Enterprise resource planning (ERP) was an important step in an ongoing evolution of computer tools that began in the 1960s. Each evolutionary step is built on the fundamentals and principles developed within the previous one. As systems developed over time, a continuous stream of new terminology surfaced.
This is a glossary of those terms.
For terms not covered here see The Lexicon of CRM Part 1: From A to I , Part 2: From J to Q , and Part 3: From R to Z.
Accounts Payable through CRM
accounts payable (AP): The value of goods and services acquired for which payment has not yet been made.
accounts receivable (AR): The value of goods shipped or services rendered to a customer on which payment has not yet been received. Usually includes an allowance for bad debts.
advanced planning and scheduling (APS): Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the "official plan." The five main components of APS systems are demand planning, production planning, production scheduling, distribution planning, and transportation planning.
APICS: A nonprofit educational organization consisting of over 70,000 members in the production and operations, materials, and integrated resource management areas.
application Software: A program that performs a task or process specific to a particular end-user's needs, or solves a particular problem. Enterprise applications are typically large-scale business systems that organizations use to manage their operations.
application programming interface (API): A set of routines, protocols, and tools for building software applications or for communicating with programs or other systems. A good API makes it easier to develop a program by providing all the building blocks that a programmer needs Although APIs are designed for programmers, they are ultimately good for users because they guarantee that all programs using a common API will have similar interfaces, which makes it easier for users to learn new programs. On the other hand, many enterprise applications vendors provide APIs for integrating other applications with their systems.
application service provider (ASP): A third-party entity that manages and distributes software-based leased services and solutions to customers across a wide area network from a central data center. In essence, ASPs are a way for companies to outsource some or almost all aspects of their information technology needs.
architecture: A structured set of protocols that implements a system's functions.
available-to-promise (ATP): The uncommitted portion of a company's inventory and planned production, maintained in the master schedule to support customer order promising.
back scheduling: A technique for calculating operation start dates and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation.
bill of material (BOM): A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly.
browser: Software used on the Web to retrieve and display documents on-screen, connect to other sites using hypertext links, display images, and play audio files.
business intelligence (BI): Sets of tools that provide graphical analysis of business information in multidimensional views thus enabling people to make better decisions and improve their business processes.
business-to-business e-commerce (B2B) (A): Business being conducted over the Internet between businesses. The implication is that this connectivity will cause businesses to transform themselves via supply chain management to become virtual organizations, reducing costs, improving quality, reducing delivery lead time, and improving due-date performance.
business-to-consumer sales (B2C) (A): Business being conducted between businesses and final consumers largely over the Internet. It includes traditional brick and mortar businesses that also offer products online and businesses that trade exclusively electronically.
capable-to-promise (CTP): The process of committing orders against available capacity as well as inventory. This process may involve multiple manufacturing or distribution sites. Capable-to-promise is used to determine when a new or unscheduled customer order can be delivered. Capable-to-promise employs a finite-scheduling model of the manufacturing system to determine when an item can be delivered. It includes any constraints that might restrict the production, such as availability of resources, lead times for raw materials or purchased parts, and requirements for lower-level components or subassemblies. The resulting delivery date takes into consideration production capacity, the current manufacturing environment, and future order commitments. The objective is to reduce the time spent by production planners in expediting orders and adjusting plans because of inaccurate delivery-date promises.
capacity requirements planning (CRP): The function of establishing, measuring, and adjusting limits or levels of capacity. The term CRP in this context refers to the process of determining in detail the amount of labor and machine resources required to accomplish the tasks of production.
client/server system: A distributed computing system in which work is assigned to the computer best able to perform it from among a network of computers.
client: In information systems, a software program that is used to contact and obtain data from a server program on another computer. Each client program is designed to work with one or more specific kinds of server programs, and each server requires a specific kind of client. A Web browser is one type of client.
computer-assisted software engineering (CASE): The use of computerized tools to assist in the process of designing, developing, and maintaining software products and systems.
computerized maintenance management systems (CMMS): Automated software systems for handling maintenance work orders, as well as associated inventory, purchasing, accounting, and human resources functions. In some industries—particularly process production, in which manufacturers look to optimize use of capital-intensive equipment—maintenance management systems play a leading role as the enterprise system. Maintenance management systems have similar basic functionality, including:
1) use of work orders for preventive and predictive maintenance,
2) equipment recording and tracking,
3) inventory control,
4) scheduling labor and resources, and
corporate performance management (CPM): An overarching term that describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise. Applications that enable CPM translate strategically focused information to operational plans and send aggregated results.
