Supply Chain Glossary

P4 Warehouse WMS Supply Chain Glossary

Comprehensive Logistics & Supply Chain Glossary #

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

3D BARCODE (3D BARCODE): Three-dimensional barcode based on a set of encrypted embossed or stamped data, 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/ THIRD PARTY LOGISTICS): The use of an external company to manage warehouse activities and inventories, including distribution, warehousing and fulfillment services.

4PL (FOURTH PARTY LOGISTICS/ROOM LOGISTICS): Manages the logistics contract with a customer for consulting, technology and logistics management through a series of 3PLs for warehousing or fulfillment. A 4PL creates a network infrastructure of 3PL warehouses 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 that, if failed, will consider the entire batch as unsatisfactory.

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

ACCESSORIAL CHARGES (ADDITIONAL CHARGES): A carrier's fees for certain logistics services such as: loading/unloading, pick-up, delivery or other relevant charges.

ACCUMULATION BIN (ACCUMULATION GARBAGE CAN): Physical location used to accumulate all parts that are part of an assembly before being shipped to the assembly plant.

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

ADVANCED SHIPPING NOTIFICATION (ASN/NOTIFICACIÓN DE ENVÍO AVANZADO): A document that is sent to a warehouse management system (WMS) from a supplier that provides detailed information about an inbound shipment.

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

ALLOCATION: Allocations in inventory management refer to the actual demand created by sales orders or work orders against a specific item. The actual terminology and processing that controls allocations will vary from one software system to another. A standard allocation is an aggregate quantity of demand against a specific item in a specific facility. Standard allocations do not specify which 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 (ANNUAL BILLING): An annual recurring billing date that resolves on the same day of the year as your initial enrollment or charge date.

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

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

ASSEMBLE TO ORDER: A production environment where a product can be assembled after a customer order is received. Key components (bulk, semi-finished, intermediate, etc.) used in the assembly or production finishing process are planned and generally 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 that stands for "actual time of departure".

AUTO ID (AUTOMATED 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 material handling system consisting of small vehicles (carts) moving along a guided path.

AUTOMATED STORAGE/RETRIEVAL SYSTEM (AS/RS/AUTOMATED STORAGE/RETRIEVAL SYSTEM): A high-density rack storage system with unmanned vehicles that automatically load and unload products on/off the shelves.

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

B2C (BUSINESS-TO-CUSTOMER): 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, bound and often wrapped bundle of a commodity, such as cotton or hay.

BARCODE (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 bar code scanners. A popular example is the UPC code used on retail packaging.

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

BARCODING: A method of encoding data for fast and accurate reading and converting such data into a bar code.

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 handheld batch 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 computationally analyzed 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: A document detailing the items in a shipment that acts as a receipt given by the carrier of the shipment to the consignee of the shipment.

BILL OF MATERIALS: The list of materials or components required to produce an item. Multilevel 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.

BILLING SCHEDULE: The rate at 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. Often blanket orders 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 in the warehouse without any purchase order or advance shipping notice.

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

BREAK-BULK (LOAD SEPARATION): Separation of a consolidated cargo into smaller individual shipments for delivery to the final consignee. Cargo may move intact or may be interchanged to connected carriers.

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

BUFFER STOCK: A quantity of goods set aside and kept in storage to prevent against shortages or unforeseen demands.

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

BUSINESS INTELLIGENCE (BI/BUSINESS INTELLIGENCE): Technologies, applications and practices for the collection, integration, analysis and presentation of information to and about a business. Its 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 point of origin to 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. Typical 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 (CAGE): (1) An enclosed, secure area for storing high-value items (2) A pallet-sized platform with sides that can be secured to the teeth of a forklift truck and on which a person can ride to inventory stored items well above the warehouse floor.

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

POSITION: Goods and merchandise transported by a carrier's means.

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, with the exception of 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 (MAINTENANCE COSTS): The 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 the inventory investment and the costs associated with storing the inventory.

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

CARTON FLOW RACK (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 bundles of items from boxes (also known as split-box picking).

CATCH WEIGHT (VARIABLE WEIGHT): A variable weight of measurement that is related to piece count, 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 several channels within a company's supply chain are in competition with each other for the same business. An example would be a retail channel in competition 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; 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 overcharge.

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 recipient.

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

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

CONSUMABLES (CONSUMABLES): Stocks of materials needed to support operations, but which are 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 the warehouse to another. Roller conveyors use gravity, while belt conveyors use motors.

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

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

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

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

DELIVERY CONFIRMATION: An e-mail message 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 (DELAY): Carrier charges and rates applied when rail freight cars and ships are held beyond a specified loading or unloading time.

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

DESTOCKING (UNLOADING): Reduce the amount of stock held in a warehouse.

DEVANNING (UNLOADING): The unloading of cargo from a truck transport container.

