Glossary
This glossary provides terms related to IBM Sterling Fulfillment Optimizer with Watson and their definitions.
The following cross-references are used in this glossary:
- See refers you from a nonpreferred term to the preferred term or from an abbreviation to the spelled-out form.
- See also refers you to a related or contrasting term.
A
- Available quantity
- The quantity of an item that is available for purchase. The available quantity is calculated by subtracting the reserved quantity from the on-hand quantity.
B
- Backorder
- The status of an ordered product when inventory allocation has determined that the product is unavailable.
- Backlog days
- Backlog days are calculated when the capacity utilization at a node is greater than the available node capacity or processing plan for the day. You can configure a specific backlog threshold for each node based on how much backlog it can handle before the overcapacity penalty is applied.
- Benefits report
- A feature of Fulfillment Optimizer that provides insight and visibility into the benefits that you've obtained over a period of time by using the inventory model to fulfill your orders. For more information, see Benefits report.
C
- Capacity
- The maximum amount of orders that a node can fulfill within a period of time.
- Cumulative Capacity Utilization (CCU)
- The backlog that is decremented for each consecutive day until no backlog remains is referred to as Cumulative Capacity Utilization (CCU). For more information, see Cumulative Capacity Utilization (CCU) for a node.
- Continuous replenishment
- A strategy of replenishment that monitors the physical inventory in the reserved location, and based on the minimum and maximum configuration, releases replenishment tasks for execution when inventory falls below the minimum (trigger) level.
D
- Dashboard
- View information about your nodes and KPIs related to total costs, orders, packages, and units using the dashboard. For more information, see Viewing optimization dashboard.
- Distance penalty cost
- When two or more ship nodes have the same cost to serve, a distance penalty tie breaker cost is applied. The distance penalty tie breaker is computed as a factor of the distance of the node from the destination address. This ensures that the closest node is selected by Fulfillment Optimizer when all other costs are equal. For more information, see Distance penalty cost.
- Distribution center (DC)
- A physical location where goods are stored for distribution to buyers.
E
- Estimated arrival date (EAD)
- A date estimation for the arrival of an order.
- Event
- A specific occurrence in the business process, often a status change or generated exception. Releasing an order and canceling an order are both examples of events. When an event occurs in a transaction, an action is triggered. You can subscribe to events in Fulfillment Optimizer. For more information, see Subscribing to events.
- Expected time of arrival (ETA)
- The date and time that a shipment is expected to arrive at a receiving dock from the supplier who shipped it.
- Expected replenishment
- The planned date upon which more inventory is supposed to arrive to re-supply the node.
F
- Fill rate
- The percentage of shipments or quantity of order line items that are fulfilled by the node as compared to the total shipments or quantities that are handled by the node.
- Fulfillment network
- Includes all of the stores, distribution centers, and carriers that are involved in fulfilling an order.
- Fulfillment network cutoff
- The fulfillment network cutoff is the time after which nodes in the fulfillment network will not process any additional orders. This can be defined for each node in the FN data feed. Alternately, you can override the cutoff time for a specific node and/or for a specific period by transferring the TP data feed. When an order is sent to Fulfillment Optimizer, the local time at the ship node is compared to the cutoff time defined in time-period/fulfillment network cutoff data type for that particular day. In cases where the cutoff time is not defined, it is assumed that the ship node operates for 24 hours daily with no cutoff times. If the local time is past the cutoff time, the next day is considered for shipping, and so on. When this occurs, a day is also reduced from the SLA days or the days to deliver.
G
- Globalization
-
Support for an application through appropriate design and implementation of systems, software, and procedures so that it can be used in multiple geographical locations.
H
I
- Idle assets
- Assets that are no longer active.
- Inventory
- Products stored and available for further action. May be reported as the quantity of a specific SKU in one location, the total quantity of a specific SKU in all locations containing that SKU, or a grand total of all material in storage (the latter generally reported as a dollar figure).
- Inventory benefits
- A column within Benefits report that displays the benefits you've received in relation to stockout avoidance, markdown avoidance, and artificial markdown reduction since you began using Fulfillment Optimizer.
- Item
- A product that has at least one characteristic that is different from all other products and which requires a unique identifier such as a stock keeping unit (SKU) or part number. The basic product of the catalog that can be used in categorization and product associations. An item is the most basic part of the catalog hierarchy.
- Item ID
- A numerical, unique identifier that is assigned to an item. Also referred to as a SKU.
