Supply Chain Glossary

P4 Warehouse WMS Supply Chain Glossary

Comprehensive Logistics & Supply Chain Glossary #

2D BARCODE: A two-dimensional barcode based on a flat array of rows of encrypted data in the form of bars and spaces, usually in a rectangular or square pattern.

3D BARCODE: A three-dimensional barcode based on an embossed or stamped encrypted data set, interpreted by variations in height rather than the contrast between spaces and bars (as used in 2D barcodes). Often used in environments where labels cannot be easily attached to items.

3PL (THIRD PARTY LOGISTICS): The use of an outside company to manage warehouse activities and inventories, including distribution, warehousing and fulfillment services.

4PL (FOURTH PARTY LOGISTICS): Manages the logistics contract with a client for consulting, technology and logistics management through a series of 3PLs for warehousing or fulfillment. A 4PL creates a 3PL warehouse network infrastructure to fulfill goods and materials with maximum efficiency and optimized geographic distribution.

ABC ANALYSIS: Assign importance to a classification of items in a warehouse inventory based on certain criteria such as sales or order volume.

ACCEPTABLE QUALITY LEVEL (AQL): During quality assurance management, when considering a continuous series of product batches, the AQL will represent a quality level limit which, if failed, will consider the entire batch as unsatisfactory.

ACCESSIBILITY: The ability of a carrier to provide service between origin and destination.

ACCESSORIAL CHARGES: A carrier's fees for certain logistics services such as: loading/unloading, pickup, delivery or other relevant charges.

ACCUMULATION BIN: Physical location used to accumulate all the parts that make up an assembly before they are sent to the assembly plant.

ACTIVE STOCK: Goods in active warehouse picking locations that are ready for order fulfillment.

ADVANCED SHIPPING NOTIFICATION (ASN): Document sent to a warehouse management system (WMS) from a supplier that provides detailed information about an incoming shipment.

AGING: The categorization and sorting of invoices, orders, inventory, and batches based on due dates, receipt dates, expiration dates, or other criteria. Aging is used to focus warehouse attention on overdue and time-sensitive items.

ALLOCATION: Allocations in inventory management refer to the actual demand created by sales orders or work orders against a specific item. The terminology and actual processing that controls allocations will vary from one software system to another. A standard allocation is an aggregate amount of demand against a specific item at a specific facility. Standard allocations do not specify that specific units will go to specific orders. A firm allocation is an allocation against specific units within a facility, such as an allocation against a specific location, lot, or serial number. Firm allocations are also known as specific allocations, frozen allocations, firm commitments, holds, reserved inventory. Standard allocations simply show that there is demand while firm allocations reserve or hold inventory for the specific designated order.

ANNIVERSARY BILLING: An annual recurring billing date that resolves to the same day of the year as your initial enrollment or charge date.

ANY-QUANTITY (AQ) RATE: A carrier rate that applies to shipments of any size; no discount rate is available, even for large shipments.

API (APPLICATION PROGRAMMING INTERFACE): A set of functions and procedures that enable applications to access data from an operating system, application, or other service.

ASSEMBLE TO ORDER: A production environment where a product may be assembled after receiving a customer order. Key components (bulk, semi-finished, intermediate, etc.) used in the assembly or finishing production process are planned and usually stocked in advance of a customer order. Product assembly begins once the receipt is processed.

ATA: An acronym that stands for “actual time of arrival,” or also known as the Trucking Associations of America.

ATD: An acronym meaning “actual departure time.”

AUTO ID (AUTOMATIC IDENTIFICATION): Refers to an automated identification system. This includes technologies such as barcodes and radio frequency tagging (RFID).

AUTOMATED GUIDED VEHICLE SYSTEM (AGVS): A computer-controlled materials handling system consisting of small vehicles (carts) that move along a guided path.

AUTOMATED STORAGE/RETRIEVAL SYSTEM (AS/RS): A high-density shelving storage system with unmanned vehicles that automatically load and unload products onto/from shelves.

B2B (BUSINESS-TO-BUSINESS): An acronym that stands for “business to business” and refers to dealings between two businesses.

B2C (BUSINESS-TO-CUSTOMER/BUSINESS TO CONSUMER): An acronym that stands for “business to consumer” and refers to dealings between a business and the end consumer.

BACK ORDER: A product that has been promised to ship when available because it was out of stock when initially ordered.

BALE (PACKAGE): A large compressed, tied, and often wrapped package of a commodity, such as cotton or hay.

BARCODE: A series of alternating bars and spaces printed or stamped on products, labels, or other media, representing encrypted information that can be read by electronic readers called barcode scanners. A popular example is the UPC code used on retail packaging.

