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The Forrester Wave™: Supplier Value Management Platforms, Q3 2024 See Report
Procurement & Supply Chain Glossary
Enhance your understanding of procurement and supply chain concepts with key terms, abbreviations, and definitions.
a
Accounts Payable (AP)
Accounts Payable refers to the amount that a business owes to its suppliers, representing the sum owed by a business to its suppliers, is recorded as a liability on the company's balance sheet...Accounts Payable Automation (AP Automation)
Accounts Payable Automation, also known as AP Automation, pertains to the use of specialized software or technology designed for accounts payable management...Accounts Receivable (AR)
Accounts receivable refers to the outstanding balances that customers owe to a business for products or services rendered...Advanced Product Quality Planning (APQP)
Advanced Product Quality Planning (APQP) enables collaborative quality & launch processes that bring stakeholders and suppliers together with standard and repeatable processes...Advanced Services Procurement
Advanced Services Procurement enables organizations to collaboratively track locations, usage, depreciation, maintenance, and decommissioning of key assets...Agile business processes
Agile business processes refers to a dynamic and adaptive approach to managing workflows and operations within an organization...Agile Procurement
Agile procurement involves adapting to changes in supply and demand by leveraging lean-agile workflow methods, which draw inspiration from just-in-time production and software development...Agile Reporting
Agile reporting refers to the systematic evaluation and dissemination of company information through specialized software and reporting methodologies...Agile Supply Chain
The agility of an organization is defined by its capacity to swiftly adapt to fluctuations in demand, encompassing changes in volume and variety...AP Invoicing
Accounts Payable (AP) invoicing encompasses the intricate process of receiving, recording, and routing invoices, culminating in the execution of payments...Approval
Approval in procurement signifies the official acceptance of documents such as expense reports, requisitions, or similar requests as satisfactory...Approval chain
The approval chain in procurement refers to the sequential involvement of stakeholders required to authorize a specific action before its execution...Artificial Intelligence (AI)
Artificial Intelligence (AI) in procurement signifies the integration of cutting-edge technology to revolutionize and optimize various aspects of the procurement process...Assets & Tooling
Assets & Tooling management involves the collaborative administration of budgets and lifecycles in conjunction with suppliers...Audit Trail
An audit trail represents a sequence of records, often electronic, that systematically links financial data from its origin to completion...Automated Invoice Processing
Automated invoice processing involves the utilization of specialized software designed to efficiently scan, extract, match, reconcile, and validate relevant invoice data...b
Backward Integration
Backward integration is a strategic move by companies to extend their role in the supply chain through the acquisition or merger with a business providing essential raw materials for their goods...Bid Analysis
Bid analysis is the systematic evaluation of bids received in response to sourcing events...BOM Lifecycle Manager
Ivalua elevates the management of a product's Bill of Materials (BOM) across its complete lifecycle...Budget Tracking
Budget tracking involves the vigilant monitoring of actual and planned spending against the available budget, ensuring alignment and consistency with accounting systems...Business Spend Management
Business spend management (BSM) integrates technology and strategic approaches to capture the entire spectrum of activities before, during, and after the direct expenditure of funds in business operations...c
Category Analysis
Category analysis involves gaining an in-depth understanding of the demand and supply market dynamics specific to a particular category...Category Management
Category management involves the definition and implementation of overarching objectives, comprehensive action plans, and detailed plans and tasks at the category level...Centralized Procurement
Centralized procurement is a structured system wherein a single team or department oversees all purchasing and procurement activities for the organization...Chart of Accounts
A chart of accounts is a foundational framework that delineates the organizational structure of legal entities, tax reporting, and cost centers within an organization...Collaboration Plans
Collaboration plans encompass the strategic organization and management of an organization's legal entities, tax reporting, and cost centers...Compliance
Compliance in procurement involves steadfast adherence to predefined rules, encompassing laws or established standards...Compliance Risk Management
Compliance risk management encompasses the systematic identification and assessment of legal penalties, financial losses, and material setbacks linked to an organization's non-compliance with specific laws and regulations...Compliant invoicing
Compliant invoicing refers to the meticulous adherence to regulatory compliance rules within a specific region...Continuity Plan
