied to oil is equivalent to 42 US gallons or 34.97 Imperial gallons. Note that a barrel has different definitions when used for materials other than oil.

Barrel of Oil Equivalent


The Barrel of Oil Equivalent is an energy unit that is convenient for expressing the quantity of oil or gas in common terms. It is equivalent to 5.8 million BTU or 6.1 GJ. In terms of oil, a BOE is the energy released (approximately) by burning 42 US gallons (one barrel) of crude oil, and in terms of natural gas is the energy equivalent of about 6000 cubic feet.

Base Inorganics

All inorganic chemicals used in industrial production can be classified as either Alkali Chemicals, or Base Inorganics. Base inorganics are widely used as additives to petrochemical feedstocks, and also in applications such as papermaking, electroplating and batteries.

Batch Process Manufacturing

Input materials are divided into distinct batch quantities. Each batch is processed and tracked individually  to account for variations in recipes and customer attribute requirements. Processing can be through automated systems twenty-four hours a day, or by different steps for each batch.

Batch Production

In batch production, a quantity of ingredients, or a number of identical parts, are grouped into a batch which travels through the plant as one unit. This can improve efficiency and simplify scheduling. The choice of the optimum quantity of materials or number of parts in a batch (the batch size or lot size) is important. It depends on the capacity and machines in the factory, the mix of orders received, and the extent to which parts need to be customized.


The ore from which aluminum is extracted.


Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to that of similar companies. The aim is to find the industry standard or best practice, as well as to demonstrate to investors how well their company is performing in key areas.


Benzene is a colourless liquid used in production of many chemicals including polystyrene. It is a volatile hydrocarbon which can be extracted from coal but since 1950 is mainly extracted from crude oil. It is toxic and  a known carcinogen, so there are strict controls on benzene emissions.

Bid-to-win ratio

The bid-to-win ratio measures the success rate of a company’s attempts to win sales. Bid-to-win is an important metric for businesses where substantial costs are incurred before a contract is awarded. This is often the case for sales of high value capital goods (for example, production machinery), engineer-to-order businesses (for example, power generation equipment), and project oriented businesses (for example, heating and ventilation installation).

The sales cycle can include extensive planning, design and configuration work, often with multiple versions to track changing specifications. To manage risk, selling companies can treat custom design work as a paid service, and can structure products for configuration.

Big Data

The vast amount of unstructured business data that exceeds convention processing power. Big Data can be characterized by the 3Vs – high-volume, velocity and variety. Volume and velocity refer to the speed at which data is generated in real time from each and every aspect of operations. Variety refers to the diverse sources of this data: sensors on machines and many other assets, unconnected software applications, employee emails, social media etc.

Bill of Materials


A listing of all the subassemblies, parts, and raw materials that go into a parent assembly. A Bill of Material is held in the organization’s ERP system and provides a link to relevant costing information held by the F&A group. The document is finalised when a new product is released to production at the end of the product development process.


Biobutanol is produced from renewable biomass sources. When produced from oil sources, it is called butanol. Biobutanol has demonstrated potential to reduce automotive carbon emissions, for example, as an additive or blend with gasoline. Recent advances with “”designer microbes”” enable use of lower-cost biomass feedstocks – for example, those with tough cellulose fibers – for biobutanol production at gasoline-competitive costs.


Biofuel is any liquid, solid or gas that is obtained from living (or recently living) materials and that can be processed or ignited to provide energy. In contrast, fossil fuels are ancient organic materials that have built up eons ago and can now be mined as oil, gas or solids (coal).


Biologics are biological products used in medicine. Unlike drugs which are chemically synthesized, biologics are created from natural source materials. Biologics include vaccines, blood, and blood components as well as products based on genetic and other biotechnologies.


The use of biological processes or organisms for human benefit. Genetic engineering and the bacteria used in sewage treatment are two examples.


A bottleneck in a production system is any point where demand exceeds capacity. It is important to identify and maximize use of bottlenecks – but only if the system is producing the right products.

Brand extension or Brand Stretch

This is a marketing strategy used by CPG companies who seek to extract maximum value from established brands by using the same brand name in a new product category. For example, the Virgin family of companies started as a record shop, then became a record label and now has businesses in a very diverse set of markets from transport to services.


An acronym for Brazil, Russia, India, and China. In 2003, these countries were identified as developing nations with large growth potential. At that time, economic forecasts indicated that BRIC together would become wealthier, and control a greater proportion of global manufacturing and services, than the traditional leading Western economic powers at the time.


A broker is an intermediary between buyer and seller. A broker facilitates and enables a buyer and seller to complete a sales transaction. In strict legal terms, this is different to an agent, who acts on behalf of either buyer or seller. Brokers earn the fees and commissions they charge in many different ways, ranging from research, market knowledge and contacts to promotional programs, product management and sales administration services.

Business Intelligence


Business Intelligence describes a category of software products that is capable of analysing data sets, that may be very large, and identifying patterns or relationships within the data that would not otherwise be apparent. BI offers significant benefits for manages or executives trying to understand data that describes complex and often changeable behaviour.

Business Jet

Business jet describes an aircraft, usually of smaller size, designed for transporting groups of business people. The more formal terms of corporate jet or executive jet tend to be used by the firms that build, sell, buy and charter these aircraft.

Business Process

A business consists of a set of interconnected business processes. Each business process is a group of related tasks and activities. Visualization of business processes (for example, as a flowchart) helps management teams analyze, improve and optimize performance, and make changes to support strategic initiatives.

Business to Business


This term describes a very common business model adopted by many manufacturers who sell primarily or exclusively to other manufacturers, rather than to consumers. In contrast, a Business to Consumer (B2C) company sells its products direct to consumers.


A by-product is an incidental or secondary product made in the manufacture of something else. A by-product can sometimes be useful and marketable, or it may be considered waste.


A cache acts as a buffer. In computer systems, ‘cache’ is short for ‘cache memory’, which acts as a buffer for transfers to and from memory systems. By building cache from very fast memory, performance is improved, especially when data or instructions are repeatedly required.

Capacity Utilization

Capacity Utlilization is usually expressed as a percentage which measures how much of a total manufacturing output capacity is being used at a given point in time. It can be used to measure a machine, production line, factory, company, industry or sometimes country.

Capital Expenditure


CAPEX is money spent by a company to acquire or upgrade physical assets, from trucks, to machinery, to whole factory facilities. Capex is recorded separately from day-to-day costs, because tax authorities often encourage this investment with special allowances; and also because it is helpful to view the cost of a capital item as if it is spread over the useful life of the item. See also Capital Purchase.

Capital Purchases

These are investments in production plants, equipment, buildings, and other fixed assets. These assets are intended to raise the revenue-earning capacity of a company. A capital purchase can be paid for from cash reserves and/or by borrowing money. Either way, accountancy procedures will help show the value of the asset, and its annual cost to the business, spread over its useful life. See also Capital Expenditure.

Carbon capture and storage (CCS)

CCS refers to several technologies and techniques which allow companies to ‘catch’ carbon dioxide gas which would otherwise be emitted into the atmosphere by industrial facilities and power plants. In 2020, the Global CCS Institute identified 59 CCS facilities worldwide with a total capture capacity  of 127 million tonnes p.a. (compare 2016 emissions due to human activity of 35 thousand million tons).

Carbon footprint

A carbon footprint is the total set of GHG (greenhouse gas) emissions caused directly and indirectly by an individual, organization, event or product (UK Carbon Trust 2008). An individual, organisation or national carbon footprint is measured by undertaking a GHG emissions assessment.

Carbon Sequestration

Carbon sequestration is achieved when carbon is removed from the atmosphere (as CO2) and stored, or separated from fuels or flue gases and stored. Carbon sequestration is either technological (usually called carbon capture and storage) or biological (biological carbon sequestration). The viability of carbon sequestration depends on the cost of the process and the policy context that determines the value of sequestered carbon.


The company that physically moves freight (the shipper is the carrier’s customer).

Cash-to-cash cycle time

Cash-to-cash cycle time measures the time from when a manufacturer pays its suppliers for material to the time it is paid by customers for the products that used those supplies or materials. This cash flow measure can range from many months in complex long lead-time industries to negative numbers for companies such as Dell Computers, which collects money from its customers before it pays suppliers for the parts in those products.

Category Management

A category in the retail environment is a group of similar products that may require in-depth knowledge and understanding. Management of the retail environment as a series of categories enables retailers to treat the business as a series of strategic business units which can be assigned a set of resources and managed on the basis of profit. Category managers may compete internally for additional resources such as floor area or marketing support for example.

Cellular Manufacturing

Cellular manufacturing is a manufacturing approach in which equipment and workstations are located in a number of close-proximity groups (‘cells’). Each cell is equipped to make a component or sub-assembly, or complete a standard sequence of process steps. This concept can improve factory efficiency, both by reducing distance travelled by materials, also by making it easier for workers to communicate about problems, changes and plans.


Certification is the procedure which enables a responsible authority to confirm a product, process or service meets relevant standards. In aviation, certification is a regulatory obligation.  A Certificate of Airworthiness is issued or validated by the state in which the aircraft is registered, and remains effective only if maintenance is performed according to approved standards.

Changeover Time

Changeover time is the time required to modify part or all of a production system to make a different product. Production systems designed for high volume standard products (food, consumer goods) are likely to have larger changeover times than production systems designed for smaller batch sizes and product variants.

Chapter 11

Chapter 11 is part of the US Bankruptcy Code which gives time to reorganise to a business facing bankruptcy. The intention is to allow the business to survive and pay creditors according to a reorganisation plan agreed at a confirmation hearing in a federal court.

Charge Coupled Devices


CCDs are silicon-based light detectors, widely used in astronomy for imaging of visible, ultraviolet and infrared radiation. They are also used in commercial digital cameras. The introduction of CCDs for astronomical imaging in the late 1970s, as replacements for the photographic plate, made possible many of the breakthroughs that have shaped modern astronomy.