BARCODE PARSING: The extraction of multiple data values from a single barcode.

BARCODING: A method of encoding data for fast and accurate reading and converting that data into a barcode.

BASING-POINT PRICING: A pricing system that includes transportation costs from a city or location, even if the shipment does not originate at the base point.

BATCH PICKING: The process of picking orders from a warehouse in which all items for multiple orders are picked by a single picker.

BATCH TERMINAL COMMUNICATIONS: The connection and transfer of information between the batch handheld device and the PC for warehouse management system integration purposes.

BEST PRACTICE: A specific process or group of processes that have been recognized by the community at large as the most efficient or effective method of achieving a specific objective.

BIG DATA: Extremely large data sets that can be analyzed computationally to reveal patterns, trends, and associations. In warehousing, big data is used to identify patterns and associations that can make your business more profitable.

BILL OF LADING (BOL/BILL OF LADING): A document detailing the items in a shipment that acts as a receipt given by the carrier of the shipment to the recipient of the shipment.

BILL OF MATERIALS (BOM/LIST OF MATERIALS): The list of materials or components required to produce an item. Multi-level BOMs also show subassemblies and their components. Other information, such as scrap factors, may also be included in the BOM for use in materials planning and cost estimating. Commonly referred to as a BOM or simply Bill of Materials.

BILLING SCHEDULE: The cadence with which a warehouse generates an invoice to its customer.

BIN CENTER: A delivery facility that is smaller than a public warehouse.

BLANKET PURCHASE ORDER: A long-term commitment to a supplier for material against which short-term releases will be generated to meet requirements. Blanket orders often cover only one item with predetermined delivery dates.

BLANKET RATE: A flat rate that does not increase depending on the distance sent.

BLIND RECEIVING: Receiving goods at the warehouse without any purchase order or advance shipping notice.

BRACING: Secure cargo inside the carrier's vehicle to prevent damage to the cargo.

BREAK-BULK (CARGO SEPARATION): Separation of a consolidated load into smaller individual shipments for delivery to the final consignee. The load may move intact or may be exchanged to connected carriers.

BREAK-BULK CARGO: Cargo that is shipped as a unit or package. Examples include: palletized cargo, boxed cargo, large machinery, trucks, etc., and is not kept in a container.

BUFFER STOCK (RESERVE STOCK): A quantity of goods set aside and held in storage to guard against shortages or unforeseen demands.

BULK AREA (VOLUME AREA): A storage area for large items that are, at a minimum, handled more efficiently by pallet loading.

BUSINESS INTELLIGENCE (BI): Technologies, applications, and practices for collecting, integrating, analyzing, and presenting information to and about a business. Their purpose is to support improved business decision making.

BUSINESS LOGISTICS: The process of planning, implementing and controlling the efficient and effective flow and storage of goods, services and related information from the point of origin to the point of consumption to meet customer requirements.

BUSINESS PROCESS OUTSOURCING (BPO/BUSINESS PROCESS OUTSOURCING): The practice of outsourcing non-core internal functions to third parties. Typically outsourced functions include logistics, accounts payable, accounts receivable, payroll, and human resources. Other areas may include IT development or complete management of the company's IT functions.

CAGE: (1) An enclosed, secure area for storing high-value items (2) A pallet-sized platform with sides that can be secured to the tines of a forklift and on which a person can ride to inventory items stored well above the warehouse floor.

CAGED: Refers to the practice of placing high-value or sensitive products in a fenced area within a warehouse.

POST: Goods and merchandise transported by a carrier.

CARRIER: The company used for the delivery of goods or cargo.

CARRIER LIABILITY: A common carrier is liable for all loss, damage and delay in shipment, except those caused by act of God, act of a public enemy, act of a public authority, act of the shipper and the inherent nature of the goods.

CARRYING COSTS: Costs associated with holding specific quantities of inventory and are used in cost-based lot sizing calculations such as EOQ. They primarily include the cost of inventory investment and costs associated with holding the inventory.

CARTAGE (FREIGHT): The movement of products locally (short distance).

CARTON FLOW RACK: A storage rack consisting of multiple lines of gravity flow conveyors.

CASE PICKING: Retrieval of full loads of each item or inner packages of items from boxes (also known as split box picking).

CATCH WEIGHT (VARIABLE WEIGHT): A variable weight of measurement that is related to piece counting, where each piece may not weigh the exact same amount, or conversely, the same total weight may not equal the same total piece count.

CERTIFICATE OF ORIGIN: A confirmed affidavit to prove the origin of imported goods. Often used for customs and foreign exchange purposes.

CHANGE ORDER: A formal notification that a purchase order must be modified in some way. This change may result from a revised date, quantity ordered, or specification by the customer.