A continuity plan is strategically crafted to secure an organization's uninterrupted performance, especially in times of crises...Contract Abstraction
Contract abstraction is a legal process that emphasizes the identification and summarization of all pertinent clauses, offering insights into the essential information within an agreement...Contract Audit
Regular contract audits are imperative across all business sectors to verify the adherence to a contract's terms and conditions...Contract Compliance
Contract compliance entails the meticulous observance of norms and procedures outlined in a contract...Contract Lifecycle Management (CLM)
Contract Lifecycle Management (CLM) is a comprehensive solution designed to streamline and digitize the entire contract process, encompassing creation, authoring, negotiation, approval, and ongoing management throughout the contract's lifecycle...Contract Management
Effective contract management is vital for organizations seeking to maximize contract value and streamline the entire contracting process...Contract Repository
A contract repository serves as a singular, centralized, and searchable database that efficiently houses all of an organization's contracts...Corporate Social Responsibility (CSR)
Corporate social responsibility (CSR) is a strategic management approach dedicated to creating a positive societal impact...Cost Avoidance
Cost avoidance involves strategic actions taken to prevent future costs, commonly referred to as "soft savings...Cost Modeling
Cost modeling is a strategic process that revolves around simulating future cost and revenue scenarios, particularly in contexts like innovative product development...cXML
cXML, short for Commerce eXtensible Markup Language, stands as a powerful protocol designed for efficient communication of business documents among procurement applications, e-commerce hubs, and suppliers...d
Decentralized Procurement
Decentralized procurement is a dynamic approach that empowers individual stakeholders to autonomously make purchases for their respective departments...Demand Forecasting
Demand forecasting in procurement involves the systematic analysis and prediction of future demand for goods and services within the supply chain...Demand Planning
Demand planning in procurement is a strategic process focused on anticipating and managing the future demand for goods and services within the supply chain...Demand Sensing
Demand sensing is a strategic approach that empowers companies to proactively and responsively adapt their supply chains to fluctuating demand...Direct Cost
Direct costs, one of the fundamental categorizations in business expenses, are explicitly associated with the production of goods and form a significant component of overall expenditure...Direct Materials Sourcing
Direct materials sourcing is a pivotal component of procurement focused on efficiently acquiring raw materials, goods, and services essential for the production of goods or services...Direct Procurement
Direct procurement is a pivotal facet of sourcing that focuses on the acquisition of materials, goods, and resources specifically intended for production purposes...Direct Sourcing
Direct sourcing, a cornerstone of strategic procurement, involves the procurement of raw materials, goods, and services integral to a business's core operations...DUNS number
A DUNS (Data Universal Numbering System) number is a distinctive nine-digit identification code assigned to each physical location of your business...e
e-Billing
e-Billing, short for electronic billing, is a transformative process that revolutionizes the way bills are paid and received online...eArchiving
eArchiving is a meticulous process that involves the electronic storage of invoices in strict adherence to country-specific tax regulations...Early Payments
Early payments in procurement present a strategic opportunity to capture new savings by leveraging early payment discounts...eAuction
eAuctions, short for electronic auctions, revolutionize procurement by offering a dynamic online platform for negotiating and determining market prices for specific items...EBITDA
EBITDA, an acronym for earnings before interest, taxes, depreciation, and amortization, serves as a pivotal financial metric providing insights into a company's operational profitability...EDI
Electronic Data Interchange (EDI) is a method of business communication through the electronic exchange of information in a standardized format...Effective collaboration
Effective collaboration in procurement is the cornerstone of successful and streamlined supply chain operations...eInvoicing
eInvoicing, short for electronic invoicing, is a revolutionary method that transforms traditional invoicing processes into a seamless digital experience...Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP) is a powerful software solution employed by businesses to connect departments within an organization and oversee crucial operations, including accounting and resource management...eProcurement
eProcurement, or electronic procurement, signifies a transformative shift toward the digital purchase of products and services through online networks and platforms...eSourcing
eSourcing, or electronic sourcing, helps procurement professionals access a diverse pool of suppliers, fosters improved transparency in buyer-supplier relationships, and unlocks opportunities for cost savings...eTender