Chlorine is a greenish-yellow gas which is toxic and corrosive. It irritates and can damage the respiratory system and the eyes. Used carefully and in suitable amounts, it disinfects drinking water and keeps swimming pools clean. Chlorine chemistry is used to make thousands of products, from plastic foams to contact lenses. Even when not part of the finished item, it is vital in many production processes – for example, titanium is purified using chlorine.


Classified information is sensitive information to which access is restricted by law or regulation to particular classes of persons. A hierarchical system with several levels of sensitivity is used by virtually every national government.

Closed loop control

Closed loop control is a method of automation in which part of the output is fed back to the input to achieve a regulatory action. For example, a closed-loop heating controller might measure a room temperature and switch heating on if the temperature is below target. In contrast, an open control would switch heating on for preset time periods without measuring the temperature.

Cloud computing

Cloud computing delivers computing services such as servers, databases, networking, and software over the Internet. Providers of cloud computing have built many large data centres around the world, equipped with banks of networked computers. They have developed technology to give customers access via the Internet to buy and use capacity as needed, usually on a ‘pay-per-use’ basis. To access cloud-based systems, all that is needed is a PC or phone and an Internet connection, so businesses can reduce investments in servers and other IT equipment.


A co-product is a product that is usually manufactured together or sequentially with another item because of product or process similarities. For example, an oil refinery produces a number of co-products such as gasoline, kerosene and naptha.

CO2 Equivalent Emissions

CO2 Equivalent Emissions is a standard which allows comparison of different amounts and types of greenhouse gas and particulate pollution. A figure for CO2 Equivalent Emissions is calculated by determining the global warming impact of each type of emission, and converting this to the amount of CO2 which would have the same impact. Adding these CO2 equivalent numbers gives a single CO2 Equivalent Emissions figure to enable legitimate comparisons between processing facilities, industries, and countries.

Coaxial cable 

Coaxial cable (often ‘coax’) offers high-data rates and high immunity to electrical interference. It is used to connect data and communication devices. It consists of (1) an inner wire surrounded by (2) a layer of insulating material, then (3) a concentric layer of conductive material, then (4) an outer cover. The conductive material (3) shields the wire (1) from interference.

Collaborative Planning Forecasting and Replenishment


CPFR is a concept which aims to lower costs and improve efficiency by enabling cooperation between participants in a supply chain. Best known in retail environments, CPFR requires shared or networked IT systems to link trading partners. This enables continuous update and visibility of inventory and supports rapid response to changes in demand. Efficiencies come from lower inventory, logistics, and transportation costs for all trading partners.


A commodity is a product that is the same no matter who produces it, such as petroleum, copper or milk.

Component Supplier Management


CSM is an approach in which organized product information supports choice of standard parts and production processes, and reuse of existing designs. Widely used in the high-tech industry, CSM encourages use of parts which have more than one supplier, and helps avoid proliferation of components and suppliers.


Composite materials (or composites for short) are engineered materials made from two or more constituent materials. There are numerous composites, but common composites are advanced thermoset systems, usually incorporating aramid fibre and carbon fibre in an epoxy resin matrix.

Compound Annual Growth Rate


CAGR is used both for historic review and future business planning. CAGR converts the up-and-down nature of most investment and market value curves into a single figure. The CAGR is the annual percentage growth rate which, if it occurred every year over the time period being reviewed or forecast, would convert the initial value into the final value.

Computational Fluid Dynamics


CFD uses mathematics and software to simulate and visualize the behaviour of gases and liquids. Most practical problems can only be solved by treating the fluid as a large number of connected cells, calculating a small step change for each cell, and repeating the calculation for the next step.

Computer Aided Design


CAD is the use of computer technology to help design engineers develop and specify a component or product. Some CAD systems are specific to particular disciplines, for example, shipbuilding, or process plant. General purpose systems support both two dimensional (2D) and three dimensional (3D) representations, and are often linked to other systems which use product information.

Computer Aided Engineering


CAE is the use of computer technology for analysis and error-checking of a design. This may include strength performance and manufacturability assessment.

Computer Aided Manufacturing


CAM systems use computers to help develop instructions and programs for automated manufacturing equipment. Programs are downloaded to the equipment, and, due to historic pre-network capabilities, are sometimes referred to as ‘tapes’.

Computer Aided Process Planning


Software-based systems that aid manufacturing engineers in creating a process plan to manufacture a product whose geometric, electronic, and other characteristics have been captured in a CAD database. CAPP systems address such manufacturing criteria as target costs, target lead times, anticipated production volumes, availability of equipment, production routings, opportunity for material substitution, and test requirements.

Computer Aided Production Engineering


Software used to model the factory, production line or work cell layout to simulate production processes and generate efficient operations plans and train operators.

Computer Integrated Manufacturing


A variety of approaches in which computer systems communicate or interoperate over a local-area network. Typically, CIM systems link management functions with engineering, manufacturing, and support operations. In the factory, CIM systems may control the sequencing of production operations, control operation of automated equipment and conveyor systems, transmit manufacturing instructions, capture data at various stages of the manufacturing or assembly process, facilitate tracking and analysis of test results and operating parameters, or a combination of these.

Computer Numerical Control


CNC allows control of motion of a manufacturing machine in an accurate and programmable manner. Machine controllers with this capability were originally called ‘numerical controls’ and this name persists.

Computerized Maintenance Management Systems


Software-based systems that analyze operating conditions of production equipment (vibration, oil analysis, heat, etc) and equipment-failure data, and also apply that data to the scheduling of maintenance and repair.

Concurrent Engineering

Concurrent Engineering seeks the optimum way to save time by performing multiple engineering tasks in parallel. Mainly used in product development and production engineering, the potential scope of concurrent engineering is large, covering development, manufacturing planning, maintenance, environmental impact and recycling planning. All these functions can potentially start in parallel with only partial information, especially when the specialists involved are organized into one team.

Configuration Management

A discipline applying technical and administrative direction and monitoring to: (1) identify and document the functional and physical characteristics of a product or process as defined in its specification; (2) control changes to those characteristics; and (3) record and report changes to processing and implementation status. This is typically implemented via a Product Lifecycle Management (PLM) system.


A rule-based system which allows the user to specify the configuration of a product required by the customer. Product information is coupled with a set of rules that specify, for instance, which combinations of options are possible. Advanced configurators allow the user to specify only some options, then optimise the remaining options for lowest cost or earliest delivery etc.

Configure To Order

Configure to Order (CTO) means assembly of standard products in a way that matches a customer’s specifications.  CTO is generally done at the last step of production on the final assembly line. Up until final assembly, products are built to forecast and at final assembly they are assembled to customer order or to a forecast of products with unique configurations.

Connected Applications

A Connected Application uses the internet and/or other methods of connectivity to receive and/or send information to sensors on ‘things’ such as devices, products or other equipment.


The Consignee is the company or person with legal and financial responsibility to receive goods being transported from sender to receiver.


In business, consolidation refers to the mergers or acquisitions of many smaller companies into larger ones.


A group of individuals or companies formed to undertake an enterprise or activity that would be beyond the capabilities of the individual members.

Constraint-based planning

Method of planning that takes account of all constraints in the production system, including supplier, material stock, factory capacity, warehousing and transportation. It is used to make plans and schedules as realistic and achievable as possible. Advanced planning Systems usually offer this capability.

Consumer Packaged Goods


This category covers a wide range of products available in packages suitable for the individual consumer or family. The category includes food and drink, health and beauty, household cleaners and many other items. The term is in widespread general use and in some cases the context may imply a more specific definition.

Content Management System


A CMS is a computer application used to create, edit, manage, search and publish various kinds of digital media and electronic text. They are used for storing, controlling, versioning, and publishing industry-specific documentation such as news articles, operators’ manuals, technical manuals, sales guides, and marketing brochures.

Continuous Acquisition and Lifecycle Support


CALS is a United States Department of Defense strategy and set of standards for use by the military and their industry partners. CALS is intended to enable more effective generation, exchange, management and use of digital data supporting defense systems.

Continuous Flow Production

CFP is achieved when materials move through the production process without stopping. This is often possible for packaging steps in high-volume production, for example, food and beverage. It is almost built-in to many automated production lines. It lowers inventory levels (no materials are waiting for the next process).

Continuous-Replenishment Programs

Arrangements with supplier companies in which the supplier monitors the customer’s inventory and automatically replaces used materials, eliminating the need for purchase orders and related paperwork.

Contract Research Organisation


An organisation to which pharmaceutical companies can sub-contract activities, for example clinical trial work.

Contrail Cirrus Clouds

Aircraft flying in cold and humid air masses induce contrails that take the form of cirrus clouds which warm the Earth’s atmosphere by reducing terrestrial radiation into space. The clouds also help to cool the Earth by increasing its albedo, but studies have shown that the warming effects dominate.

Core Competency

The processes, functions, and activities in a plant or company that are its lifeblood, namely, the source of its differentiated added-value. Usually, these are the activities for which the enterprise derives the greatest return for its investments or those that intrinsically align the enterprise with its core market.

Corporate Governance

The set of processes, customs, policies, laws, and institutions affecting the way a company is directed, administered or controlled. Corporate governance also includes the goals for which the corporation is governed including the relationships among the many stakeholders. Stakeholders include the shareholders, the management, the board of directors, employees, customers, creditors, suppliers, regulators, and the community at large.

Cost of Goods Sold


COGS are the costs directly associated with making or acquiring products for resale. Costs include materials purchased from outside suppliers and used in the manufacture of the product, as well as any internal expenses directly expended in the manufacturing process, e.g. labor costs.

Cost of quality

The sum of all costs associated with conformance and nonconformance. Cost of conformance includes prevention costs (employee training, tooling maintenance, planned preventive maintenance, suggestion awards) and appraisal costs (inspection, testing, gages and instrumentation, audit expenses). The cost of nonconformance includes internal costs (unscheduled maintenance, pre-shipment scrap and rework, workers’ compensation) and external costs (warranty, customer complaint investigation, rework of returned goods, and product liability insurance).