DIRECT STORE DELIVERY (DSD/DIRECT STORE DELIVERY): Direct shipping process from a manufacturer's plant or distribution center to the customer's retail store, thus bypassing the customer's distribution center.

DISCRETE PICKING: An order picking process in which the picker picks all 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, material 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 accomplished through one or more levels of field warehouses. The systematic division of a whole into discrete parts with distinctive characteristics.

DISTRIBUTION CENTER (DC/DISTRIBUTION CENTER): A warehouse facility that stores manufacturing or other warehouse inventory prior to distribution to appropriate retail locations.

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

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

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

DOCK DOOR: The garage-like door in 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 at an accepted port or 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 schedules for receiving and shipping goods in and out of warehouse yards. With the use of dock scheduling, a dock calendar is maintained that shows all delivery logistics, such as opening/closing times, 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 pickup and delivery of ocean containers or rail containers. Short haul forwarders generally handle full container loads 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 (PROTECTION MATERIAL): The packaging material used to protect a product from damage during transportation.

EACH (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 orders from the online store and work through logistics to get the purchased goods to the end user.

ELECTRONIC DATA INTERCHANGE (EDI): A computer-to-computer business-to-computer transmission 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 to process the order.

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

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

EPC (ELECTRONIC PRODUCT CODE): An electronic code that is considered an enhancement of the UPC barcode system. The EPC is a 96-bit label containing 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 your space.

FIRST IN FIRST OUT (FIFO/FIRST IN, FIRST OUT): In inventory control and financial accounting, this refers to the practice of using inventory stock based on what was received first and consumed first. Antonym: Last In First Out.

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

FOB: A sales term 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 meant "free on board ship".

FORWARD PICKING: A storage area designed for efficient picking of parts and boxes that is usually replenished from back-up 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 company 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 TRUCKLOAD): 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 response to the message. The FA will confirm that the message contained the correct number of lines, etc., through check 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 working days of the carrier's arrival are stored at the importer's risk and expense.

GTIN (GLOBAL TRACKING IDENTIFICATION NUMBER/GLOBAL TRADE IDENTIFICATION NUMBER): The globally unique identification number used for commercial items (goods or products). It is used to uniquely identify commercial items sold, delivered, stored and invoiced through retail and commercial 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) Common term indicating movable property, merchandise or goods. 2) All materials that are used to satisfy demands. 3) All or part of the cargo received from the shipper, including any equipment supplied by the shipper.

GOODS RECEIPT (RECEIPT OF GOODS): This is where the warehouse confirms that products have been received from a supplier, according to an issued purchase order, and placed in stock. Upon receipt, products can be checked against a packing list or ASN, run through QA, labeled and stored in a garbage can or shelf location.

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

HOLDING COST (MAINTENANCE COST): The expense associated with keeping an item in stock for a specified time.

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

IGLOOS: Pallets and containers used in air transport; the igloo shape fits 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 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 quantity that are stored in a warehouse, available to be sold to customers.

INVENTORY COST: The cost of holding assets generally expressed as a percentage of inventory value; 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 bin master file to control material transport 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 (ARTICLE): Any single 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 just-in-time delivered products. Developed by the automotive industry, it refers to shipping goods in smaller, more frequent batches.

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

LADING (CARGO): The cargo transported in a transport vehicle.

LAST IN FIRST OUT (LIFO/ÚLTIMO EN ENTRAR, PRIMERO EN SALIR): In inventory control and financial accounting, this refers to the practice of using inventory stock based on what was last received is consumed first. This has limited use in inventory maintenance 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): An organization that arranges other third-party logistics partners for the outsourcing of logistics functions.

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

LESS-THAN-CONTAINER-LOAD (LCL/LOAD LESS THAN CONTAINER): When goods do not fully occupy 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 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 in a warehouse or other building where a truck or other vehicle loads or unloads material.

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

LOGISTICS CENTER: Locations in the supply chain to perform logistics activities, often including stock and warehousing.

LOGISTICS DATA INTERCHANGE (LDI/LOGISTICS DATA INTERCHANGE): 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 (MANIFESTO): 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 distance local delivery.

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

MATERIALS HANDLING: Physical handling of products and materials between procurement and shipment.

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

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

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

ORDER: All products that are 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 shipment.

PACKING LIST: A document containing information about the warehouse location of each product ID on each order. It allows the order picker 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 (PALLET): The pallet on which cartons or boxes of specific goods are stacked and grouped together, and then used for shipping or movement as a group. Pallets may be made of wood or composite materials.

PALLET IN/PALLET OUT (PIPO/PALLET IN/PALLET OUT): Receiving, storing and shipping complete pallets, sending them in the same condition in which they were received.

PALLET PICKING: Recovery 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 uses software such as warehouse management systems to record and operate all warehouse functions.

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 inventories in a warehouse or plant in a single event. Also called wall-to-wall inventory.