eTender, short for electronic tender, is a seamless process for sending and receiving bid tenders through online procurement platforms...Ethical Procurement
Ethical procurement encompasses a diverse range of considerations crucial for upholding a business's ethical and sustainability objectives...Expenses
Expenses in procurement pertain to the financial outlays incurred during the acquisition of goods and services necessary for business operations...f
Financial Supply Chain Management
Financial Supply Chain Management (FSCM) is a strategic discipline that views financial processes holistically, emphasizing the interconnectedness of various financial activities rather than treating them as isolated components...Flat file
A flat file refers to a standalone data storage structure that lacks interlinkages or associations with other files...Forecast Collaboration
Forecast collaboration in procurement represents a strategic alliance between stakeholders to refine predictive models and enhance the accuracy of future demand forecasts...g
Global Sourcing
Global sourcing stands is a procurement strategy where businesses acquire goods and services from international markets...Green Procurement
Sustainable procurement, commonly known as green procurement, involves the assessment of products, materials, and services based on their environmental impact...Green Supply Chain Management
Sustainable supply chain management (SSCM) integrates environmentally responsible practices into traditional supply chains, encompassing all phases from manufacturing and operations to end-of-life management...i
Indirect Materials
Indirect materials refer to consumable items essential for the day-to-day functioning of a business but are not directly incorporated into the final product...Indirect Procurement
Indirect procurement plays a pivotal role in business sustainability and growth, encompassing the acquisition of goods, services, and merchandise that aren't directly associated with product manufacturing...Integrated Logistics
Integrated logistics, a progressive business management model, is gaining prominence for its role in expediting product delivery and enhancing customer service...Inventory Collaboration
Inventory collaboration is a strategic approach aimed at simplifying and optimizing inventory levels in alignment with the broader procure-to-pay workflow...Inventory Management
Inventory management, a pivotal subset of supply chain management, empowers enterprises to oversee diverse facets and stages of products within their inventory...Inventory Visibility
Inventory visibility refers to the capacity to observe and monitor inventory in real time, providing valuable insights into the precise quantity of each Stock Keeping Unit (SKU) available at each location...Invoice Approval
Invoice approval involves the meticulous evaluation and sanctioning of supplier invoices before finalizing the payment...Invoice Automation
Invoice automation in procurement revolutionizes traditional workflows by leveraging cutting-edge technology to expedite and enhance the invoicing cycle...Invoice Data Extraction
Invoice data extraction in procurement is a process empowered by eInvoicing processing technology to streamline and optimize the handling of crucial financial information...Invoice Hub
An Invoice Hub in procurement serves as the centralized nerve center for managing and processing invoices within an organization...Invoice Management
Invoice management in procurement is a pivotal internal function intricately linked to the seamless processing of invoice documents received from vendors and suppliers...Invoice Reconciliation
Invoice reconciliation, a crucial facet of procurement, also referred to as invoice comparison or verification, plays a pivotal role in ensuring the accuracy and alignment of invoices with corresponding orders...Invoicing
Invoicing in procurement is a crucial aspect of the source-to-pay (S2P) process, encompassing the issuance, submission, and handling of invoices between buyers and suppliers...Issues Management
Issues management within the realm of procurement involves the systematic identification and resolution of various challenges that may arise throughout the procurement lifecycle...Item and Service Master
The Item and Service Master in procurement refers to a centralized repository that catalogues and categorizes the diverse array of products and services available for procurement within an organization...l
Lean Procurement
Lean procurement involves the strategic design of a purchasing organization based on lean principles, encompassing various facets such as strategy, processes, structure, and personnel...Lean Supply Chain
A lean supply chain is a strategic approach focused on delivering a product to the end customer with maximum efficiency and minimal waste...m
Material Requirements Planning (MRP)
Material Requirements Planning (MRP) is a comprehensive system that plays a pivotal role in identifying and managing the essential materials needed for production...Maverick Buying
Maverick buying refers to a practice in which internal stakeholders bypass formal purchasing procedures within an organization...MRO Inventory
MRO Inventory, or Maintenance, Repair, and Operations Inventory, encompasses the essential supplies, spare parts, and materials crucial for routine maintenance, repairs, and day-to-day operations within a business...p
P-card
A P-card, short for Purchasing Card, serves as a dedicated company debit card utilized by authorized personnel to autonomously acquire goods and services directly from predefined suppliers...P2O