J
K
- Key Performance Indicator (KPI)
- Goals that relate to a company's primary business objectives.
L
- Lead time
- The amount of time in days that it takes for a supplier, such as a distribution center, to acquire an item for shipping.
- Line item
- An item, material, service, or tool that is named on a contract, purchase requisition, purchase order, or invoice.
- Line ID
- A numerical, unique identifier that is assigned to an order line.
- Load balancing cost
- The cost associated with balancing the fulfillment load across nodes.
- Labor cost
- The cost associated with the labor required for fulfilling an order.
M
- Markdown avoidance
- Actively avoiding having to markdown items within a store by keeping just enough merchandise in stock to avoid having to markdown prices on the merchandise.
- Markdown avoidance cost
- The cost associated with having to markdown merchandise within a store.
- Markdown candidates
- The markdown candidate data type (MKC) is used in computing inventory performance cost, including estimating the probability of an item experiencing stockout before its end date. For more information, seeMarkdown candidate data type (MKC).
N
- Net benefits
- The total amount of money saved over a period of time, viewable in Benefits report.
- Network capacity
- Indicates the node capacity consumed at fulfillment centers and stores versus the processing plan or node capacity available for the day.
- Node carrier applicability
- An SLA data type that corresponds with the shipping carriers and the supported SLAs that are available for each node. This information is used to calculate shipping details for the fulfillment network. For more information, see Node carrier applicability SLA data type (NCA).
- Node
- An organization that represents a physical location whether it is a manufacturing plant, small stock room, or warehouse.
- Node calendar
- A calendar that defines the non-working days for a particular node. When an order is sent to Fulfillment Optimizer, the node calendar is checked to determine if the node is operating on a specific day. If it is a non-working day, the next day is considered for shipping, and so on. When this occurs, a day is also reduced from the SLA days or the days to deliver.
- Node capacity
- The node capacity (also known as the processing plan) is the maximum amount of orders or releases that a node can process. It can be defined in terms of units or releases. The available capacity is fed into Fulfillment Optimizer through the Node capacity plan data type (PP) feed for all nodes in the Fulfillment Network. Consume capacity is fed into Fulfillment Optimizer through either the backlog feed or alongside the order sent for optimization.
- Node balancing coefficients (NBCs)
- Node balancing coefficients are used to balance the load across a fulfillment network. These coefficients are defined for each node or node type in terms of threshold, over capacity cost, and sacrifice. They determine the penalty to be applied to a node during load balancing optimization. See Node-balancing coefficients for more information.
O
- Optimization dashboard
- View information about your nodes and KPIs related to total costs, orders, packages, and units using the dashboard. For more information, see Viewing optimization dashboard.
- Optimization explainer
- Optimization explainer helps business users understand how order were optimized by Fulfillment Optimizer based on their business objectives. Specifically, the interface displays how factors such as costs, shipments, backlog and inventory positions, paired with the respective weightings of the sliders at the time of optimization went into influencing the final decision made by Fulfillment Optimizer. For more information, see Optimization explainer.
- Optimization parameters
- Multiplier factors that are considered during optimization. Use optimization parameters to define your business objectives within Fulfillment Optimizer.
- Order age
- The number of days since the creation of the order. Order age is calculated for pending orders only.
- Order composition
- The line items within an order.
- Order lines
- The order line status data type (OL) includes details for E-COM orders. The ongoing order line status data feed is used to compute capacity backlog for the Shipping/Capacity model. Order line status historical data is required for the Inventory Optimizer model only. For more information, see Order line status data type (OL).
- Order ID
- A numerical, unique identifier that is assigned to an order.
- Over capacity
- The percentage of shipments or quantity of order line items being fulfilled by the node that exceeds the total capacity of the node for the day.
- Over capacity cost
- A node balancing coefficient. Apenalty that is charged when a node exceeds its specified threshold. The overcapacity penalty is charged for each day that the fulfillment location cannot ship new orders due to a backlog in fulfilling previous orders.
P
- Pre-order
- Orders taken before a supplier has the stock necessary to fulfill them.
- Processing cost
- The processing cost data type (PC) is used when optimizing processing costs at nodes. This data feed is only required when you are optimizing processing costs at nodes. The processing cost provides the cost to process (pick and pack) each unit for an e-commerce order, which may vary by node.
- Processing time
- The amount of time required for an item to be received by a supplier and be prepared for shipment.
- Processing plan
- The capacity that is available for nodes over a specified time span, also referred to as node capacity.