CHANNEL CONFLICT: This occurs when multiple channels within a company's supply chain are competing with each other for the same business. An example would be a retail channel competing with a web-based channel that was created by the same company.

CHANNEL PARTNERS: Members of a supply chain (i.e. manufacturers, suppliers, distributors, etc.) that work together to manufacture, distribute, and sell a specific product.

CHARGEABLE WEIGHT: The weight of the shipment used to determine freight charges; it includes both the dimensional weight and the gross weight of the shipment less the tare weight of the container.

CLAIM: A charge made against a carrier for loss, damage to goods, delay in delivery, or overcharging.

CONFIRMATION: With respect to EDI, a formal notice indicating that a message sent to a trading partner has arrived in its intended mailbox or has been retrieved by the message's recipient.

CONSIGNEE: The party to whom goods are shipped and delivered. They are the recipients of a shipment.

CONSIGNOR: The party that originates a shipment of goods (shipper), often the seller.

CONSUMABLES: Stocks of materials needed to support operations but not part of the final product. Examples include oil, paper, cleaners, etc.

CONVEYOR: A material handling device that moves products or consumables from one area of a warehouse to another. Roller conveyors use gravity, while belt conveyors use motors.

CRITICAL STOCK: A quantity of a good that must be kept in inventory, even if rarely used, to meet an expressed need.

CROSS DOCKING (CROSSING OF GOODS): It refers to the practice of moving products directly from the receiving area to the shipping area for distribution rather than being kept and stored for a period of time. Cross-loading goods requires close synchronization of all inbound and outbound shipping movements. By eliminating storage, picking, and sorting operations, you can significantly reduce distribution costs.

CUBAGE: Cubic volume of space being used or available for shipping or storage.

DATA ANALYSIS: The act of interpreting numbers to find meaning about specific processes within a warehouse.

DEFECTIVE GOODS INVENTORY (DGI/INVENTORY OF DEFECTIVE GOODS): Items that have been returned, have an outstanding freight claim due to damage upon delivery, or have been damaged in some way during warehouse handling.

DELIVERY APPOINTMENT: The time agreed between two companies for goods or transportation equipment to arrive at a selected location.

DELIVERY CONFIRMATION: An email sent by the carrier to confirm that the shipment has been successfully delivered. Depending on the carrier's service, this may be the final delivery status update message.

DEMURRAGE: Carrier charges and fees applied when rail freight cars and ships are held beyond a specified time for loading or unloading.

DISPATCH CONFIRMATION: An email sent by the warehouse to confirm that a specific package, parcel, or shipment has left the warehouse successfully. A dispatch confirmation may contain the package's tracking number.

DESTOCK (UNLOADING): Reduce the amount of stock kept in a warehouse.

DEVANNING (DOWNLOAD): Unloading cargo from a truck shipping container.

DIRECT STORE DELIVERY (DSD): Process of shipping directly from a manufacturer's plant or distribution center to a customer's retail store, thereby bypassing the customer's distribution center.

DISCRETE PICKING: An order picking process in which the picker collects all the items for a particular order.

DISTRIBUTION: Outbound logistics, from the end of the production line to the end user. The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, materials handling, order management, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution as well as the return of goods to the manufacturer. In many cases, this movement is through one or more levels of field warehouses. The systematic division of a whole into discrete parts with distinctive characteristics.

DISTRIBUTION CENTER (DC): A warehouse facility that stores manufacturing or other warehouse inventory before it is distributed to the appropriate retail locations.

DISTRIBUTION CHANNEL: One or more companies or individuals involved in the flow of goods and services from manufacturer to end user or consumer.

DISTRIBUTION WAREHOUSE: A finished goods warehouse from which a company gathers customer orders.

DISTRIBUTOR (DISTRIBUTOR): A company that does not manufacture its own products, but instead purchases and resells these products. Such a company usually maintains an inventory of finished goods. Synonym: Wholesaler.

DOCK DOOR: The garage-like door at a loading dock that allows access to a transport vehicle for loading and unloading operations of goods entering and leaving a warehouse.

DOCK RECEIPT: A document used to accept materials or equipment at a dock in a port or accepted location. It provides the ocean carrier with verification of receipt and the delivering carrier with proof of delivery.

DOCK SCHEDULING: Also known as dock door appointment scheduling, is the use of scheduling tools or software to automate and manage the schedules for receiving and shipping goods entering and leaving warehouse yards. With the use of dock scheduling, a dock calendar is maintained that shows all delivery logistics such as opening/closing hours, delivery appointments, and goods to be accepted through the dock/yard door, making the loading and unloading of goods as efficient as possible.