P2O, or Procure to Order, represents a manufacturing process within the business landscape...P2P
P2P, also known as Procure-to-Pay or Purchase-to-Pay, encapsulates a comprehensive set of activities essential for securing and overseeing materials needed in the production of goods or delivery of services...Performance review (supplier)
A supplier performance review involves a thorough and systematic evaluation of a supplier's overall performance within the procurement process...Planned Order Collaboration
Planned Order Collaboration in procurement involves real-time collaboration with suppliers on MRP/ERP-driven Scheduled Lines, creating an efficient, transparent, and secure supply chain...Preferred supplier
A preferred supplier is a specially designated category of chosen suppliers that play a pivotal role in the procurement strategy of a company...Price List & Catalogs
Price List & Catalogs in procurement refer to the management and utilization of comprehensive catalogs containing detailed product or service information along with accurate pricing...Procure-to-invoice (P2I)
Procure-to-invoice (P2I) is a specialized subset within the broader procure-to-pay process that specifically focuses on the seamless integration of procurement activities up to the generation and processing of invoices...Procure-to-Pay (P2P)
Procurement metrics, also known as Key Performance Indicators (KPIs), are a set of quantifiable measurements used to evaluate and monitor the efficiency and effectiveness of procurement processes within an organization...Procure-to-Pay Process
The Procure-to-Pay (P2P) process is a comprehensive business workflow that encompasses the entire lifecycle of procurement, from the initial requisition of goods or services to the final payment to suppliers...Procurement Analytics
Procurement Analytics refers to the systematic approach of collecting and analyzing data sourced from diverse channels, categorizing this information, and deriving valuable insights to enhance an organization's sourcing and purchasing procedures...Procurement Contract Management
Procurement contract management is a strategic process integral to the effective administration of contracts associated with procurement and purchases...Procurement Cycle
Procurement Cycle refers to the series of steps or stages involved in the procurement or purchasing process within an organization...Procurement Master Data Management
Procurement Master Data Management refers to the process of collecting, organizing, and maintaining essential data related to suppliers, products, contracts, and other procurement-related information...Procurement Metrics
Procurement metrics, also known as Key Performance Indicators (KPIs), are a set of quantifiable measurements used to evaluate and monitor the efficiency and effectiveness of procurement processes within an organization...Procurement Process
The Procurement Process is a strategic and systematic approach that guides organizations through the entire lifecycle of acquiring new products or services...Procurement System
A Procurement System refers to a sophisticated framework or software designed to streamline and automate various stages of the procurement process within an organization...Procurement Technology
Procurement Technology refers to advanced tools and systems primarily designed to simplify intricate procurement processes and drive cost reduction within businesses...Procurement Transformation
Procurement Transformation marks a paradigm shift in the role of the procurement function, evolving from a historically tactical focus on cost reduction to a strategic business function that generates enhanced value...Procurement Value
Procurement Value, in economic terms, is a metric that assesses the efficiency and effectiveness of the resources invested in acquiring goods or services...Public Procurement
Public Procurement refers to the formalized processes through which governmental entities, including municipalities and ministries, acquire goods or services from selected companies...Purchase Order
A Purchase Order (PO) serves as a legally binding document initiated by an organization seeking to procure goods and/or services from a designated supplier...Purchase Requisition
A Purchase Requisition (PR) serves as an internal document used by employees to formally request approval for the acquisition of goods or services on behalf of their organization...Purchase to Pay
The Purchase-to-Pay cycle (P2P) is a comprehensive process that covers all stages from the initiation of purchasing goods to the final step of making payments...Purchasing
Purchasing is a comprehensive term that encapsulates the entirety of operational activities carried out within the purchasing department of an organization from identifying needs, engaging with suppliers, and ensuring the timely delivery of products or services to meet organizational requirements...r
Requisition to Purchase Order (Req-to-PO)
The Requisition to Purchase Order (Req-to-PO) process initiates with the creation of a purchase requisition (PR), followed by the approval of the PR...RFI
An RFI, or Request for Information, is a solicitation document strategically employed to gather comprehensive information about products, services, or potential suppliers...RFP
An RFP, or Request for Proposal, is a formal document designed to solicit business proposals, typically through a competitive bidding process...RFQ
