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Fulfillment Glossary

There are a lot of terms out there related to fulfillment. Make sure you’re speaking the same language as your suppliers and customers.
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Welcome to our Fulfillment Glossary, your essential guide to understanding the key terms and concepts in the world of logistics and supply chain management. Whether you’re a seasoned professional or new to the field, this glossary is designed to demystify the jargon and help you navigate the complexities of fulfillment with confidence. From basic terms like “inventory management” and “order processing” to more advanced concepts like “demand forecasting” and “reverse logistics,” we cover everything you need to know to enhance your understanding and streamline your operations.
Efficient fulfillment is critical to maintaining customer satisfaction and achieving business success. Our glossary provides clear, concise definitions and explanations of industry-specific terminology, ensuring you have the knowledge to make informed decisions. Learn about the latest technologies and best practices, including “warehouse management systems (WMS)” and “transportation management systems (TMS),” and discover how these tools can optimize your supply chain, reduce costs, and improve service levels. Whether you’re looking to boost your logistical efficiency or stay ahead of industry trends, our glossary is an invaluable resource.
Explore the glossary at your own pace and uncover the insights that can drive your business forward. With each term defined in straightforward language and supported by practical examples, you’ll gain a deeper understanding of how each component of the fulfillment process works together. Stay informed, enhance your strategy, and elevate your supply chain operations with our comprehensive Fulfillment Glossary. Let’s embark on this journey to mastering fulfillment together!

Fulfillment Glossary

There are a lot of terms out there related to fulfillment. Make sure you’re speaking the same language as your suppliers and customers.

Your Guide to Everything 3PL

This glossary is your guide to understanding the key terms and concepts in the world of logistics and supply chain management. Whether you’re a seasoned professional or new to the field, this glossary is designed to demystify the jargon and help you navigate the complexities of fulfillment with confidence. From basic terms like “inventory management” and “order processing” to more advanced concepts like “demand forecasting” and “reverse logistics,” we cover everything you need to know to enhance your understanding and streamline your operations.
Efficient fulfillment is critical to maintaining customer satisfaction and achieving business success. Our glossary provides clear, concise definitions and explanations of industry-specific terminology, ensuring you have the knowledge to make informed decisions. Learn about the latest technologies and best practices, including “warehouse management systems (WMS)” and “transportation management systems (TMS),” and discover how these tools can optimize your supply chain, reduce costs, and improve service levels. Whether you’re looking to boost your logistical efficiency or stay ahead of industry trends, our glossary is an invaluable resource.
Need 3PL Help? Contact Us
Explore the glossary at your own pace and uncover the insights that can drive your business forward. With each term defined in straightforward language and supported by practical examples, you’ll gain a deeper understanding of how each component of the fulfillment process works together. Stay informed, enhance your strategy, and elevate your supply chain operations with our comprehensive Fulfillment Glossary. Let’s embark on this journey to mastering fulfillment together!

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3D Printing

Manufacturing process where products are produced by layering various composites and materials (like plastics and metals), building each layer on top of the previous one to create shapes and patterns in a three-dimensional process.

1PL

First-party logistics (1PL) companies provide the manufacturing, warehousing, and distribution of their products independently.

2PL

Second-party logistics (2PL) involves a manufacturing company that outsources transportation services to a secondary partner company.

3PL

Third-party logistics (3PL) is the outsourcing of a companies logistics processes to a third party business.

4PL

Fourth-party logistics (4PL) is the outsourcing of all supply chain and logistics processes to one specific external business.

5PL

Fifth-party logistics (5PL) involves an organization managing multiple 3PL and 4PLs.

6PL

Sixth-party logistics (6PL) monitors the supply chain using data like ordering patterns and forecasting models to execute the most efficient logistics operations possible by using artificial intelligence (AI).

7PL

Seventh-Party Logistics (7PL) is the combination of both a 3PL and 4PL model.

A

ABC Analysis

A method of inventory management that categorizes items based on their level of importance or value to the business.

ABC Inventory Control

A method of inventory control that uses the ABC Analysis to manage inventory levels and ensure that high-value items are given more attention than low-value items.

Absolute Minimum Charge (AMC)

The minimum charge after all pricing terms have been applied to a shipping order.

Acceptable Quality Level

The maximum number of defective items or errors that are considered acceptable in a batch of products.

Accessibility

The ability of carriers to provide a service between an origin and destination location.

Accumulation Bin

A storage bin or container used to temporarily store items that are frequently used or needed in a particular area.