DRAYAGE (SHORT DISTANCE TRANSPORT): The service offered by a motor carrier for the collection and delivery of ocean containers or rail containers. Short sea freight forwarders typically handle full load containers for ocean and rail carriers.

DROP: When a trailer or railcar at a facility is deposited at a location to be loaded or unloaded.

DUNNAGE (PROTECTIVE MATERIAL): The packaging material used to protect a product from damage during shipping.

EACH: Pluralized as “eaches,” it refers to a single unit or item within a warehouse.

ECOMMERCE FULFILLMENT: Conducting business electronically through traditional EDI technologies or online via the Internet. In the traditional sense of selling goods, it is possible to do so electronically because of certain software programs that perform the core e-commerce support functions such as product display, ordering, shipping, invoicing, and inventory management. E-commerce fulfillment will take the orders from the online store and work through the logistics to get the purchased goods to the end user.

ELECTRONIC DATA INTERCHANGE (EDI): A computer-to-computer transmission between businesses of electronic information in a standard format. An EDI transmission consists of business data only, without any accompanying verbiage or free-form messages. In warehousing, this is often the exchange of orders from a website or portal to a warehouse for order processing.

END ITEM: A product sold as a finished item or repair part; any item subject to a customer order or sales forecast.

ENTERPRISE RESOURCE PLANNING (ERP/ENTERPRISE RESOURCE PLANNING SYSTEM): A class of software for planning and managing the resources required at the enterprise level to take customer orders, ship them, account for them, and replenish all necessary goods according to customer orders and forecasts. It often includes e-commerce with suppliers.

EPC (ELECTRONIC PRODUCT CODE): An electronic code that is considered an enhancement to the UPC barcode system. The EPC is a 96-bit label that contains a number called a Global Trade Identification Number (GTIN). Unlike a UPC number, which only provides information specific to a group of products, the GTIN gives each product its own specific identification number, providing greater accuracy in tracking.

EXPEDITING: Move shipments through regular channels at an accelerated pace.

FACILITIES: The physical plant, distribution centers, service centers and related equipment.

FAST (FLOW, ACCESSIBILITY, SPACE, PERFORMANCE): The set of principles used to describe the optimal layout of a warehouse for optimum efficiency. Ensuring that the structure in place allows for efficient flow, easy access to inventory, space allocated to inventory and room to move, and throughput, or the adaptability of its space.

FIRST IN FIRST OUT (FIFO): In inventory control and financial accounting, this refers to the practice of using inventory stock on a first-in, first-out basis. Antonym: Last In First Out.

FLOW RACK: A storage method where product is presented to picking operations at one end of a rack and replenished from the opposite end.

FOB: A term of sale that defines who should incur the transportation costs of the shipment, who will control the movement of the shipment, or where title to the goods passes to the buyer; originally meaning "free on board ship."

FORWARD PICKING: A storage area designed for efficient picking of parts and boxes that is usually replenished from reserve storage, but sometimes directly from receiving.

FREIGHT: Goods transported from one place to another, often via a container.

FULFILLMENT: The act of fulfilling a customer order, often referring to e-commerce. Fulfillment includes all of the following processes: order management, picking, packing, and shipping.

FULFILLMENT SERVICES PROVIDER: A fulfillment service provider is an organization that operates on behalf of a business to take delivery of stock from its suppliers, store inventory, and fulfill customer orders. It may also be called a fulfillment house, fulfillment company, or 3PL.

FULL CONTAINER LOAD (FCL/FULL CONTAINER LOAD): When the goods occupy a full container.

FULL TRUCKLOAD (FTL/FULL TRUCK LOAD): Similar to full container load, but refers to truck carriers instead of containers.

FUNCTIONAL ACKNOWLEDGEMENT (FA/FUNCTIONAL ACKNOWLEDGEMENT): A specific EDI transaction set (997) sent by the recipient of an EDI message to confirm receipt of data, but without any indication of the recipient's application's response to the message. The FA will confirm that the message contained the correct number of lines, etc., through control digests, but will not report on the validity of the data.

GENERAL ORDER (GO/GENERAL ORDER): A customs term referring to a warehouse where goods not entered within five business days of the carrier's arrival are stored at the importer's risk and expense.

GTIN (GLOBAL TRACKING IDENTIFICATION NUMBER): The globally unique identification number, used for trade items (goods or products). It is used to uniquely identify trade items sold, delivered, stored, and billed through retail and business distribution channels. Unlike a UPC number, which only provides information specific to a group of products, the GTIN gives each product its own specific identification number, providing greater accuracy in tracking.

GOODS: 1) A common term indicating movable property, merchandise, or articles. 2) All materials used to satisfy claims. 3) All or part of the cargo received from the shipper, including any equipment furnished by the shipper.