An RFQ, or Request for Quotation, also referred to as a Call for Bids or Invitation for Bid, is a formalized business process wherein a company or public entity solicits quotes from suppliers for the procurement of specific products or services...RFX
RFX, or Request for "X," is a term denoting various electronic inquiries, commonly referred to as "eRfX...Risk Center
A Risk Center is a comprehensive risk monitoring solution that seamlessly integrates advanced risk intelligence technology and resources for the collection and analysis of all-hazards information...s
Savings Tracking
Savings Tracking in procurement refers to the systematic monitoring and recording of cost reductions and efficiencies achieved through strategic procurement practices...Seamless integrations
Seamless integrations refer to the advanced capabilities within a platform to effortlessly connect with multiple Enterprise Resource Planning (ERP) systems or other customer-specific systems...Should Cost Analysis
Should Cost Analysis is a strategic assessment conducted by a customer to analyze the supplier's expenses associated with delivering a product or service or fulfilling a contract...Smart Procurement
Smart Procurement entails leveraging technology, such as S2P software to enhance the efficiency of traditionally manual and labor-intensive procurement processes...Source to Contract
Source to Contract (S2C) represents a strategic framework encompassing a series of processes aimed at identifying and selecting strategic vendors for products or services within an organization...Source-to-Pay (S2P)
Source-to-Pay (S2P) represents the comprehensive end-to-end process that encompasses all interactions between an organization and its suppliers...Sourcing
Sourcing is a crucial component of the procurement lifecycle, encompassing a series of activities aimed at identifying, evaluating, and selecting suppliers to secure optimal goods and/or services for an organization...Sourcing Decision Center (SDC)
The Sourcing Decision Center (SDC) is an advanced optimization tool designed to empower Procurement teams with an intuitive and powerful solution for making well-informed decisions...SOW
A Statement of Work (SOW) is a detailed document outlining the specific requirements of a given project...Spend Analysis
Spend Analysis is a dynamic process involving the thorough review of procurement spend with the primary objectives of cost reduction, efficiency enhancement, and the improvement of supplier relationships...Spend Analytics
Spend Analytics in procurement refers to the systematic process of collecting, cleansing, categorizing, and analyzing expenditure data to gain insights into an organization's purchasing activities...Spend Cube
A Spend Cube is a structured data methodology employed to provide insights into key procurement questions, addressing factors such as the nature of purchases (product group), cost allocation origins (cost center), and the identity of suppliers...Spend Management
Spend Management is a strategic approach aimed at maximizing the efficient procurement of materials, products, and services within an organization...Spot bid
A Spot Bid in procurement refers to a real-time bidding process where organizations invite suppliers to submit immediate quotes for goods or services...Strategic Cost Management
Strategic Cost Management is a systematic process geared towards reinforcing a company's strategic position by meticulous control of costs aligned with broader organizational objectives...Strategic Sourcing
Strategic Sourcing is a methodical and standardized approach within supply chain management that formalizes the gathering and utilization of information...Sub-Tier Supplier Management
Sub-Tier Supplier Management involves overseeing and mitigating risks associated with suppliers beyond the primary or first-tier level in a supply chain...Supplier Evaluation
Supplier Evaluation is a crucial process undertaken by procurement teams to thoroughly assess potential vendors before entering into contractual agreements, ensuring the selection of the most suitable partners...Supplier Information Management (SIM)
Supplier Information Management (SIM) is a systematic business solution designed to capture, store, update, and analyze all relevant supplier data in a centralized repository...Supplier Management
Supplier Management involves a structured set of activities centered around the assessment, choice, enhancement, and strategic integration of suppliers across the entire value chain...Supplier Performance Management
Supplier Performance Management (SPM) is a vital business process designed to assess, analyze, and effectively oversee the performance of an organization's suppliers...Supplier Portal
A Supplier Portal is an online platform that serves as a centralized hub for collaboration and communication between a company and its suppliers...Supplier Relationship Management
Supplier Relationship Management (SRM) is a strategic practice dedicated to fostering, overseeing, and cultivating robust business partnerships with vendors...Supplier Risk & Performance Management
upplier Risk & Performance Management is a holistic approach encompassing the systematic identification, assessment, and control of risks within the supply chain...Supplier Sourcing