- Parameter profile
- Profiles created for specific circumstances where you can set optimization values based on the associated business goals.
Q
R
- Receiving node
- The warehouse or distribution center that is receiving the shipment of products.
- Reinvested shipping cost
- The amount of money saved in shipping costs that can be reinvested.
- Replenishment
- The process of refilling an active pick location based on deliberate, controlled calculation and
task assignment. The replenishment data type (REPL) is used to determine when an item will be
replenished, if a stockout will occur before the replenishment date, and if replenishment will
prevent a stockout.
For more information, see Replenishment data type (REPL).
- Return on investment (ROI)
- The amount of profit or cost saving that is realized for a given expenditure.
S
- Ship node
- The warehouse or distribution center that is shipping the shipment or products.
- SLA rate
- The percentage of shipments or quantity of order line items that are fulfilled on time (based on the service level agreement) when compared to the total number of those respective quantities handled by the node.
- Stock keeping unit (SKU)
- An alphanumeric identifier for each item of merchandise, or catalog entry. The smallest unit available for keeping inventory control. It can include variables for department, class, vendor, style, color, size, and location.
- Stockout avoidance cost
- The estimated amount of money that is spent to avoid a predicted stockout.
- Stockout cost
-
The lost income and expense associated with a shortage of inventory.
- SmartStart
- IBM's SmartStart offering allows you to quickly visualize the impact of using Fulfillment Optimizer on your business and test the integration between Fulfillment Optimizer and IBM Sterling Order Management prior to making major changes to your existing processes. For more information, see SmartStart.
- Shipping rate card
- The shipping rate card data type (RC) corresponds with each carrier's individual cost specifications for shipping. Each of the attributes corresponds with an aspect of the shipping cost per product or package for any carriers that your business works with. Each attribute is factored in when IBM Sterling Fulfillment Optimizer with Watson optimizes shipping costs for an order. The shipping cost information is used to calculate the total shipping cost when combined with the rate card information. The data is used to determine the eligibility of all order fulfillment possibilities for an order. For more information, see Shipping rate card data type (RC).
- Shipping dimension weight factor
- The shipping dimension weight factor is a data type that defines the dimensional weight factor to calculate the shipping cost of a package when combined with the shipping rate card. This data is used to determine the eligibility of all order fulfillment possibilities. For more information, see Shipping dimension weight factor data type (CMF).
- Safety stock
- An additional amount of inventory that is maintained to prevent instances of stockout.
- Sacrifice
- A node balancing coefficient. The value of sacrifice determines the extra cost that a fulfillment center is willing to invest to ship an order that can also be shipped from another node. The additional amount that is invested is directly proportional to the value of the sacrifice parameter.
- Shadow optimization
- Enables Fulfillment Optimizer to calculate the benefits related to specific business objectives so that you can get a better understanding of how you would benefit from using it.
T
- Transit matrix
- Used to calculate the shipping cost of an order. Each of the attributes of an order corresponds with an aspect of the shipping cost per product or package for any carriers that your business works with. These attributes include cost per transit day, cost per weight, what a package's origin and destination are, and more. Each attribute is factored in when Fulfillment Optimizer optimizes shipping costs for an order. The shipping matrix information is used to calculate the total shipping cost when combined with the rate card information. The data is used to determine the eligibility of all order fulfillment possibilities for an order. For more information, see Shipping transit days data type (TM).
- Total shipping cost
- The total cost of shipping an item.
- Transaction log data type (TLOG)
- The transaction log (TLOG) data captures the transactional sales history that is used to help determine demand. The demand forecast helps determine the inventory levels needed to fulfill orders. The transaction log data is used for computing inventory performance cost, including estimating the chances of a stockout and key indicators predicted velocity. Each transaction log file contains a single day of data. For more information, see Transaction log data type (TLOG).
- Threshold
- A node balancing coefficient. The number of days of capacity that a node can consume before the over capacity penalty is charged. It is recommended that the threshold value is set based on the backlog that a node can manage so that the over capacity penalty only causes orders to be fulfilled by another node when necessary.
U
V
- Velocity
-
The the average daily in-store and online sales for a product predicted by a statistical model.
W
- Warehouse
- A physical location where goods are stored.
- Winning node
- The node that Fulfillment Optimizer has selected as the most optimal for shipping an item.
- Without inventory model (settings)
- A column within Benefits report that displays the values associated with optimization that does not involve the inventory model.
X
Y
Z
- Zone
- A group of locations in a warehouse used to distinguish storage types or the kind of item stored in those locations.