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Glossary
gap analysis An assessment of the disparities job In SAP, a general classification of tasks that 245
between an organization’s current situation and its are routinely performed together.
long-term goals. lead time The cumulative time required for a
general ledger The primary accounting record of supplier to receive and process an order, take the
a business. material out of stock, package it, load it on a truck,
hierarchical modeling The ability to flexibly and deliver it to the manufacturer.
describe a business process in greater or less detail legacy system An older and often outdated
depending on the task at hand. information system.
human capital management (HCM) Another lot sizing The process for determining purchase
term for human resources that describes the and production order quantities.
tasks associated with managing a company’s managerial accounting Accounting processes
workforce. that deal with determining the costs and
Human Resources (HR) A functional area of profitability of a company’s activities.
business that manages recruiting, training,
Marketing and Sales (M/S) The functional area
evaluating, and compensating employees.
of business that is responsible for developing
Human Resources (HR) module A module in products, determining pricing, promoting products
SAP ERP that facilitates employee recruiting, to customers, taking customers’ orders, and
hiring, training, and payroll and benefits creating sales forecasts.
processing.
master production schedule (MPS) The
IFRS See International Financial Reporting production plan for finished goods.
Standards.
Materials Management (MM) A module in SAP
income statement A financial statement that ERP that manages the acquisition of raw materials
shows a company’s revenue and expenses and from suppliers (purchasing) and the subsequent
profit or loss for a period of time; also called a profit handling and storage of raw materials, work in
and loss (P&L) statement. process, and finished goods.
indirect costs Overhead cost items that are material master data Relatively permanent data
difficult to associate with a specific product. about materials that are stored in central database
information system (IS) The people, tables in SAP ERP. These data are used by SD, MM,
procedures, software, and computers that store, and other SAP ERP modules.
organize, and deliver information. material requirements planning (MRP) A
initial fill rate The percentage of an order that production-scheduling methodology that
the supplier provided in the first shipment. determines the timing and quantity of production
and purchase-order releases to meet a master
initial order lead time The time needed for the
production schedule. This process uses the
supplier to fill an order (used in supply-chain
bill of material, lot-size data, and material
management metrics).
lead times.
integrated information system An information
metrics Measurements of performance; discussed
system that allows sharing of common data
in this book in relation to the effects of supply-
throughout an organization. ERP systems are
chain management efforts.
integrated systems because all operational data
are located in a central database, where they modules Individual programs that can be
can be accessed by users throughout an purchased, installed, and run separately, but that
organization. all extract data from the common database.
intercompany transaction A transaction that MRP record The standard way of showing the
occurs between a company and one of its materials requirements planning (MRP) process on
subsidiaries. paper.
International Financial Reporting Standards multidimensional data cubes The structure
(IFRS) A set of international accounting of data in a data warehouse that allows for
standards. relationships in the data to be analyzed quickly.

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