GOODS RECEIPT: This is where the warehouse confirms that products have been received from a supplier, based on an issued purchase order, and are placed into stock. Upon receipt, products may be checked against a packing list or ASN, passed through QA, labeled, and put away in a bin or shelf location.

GROSS WEIGHT: The total weight of the vehicle and the load of goods or passengers.

HOLDING COST: The expense associated with holding an item in stock for a specified time.

HYBRID WAREHOUSE: A warehouse that is a combination of a private and public warehouse. It will house products primarily for a single customer, but when additional space becomes available, it will rent out the storage space to other customers.

IGLOOS: Pallets and containers used in air transport; the igloo shape conforms to the contours of the inner walls of a narrow-body aircraft.

IMPORT: Movement of products from one country to another.

INBOUND LOGISTICS: The management of materials from suppliers and vendors to production processes or storage facilities.

INFINITE CAPACITY SCHEDULING: A manufacturing planning system that completely ignores capacity constraints and schedules purely based on demand. MRP is an example of an infinite capacity scheduling system. It requires planners to check the production schedule against capacity and make adjustments accordingly.

INVENTORY: The products and their quantities that are stored in a warehouse, available to be sold to customers.

INVENTORY COST: The cost of holding goods, usually expressed as a percentage of the value of inventory; includes the cost of capital, storage, taxes, insurance, depreciation, and obsolescence.

INVENTORY MANAGEMENT: The ability to account for and manage all products and goods available in a warehouse at any given time.

INVENTORY MASTER FILE: File maintained by a WMS that contains the total quantity and storage locations of each item stored in the warehouse. Used in conjunction with the location master file to control material transportation operations.

INVOICE: An itemized statement showing the goods sold or shipped and the amounts for each. The invoice is prepared by the seller and acts as the document the buyer will use to make payment.

ITEM: Any unique manufactured or purchased part, material, intermediate, subassembly or product.

ITEM NUMBER: The identification number assigned to an item. Also called part number, SKU number, or SKU.

JUST IN TIME (JIT): An inventory control system that controls the flow of materials in assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered just in time. Developed by the automotive industry, it refers to the shipment of goods in smaller, more frequent batches.

LABELS: Barcode labels that can be applied to both palletized shipments and individual cartons. Each label has information about the origin, destination, and contents of the shipment. Additional information typically includes a purchase order number and the carrier code (SCAC).

LADING: The load transported in a transport vehicle.

LAST IN FIRST OUT (LIFO/LAST IN FIRST OUT): In inventory control and financial accounting, this refers to the practice of using inventory stock on a what was last received is first consumed basis. This has limited use in stock keeping and is primarily a cost accounting method. Antonym: FIFO.

LAST MILE: The final stage of a commercial delivery, where the carrier is responsible for final delivery to the customer.

LEAD LOGISTICS PROVIDER (LLP/MAIN LOGISTICS PROVIDER): An organization that organizes other third-party logistics partners for the outsourcing of logistics functions.

LEAD TIME: The total time elapsed between placing an order and receiving it. Includes the time required for order transmission, order processing, order preparation, and transit.

LESS-THAN-CONTAINER-LOAD (LCL/LESS THAN CONTAINER LOAD): When goods do not completely fill a container. When goods from multiple shippers occupy a single container, each shipper's cargo is considered LCL.

LESS-THAN-TRUCKLOAD (LTL/LESS THAN TRUCKLOAD): Transportation companies that consolidate and transport smaller shipments (less than a full truckload) using a network of terminals and relay points.

LINE: Products in an order that share the same SKU or UPC number.

LINE ITEM: A specific and unique identifier assigned to a product by the responsible company.

LOADING DOCK: Also called a loading bay, it is an area of a warehouse or other building where a truck or other vehicle loads or unloads material.

LOGISTICS: A broad term covering anything related to the planning, deployment, or control of goods or resources as they are stored or delivered from one point to another.

LOGISTICS CENTER: Locations in the supply chain for performing logistics activities, often including inventory and storage.

LOGISTICS DATA INTERCHANGE (LDI/LOGISTICS DATA EXCHANGE): A computerized system that transmits logistics information electronically.

LOT (LOT): A production run or batch that can be isolated.

LOT SIZING: Combine several small orders into larger orders for MRP.

MANIFEST: A document containing information about each order being transported within a shipment.

MARKET-POSITIONED WAREHOUSE: Warehouse positioned to replenish customer inventory assortments and provide maximum inbound transportation consolidation economies from inventory origin points with relatively short local delivery distance.

MATERIAL: Any resource that goes into the production of another product.

MATERIALS HANDLING: The physical handling of products and materials between procurement and shipping.