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

PICK/PACK (PICK/PACK): Immediate collection and packing in 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 pulling products from storage areas to complete a customer order.

PICK LIST (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 to pick.

PICK SEQUENCE: The order of location routing 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 case collection).

PLANNED ORDER RECEIPT: A 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 (PLANNED ORDER RELEASE): A term used within MRP and DRP systems to describe the date on which a planned order must be released to meet the lead time. It is essentially the date of receipt of the planned order offset by the lead time.

POS (POINT OF SHIPMENT/POINT OF SALE): An acronym that stands for "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 non-refundable if the goods do not arrive at the intended destination.

PRIVATE WAREHOUSING: The storage of goods or materials in a warehouse that are 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 (PRODUCT IDENTIFICATION): A method of identifying a product without using a full description. These may be different for each type of document and therefore must be captured and related to the document in which they were used. They must then be related to each other in context (also known as SKU, item code or number or other similar names).

PROOF OF DELIVERY (POD/PROOF OF DELIVERY): 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, usually 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 that a company delivers 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 goods. The purchase order generally lists the type of item, the quantity and the agreed 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 (QR CODE): A Quick Response (QR) code is a scannable code, composed 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 (QUALITY ASSURANCE): Planned program to provide that purchased goods can be inspected and/or tested so that compliance with specifications can be determined.

QUARANTINE: Withhold items from availability for use or sale until all required quality tests have been performed and certified as compliant.

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

RADIO FREQUENCY (RF/RADIO FREQUENCY): 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, thus updating inventory records in real time.

RADIO FREQUENCY IDENTIFICATION (RFID/IDENTIFICACIÓN POR RADIOFRECUENCIA): 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 product units.

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

RATE SHOPPING (RATE COMPARISON): 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 by 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 entry at a later time (batch processing).

RECEIVING (RECEPTION): The process involving the physical receipt of goods, their inspection for accuracy and to identify any damage, determination of 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 occurs.

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

REORDER LEVEL: The stock level at which another order of materials needs to be placed (generally the lead time demand plus safety stock minus any on-order stock).

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

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

REQUEST FOR PROPOSAL (RFP/REQUEST FOR PROPOSAL): A document that provides information on 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 solicit 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 forward picking is performed.

RETURN GOODS HANDLING: Processes involved in returning goods from the customer to the manufacturer. Products may be returned due to performance problems 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 (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/SECURE ELECTRONIC TRANSACTION): In e-commerce, a system to ensure the security of financial transactions carried out over the Internet.

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

SERVICE CHARGES: An additional charge assessed for one 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 integrate with EDI to ship goods within a single order directly to the warehouse without creating an intermediary between the store and the warehouse.

SIMULTANEOUS PICKING: Variation of zone picking in which 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 the workload.

SMALL PARCEL SHIPPING: Also known as small parcel shipping, it is the shipment of goods or packages weighing less than 150 pounds. These smaller packages can be shipped using less-than-truckload freight or via 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: Draw 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 in inventory availability and accuracy.

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

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

STORAGE BILLING: The charge incurred for housing goods or materials within a warehouse for a specified 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 inventory, as well as the storage equipment (shelving, 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 in 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) Material and information exchanges in the logistics process, from the procurement 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): 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 can be suppliers, intermediaries, third-party service providers and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply chain management is an integrating 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: Outsourcing of the warehousing function by the seller of the goods.

TRACK-BYS (FOLLOW-UPS): 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, e.g., transmission of an invoice over an EDI network. Analogous to the use of the term in data processing where a transaction can be a query or a range of updates and business 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 multi-mode transportation management along with associated activities, including shipping unit management, labor planning and construction, shipment scheduling through 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 WMS.

UNIFORM PRODUCT CODE (UPC/UNIVERSAL PRODUCT CODE): 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 constrained so that they can be handled as a single entity and maintain their integrity.

UNIT OF MEASURE (UOM/UNIT OF MEASURE): The unit in which the quantity of an item is managed, e.g., pounds, each, case 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 cases, and issued in individual units.

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

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

VELOCITY: Rate of product movement through a warehouse.

VENDOR-MANAGED INVENTORY (VMI/VENDOR-MANAGED INVENTORY): 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 stock-outs.

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

WAREHOUSE: The place of storage of goods or materials. The main activities of the warehouse include receiving goods, storing, shipping and picking orders.

WAREHOUSING: Storage (maintenance) of goods.

WAREHOUSE MANAGEMENT SYSTEM (WMS/WAREHOUSE MANAGEMENT SYSTEM): The software solution that tracks all warehouse operations, including receiving, storage, picking, shipping and inventory. It also includes support for radio frequency communications, allowing 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 pick items from an order from specific assigned storage areas to be assembled for shipment at a later date.

ZONE-BATCH PICKING (PICKING BY ZONES AND BATCHES): A combination of zone and batch picking, where multiple pickers pick portions of multiple orders.