Glossary

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

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.

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.

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.

Optochemicals are used in the development and manufacturing of products for treatment of optical devices. They are all chemicals associated with sight and vision.

Optochemicals produce or react to light and can be used as sensors and to control chemical reactions.

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.

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.

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 fulfillment lead time is the elapsed time from the receipt of a customer order until the finished product is received by the customer.

Order-to-Cash Cycle is 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.

In some environments, this metric is widely used, for example, in 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 is 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 is 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.

An Original Equipment Manufacturer (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 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 Equipment Effectiveness (OFE is OEE) 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.