MOVABLE UNIT: A uniquely identifiable load (i.e. carton, pallet, trailer, etc.) that can move between or be stored at a location.

NET WEIGHT: The total weight of the merchandise, unpacked, outside of any container.

OMNICHANNEL FULFILLMENT: Multi-channel fulfillment describes how a warehouse accepts and fulfills orders across multiple channels, including but not limited to ERP, shopping cart integrations, manual orders, etc.

ORDER: All products included in a customer transaction.

OUTBOUND LOGISTICS: The process related to the movement and storage of products from the end of the production line to the end user.

OVERHEAD (INDIRECT COSTS): Indirect costs associated with facilities and management that are applied to the costs of manufactured goods through the manufacturing reporting process.

PACKING: The process of preparing a container for shipping.

PACKING LIST: A document containing information about the warehouse location of each product ID on each order. It allows the person picking the order to quickly find the item they are looking for without an extensive search of all packages. It also confirms the actual shipment of goods on a line item basis.

PALLET: The platform on which cartons or boxes of specific goods are stacked and grouped together, and then used for shipping or moving as a group. Pallets may be made of wood or composite materials.

PALLET IN/PALLET OUT: The reception, storage and shipment of complete pallets, sending them in the same condition in which they were received.

PALLET PICKING: Retrieval of full pallets of cartons or layers of cartons from a pallet (also known as unit load picking).

PAPERLESS WAREHOUSE: A warehouse that does not rely on manual or analog processes to operate its warehouse, but instead uses software such as warehouse management systems to record and operate all the functions of a warehouse.

PARCEL SHIPMENT: Small packages that generally weigh less than 150 pounds and are typically handled by carriers such as UPS and FedEx for delivery to the final recipient.

PHYSICAL INVENTORY: The process of counting all inventory in a warehouse or plant in one event. Also called wall-to-wall inventory.

PHYSICAL SUPPLY: The movement and storage of raw materials from supply sources to the manufacturing facility.

PICK/PACK: Picked and packed immediately into shipping containers.

PICK TICKET/PICK INSTRUCTION: An instruction used in the warehouse that lists which products and their quantities are to be picked when processing a single order.

PICKING: The operations involved in removing products from storage areas to complete a customer order.

PICK LIST: A list of items to be picked from stock to fill an order; often created by a WMS to create the most efficient route for picking.

PICK SEQUENCE: The order of location traversal within a warehouse when picking items.

PIECE PICKING: Recovery of individual units (or 'eaches') of an item, where each piece collected is the unit of issue to the end customer (also known as split-box collection).

PLANNED ORDER RECEIPT: Term used within MRP and DRP systems to describe the date by which a planned order must be received to meet net requirements.

PLANNED ORDER RELEASE: Term used within MRP and DRP systems to describe the date by which a planned order must be released to meet the lead time. It is essentially the planned order receipt date offset by the lead time.

POS (POINT OF SHIPMENT/POINT OF SALE): An acronym meaning “shipping point” or “point of sale.”

PREPAID FREIGHT: Freight paid by the shipper to the carrier when the goods are delivered for shipment, which is not refundable if the goods do not arrive at the intended destination.

PRIVATE WAREHOUSING: The storage of goods or materials in a warehouse that is owned and operated by a single company or manufacturer.

PROCUREMENT: The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations. Synonym: Purchasing.

PRODUCT: A good that has been or is being produced.

PRODUCT CHARACTERISTICS: All the elements that define the character of a product, such as size, shape, weight, etc.

PRODUCT DESCRIPTION: The company's product description for consumer use.

PRODUCT ID: A method of identifying a product without using a full description. These can be different for each type of document and therefore need to be captured and related to the document they were used on. They then need to be related to each other in context (aka SKU, item code or number or other similar names).

PROOF OF DELIVERY (POD): Information supplied by the carrier containing the name of the person who signed for the shipment, the time and date of delivery, and other information related to the delivery of the shipment. POD is also sometimes used to refer to the process of printing materials just prior to shipment (Print on Demand).

PUBLIC WAREHOUSE: A warehouse space that stores goods or materials from multiple independent companies while providing a variety of services for a fee or on a contract basis, typically owned by a third-party logistics (3PL) company.

PUBLIC WAREHOUSE RECEIPT: The basic document that a public warehouse manager issues as a receipt for goods delivered by a company to the warehouse manager. The receipt may be negotiable or non-negotiable.

PURCHASE ORDER (PO/PURCHASE ORDER): A purchase order is a document sent from a buyer to a supplier requesting an order for merchandise. The purchase order typically lists the type of item, the quantity, and the agreed-upon price.

PUTAWAY (STORAGE): Remove incoming orders from the location where they are received to the final storage area and record the movement and identification of the storage location where it has been placed.