Crack spread

Used in the oil and gas sector, crack spread compares the prices of just one or two refinery output products to the cost of the crude oil used to make them. Like Gross Product Worth, crack spread can be used to estimate refining margins, however crack spread is intended as a simple, quick measure.

Crack spread is often based on a single product, typically gasoline, but multiple products can be included. The 3:2:1 crack spread is well known in US oil refineries, which generally produce about 2 barrels of gasoline for every barrel of distillates (distillates include diesel and home heating oil). The 3:2:1 crack spread is calculated by subtracting the price of 3 barrels of oil from the total price of two barrels of gasoline plus one barrel of distillates.

Critical Path

In project management, a critical path is the set of tasks which define the shortest possible time to complete the project.  Any delay in critical path tasks will delay overall project completion. To identify the critical path, it is essential to know dependencies between tasks, that is, which tasks must be complete before another task can start. For tasks away from the critical path, there may be room to start late, or take longer than planned, without any impact on the overall project completion.


The logistics practice of transferring materials from an inbound source to outbound transport with little or no storage in between, i.e. across the loading dock.

Cross-Functional Teams

Teams of employees representing different functional disciplines and/or different process segments that tackle a specific problem or perform a specific task, frequently on an ad hoc basis.


Skill-development practices that require or encourage production workers and other employees to master multiple job skills, thus enhancing workforce flexibility.

Customer churn

Customer churn is a short version of ‘customer churn rate’, or ‘customer attrition rate’, and measures the percentage of customers who stop buying from their existing supplier in a given period. Customer Retention Rate measures the same characteristic by measuring retained rather than lost customers. These metrics are especially important in market segments dominated by subscription sales. Customer churn – the percentage of customers lost – is usually analyzed into those customers lost to competitors, and those who simply stop using a service.

Customer Leadtime

The time elapsed from receipt of an order until the finished product is received by the customer.

Customer Reject Rate

A quality measure, expressed in parts per million (ppm), reflecting the number of completed units rejected or returned by external customers. Calculation should include parts reworked by customers. The term applies to all shipped units, including parts.

Customer Relationship Management


CRM systems are IT systems which manage customer information. CRM systems may: track orders, analyze sales performance, manage customer details (like contacts, discounts and billing information) and automate many routine aspects of marketing – like customer segmentation, follow-up emails, monthly newsletters, and other promotional mail outs.

Customer Retention Rate


The number of customers active at some point in the past and still active, divided by the total number of customers at the same point in the past.

Days of Inventory

Days of inventory is a measure used by production management teams. It is calculated by dividing inventory on hand by average daily inventory usage. The result is an initial estimate of the number of days production could continue using just materials on hand. Further insights can be obtained by looking at specific types of inventory (raw-materials inventory, work-in-process inventory, and finished-goods inventory).

Days sales outstanding


Days sales outstanding (DSO) measures the speed at which a company collects accounts receivable from those who owe it money. Some companies may have 40 DSO, while others have created ways to collect money almost immediately on shipment of the product and others may not be paid for months by customers.

Debt-Adjusted Cash Flow (DACF)

DACF is used to reduce distortions in cash flow figures. Distortions arise from different financing methods, and the different accounting methods related to these financing methods. DACF is mainly used when there is substantial debt, large cash flows, and significant impact of tax treatment. This is not unusual in oil and gas companies. DACF smooths out the differences, so that DACF figures can be compared across companies to help assess relative performance and valuations. If companies handle exploration costs in very different ways, then an adjustment for exploration is included in the DACF calculation which is: cash flow from operations + financing costs (after tax), and sometimes + exploration expenses (before tax) +/- working capital adjustment.


In the oil and gas sector, definition is the name of an upstream process which determines how a resource (a reserve of oil or gas) can best be recovered and exploited.

Demand Flow Scheduling Systems

A demand flow scheduling system uses customer orders as the basis for calculating production schedules. This is central to demand-based manufacturing strategies, which generally require good cooperation along the supply chain.

Department of Defence, US, (DoD)

The published mission of the DoD is to provide the military forces needed to deter war and to protect the security of the USA. The military consists of seven armed forces (army, marines, navy, air force, space force, coast guard and national guard); eleven combatant commands with regional or functional roles; plus supporting capabilities.


Desalination a set of processes to remove salt and minerals from seawater. The result is water for human consumption or agricultural use.  Water from desalination is usually more expensive than other sources, so is generally found in regions with limited water supply, and also on ships and submarines.

Design for Assembly

The practice in which ease and cost of assembly is emphasized during the product-design stage.

Design for Logistics

The practice in which physical handling and distribution of a manufactured product are emphasized during the product-design stage.

Design for Manufacturability

The practice in which ease and cost of manufacturing, including quality-assurance issues, are emphasized during the product-design stage.

Design for Procurement

A practice in which product designers work effectively with suppliers and sourcing personnel to identify and incorporate components, technologies or designs that can be used in multiple products. This facilitates the use of standardized components to achieve economies of scale and assure continuity of supply.

Design for Quality

The practice in which quality assurance and customer perception of product quality are emphasized as an integral part of the design process.

Design for Recycling/Disposal

The practice in which ultimate disposal and recycling of the manufactured product are considered during the product-design stage.

Digital marketing

Digital Marketing is the discipline of promoting products and services to consumers through various electronic media, including the internet, mobile, and email.

Digital Mock Up (or Virtual Product Mock Up)

Often called ‘DMU’, these systems generate images of an assembly of parts from various sources and check for fitness for purpose, interference etc. This concept was required by early design systems which handled only individual components. Therefore, to see a complete product, this additional step was required. Now that most design systems handle assemblies and whole products, the emphasis has moved to realistic graphics combined with effective simulation.

Discrete Manufacturing

Discrete manufacturing handles components, assemblies and products which are distinct items. Examples include automobiles, machines, and consumer electronics. Discrete manufacturing contrasts with process manufacturing, which uses liquids, gases, and powders to make products which are usually measured by weight and volume, for example, food, gasoline, chemicals and paint.

Disruptive technology

A disruptive technology or disruptive innovation is an innovation that satisfies a market requirement in unexpected ways, or creates a new market requirement. Examples include cellphones; the compact disc replacing magnetic tape for recording; and digital cameras replacing film-based cameras.

Distributed Control System


A DCS is a real-time, fault-tolerant control system for continuous and complex batch-process applications. Over time, DCS technology has evolved from proprietary, special purpose hardware and software to more use of standards, although proprietary communication protocols remain common.


A distributor buys and stocks products, and then sells them to other businesses. For manufacturers, this simplifies distribution. For buyers, the distributor may offer more suitable buying conditions such as packaging and delivery. In the retail sector, a distributor may be called a wholesaler.

Document Management System

Allows users to store, search, and manipulate documents electronically and to track and manage document versions, status and distribution.

Downstream Operations

In the oil and gas sector, downstream starts at the point extracted oil and gas is first delivered to storage or refinery facilities. Downstream operations take these materials, convert them into fuels, chemicals and other products, and deliver these products to motorists, airlines and many other industrial users.


Periods when a computer, piece of equipment, or manufacturing system is not available to perform work.


In transportation and logistics, drayage refers to movement of containers between transport modes, e.g. from ship to rail.

Dual Use Products

Dual Use Products (sometimes Dual Purpose Products) is the phrase used in UK and US regulations to cover export licensing of products with both civilian and military applications. Examples include radar equipment, heavy road vehicles and civil airliners suitable for reuse as tankers.

Dynamic scheduling

A dynamic scheduling capability allows refinement of production schedules as conditions change. Dynamic scheduling software gathers order, capacity, inventory and supply data, and runs multiple simulations to find the optimal scheduling solution.

Economies of Scale

Economies of Scale refers to the cost advantages associated with increasing the volume and/or rate of production. Imagine a company’s annual lease on their factory premises is $200,000 per year. If they make 100,000 units, the cost is 200,000 / 100,000 = $2 per unit. If they crank up production to 200,000 units, then the lease component of the cost of goods sold falls to $1 per unit.


Ecotoxicology is a scientific discipline combining the methods of ecology and toxicology in studying the effects of toxic substances and especially pollutants on the environment.


An elastomer is a polymer with the property of elasticity

Electro-Mechanical Systems

This phrase originated to describe all devices with interaction between electrical and mechanical elements – for example, a motor, or a switch. Now it means a mechanical device which is triggered or controlled by an electrical or electronic device including, for example, the huge number of products containing electronic microcontrollers, ranging from washing machines to aircraft fly-by-wire controls.

Electronic Data Interchange


EDI standard data formats were developed in the early 1970s to support business-to-business e-commerce. Refined over the years, and with specific versions for particular industries, EDI is still in use today, for example, as messages attached to AS2 protocol communications, which can use Internet connections and maintain security.

Electronic Design Automation


EDA is the class of software tools used for development of integrated circuits, PCBs, and electronic systems. Early EDA software enabled users to manipulate complex connector and device geometry layouts, and generate manufacturing instructions. Current systems have layered many levels of automation on top of this capability – now, users input requirements using diagrams or software-code-like statements. EDA software generates layouts from these inputs, and simulates their performance.

Electronic manufacturing services


Electronic manufacturing services (EMS) is the name used in the high-tech industry to identify companies that assemble, produce, and test electronic components and assemblies for original equipment manufacturers (OEMs). Typically, OEMs retain ownership of product designs and brand names. Some EMS companies offer design, rapid prototyping and product testing services, and are described as contract electronic manufacturers (CEMs).

Electronic Point of Sale


EPOS systems are commonly found at retail checkouts, both instore and online. An in-store EPOS terminal supports item identification, pricing, and loyalty card systems as well as payment, in addition to communicating actual sales to finance and supply chain systems. Online EPOS systems are hosted on secure servers and used by an online customer via a web-interface to finalize delivery and payment arrangements.

Embedded Systems

An embedded system is a special-purpose computer system designed to perform one or a few dedicated functions, often with real-time computing constraints, and usually as a part of – i.e. embedded into – another product.

Employee time-to-productivity

Employee time-to-productivity, sometimes “Time to full productivity” measures the time taken for a new employee to learn enough to ably complete every aspect of their job. The time taken varies by role and can be work time or calendar time. The judgement about doing the job can be well defined or informal. There may be a framework of local employment law which guides the way the organization must work with the employee.

