Industrial Materials Tracking Definitions

People in manufacturing and industrial distribution often use the same terms to mean different things.

Here are some definitions used by Dr. Peter Green, our Technical Director, who is one of the experts in this field:

Work-in-Process Materials Tracking: This includes  tracking the receipt and put-away of raw materials, their conversion into intermediate and then finished products, as well as tracking the picking, packing and shipping of finished products to customers.

Work-in-Progress Tracking: Often also referred to as Work-in-Process or Production Tracking. Tracking the status of customer orders as they flow from one work-center to another. This may include when operations start and end as well as who performed each operation and how long they took.

WIP Tracking: Also referred to as Work-in-Process Tracking. Tracking unfinished materials as they flow from one manufacturing operation to another.

WIP Materials: Materials that flow between manufacturing operations. Typically these do not have their own part numbers but are simply materials on their way to becoming some intermediate or finished part that does have its own part number.

Materials Tracking: Tracking materials in containers or as serialized items. This includes tracking the location of the containers or items, as well as the quantity in each container and possibly the lot number and expiration date of the material. It also includes tracking nested containers of different materials, such as mixed pallets.

Inventory Tracking: Tracking the quantity of each part number in a warehouse or other location. Typically used for accounting and materials planning purposes.

Supplier:An organization that supplies raw or semi-finished materials to a manufacturer or finished products to an industrial distributor. Used to be called a Vendor but today there are many different supplier relationships, including from a sister plant.

Purchase Order: An order issued to a supplier for needed materials. May be a "blanket" purchase order covering multiple deliveries.

Customer Order: An order issued by a customer for delivery of materials. May be a "blanket" order covering multiple deliveries. Sometimes referred to as a Purchase Order (which is what the customer typically issues).

Ship Order: An order to ship materials, usually as one shipment, possibly on multiple trucks, to a customer or other plant or warehouse. These often correspond to releases in construction projects and to the materials on a blanket customer order to be shipped on a specific date.

Work Order: An order to convert raw or intermediate products into intermediate or finished products through a sequence of manufacturing operations. This is often referred to as a Job which may also be used to refer to multiple work orders.

Project: Also referred to as a job. Covers multiple purchase, work, and ship orders, all issued in response to a single customer order.

Job: May refer to a customer order, a single work order, multiple work orders, or a whole project.

BOM: Bill of Materials. These are the lists of input materials needed for each operation in making a unit quantity of an intermediate or finished product. Often BOM is also used to refer to the quantities of materials needed for all operations on a Work Order for making a unit quantity or even the total quantity required on a Job.

Secondary Operations: These are operations such as kitting, repacking, relabeling, and palletizing carried out by industrial distribution warehouses. They are tracked just like any other manufacturing operation.

Accounting System: Used to issue purchase orders and enter customer orders. Used for recording General Ledger, Accounts Receivable, Banking, and Accounts Payable activities. Tracks quantity and value of inventory.

Job Shop System: Issues work orders and does work-in-progress tracking.

MRP System: Materials Requirements Planning System - plans materials to be ordered and made based on projected customer orders. Sometimes also schedules manufacturing operations.

ERP System: Enterprise Resource Planning system. Consists of an integrated accounting system, a job shop  system and an MRP system. Sometimes also integrates a CRM system. Typically does not do work-in-process materials tracking.

CRM System: Customer Relations Management. Tracks interactions with customers and prospective customers.

WMS System: Warehouse Management System. Tracks receipt of inventory against purchase orders. Tracks location of inventory in Warehouse. Controls and records Picking and Shipping of products.

Work-in-Process Tracking System: Such as BellHawk. Integrates Work-in-Process Materials Tracking with the capabilities of a Job Shop System. May also include Warehouse Management System capabilities.