QR CODE: A Quick Response (QR) code is a scannable code, made up of several black and white squares, that allows cameras or smartphones to read it and take the user to a stored URL or other information.

QUALITY ASSURANCE/QA: A planned program to provide for purchased goods to be inspected and/or tested so that compliance with specifications can be determined.

QUARANTINE: Withdraw items from availability for use or sale until all required quality tests have been carried out and their conformity has been certified.

QUEUE TIME: The amount of time that inventory is placed before processing.

RADIO FREQUENCY (RF): A form of wireless communication that allows users to transmit information via electromagnetic energy waves from a scanner to a computer. When combined with a bar code system to identify inventory items, a radio frequency system can transmit data instantaneously, thereby updating inventory records in real time.

RADIO FREQUENCY IDENTIFICATION (RFID): The use of radio frequency technology such as RFID tags and tag readers to identify objects. Objects can include virtually anything physical, such as equipment, pallets of stock, or even individual units of product.

RANDOM-LOCATION STORAGE: In warehouses, a storage technique in which received material is stored in any available space rather than according to a specific logical criterion decided upon.

RATE SHOPPING: The process by which shipping rates from multiple carriers are compared to find the optimal shipping solution.

RAW MATERIALS (RM/RAW MATERIALS): Raw or processed material that can be converted through manufacturing or processing into a new and useful product.

REAL-TIME: The processing of data in a business application as it occurs, as opposed to storing data for input at a later time (batch processing).

RECEIVING: The process involving the physical receipt of goods, their inspection for accuracy and to identify any damage, determining where the stock will be stored, delivery to that location, and completion of the receiving report.

RECEIVING DOCK: Location of the distribution center where the actual physical receipt of the purchased material from the carrier takes place.

RECURRING BILLING: Automated billing charges that occur at a specific time interval (monthly, bi-monthly, annually, etc.).

REORDER LEVEL: The stock level at which materials need to be reordered (usually lead time demand plus safety stock minus any stock on order).

REPLENISHMENT: The process of moving stock from a secondary storage area to a fixed storage location. This could also refer to the process of moving stock between distribution centres or from suppliers to meet customer demand.

REQUEST FOR INFORMATION (RFI): A document used to request information about suppliers, products and services prior to a formal RFQ/RFP process.

REQUEST FOR PROPOSAL (RFP): A document that provides information about needs and requirements for a manufacturer. This document is created to solicit proposals from potential suppliers. For example, a computer manufacturer may use an RFP to request proposals from third-party logistics service providers.

RESERVE STORAGE: An area intended for the storage of material in full pallet load sizes from which both advance picking and pick up are performed.

RETURN GOODS HANDLING: Processes involved in returning goods from the customer to the manufacturer. Products may be returned due to performance issues or simply because the customer does not like the product.

REVERSE LOGISTICS: A specialized segment of logistics that focuses on the movement and management of products and resources after sale and after delivery to the customer. Includes product returns for repair and/or credit.

REWAREHOUSING: The process of moving items to different storage locations to improve handling efficiency.

SALES ORDER: A document used to approve, track, and process outbound customer shipments.

SECURE ELECTRONIC TRANSACTION (SET): In electronic commerce, a system to ensure the security of financial transactions carried out over the Internet.

SERIAL NUMBER: A unique number assigned for the identification of a single part that will never be repeated for similar parts. Serial numbers are usually applied by the manufacturer, but may be applied at other points by the distributor or wholesaler.

SERVICE CHARGES: An additional charge assessed for a service.

SHIPPING: The delivery of goods or materials from one destination to another.

SHOPPING CARTS: Online store features that consolidate all the goods a user was considering purchasing into a single order. In warehousing, shopping carts are integrated with EDI to send the goods within a single order directly to the warehouse without creating a middleman between the store and the warehouse.

SIMULTANEOUS PICKING: A variation of zone picking where items for an order are picked simultaneously in each zone and then consolidated, making it possible to minimize the total picking time required for an order (which is useful if there are multiple waves per shift).

SLOTTING: Warehouse slotting is defined as the placement of products within a warehouse facility. It aims to increase picking efficiency and reduce warehouse handling costs by optimizing product placement and balancing workload.

SMALL PARCEL SHIPPING: Also known as small package shipping, this is the shipping of goods or packages weighing less than 150 pounds. These smaller packages can be shipped using less than full truckload freight or through a local courier, such as UPS or FedEx.

SPLIT DELIVERY: A method by which a larger quantity is ordered on a purchase order to secure a lower price, but delivery is divided into smaller quantities and spread over several dates to control inventory investment, save storage space, etc.