Energy Information Administration


The EIA is a US Government agency charged with providing official energy statistics. Its stated mission is to provide policy-neutral data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy and its interaction with the economy and the environment.

Energy Intensity

Energy Intensity is the amount of energy consumed per unit of output. It can be applied at the level of a machine, a production line, a factory or a process plant. It is also used by governments and industry bodies to characterize whole country economies and industry sectors. Industry sectors where energy costs are a significant part of total costs are called ‘energy intensive’ sectors – for example, manufacture of cement, chemicals (including petrochemicals), primary metals and paper. Companies in energy intensive sectors almost always use energy intensity as a key performance indicator.

Energy returned on energy invested


EROEI is used in energy provider industries as a guide to the viability and profitability of a resource. In oil well development, EROEI is the energy the well will produce as end fuel, expressed as a multiple of the energy required to extract and process it.

Engineer to Order


ETO products are built to customer specifications. The ETO approach to manufacturing is similar to Assemble to Order (ATO). ETO is often an extension to ATO, where a manufacturer can still accept orders which cannot be built from the components used for ATO – but instead of refusing the order, the manufacturer designs and makes additional components. Other ETO environments are general job-shop operations which offer to build anything a customer has designed. Another important class of ETO is capital equipment such as equipment used in process plants, where design and manufacture of each item is often adjusted for the specific installation.

Engineering Change Order


An ECO is one of the documents which allows a manufacturer to control changes. If a change is necessary, an Engineering Change Request (ECR) is created. This forms the basis of analysis of the feasibility and effects of the change. The decision whether to go ahead with the change uses these results and needs approval by all affected departments.  change. When approved, the ECR is converted into an ECO, which will define the changes, and when they will take place.

Engineering Document Management System


See Document Management System (DMS). An EDMS is a DMS with additional engineering specific capabilities. These additional capabilities could include ability to handle Bill of Material; ability to handle technical files such as inputs to and outputs from manufacturing or test equipment; automation of workflows such as create a new part number or review an engineering change request; control access to documents such as recipes used for regulatory approval.

Engineering, Procurement and Construction


EPC companies provide design and build services for industrial facilities ranging from small factories to large oil refineries. Owner-Operator companies commission EPC companies to execute projects.

Enterprise integration


A broad implementation of information technology to link various functional units within a business enterprise. On a wider scale, it may also integrate strategic partners in an inter-enterprise configuration. In a manufacturing enterprise, EI may be regarded as an extension of CIM that integrates financial or executive decision-support systems with manufacturing tracking and inventory systems, product-data management, and other information systems.

Enterprise Resource Planning


ERP is an umbrella term for a suite of software modules used to control a firm’s processes. ERP is considered the ‘core’ business system and underpins all of the company’s business activity, including materials management, supply-chain management, production, sales and marketing, distribution, finance, field service, and human resources.

Environmental Management System


A system to allow an organisation to demonstrate compliance with appropriate laws and regulations through both internal actions and by certification by a third party. The detailed requirements are covered in ISO14001 Environmental Management.


Ethernet, first standardized in 1983, remains the standard for local communications networks. It was developed jointly by Digital Equipment Corp., Xerox, and Intel. The first Ethernet, based on coaxial cable, supported data at 3 megabits per second. In 2017 a standard using optical fiber for 400 gigabits per second Ethernet was approved – an increase in speed by a factor over one hundred thousand in 35 years.


Ethylene is a colorless flammable gas derived from petroleum and natural gas and used as an organic chemical raw material in plastics and specialty chemical products.

European Economic Community


The European Economic Community (EEC) was a forerunner of the European Union (EU). The EEC organization was absorbed into the European Union (EU) in 1993.

eXtensible Markup Language


XML is a document and data markup standard. The concept of markup is to annotate a document with information which can be recognized as separate from the document content. This allows easier transfer of documents and data between applications. XML is important for Enterprise Application Integration, and for data transfer in e-commerce.


An extranet is formed using secure, managed access to enable external participants to use an internal network. A typical example connects customers and suppliers to a corporate or plant internal network (an ‘intranet’) in order to access information deemed sharable by the intranet operators.

Fast Moving Consumer Goods


FMCG is another term that is widely used but whose meaning is not particularly standardised. In some uses it may be almost synonymous to CPG and include all non-durable consumer goods. In other uses it may be more specific and refer for example to predominantly for food or drink products.


The basic raw materials that are the input to and requirement for an industrial process. Oil and gas are feedstocks for the manufacture of a wide range of fertilizers, plastics, fuels and other products.


A Fieldbus is a digital, two-way communication link which can connect multiple intelligent measurement and control devices. It serves as a Local Area Network (LAN), in particular for the machines, controllers and sensors which are directly involved in production processes.

Fill rates

Measures the extent to which stored inventory satisfies customer demand. If a customer orders 100 units, and inventory only has 50, then the fill rate is 50%. In this way, a higher fill rate is representative of higher customer satisfaction.

Finite capacity scheduling

Software to implement finite capacity scheduling uses actual production capacity as a key parameter for its scheduling calculation. This is different from the original production scheduling method, MRPII. MRPII assumes infinite capacity, and creates schedules by working back from customer due date. This allows an MRPII schedule to be unachievable, because it assumes no limit on the number of items a workcentre can process in a day. There are many different approaches to finite capacity scheduling, including, for example, constraint based scheduling, and also MRPII add-ons which adjust an MRPII schedule to match actual capacity.

Finite Element Analysis


FEA is a mathematical method which is at the heart of simulation software. FEA uses 3D meshes of millions of cells to represent the complex geometry of an item. By performing calculations for every single point or cell in the mesh, then combining the results, FEA determines the overall result for the item. FEA based simulation is used in product-design software to conduct graphical on-screen analysis of structural loads, thermal behaviour, and fluid flows.

First In First Out


FIFO is a strategy used in material handling. In the FIFO model, items that have been ready and available the longest are the first to be used. FIFO, for example, is appropriate when goods are perishable. FIFO is the opposite of Last In First Out (LIFO).

First-Pass Yield

The percentage of finished products that meet all quality-related specifications at a final test point without being scrapped, rerun or reworked. In process industries, yield often is calculated as the percentage of output that meets target-grade specifications (this excludes output which is off-grade, even when it is still saleable).

Flexible Manufacturing System


The FMS concept prioritizes automated manufacturing equipment and/or cross-trained work teams that can make a variety of product or part configurations. From an equipment standpoint, an FMS is typically a group of computer-based machine tools with integrated material handling that is able to produce a family of similar parts.

Flight Simulators

A flight simulator is a system whose purpose is to copy, or to simulate, the experience of flying an aircraft, but without leaving the ground. The different types of flight simulator range from video games up to full-size cockpit replicas mounted on computer controlled actuators. Flight simulators are extensively used for aerospace design and development and in aviation for the training of pilots and other flight deck crew in both civil and military aircraft.

Fluid Flow Sensors

A Fluid Flow Sensor measures the rate or amount of liquid, gas or vapor which goes past it. The same name is sometimes used for sensors which measure the flow rate of powdered solids.

Fly by Wire

Fly by wire is a method used to connect an aircraft pilot’s control inputs to the control surfaces and equipment of the aircraft. In a fly by wire system, control movements by the pilot are measured by sensors. The sensor readings are used by software running on flight control computers to calculate optimum adjustments to the aircraft’s control surfaces and systems. The flight control computers signal actuators to make the calculated changes.

Foreign Owned US Defense Contractor

A company recognised by the US government as one allowed to bid for US defense contracts, despite being foreign owned. To achieve this status, such US subsidiaries are generally incorporated in the US and have a local board of directors which is predominately composed of US citizens. An example is BAESystems North America, headquartered in Maryland.


In process manufacturing, a formula specifies the ingredients, and the amounts needed (e.g., pounds, gallons, liters). A formula can also specify the processing steps required to make a product, and in this case is often called a recipe.

Free Trade Agreements

A free trade agreement is a contract between participant countries to eliminate restrictions such as tariffs, quotas, and trade taxes. The goal is to encourage imports and exports across their borders.

Fuel Cells

A fuel cell consumes fuel in order to generate electricity. A hydrogen fuel cell uses hydrogen as fuel and oxygen (usually from air) as oxidant. Fuel cells are very common as power sources in remote locations, such as spacecraft, remote weather stations and in certain military applications.

Gas hydrate

Gas hydrate is a widespread combination of water and natural gases (often methane). It can be a source of problems for oil and gas drilling and production. It has potential as an energy reserve and as a basis for carbon sequestration. It is known to occur on every continent, and in large quantities in marine sediments. Its appearance and properties are like ice. There can be a layer several hundred meters thick just below the sea floor near permafrost in the Arctic. The worldwide amounts of carbon bound in gas hydrates is conservatively estimated to total twice the amount of carbon to be found in all known fossil fuels on Earth.


Gate-All-Around architecture means the gate surrounds all four faces of the channel where electric current flows.

General Agreement on Tariffs and Trade


The General Agreement on Tariffs and Trade (GATT) covers international trade in goods. The workings of the GATT agreement are the responsibility of the Council for Trade in Goods (Goods Council) which is made up of representatives from all WTO member countries. The Goods Council has 10 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures and so on). Again, these committees consist of all member countries.

Generation Y

Also known as the ‘Millennial Generation’, Generation Y is a term for the demographic group born between 1980 and the early 2000s (though there are no precise dates).


Generics is a term for generic drugs. A generic drug is a pharmaceutical substance which contains an active ingredient which was originally protected by chemical patents. In most cases, generics are brought to market to replace a successful, branded drug after its patent protections expire. The availability of a generic alternative usually causes significant reduction in the price of the drug.

Geographic Information System


A GIS integrates hardware, software, and data for capturing, managing, analyzing, and displaying all forms of geographically referenced information. GIS data is used as the basis for location based services such as routing information.