Active Stock

The inventory of products or goods that are currently in use or available for sale. This excludes any items that are backordered, out of stock, or otherwise unavailable.

Actual Weight

The physical weight of an item or package

Advanced Shipping Notification (ASN)

A document sent by a supplier to a customer to inform them of an upcoming delivery.

Agile Manufacturing

A manufacturing methodology that emphasizes flexibility, collaboration, and rapid response to change.

Anniversary Billing

A billing system in which customers are billed on the anniversary of their sign-up or purchase date, rather than on a fixed monthly or annual schedule.

Any-Quantity (AQ) Rate

A shipping rate that applies to any quantity of goods shipped, regardless of the total weight or volume of the shipment.

API

Application Programming Interface (API) is a protocol that allows two different computer programs to communicate with each other

Artificial Intelligence (AI)

Computer systems that can perform complex tasks traditionally requiring human intelligence, such as decision-making and problem-solving.

Assemble to Order

A manufacturing strategy in which products are assembled from pre-made components or sub-assemblies, based on customer orders or demand.

ATA

An abbreviation for Actual Time of Arrival, which refers to the actual time that a shipment or transport arrives at its destination.

ATD

An abbreviation for Actual Time of Departure, which refers to the actual time that a shipment or transport departs from its origin.

Auto ID

A set of technologies used to automatically identify and track objects or people using various types of sensors or markers. This may include technologies such as barcodes, RFID tags, or biometric identifiers.

Automated Guided Vehicle System (AGVS)

A system of vehicles or robots that are guided by a computerized control system to transport materials or products within a manufacturing or warehouse environment.

Automated Storage/Retrieval System (AS/RS)

A computer-controlled system used to automatically store and retrieve goods from a warehouse or storage facility.

Average Order Volume (AOV)

The average amount of money that a customer spends on an order. This is typically calculated by dividing the total revenue by the number of orders received.

B

Back Order

An order for goods or products that cannot be fulfilled immediately due to insufficient stock or other issues. These orders are typically fulfilled at a later date when the goods become available.

Backsourcing

The process of bringing previously outsourced business operations or functions back in-house. This may be done for a variety of reasons, such as cost savings, improved quality control, or greater flexibility.

Bale

A large bundle of goods or materials that has been compressed or tightly packed for storage or transport.

Barcode

A series of vertical bars and spaces of varying widths that represent data or information. Barcodes are typically used for product identification, inventory management, and other applications that require fast and accurate data capture.

Barcode Parsing

The process of breaking down a barcode into its component parts in order to extract relevant data.

Barcoding

The process of applying barcodes to products or items for the purpose of identifying and tracking them.

Base Stock Method

Inventory valuation method that maintains a constant base stock level, and the cost of goods sold is based on the average cost of the units in the base stock.

Batch Picking

A warehouse picking strategy in which multiple orders are picked simultaneously, with each picker responsible for picking items for multiple orders at once.

Batch Production Manufacturing

A semi-continuous process where products are manufactured in specified amounts and stored as batches.

Best Practice

A method or technique that has been proven to be effective in achieving a particular goal or outcome.

Big Data

A term used to describe extremely large and complex datasets that cannot be easily analyzed using traditional data processing methods. Big data typically involves the use of advanced analytics tools and technologies to extract insights and value from large volumes of data.

Bill of Landing (BOL)

A legal document used to detail the type, quantity, and destination of goods being transported, serving as both a receipt and a contract between the shipper and the carrier.

Bill of Materials

A comprehensive list of all the materials, parts, and components required to manufacture a finished product.

Billing Schedule

A schedule or timeline that outlines when payments are due for goods or services rendered.

Blind Receiving

Receiving process in which the contents of a shipment are not disclosed to the receiving party until after the shipment has been received and documented.

Bonded/Customs Warehouse

A bonded warehouse, or customs warehouse, is used to store imported goods.

BOPP

An acronym for Biaxially-Oriented (BO) Polypropylene (PP), commonly used in sticker and label printing, food packaging, bottle caps, and other applications.

Bracing

Securing or reinforcing cargo or equipment to prevent it from shifting or moving during transportation. Bracing may involve the use of straps, braces, or other materials to hold the cargo or equipment in place.

Break-Bulk

The process of unloading and separating individual pieces of cargo or equipment from a larger shipment.

Break-Bulk Cargo

Goods or products that are transported in individual pieces, rather than in bulk or containerized form.

Buffer Stock

A reserve inventory of goods or materials that is held in storage to prevent shortages or stockouts.