STAGING: Removing material for an order from inventory before the material is required. This action is often taken to identify shortages, but can lead to increased problems with inventory availability and accuracy.

STOCK (STOCK): All the goods and materials that an organization stores until they are needed.

STOCK-KEEPING UNIT (SKU): A category of unit with a unique combination of form, fit and function (i.e., unique components kept in stock).

STORAGE BILLING: The charge incurred for housing goods or materials within a warehouse for a specific period of time.

STORAGE COST: The costs associated with the physical storage of inventory. This would include the cost of the physical space dedicated to the inventory, as well as the storage equipment (shelves, racks) used to store the inventory.

STORAGE LOCATION: An identifiable location in a warehouse assigned a unique address and used to store a single item, where the capacity of the location corresponds to the maximum number of units of the item that can be stored at the location.

SUPPLY CHAIN: (1) Starting with unprocessed raw materials and ending with the end customer using the finished products, the supply chain links many companies together. (2) The exchanges of material and information in the logistics process, from the acquisition of raw materials to the delivery of finished products to the end user. All suppliers, service providers and customers are links in the supply chain.

SUPPLY CHAIN MANAGEMENT (SCM): Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which may be suppliers, intermediaries, third-party service providers, and customers. At its core, supply chain management integrates supply and demand management within and across enterprises. Supply chain management is an integrative function with primary responsibility for linking important business functions and business processes within and across enterprises into a cohesive, high-performance business model. It includes all of the logistics management activities mentioned above, as well as manufacturing operations, and drives the coordination of processes and activities with and across marketing, sales, product design, finance, and information technology. — As defined by the Council of Supply Chain Management Professionals (CSCMP).

SUPPLY WAREHOUSE: A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, organized, or sequenced in the warehouse to assemble plant orders.

THIRD-PARTY WAREHOUSING: The outsourcing of the storage function by the seller of the goods.

TRACK-BYS: Inventory qualifiers assigned at receiving that provide an additional layer of inventory granularity. Examples include lot numbers, serial numbers, landed cost, and expiration date.

TRANSACTION: A single completed transmission, for example, transmission of an invoice over an EDI network. Analogous to the use of the term in data processing where a transaction may be an inquiry or a range of business updates and transactions. The definition is important for EDI service operators who must interpret invoices and other documents.

TRANSPORTATION MANAGEMENT SYSTEM (TMS): A supply chain management system designed to provide optimized management of transportation across multiple modes along with associated activities including shipping unit management, labor planning and building, shipment scheduling across inbound, outbound, intra-company shipments, documentation management (especially when international shipping is involved), and third-party logistics management. TMS systems are often integrated with a warehouse's WMS.

UNIFORM PRODUCT CODE (UPC): A standard product numbering and coding system used by the retail industry. UPC codes are administered by the Uniform Code Council. They identify the manufacturer as well as the item, and are included on virtually all retail packaging.

UNIT: A single physical item or product. See also “eaches” and “widgets.”

UNIT LOAD: A single unit of an item or multiple units arranged or restricted so that they can be handled as a single entity and maintain their integrity.

UNIT OF MEASURE (UOM): The unit in which the quantity of an item is managed, for example, pounds, each, box of 12, pack of 20, or case of 144. Multiple UOMs may exist for a single item. For example, a product may be purchased in cases, stored in boxes, and issued in individual units.

UPC (UNIVERSAL PRODUCT CODE): The standard barcode for retail items in North America.

UNIQUE PARCEL IDENTIFIER (UPI): A series of characters assigned to a specific package that allows it to be tracked throughout delivery by a carrier.

VELOCITY: Rate of movement of products through a warehouse.

VENDOR-MANAGED INVENTORY (VMI): The practice of retailers making suppliers responsible for determining order size and timing, usually based on receipt of POS and retail inventory data. Its goal is to increase retail inventory turns and reduce stockouts.

VISIBILITY: The ability to access or view relevant data or information relating to logistics and the supply chain, regardless of where in the chain the data exists.

WAREHOUSE: A place where goods or materials are stored. The main activities of a warehouse include receiving products, storing, shipping and picking orders.

WAREHOUSING: The storage (maintenance) of goods.

WAREHOUSE MANAGEMENT SYSTEM (WMS): The software solution that tracks all warehouse operations, including receiving, putaway, picking, shipping, and inventory. It also includes radio frequency communications support, allowing for real-time data transfer between the system and warehouse personnel. A good WMS will maximize space and minimize material handling by automating warehouse processes.

ZONE PICKING: An order picking process in which different pickers collect items of an order from specific assigned storage areas to be assembled for shipment at a later time.

ZONE-BATCH PICKING: A combination of zone and batch picking, where multiple pickers pick portions of multiple orders.