Global Data Synchronization Network


The Global Data Synchronisation Network (GDSN) was created as an industry endorsed initiative to overcome product data inaccuracies and increase efficiencies among trading partners and their supply chains. GDSN is a network of certified data pools that enable product information to be captured and exchanged in a secure environment conforming to global standards. The standards body that governs the GDSN is GS1

Global positioning system (GPS)

A GPS receiver uses signals from a set of US satellites to calculate its geographic location, and establish the reference time. GPS receivers are built into a wide variety of devices, including cell phones, navigation devices, vehicle tracking systems. Similar global systems have been established by the EU (Galileo), China (BeiDou) and Russia (Glonass), and regional systems by Japan (QZSS) and India (IRNSS); however GPS is more widely used.


Globalization is a widely used term. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour. An example is harmonization of standards). When used in relation to manufacturing and supply chain, it often refers to outsourcing and offshoring production to low cost regions.

Greenhouse Gases

Greenhouse gases are gases in the atmosphere that absorb and emit radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. Common greenhouse gases in the Earth’s atmosphere include water vapour, carbon dioxide, methane, nitrous oxide, ozone, and chlorofluorocarbons.

Gross Product Worth (GPW)

Used in the oil and gas sector, GPW is the value of all refined products which are produced from a barrel (or sometimes tonne) of crude oil. GPW can be used to assess historic performance. It can also be used to help plan oil refinery operations, by reconfiguring processing to maximize estimated GPW.

Hazard Analysis and Critical Control Points,


HACCP stands for Hazard Analysis and Critical Control Points, which is a way of managing food safety standards. HACCP starts by scoping the food handling operations, then lists the hazards capable of causing injury or illness if not controlled. Next, critical control points are identified; these are steps at which control can be applied and is required to reduce a hazard to an acceptable level. This structure enables food safety management across production, procurement and handling, manufacturing, distribution and consumption of the finished product.

Heavy Commercial Vehicle

Although the exact definition may vary slightly from region to region, heavy commercial vehicles tend are those trucks, vans and pickups with an allowed gross vehicle weight (GVW) above a certain weight. For example, to meet this description in Europe the maximum total weight of the vehicle and its full permitted load will exceed 3.5 tonnes.

Horizontal Integration

Horizontal Integration involves bringing together business activities which support the same level of the value chain in similar or different industries. This can be achieved by internal expansion or acquisition. Horizontal integration can create opportunities for economies of scale and cost savings from rationalization.

Hub to Hub

A transport hub or transport interchange is a central location where passengers and cargo are exchanged across one or more modes of transport. In air transport, the term hub-to-hub is used to describe travel between large airports using large aircraft. Hub to hub capacity must be complemented with hub and spoke – or ‘regional’ services – to link origins and destinations to the hubs.

Hybrid Manufacturing

Hybrid manufacturing is a combination of continuous and discrete manufacturing. An example is beverage manufacturing where a continuous process for production of the liquid is linked to a bottling or canning line to package the liquid for distribution and sale.

Hydrochloric Acid


Hydrochloric Acid is a solution of hydrogen chloride mixed with water. This has many commercial applications and is used as a chemical reagent (to cause specific chemical reactions). A major application is use as a cleaning or dissolving agent for industrial processes. It is also used in domestic household cleansers.


In a production environment, identification describes the process of labelling goods for put-away, including their intended storage location. RFID tags can be used to help automate later retrieval.

IEC 61508

This is the international standard for electrical, electronic and programmable electronic safety related systems. It sets out the requirements for ensuring that systems are designed, implemented, operated and maintained to provide the required safety integrity level.


In-licensing means obtaining a license to use some other party’s technology/IP. Generally this involves payment of a license fee usually an up-front payment plus a monthly/quarterly/yearly license fee.


Inorganics are chemicals whose molecules do not contain a carbon-hydrogen bond. This means there are some carbon compounds which are inorganic, for example, carbon dioxide, also all carbonates such as calcium carbonate. But most carbon compounds for example proteins, carbohydrates, sugars, vitamins, plastics, and alcohols contain the carbon-hydrogen bond, so are considered ‘organic’.


Instrumentation is a general term to describe the sensors, devices, interconnections, and systems used to observe, measure, and communicate what is happening or what has happened in some physical environment. Control systems use data from instrumentation to choose future actions.

Integrated Circuit


An integrated circuit (also known as IC, microcircuit, microchip, silicon chip, or chip) is a miniaturized electronic circuit manufactured in a thin layer of semiconductor material. The technology to make electronic circuits this way was developed in the 1960s. Since then, the capacity and speed of these circuits has grown enormously, and yet the cost and physical size has gone down. This combination has been the driving force behind dramatic growth of the computer and communications industries.

Integrated Defense System

An integrated defense system typically combines two or more of the following: weapons and aircraft, intelligence and surveillance systems, and communications and IT. These systems are usually provided by large scale prime contractors, such as Boeing, Lockheed Martin or BAE Systems.

Integration Definition for Functional Modelling


IDEF is a family of modelling languages used in systems and software engineering. The family covers a range of uses from function modelling to information, simulation, object-oriented analysis and design and knowledge acquisition.

Intellectual Property

Intellectual property refers to creations of the mind. Intellectual property regulations seek to protect the value of these creations. There are two main parts to intellectual property regulations: Patents address inventions, trademarks, industrial designs, and geographic indications of source. Copyright addresses literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures.

Intercontinental Exchange

Intercontinental Exchange ICE) is a company which operates in the arena of regulated global futures exchanges and over-the-counter (OTC) markets for agricultural, energy, equity index and currency contracts, as well as credit derivatives. It provides clearing, market data and risk management services. It is one of the largest futures and options exchanges in the world. It operates the former International Petroleum Exchange as ICE Futures.


Intermodalism is the coordinated use of multiple modes of transport (i.e. road, rail, ship, air) to move containerized freight from source to destination.

International Energy Agency


The International Energy Agency (IEA) is an intergovernmental organization which acts as energy policy advisor to 28 countries including the US, the UK, Canada, S Korea, Japan Australia, New Zealand and many European countries. It structures its role into three areas: energy security, economic development and environmental protection.

International Petroleum Exchange

The International Petroleum Exchange is now known as ICE Futures by virtue of its acquisition in 2001 by ICE. It was one of the world’s largest futures and options exchanges.

International/Integrated Oil & Gas Company


An international (or integrated) oil or gas company spans exploration and production, transportation, refining, and marketing. This is essentially everything – starting with exploration, leading to the point of use of oil and gas.

Internet of Things


The Internet of Things (IoT) is (1) the set of all devices (but excluding traditional computer systems) which are connected to the Internet (2) the technology which enables advanced interconnectivity of ‘smart’ devices to the Internet and each other. The scope of the IoT ranges from fridges that send messages to your smartphone when you run out of milk, to factory machines that can ‘talk’ to each other, follow instructions from computer systems, and run entire production process with virtually no human input.

Internet Protocol Address

An Internet Protocol address (IP address) identifies a device connected to the Internet. There are two formats – the widely used version 4 (IPv4) and the newer version 6 (IPv6). Both are numerical labels which are used by network connection electronics to enable communication between devices, even though many devices are sharing the same cables and other communication links.


Interoperability is the capability of two or more systems (especially computer systems) to work together.


An intranet is a computer network for use only by people and systems within an organization.


Inventory is the aggregate of all the goods and materials used and held by a company to make, or incorporate into, its products. The main types of inventory are raw-materials inventory, work-in-process inventory, and finished-goods inventory.

Inventory carrying cost

Inventory carrying cost is the cost of owning inventory and having it available. Costs depend on the inventory’s value, and also on storage space, obsolescence, spoilage, taxes and insurance. Higher inventory levels drive higher inventory carrying costs, but can also improve customer service (product available to ship today) and reduce risk of disruption due to events such as supplier delays or the breakdown of critical machine.

Inventory days of supply

This measures the average amount of inventory on hand, expressed as how long it would take to use it all. The assumption is no more inventory comes in, and production usage will be average. The volatility of supply and demand determine what is required. Companies with stable demand and reliable suppliers can operate with very low inventory days of supply.

ISO 14000

ISO 14000 is a set of standards known as the Environment Management System, produced by ISO (the International Organization for Standardization which is often called the International Standards Organization). ISO 14000 standards ask companies to treat environment management like an ongoing project, subject to its own processes, monitoring and IT support. The aim is to help companies limit the environmental damage caused by their activities.

ISO 9000

ISO 9000 is a set of standards for quality-process audit. ISO 9000 is produced by ISO (the International Organization for Standardization which is often called the International Standards Organization). Compliance with ISO 9000 enables manufacturing plants to receive internationally recognized certification to confirm that stated quality processes are adhered to in practice.

Jet A-1

Jet A is the commercial jet fuel specification for North America. Jet A-1 is the common jet fuel specification outside North America.


A jig is a device that both holds an item in place and guides a machine tool such as a drill.

Joint Operating Model


(1) In logistics, a Joint Operating Model is the logical extension of the 4PL, with tight-knit integration between the service provider, the customer, and the customer’s supply chain. (2) In oil and gas, the JOM is defined by a Joint Operating Agreement, a common basis for exploration and production companies to cooperate.

Joint Venture

A joint venture is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. The venture can be for one specific project only, or for a continuing business relationship.



A methodology where inventory movements are controlled by real-time demand, rather than stacking materials up in piles according to a forecast. JIT sees materials, parts, sub-assemblies, and support items delivered to the production line at the exact moment they are needed, and neither sooner nor later. This can control costs by reducing inventory, and also by encouraging production only when needed, not simply because a production machine is idle.


Kaizen is the business concept of continuous improvement. The term originated in Japan (the word Kaizen means improvement). It became widely known globally when Toyota publicized its production philosophy and management methods, which include systematic, organized improvement of processes by those who operate them, using straightforward methods of analysis.


Kanban, which means signboard in Japanese, is workflow management system. The most widely used implementation is Kanban cards. A Kanban card is a colored card which is attached to the container used to move the output of one process to the next process. When the next process consumes that material, the kanban is returned to the producer process, authorizing the producer process to make the next container load of output. The aim is make sure each part of the factory stocks only the inventory that is needed no more, no less. This eliminates ‘stock outs’ and reduces inventory carrying costs.