Supplier Sourcing is a multifaceted set of activities centered around the identification, assessment, selection, and engagement of potential suppliers, with a primary focus on obtaining the best value in terms of both product quality and cost...Supply Chain
A supply chain is a network of interconnected entities and activities involved in the creation and delivery of goods or services to end consumers...Supply Chain Collaboration
Supply Chain Collaboration refers to the strategic partnership between two or more independent enterprises to plan and execute supply chain operations collaboratively...Supply Chain Design
Supply Chain Design is a strategic framework that delineates the structure and network of a supply chain, providing a comprehensive model to estimate the time and costs associated with bringing goods to the market...Supply Chain Forecasting
Supply Chain Forecasting is a strategic process within supply chain management that involves predicting future demand for products or services to optimize planning and operational decisions...Supply Chain Management
Supply Chain Management is the strategic orchestration and oversight of the flow of goods and services, with the primary objectives of reducing costs, enhancing operational efficiencies, and maximizing overall value...Supply Chain Optimization
Supply Chain Optimization is a strategic process aimed at maximizing efficiency and performance within the flow of goods and services, with a focus on reducing costs and enhancing overall operational effectiveness...Supply Chain Planning
Supply Chain Planning Supply Chain Planning involves the comprehensive and strategic coordination of activities for the seamless movement of goods and services from the point of origin to the end user...Supply Chain Resilience
Supply Chain Resilience is the capacity of a supply chain to withstand and recover from disruptions, ensuring continuity and adaptability in the face of challenges...Supply Chain Sustainability
Supply Chain Sustainability is a strategic approach that emphasizes integrating environmentally and socially responsible practices into the end-to-end processes of the supply chain...Supply Chain Visibility
Supply Chain Visibility is the strategic capability to monitor and track inventory seamlessly as it progresses through the supply chain...Sustainability Reporting
Sustainability Reporting, a subset of non-financial reporting, empowers companies to articulate their advancements towards diverse sustainability objectives...Sustainable Procurement
Supplier Performance Management (SPM) is a pivotal business process integral to effective procurement and supply chain operations...Sustainable Sourcing
Sustainable sourcing involves the systematic integration of social and environmental considerations into the supplier selection process...t
Tail Spend
Tail spend, historically characterized as high-volume, low-value transactions outside procurement's purview, has evolved in its definition...Total Cost of Ownership (TCO)
Total Cost of Ownership (TCO) is a comprehensive methodology for quantifying all expenses associated with various activities along the entire supply chain...v
Value-added tax (VAT)
Value-Added Tax (VAT) is a taxation model wherein each company functions as a tax collector on the goods and services it sells...Vendor Agreement
A vendor agreement is a legally binding document that outlines the terms and conditions governing the work or services provided by a vendor...Vendor Compliance
Vendor compliance refers to the adherence of suppliers to a set of predetermined standards and specifications outlined by a retailer when fulfilling purchase orders...Vendor Contract Management
Vendor contract management involves the systematic oversight of vendor contract creation, execution, and analysis to optimize operational and financial performance within an organization while mitigating financial risks...Vendor Managed Inventory (VMI)
Vendor Managed Inventory (VMI) is a strategic business practice in which a supplier assumes the responsibility of monitoring and replenishing an agreed-upon level of inventory for specific materials directly at the buyer's location...Vendor Management
Vendor management is a systematic approach designed to oversee and enhance the impact of suppliers on a buyer's business operations...Vendor Master Data
Vendor master data is a comprehensive repository encompassing pertinent details about sources of goods and services...Vendor Master Data Management (VMM)
Vendor Master Data Management (VMM) serves as the central hub for maintaining accurate and consistent vendor information within an organization...Vendor Onboarding
Vendor onboarding is the systematic procedure of gathering essential information required to authorize a company as an approved vendor...Vendor Portals
Vendor portals, also known as supplier portals, are online platforms designed to facilitate seamless collaboration and connectivity between businesses and their third-party suppliers...Vendor Relationship Management
Vendor Relationship Management (VRM) represents a strategic business approach facilitated by software solutions that empower users with increased autonomy in their interactions with vendors...Vendor Risk Management
Vendor Risk Management (VRM) is a comprehensive, enterprise-wide initiative designed to assess and mitigate potential risks associated with third-party vendors...Vendor Sourcing
Vendor sourcing is the strategic process of identifying and selecting vendors to supply an individual or organization with goods and services...w