cost of goods sold (COGS): An accounting classification useful for determining the amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time.
customer relationship management (CRM): Software systems that range from simple, off-the-shelf contact management solutions to high-end interactive selling suites that combine sales, marketing, and executive information tools. These include product configuration, quote and proposal management, and marketing encyclopedias. Some systems extend functions to include complex pricing, promotions, commission plans, team selling, and campaign management. Enterprise-level solutions installed at large companies with hundreds or even thousands of users have capabilities for call center and help desks; field service; forecasting; and analysis.
Database through Internet
database: A data processing file-management approach designed to establish the independence of computer programs from data files. Redundancy is minimized, and data elements can be added to, or deleted from, the file structure without necessitating changes to existing computer programs.
database management system (DBMS): The software designed for organizing data and providing the mechanism for storing, maintaining, and retrieving that data on a physical medium (i.e., a database). A DBMS separates data from the application programs and people who use the data and permits many different views of the data.
data warehouse: A repository of data that has been specially prepared to support decision-making applications.
discrete manufacturing: Production of distinct items such as automobiles, appliances, or computers.
e-Business: The generic name given to any type of business conducted using the Internet from online trading to self-service.
engineer-to-order (ETO): Products whose customer specifications require unique engineering design, significant customization, or new purchased materials. Each customer order results in a unique set of part numbers, bills of material, and routings.
enterprise application integration (EAI): The unrestricted sharing of data and business processes throughout the networked applications or data sources in an organization, since early software programs in areas such as inventory control, human resources, sales automation and database management were designed to run independently, with no interaction between the systems. There are four major categories of EAI:
1) database linking: databases share information and duplicate information as needed;
2) application linking: the enterprise shares business processes and data between two or more applications;
3) data warehousing: data is extracted from a variety of data sources and channeled into a specific database for analysis; and
4) common virtual system: the pinnacle of EAI; all aspects of enterprise computing are tied together so that they appear as a unified application.
enterprise asset management (EAM): A term used by maintenance management software vendors to connote the wide-ranging functionality that their systems include, for example inventory management and financials. A company's total assets might include labor, tools, equipment, materials, and information. The goal of asset management is to optimize asset use and manage all maintenance efforts involved in making assets as reliable, accurate, and efficient as possible. A further crucial element in enterprise wide asset management is integration with financial, human resources, and purchasing functions, as well as production, material requirements planning, and enterprise resources planning systems.
enterprise resources planning (ERP) system:
1) An accounting-oriented information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders. An ERP system differs from the typical MRP II system in technical requirements such as graphical user interface, relational database, use of fourth-generation language, and computer-assisted software engineering tools in development, client/server architecture, and open-system portability.
2) More generally, a method for the effective planning and control of all resources needed to take, make, ship, and account for customer orders in a manufacturing, distribution, or service company.
finite scheduling: A scheduling methodology where work is loaded into work centers such that no work center capacity requirement exceeds the capacity available for that work center.
flow manufacturing: A form of manufacturing organization, in which machines and operators handle a standard, usually uninterrupted, material flow. The operators generally perform the same operations for each production run. A flow shop is often referred to as a mass production shop or is said to have a continuous manufacturing layout. Each product, though variable in material specifications, uses the same flow pattern through the shop. Production is set at a given rate, and the products are generally manufactured in bulk.
fourth-generation language (4GL): A general term for a series of high-level nonprocedural languages that enable users or programmers to prototype and to code new systems. Nonprocedural languages use menus, question-and-answer combinations, and a simpler, English-like wording to design and implement systems, update databases, generate reports, create graphs, and answer inquiries.
graphical user interface (GUI): A connection between the computer and the user employing a mouse and icons so that the user makes selections by pointing at icons and clicking the mouse.
infinite loading: Calculation of the capacity required at work centers in the time periods required regardless of the capacity available to perform this work.
Internet: A worldwide network of computers belonging to businesses, governments, and universities that enables users to share information in the form of files and to send electronic messages and have access to a tremendous store of information. Also referred to as Web, it is a universal mass of web pages connected together through links.