Key Performance Indicator


KPIs are metrics tracked by an organization to help it evaluate how successful it is, and to help it define and achieve its long-term goals. KPIs can cover both financial and non-financial aspects, including estimation of difficult-to-measure activities like leadership development, service, and customer satisfaction, as well as more measurable activities such as production efficiency and energy use.

Laboratory Information Management Systems


LIMS are computer systems which help manage activity in laboratory, including the flow of samples, connectivity to automated instruments, the data related to samples, and results reporting. LIMS can be used both in laboratories closely connected to production, for example regular sample testing in food production, and also in more independent laboratory environments.

Landing Gear

In aviation, the landing gear or undercarriage is the structure (usually including wheels equipped with shock absorbers) that supports an aircraft on the ground and allows it to taxi.

Last In First Out


LIFO is a strategy used in material handling and storage. In the LIFO model, the most recently stored items in a location are the first taken out. LIFO can be efficient and practical in transportation (trucks, rail cars, containers), and can be used in storage if goods do not deteriorate over time, and it saves time or cost to store and retrieve an item from one side of a storage location. LIFO is the opposite of First In First Out (FIFO).

Launch Systems

A launch system is a vehicle designed to carry a payload into space. The vehicle typically consists of several rocket stages, discarded one by one as the vehicle gains altitude and speed. The earliest launch systems were treated as expendable, but from the time of the space shuttle (first launched in 1981), there has been interest and some development of launch systems which can be reused.

Lead Logistics Provider


LLP (sometimes also referred to as a 4PL or Fourth Party Logistics Provider) is an integrator that assembles the resources, capabilities, and technology of its own organization and other organizations to design and deliver supply chain solutions. A typical LLP uses a 3PL to supply service to customers, owning only computer systems and intellectual capital.

Lead time

Lead time is the period between a customer’s order and delivery of the final product. A small order of a pre-existing item may only have a few hours lead time, but a larger order of custom-made parts may have a lead time of weeks, months or even longer. Lead time may change according to seasons or holidays or overall demand for the product.

Lean Manufacturing

Lean Manufacturing is a technology and business process-driven strategy for reducing unnecessary activity in the manufacturing environment. The concept involves deliberate, continuous and if possible systematic identification and elimination of unnecessary activities and inefficiencies. These are referred to as ‘wastes’ and include: poor job scheduling (leaving staff waiting around between job), performing too much work on components (more than the customer needs) and unnecessary movement of inventory around the facility (wasting time and resources).

Less than Truck Load


Less than Truck Load, also known as Less-Than-Load, is a type of shipping service for small to medium quantities of freight. LTL providers fill the gap between parcel services and large-scale transportation providers. LTL companies combine loads from several different companies onto one truck, and often operate a hub-and-spoke model to reduce shipping costs.

Light Commercial Vehicle

Although the exact definition may vary slightly from region to region, light commercial vehicles are those trucks, vans and pickups which have a gross vehicle weight (GVW) below a certain weight. For example, to meet this description in Europe the maximum total weight of the vehicle and its load must not exceed 3.5 tonnes.

Liquefied Natural Gas


LNG is a clear, colorless liquid made by cooling natural gas to about -163 degrees centigrade. Natural gas is composed mainly of methane and ethane, and can be used as a fuel. It is extracted from oil and gas wells, and is also found in wetlands and from anthropogenic sources that include landfills and agricultural operations. When cooled and liquefied, it takes up only a tiny fraction of the volume of the gaseous form, so can be transported efficiently.


Logistics is the management of the flow of resources from source to destination to meet the needs of in-house operations, customers, and consumers. Logistics is usually seen as part of supply chain management, and is often separated into inbound logistics (obtaining supplies) and outbound logistics (distribution of products).

Logistics Providers

Logistics providers are third parties who provide a range of services to manufacturers, wholesalers and retailers that includes transport, storage and distribution.

Logistics Service Providers

Logistics Service Providers are companies that provide transportation and/or storage capabilities and sometimes associated services such as freight forwarding. When Logistics Service Providers expand their offer to include broader supply chain responsibility, they become known as 3PL or 4PL providers.

Lost Time Incident Rate (LTIR)

A lost time accident is an incident that has resulted in an employee needing to miss work due to sustaining an injury while working.

The formula for calculating LTIR is:

(LTI / Total # of Hours in Measured Period) x 200,000

Divide the total amount of lost time injuries in a specific period by the total number of hours worked in that same period. Then multiple by 200,000 – this represents 100 employees working a 40 hour week for 50 weeks per year (this is the generally accepted baseline of LTI established by OSHA).

Machine Availability Rate

The percentage of time that production equipment is available for use, divided by the maximum time it would be available if there were no downtime for repair or unplanned maintenance.

Machine Tools

A Machine Tool is a specialist type of production equipment. It can cut, bend, drill, press or stretch metal and other materials in a factory environment. The earliest machine tools were controlled by hand – an operator used wheels and levers to control the position of the workpiece and the movement of the toolhead (which can be a cutter or other device). Modern machine tools are computer-controlled, and can take instructions about what dimensions or geometries are required from computer-aided design systems. This automation creates high accuracy levels and speed.

Machine Vision

Machine Vision uses technology similar to a cell-phone camera to gather images which are used by a computer system to achieve a vision-like function. The range of functions is constantly growing, and includes guidance for robotic or automated equipment; and visual inspection for quality control.

Maintenance Management Systems


An MMS is a software system for handling maintenance scheduling, maintenance work orders, as well as associated inventory, purchasing, accounting, and human-resources functions. In some industries, particularly process-production, manufacturers use MMS to optimize the use of capital-intensive equipment, by finding maintenance schedules which minimize disruption to production. Some MMS have their own financial and purchasing functions. In other cases, integration with ERP is used to provide these functions.

Maintenance Repair and Overhaul


MRO services provide after-sale engineering support, replacement parts and mid-life product upgrades. Companies may maintain MRO organizations for their own in-house equipment, and/or to offer maintenance services for equipment sold to customers. Computer systems known as MRO support these activities.

Make to Order / Build to Order / Assemble to Order


MTO, BTO and ATO describe slight variations on the same manufacturing concept – make a product after receiving a confirmed order. This is in contrast to the make-to-stock concept, in which production is scheduled to achieve target stock levels. MTO/BTO/ATO is most common for products which are customized, but may also be important to reduce waste or handle fluctuating demand. In general, customer lead times are higher for MTO/BTO/ATO compared to make to stock.

Make to Stock


MTS production involves building finished product to a forecast. The forecast is based on historical sales and expected changes in demand. Finished products are stored in warehouse inventory, and can be shipped as soon as a customer order is received.

Manufacturing cost

US GAAP accounting rules require external financial statements to assign all manufacturing costs to units produced. The resulting unit costs are used for both inventory valuation, and to calculate the cost of goods sold. Manufacturing costs are the costs of direct materials, plus the cost of employees directly involved in production, plus manufacturing overhead (such as depreciation of equipment, factory rent and utility bills, maintenance and repair costs, costs of supervisory staff). For internal management accounts, production costs are usually all costs incurred in the manufacturing facilities, and are sometimes also called manufacturing costs.

Manufacturing Cycle Time

(Throughput Time)

The manufacturing cycle time assumes an order exists for a product and measures the amount of time from the start of production until the product is shipped. The cycle time includes actual time for production processing, inspection, material movement and queuing times. Only processing time adds value. The others are non value-add activities that can be reduced or eliminated in continuous improvement, Lean and Six Sigma programs.

Manufacturing Execution System


An MES is an information system which helps convert production plans for the whole plant into coordinated and tracked operations for each individual production process. MES encompasses such functions as planning and scheduling, production tracking and monitoring, equipment control, maintaining product histories (verifying and recording activities at each stage of production), and quality management. The growing scope of MES is recognized in development of its name (1) to Manufacturing Enterprise System (quite rare) and (2) to MES/MOM, where the MOM refers to the whole scope of Manufacturing Operations Management (quite common).

Manufacturing Resources Planning


The first widely used production planning software had the same acronym but with a different meaning. The original MRP meant material requirements planning. This takes target dates for finished products, and works backwards to determine a production plan and raw material purchasing plan. MRP II (spoken as “”MRP-two””) extended MRP by handling at least financial and forecast data, and sometimes engineering and human resources.  MRP II translates forecasts into master production schedules; maintains bills of material (lists of product components); creates work orders for each step in the production routing; tracks inventory levels; coordinates materials purchases with production requirements; and generates reports. The progression from MRP to MRP II continued, and the next generation gained the name ERP (Enterprise Resource Planning).

Market Capitalization

Market Capitalization is one measure of the value of a company. It is calculated by multiplying the current share price by the number of shares.

Market share

Market share is calculated as a company’s sales in a market segment expressed as a percentage of the total sales in that market segment. The easiest way to define a market segment is to list a company’s competitors, and use sales figures for these competitors to estimate the total sales into the market segment. The choice and definition of the target market segment is key to obtaining meaningful market share figures. Investors monitor changes in market share, particularly in mature and stable market segments, as an indicator of a company’s competitiveness.

Master Production Schedule


An MPS is a plan which defines which products must be produced in a given time period. MPS generally operates an aggregate level (not too much detail), and aims to meet requirements at a minimum cost. To do this, it handles people costs for regular shifts and overtime, how these relate to production capacity, the possibility of using subcontractors, forecast demand, and inventory costs.

Material Requirements Planning


MRP was the first widely used production planning software and focused on materials (not production capacity or cost). MRP takes target dates for finished products, and works backwards to determine a production plan and raw material purchasing plan. The MRP process expands each bill of material, adjusts for inventory quantities on hand or on order, and offsets the net requirements by the appropriate lead times. The result is a list of recommendations to release replenishment orders (purchase orders) for materials.

