Glossary

REACH is a European Union regulation concerning the Registration, Evaluation, Authorisation and restriction of Chemicals. It came into force on 1st June 2007. REACH covers both production and use of chemical substances, and replaces a number of earlier European Directives and Regulations with a single system.

Real Time Feedback requires Instantaneous (or nearly instantaneous) communication of sensor data to process operators or equipment. This enables rapid or automated adjustments that keep production processes operating within quality parameters.

A Real Time System is a computer system designed to receive, process, and respond to data within a time frame set by outside events. Many industrial control systems are real time systems.

The events which establish the required time frame can be both on the input side of the computer (for example, sense the position of an elevator) and on the output side (apply the brakes, announce the floor, open the doors).

In logistics and material handling, receiving is the process of accepting incoming goods for storage or use. Receiving may involve a decision to accept or reject goods based on condition or related documentation.

In process manufacturing, a recipe is a central document. It combines a formula (ingredients and quantities) with the processing steps and processing times needed to make the product.

In transportation, ‘Reefer’ means refrigerated.  A reefer truck is usually a standard semi cab pulling a refrigerated trailer.

Regional Aircraft (also regional airliner, commuter airplane, feederliner) is the term for aircraft used for short flights which allow passengers and cargo to travel between a hub airport and final start and destination points. The use of regional aircraft is driven partly by airport facilities (not all airports can handle large aircraft), and partly to balance capacity (and cost) to demand.

Remote Sensing Equipment is used to obtain information about an object from a distance, and, almost always, with no contact with the object. The term is widely used for earth observation data from aircraft and satellites. The sensing technology may detect available light, sound, infrared, magnetic, gravity or other signals, or actively scan with radar, lidar or ultrasound. A few applications require contact with the object being measured, for example, sea temperature at depth usually needs a submerged sensor in contact with the water.

In the energy industry, renewables refers to all the sources and fuels which can be used to generate energy without being depleted. For example, unlike coal, oil and gas, energy from rivers, wind, waves, tides and solar sources are essentially inexhaustible. Because biofuels can be ‘renewed’ by growing new plant material, these are also considered renewables.

Repetitive Manufacturing is a category of discrete manufacturing. It covers production of the same product using the same method. Automated production lines are typical in repetitive manufacturing. Production planning can be reduced to the single decision – shall we switch the line on or off?

A Request for Proposal (RFP) is an invitation for suppliers, often through a bidding process, to submit a proposal to solve a specified problem, or meet a specified requirement. By sending the same RFP to a number of possible suppliers, the RFP process helps to bring structure to a company’s procurement decision and allows an objective comparison of supplier responses.

A company’s procurement department sends out an Request for Quotation (RFQ) to invite suppliers to bid to supply them with goods or services. As well as price, the customer looks at things like delivery schedules, quality, and technical ability.

Research and Development (R&D) is the discipline responsible for applying science and technology to create new (or improve existing) products, and improve the processes used to make them.

Used in the oil and gas sector, Reserve Replacement Rate (RRR) measures new proven reserves, expressed as a percentage of the oil or gas extracted for production. Investors prefer RRR to be 100% or more, because this demonstrates that the company can maintain or increase existing extraction and production levels. RRR of less than 100%, particularly if sustained for an extended time period, makes investors worry that the company will run out of oil and gas.

Residual Value is the estimated value of an asset after it has lost part of its original value (i.e. depreciated) over a period of time. For example, a car that is five years old has not got the same value as it did when it was brand new.

Restriction of Hazardous Substances (RoHS) is the acronym for Restriction of Hazardous Substances. RoHS originated in the European Union and restricts the use of specific hazardous materials found in electrical and electronic products.

All applicable products in the EU market after July 1, 2006 must pass RoHS compliance. Electrical and electronic manufacturers whose products are sold in the EU or some additional countries which have adopted RoHS must achieve RoHS compliance. They must also comply with the related WEEE directive, which defines disposal and recycling conditions for this equipment.

Return on Assets Employed (ROAE) is the ratio that shows how many dollars of net income a company gets from every dollar of assets used in the business. ROAE is generally based on fixed assets. This is very similar to Return on Net Assets (RONA), except RONA usually adds inventory, accounts receivable and working capital into the pool of assets.

Both ROAE and RONA are particularly important in asset intensive industries (for example, oil refining and bulk chemical production) where the efficient choice and use of expensive production equipment is key to profitability. Two other similar measures, Return on Capital Employed (ROCE) and Return on Assets (ROA) take a broader view of the assets and capital against which the return should be calculated.

Return on Equity (ROE) shows a company’s efficiency in making profits from shareholders’ equity. It is equal to net profits divided by shareholders’ equity. 

Return on Invested Capital (ROIC) is a measure of how effectively a company uses the money (borrowed or owned) invested in its operations. It is the ‘return’ expressed as a percentage of ‘invested capital’. In most situations, ‘return’ is the net operating profit after taxes (NOPAT); and the ‘invested capital’ is (total assets less excess cash) but excluding non-interest-bearing liabilities.

The Return on Investment (ROI) metric allows an investor to quantify the success of an investment. A reliable figure can be calculated after the investor has sold their investment, but ROI is used extensively as an estimated forecast based on plans and expectations. ROI is usually expressed as a percentage increase in the value of an investment per year, or over the lifetime of the investment. Inside companies, projects and initiatives are often judged as investments with ROI. But in this case, cost savings and revenue growth are the main return.

For outside investors, and therefore for top management, positive revenue growth is one of the important indicators of the value of a business. Revenue growth is measured as the percentage change in revenue between two comparable time periods. Organic growth is the component of revenue growth which is achieved by the underlying business from the first time period. Further revenue growth may be achieved by acquisition of other organizations.