Supply Chain Glossary - E

effectivity date also effective date

Syn: effective date.

A measurement (usually expressed as a percentage) of the actual output to the standard output expected. Efficiency measures how well something is performing relative to existing standards; in contrast, productivity measures output relative to a specific input, e.g., tons/labor hour. Efficiency is the ratio of (1) actual units produced to the standard rate of production expected in a time period or (2) standard hours produced to actual hours worked (taking longer means less efficiency) or (3) actual dollar volume of output to a standard dollar volume in a time period. Illustrations of these calculations follow. (1) There is a standard of 100 pieces per hour and 780 units are produced in one eight-hour shift; the efficiency is 780/800 converted to a percentage, or 97.5%. (2) The work is measured in hours and took 8.21 hours to produce 8 standard hours; the efficiency is 8/8.21 converted to a percentage or percent. (3) The work is measured in dollars and produces $780 with a standard of $800; the efficiency is $780/$800 converted to a percentage, or 97.5 percent.

In cost accounting, the difference between the actual volume of a resource used and the budgeted volume, multiplied by the budgeted or standard price.

1) A grocery industry-based, demand-driven replenishment system that links suppliers to develop a large flow-through distribution network. Information technology is designed to enable suppliers to anticipate demand. Manufacture is initiated based on point-of-sale information. Accurate, instantaneous data are essential to this concept. 2) A management approach that streamlines the supply chain by improving its effectiveness in providing customer service and reducing costs through innovation and technology.


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