Materials Handling

 In manufacturing and production, the word ‘materials’ is used to describe a manufactured product in all states of transformation, including raw materials. ‘Handling’ includes both movement and storage. Materials handling means the techniques and equipment used to move and store materials within and between manufacturing facilities and storage facilities such as warehouses.

Mean Time Between Failure


MTBF is a mathematical calculation created by design engineers for new products that predicts the average expected amount of time a piece of equipment is in operational condition.

Mean Time to Repair


Mean Time To Repair represents the average time taken to put a defective component or system back in working order. It is a measure of the maintainability of a system and predicts the average amount of time required to get the system to work again in case of a failure.

Consumer industries often recognize the importance of the customer perspective, and may use alternative names and definitions for this ‘time to fix’ parameter, for example, utility companies may refer to the out-of-service restoration interval.

Mechanical Computer Aided Engineering


MCAE software is used to analyze and simulate mechanical parts, assemblies and products. Early MCAE systems were limited by the technical complexity of software, and the computer capacity required. So they focused on one type of analysis (such as stress, kinematics, vibration, failure, thermal, fluid etc.) and also imposed part complexity limits. However, these limitations are being removed, and, as more products combine mechanical parts with electronic and software controls, and also network connectivity, there is increasing integration of MCAE with other types of analysis and simulation.

Mechanical, Electrical and Plumbing


MEP is an industry classification used extensively in the construction sector which often puts these three areas of facility design and maintenance into the single MEP category.


Mercosur is the name of a trading zone set up in 1991 between Argentina, Brazil, Paraguay, and Uruguay. In 2012, Venezuela also joined, but its membership was suspended in 2017.

Merge in transit

Merge in transit allows a customer to order from multiple suppliers, and receive a single delivery of the products as ordered. This service is often offered by logistics providers. Merge in transit requires streams of goods from multiple sources to be matched at points between source and destination to form sets to match customer orders.  It is used, for example, for automotive assemblies, and also in retail.

Mergers and Acquisitions


M&A is the name given to the business activity of buying and selling companies and parts of companies. M&A departments in companies handle strategy, corporate finance and management to buy, sell and combine businesses which can aid, finance, or help a company to grow. Growth without M&A is called ‘organic growth’.


Methanol is a liquid chemical used in the production of plastics, paints, and cosmetics. It can also be used as a fuel in automotive, electricity and marine applications. It is sometimes known as wood alcohol due to an early production method. Now, it is usually manufactured industrially by combining hydrogen and carbon monoxide.


A metric is a measurable characteristic of a business activity. Metrics can quantify both physical characteristics (for example, the number or weight or volume of products made today) and less tangible characteristics (for example, customer satisfaction). Metrics can be used individually (for example, machine set-up time) and multiple metrics can be combined to make a single value (for example profit per employee). Management teams select and sometimes develop metrics to use as key performance indicators (KPIs) to help monitor, analyze and improve the processes in their business.

The metric system is a consistent set of units to measure physical quantities. It is based on meters (for length), kilograms (for mass), and seconds (for time).


Midstream is an Oil & Gas industry term used to describe the ‘gathering’ of the raw oil or gas from thousands of different wells into a central hub, and the eventual transportation of the raw materials to the refinery for processing.

Million British Thermal Units


Both MMBTU and MMBtu are abbreviations for ‘Million British Thermal Units’. One British Thermal Unit (BTU and Btu) is the amount of heat required to increase the temperature of one pound of water by one degree Fahrenheit. The BTU and the MMBTU are recognized as units of energy in the United States system of customary units. The BTU is often used to quantify the cooling capacity of an air conditioning system.  A wooden kitchen match produces approximately 1 BTU, and the cooling capacity of household air conditioners is typically  between 5,000 and 15,000 BTU per hour.

Mixed Mode Manufacturing

Mixed Mode Manufacturing describes a manufacturing facility which combines more than one type of manufacturing. The types can be discrete and process, but the term also applies to multiple types within discrete (for example, engineer to order and continuous flow); and to multiple types within a process environment (continuous and batch). Production scheduling, product traceability, and labelling may need specialist software in a mixed mode manufacturing environment.

Modular Design

Modular design describes components or other independent units which fit together using standard interfaces. This simplifies creation of alternative configurations to extend or customize a range of products. Examples range from buildings to farm machinery to automobiles.


The term monopoly is used to describe a market in which a single firm controls the vast majority of the market for a given product or service. A monopoly is characterized by a lack of competition (so reduces customer choice) and this can lead to higher prices and sub-standard goods or services.

Moore’s Law

Moore’s Law estimates the growth of component density on an integrated circuit. It was proposed in 1965 by Gordon Moore, a semiconductor pioneer. In 1975, Moore refined the estimate to a doubling – that is, twice as many components – every two years. Doubling every two years was a good predictor between about 1970 and 2015. Since about 2015, advances in performance, cost and miniaturization have depended less on component density per integrated circuit, and more on other techniques. Even so, the improvement is often still referred to as Moore’s Law.



A unit of length in the metric system, equal to one billionth of a meter, which is the same as one millionth of a millimeter. It is the most common unit used to describe the manufacturing technology used in the semiconductor industry.


Nanotechnology is science, engineering or technology at the nanoscale, which is about 1 to 100 nanometers.  It originated with the goal of being able to manipulate one atom or molecule at a time. Semiconductor manufacturing processes now routinely operate in this range. Nanotechnology has potential applications in healthcare, personal care, biomaterials, medicine, electronics, chemicals and areas yet to be explored. An example is the improvement of solar cell efficiency using ‘nanopillars’ – a nanoscale material type which can be used for bulk applications.

Network Centric Operations


NCO is a term used in military activity. It describes the provision of robustly networked, collaborative armed forces capabilities. NCO covers the complete command, control and communication infrastructure. The objective is to enable soldiers, commanders and equipment to have immediate secure controlled access to every relevant asset. Real-time information sharing across surveillance systems, and land, sea & air weapons, integrated with command-and-control IT systems is needed to implement NCO.

Network Marketing

A type of organization that markets its products through a multi-level network marketing structure. This usually means consumers selling to consumers, but success often depends on identification of local and regional managers, together with central control of promotional materials and initiatives. This has proven to be a successful business strategy for companies selling personal care, vitamins, weight loss and household products.

Non Disclosure Agreement


A confidentiality or non-disclosure agreement limits the use of information provided by a discloser to a recipient. It is an important way to protect confidential information. As the value of the confidential information increases, so does the relative complexity of the agreement. An NDA is a document signed by both the discloser and the recipient.

Non-Productive Time

Non-Productive Time (NPT) is the time when drilling operations are interrupted for whatever reason, for example unpredictable weather or technical issues, and is a key measure of cost-effective and successful drilling operations.

Nord Stream

Nord Stream is a system of offshore natural gas pipelines in Europe, running under the Baltic Sea from Russia to Germany.

North American Free Trade Agreement


NAFTA is an abbreviation for North American Free Trade Agreement. This agreement establishes the rules for tariff- and quota-free trade between Mexico, Canada and the United States.

Numerical Control


A numerical control system enables control of the motion and action of a machine tool or similar equipment using coded instructions. These coded instructions are often referred to as ‘tapes’, because the earliest NC systems read their instructions from holes punched in paper tapes. Now, NC systems can receive instructions through connected computer networks.


Nutraceuticals are foodstuffs which provide health benefits in addition to their basic nutritional value. These may include fortified foods as well as dietary supplements that can be sold in capsules, tablets or powders.


Oleochemicals are derived from biological oils or fats. Oleochemicals can be an ingredient in the manufacture of soaps, detergents, and lubricants.  The name is analogous to petrochemicals which are derived from petroleum.

On Time Delivery Rate

On Time Delivery Rate is the percentage of products ordered which are received by customers on or before the specified time or date.

Online Order Entry System

An online order entry system is a computer bases system which eliminates paper from the order-taking process. It also enables distributors, field-sales representatives, and even customers to place orders directly, over the Internet or a corporate intranet, without intervention by an inside salesperson.  The software often includes a product configurator and pricing; and may offer delivery scheduling.

Operating Costs

Operating costs, also referred to as operating expenses, operational costs and OPEX, are the costs required for the day-to-day running and administration of a business. This excludes capital expenditure (CAPEX), but includes costs such as payroll and other employee benefits, sales commissions, office supplies, advertising costs, machinery depreciation, rent, utility bills, and cost of raw materials.


(1) optochemicals are used in the development and manufacturing of products for treatment of optical devices (2) optochemicals are all chemicals associated with sight and vision (3) optochemicals produce or react to light and can be used as sensors and to control chemical reactions.

Order Fill Rate

Also known as customer order fill rate and demand satisfaction rate, the order fill rate is an inventory management metric. It is the number of customer orders which are fulfilled immediately (for example, from available stock), expressed as a percentage of the total number of customer orders. It can be measured over any chosen time period.

Order Fulfillment Cost

(1) As a general business metric, for example in an engineer to order environment, the order fulfillment cost is the overall cost of meeting the customer’s order. (2) To compare alternative logistics providers, a manufacturer will obtain estimates for each provider’s order fulfillment cost. This is the total fee paid to a provider for product storage together with costs to pick, pack and ship an order.

Order-to-Cash Cycle

The time taken from the initial order for goods and services, to the moment the company receives payment from the customer. This metric is used mainly by manufacturers with a traditional process flow in which they must pay for materials and make/deliver a product before they can send an invoice. However, in some environments, this metric is widely used, for example, consumer online and in-store sales. In these environments, the consumer customer pays when or even before goods are made or delivered. Many retail cash flow models assume they can be paid before they have to pay suppliers.

Order-to-Delivery Leadtime

The time from when a specific customer order is received by the plant until product is delivered to customer, including any warehousing, cross-docking and transportation time.

Order-to-Shipment Leadtime

The time from when a specific order is released to the shop floor until that order is shipped to the customer, including any storage time in finished goods inventory.

Organization of the Petroleum Exporting Countries


OPEC is an international organization of countries which export large quantities of oil. OPEC acts as a cartel, coordinating its members’ decisions on oil production and pricing. This is not illegal because, as countries, its members benefit from the international law doctrine of state immunity. OPEC’s decisions used to be the single most important factor in international oil markets. However, its influence declined, partly because US oil and gas production more than doubled between 2008 and 2019 to exceed those of OPEC leader and largest producer, Saudi Arabia.

Original Equipment Manufacturer


An OEM is the organization responsible for the design, manufacture, sale and in some cases in-service support and recycling of a finished product. Boeing and Airbus are examples of OEMs in the aerospace sector; BMW and Ford are automotive examples. OEMs purchase components and sub-assemblies for use in the final product, and may subcontract substantial amounts of design and manufacturing (for example, Apple is an OEM which performs very little manufacturing of Apple products). OEMs oversee the product lifecycle from design to shipment for quality assurance. Sometimes, they also manage the lifecycle until end of life and provide tracking of equipment from as-designed, as-built, as-changed, as-shipped and as-serviced.


An oscilloscope is a piece of equipment used to measure electrical signals. After connecting it to the signal to be measured, an oscilloscope displays the characteristics of the signal on a screen similar to a television screen.

Out licensing

Out licensing occurs when a company offers their technology/IP to another company for a license fee.


An outage is a planned or unplanned interruption to a service, or availability of a resource. In utilities, this means an interruption to the electricity, gas or water supply. In production, a machine breakdown is an unplanned outage; whereas routine maintenance of a machine is a planned outage.


Outsourcing means subcontracting a process, such as product design or manufacturing, to a third-party company. The management concept of ‘focus on core competence’ has encouraged outsourcing everything which is not core competence. The ability to make use of lower cost resources (for example, land and labour in lower cost countries) has also been a driver of outsourcing.

Over-the-Air Update


OTA update is the use of a network connection to update the software of a remote device. Benefits include fault-fixing and upgrades. Typical examples are games consoles and smart phones.

Overall Equipment Effectiveness or Efficiency


OEE is usually interpreted as Overall Equipment Effectiveness. It measures the percentage of manufacturing time during which a manufacturing asset is truly productive. To score 100%, this means no down time, no parts made which do not conform to specification, and a production rate which is the full potential of the asset. OEE is also expanded to Overall Equipment Efficiency – specialists will say this is Overall Equipment Effectiveness achieved with minimum resources, but in many environments the two versions are used interchangeably.

Overall Factory Effectiveness


OFE is OEE (Overall Equipment Effectiveness) but applied to a whole production plant or factory, comparing theoretical output with actual output. To calculate OFE, an intermediate metric Overall Throughput Effectiveness (OTE) is needed to handle the many possible permutations of material flow through a factory.


Overcapacity is a situation in which a production system, or even a whole industry, can make more than is needed. Overcapacity causes problems for all producers. However, most management teams feel it is their competitors who own the excess production capacity.

Parts Manufacture Approval


PMA is an aviation industry term used to describe official approval for supplying replacement aircraft parts. PMA approvals are given by national authorities, like the US Federal Aviation Administration (FAA), and give 3rd party manufacturers clearance to produce and sell these parts for installation on certificated aircraft.

Perfect Order Fulfillment

Perfect order fulfillment measures the percentage of orders where everything is shipped exactly as ordered, and arrives to the customer on the promised date.


A petrochemical is the term given to any chemical derived from crude oil, crude oil components, or natural gas, but usually excludes fuels. These chemicals have made an enormous impact on the way we live today and appear in things as wide-ranging as: candles, medical equipment, vitamins, dyes and inks, consumer electronics, plastics, food additives and packaging, acrylic paints and detergents.

Phase Gate

Phase Gates appear on project plans. They define an intermediate target, and the process to check the target is achieved. They are used in project management to establish that a group of project activities has been completed to the satisfaction of the project leader or phase gate owner, before proceeding on the next phase. Phase gates usually have two assessed criteria: a) have all required deliverables been achieved and b) has formal approval and an action plan been agreed for the next phase.


A Physiochemical is a chemical which is active or of interest to both chemistry and physiology (the study of life, specifically, how cells, tissues, and organisms function).


Picking is the process of retrieving goods from a storage location.

Picking List

A Picking List (often ‘pick list’) is a list of items to retrieve from a storage facility such as a warehouse. A picking list is ideally produced for the optimum route through the warehouse, or in reverse order of loading onto a truck.

Piping and Instrumentation Diagrams


A P&ID is a schematic drawing which documents connectivity of piping, equipment, instruments and controls. Widely used in process, power and marine industries, a modern P&ID acts as the user interface to a database which defines the names and logical relationships between the equipment and pipes used in each process, and the components that sense, control and display the status of the network of processes and operations.

Point to Point

Point to Point means a direct connection between two locations. (1) In transportation, especially aviation, this refers to a system where a vehicle travels directly from its start point to its destination. This is in contrast to the use of hubs. (2) In electronic communications, point to point refers to a permanent communication link between two locations. In telecoms, the abbreviation P2P can mean either point to point, or peer to peer.

Polyethylene Terephthalate


The petrochemical PET is a thermoplastic polymer resin used to make fibers for textiles, plastic containers and other materials. Of these, fiber production accounts for about 60% of production, and bottles about 30%. The polymer has a formula (C10H8O4) and is solid at room temperature.


The plastics used in everything from food packaging to children’s toys are polymers, but the term encompasses a much wider group of materials than that. Other polymers include polystyrene, and the thickeners in shampoo which give them their gel-like consistency. The technical definition of polymer also includes natural materials such as wool, silk, natural rubber, and cellulose.

POSC-Caesar Association

POSC-Caesar Association is a non-profit global member organization targeting the development of open specifications to be used as standards for enabling the interoperability of data, software and related matters. The Association was responsible for the initiation of ISO 15926, Integration of life-cycle data for process plants including oil and gas production facilities

Possible Reserves

Possible reserves are oil and gas reserves which are considered likely to be significant. However, the technical and commercial probability of successful production has not been shown to be over 50%. When the over-50% target is achieved, reserves are classified as Probable Reserves.


Postponement involves delaying the final assembly, configuration, and/or packaging of a product.  The goal is to delay incurring this cost, and committing use of materials to a specific configuration to as late as possible in the production process.  This will generally be after an order has been received, and often just before a product ships to the customer.


The Powertrain is the group of components that generate power in motor vehicles and enable movement. For manufacturers and maintainers this includes the engine, transmission, suspension, exhaust system and the wheels. A powertrain warranty will usually cover some not all of these components.

Predictive Maintenance

Predictive Maintenance is an approach to equipment service and repair which seeks to prevent unscheduled downtime, and avoid costs of unnecessary maintenance. The approach involves collection of equipment data, analysis of this data to predict future maintenance needs, then planning maintenance in advance of any loss of performance. Predictive maintenance systems typically measure parameters such as vibration, heat, pressure, noise, and lubricant condition. In conjunction with computerized maintenance management systems (CMMS), predictive maintenance enables repair-work orders to be released automatically, repair-parts inventories checked, and routine maintenance scheduled.

Premium Freight

Air or other expedited shipment method that increases the standard cost of filling a customer order.

Preventive Maintenance

Maintenance activities, often performed by machine operators at regularly scheduled intervals, to keep equipment in good working condition.

Price – Earnings (P/E) Ratio

The Price – Earnings (P/E) ratio expresses a company’s share price as a multiple of its Earnings Per Share (EPS). P/E ratios are used by investors and analysts to compare relative value of shares across several companies or sectors.

Prime Contractor

The prime contractor is the contractor possessing a contract with the owner of a project, and has the full responsibility for its completion. A prime contractor undertakes to perform a complete contract, and may employ (and manage) one or more subcontractors to carry out specific parts of the contract.

Printed Circuit Board


A PCB is a thin plate which provides mounting points for electronic components, and electrical connectivity between them.

Private Label

Private Label, also called own label goods, are CPG products in a retailer’s own brand livery. Originally these were lower cost alternatives to familiar market leading branded products. As retailers have pursued and developed their Private Label strategies this has changed and many large retailers also have premium private label products.

Probable Reserves

Probable Reserves are oil and gas reserves not yet  classified as Proven Reserves, but which the available evidence suggests have an estimated chance of being technically and commercially producable (i.e. becoming Proven) in excess of 50%.

Process Capability

Process Capability is a specification of facilities within a production plant, with special emphasis on accuracy and consistency of manufacturing processes. In other words, how much product output falls within acceptable tolerances? In process industries, characteristics might be acidity, viscosity, temperature. In discrete industries perhaps shape, size, surface finish are key. In all industries, processing time can be significant.

Process Control

Process Control is the monitoring and control of a process. The term generally excludes direct manual control, and describes use of an instrument or computer programmed to respond appropriately to feedback, and implement operator commands.

Process Manufacturing

In process manufacturing, input materials or products or both are generally measured by weight or volume because they are agricultural products,  powders, liquids or gases which can’t be counted. There are two main categories of process manufacturing. (1) Continuous production processes involve non-stop production of chemicals, petrochemicals, and other high volume standard product that seldom varies in formulation. (2) Batch production processes in which materials are divided into batches which undergo operations such as heating, mixing, and chemical reactions to produce products such as food, beverages, and paint.

Process Reengineering

(1) In management consultancy, business processes are the groups of activities which govern how resources are used to create products and services that meet the needs of customers and markets. Process Reengineering aims to improve business performance by analysis and redesign of an organization’s business processes. (2) In process manufacturing, rework of a production process is called process reengineering.


A processor or central processing unit (CPU) is an electronic circuit that can execute computer programs.

Product Configurator

A product configurator enables selection of options for a product. A typical example is the way computer manufacturers allow online configuration of a PC – selecting memory, disk size etc. Product configurators normally check that the selections are valid. Advanced configurators allow the user to specify only some options, then optimise the remaining options for lowest cost or earliest delivery etc.

Product Data Exchange using STEP


PDES describes a set of international standards to support the establishment of digital enterprises, through enabling model-based engineering, manufacturing, and sustainability across an extended enterprise. The standards are developed, tested and published by an industry/government consortium called PDES Inc.