Bulk Area

A designated area within a warehouse or storage facility where large quantities of goods or materials are stored in bulk.

Business Intelligence (BI)

A set of tools and techniques used to analyze and interpret data to gain insights and make informed business decisions.

Business Logistics

The process of planning, implementing, and controlling the movement of goods and services from the point of origin to the point of consumption.

Business Process Outsourcing (BPO)

The practice of outsourcing non-core business functions to third-party service providers. BPO may involve outsourcing functions such as customer service, accounting, payroll, and human resources.

Business Process Reengineering (BPR)

The process of redesigning business processes to improve efficiency, productivity, and quality.

Business to Business (B2B)

A type of commerce that involves transactions between businesses.

Business to Consumer (B2C)

A type of commerce that involves transactions between businesses and individual consumers.

C

Cage

A secure storage area within a warehouse or distribution center where high-value or sensitive items are stored.

Caged

A term used to describe items that are stored in a secure cage or storage area.

Carrier

A company or individual that transports goods or products from one location to another.

Carrier Liability

The legal responsibility of a carrier for the safe and timely delivery of goods in its custody.

Cartage

The process of transporting goods or products over short distances.

Carton Flow Rack

A type of shelving system that uses rollers or gravity to move cartons or boxes from the back of a shelf to the front.

Case Erector

A machine that automatically forms, folds, and seals corrugated cartons. Also referred to as a “box erector”

Case Picking

The process of picking a product in full case or carton quantities to fill a customer order.

Catch Weight

A method of inventory measurement used for goods that are sold by weight but may vary in weight from unit to unit.

Certificate of Origin

A document that verifies the country of origin of goods being shipped.

Change Order

A written order that changes the scope, schedule, or cost of a project or contract.

Channel Conflict

A situation in which different distribution channels for a product or service compete with each other, rather than complementing each other.

Channel Partners

Companies or individuals that work together to produce and sell a product or service.

Chargeable Weight

The weight used to calculate shipping charges for air and sea freight shipments.

Claim

A request by a customer for compensation or reimbursement for loss, damage, or delay in the delivery of goods or services.

Cold Storage

Warehouses that store products that have strict temperature and/or moisture range requirements.

Collaborative Robot (cobots)

These robots are used alongside the human warehouse staff and can handle repetitive tasks like picking or kitting.

Confirmation

An official notification or verification of an order or transaction. Confirmation may be provided through an email, fax, or other communication method.

Consignee

The person or company to whom goods are shipped or delivered.

Consignor

The person or company that sends goods to another party.

Consumables

Items that are used up or depleted over time, such as office supplies or fuel.

Continuous Flow Distribution

A logistics system in which goods are continuously moved from one stage of the supply chain to the next without interruption.

Continuous Production Manufacturing

Like batch production, continuous production manufacturing is a process manufacturing method where the raw materials being processed are gasses, liquids, powders, or slurries, rather than solid materials.

Contract Manufacturing

Sourcing strategy where a company will outsource parts of their manufacturing process

Contract Packaging

A strategic business arrangement in which a company outsources its packaging and other related services to a third-party provider.

Contract Warehouse

Type of public warehouse that provides you guaranteed storage space. These contract warehouses can also provide value-added fulfillment services.

Conveyor

A mechanical device used to move materials or goods from one location to another.

Critical Stock

Inventory items that are essential to a company’s operations and require careful management to ensure that they are always in stock.

Cross Dock/Cross Docking

A logistics strategy in which goods are unloaded from inbound trucks or containers and immediately loaded onto outbound trucks or containers without being stored in a warehouse.

Cubage

The total volume or capacity of a shipment, usually expressed in cubic feet or cubic meters.

Cumulative Lead Time

The total time required to complete a manufacturing or supply chain process, including all lead times for each stage of the process.

Customer Relationship Management (CRM) Systems

A system that helps a business manage and analyze customer interactions and relationships throughout the customer lifecycle. The primary role of a CRM system is to provide a centralized platform where all customer-related information is stored and accessible.

Customs Broker

A specialized firm that helps businesses with importing and exporting goods.

Customs Clearance

A process within international trade that involves the documentation, inspection, and regulatory procedures necessary for goods to cross international borders.

Custom Product Development

The process of designing and manufacturing products according to specific customer requirements.

Cybersecurity Systems

System that helps safeguard sensitive data and maintains the integrity and confidentiality of information within the supply chain.

Cycle Count

An inventory auditing procedure, where a company follows a regularly repeated sequence of checks on a small amount of their inventory.

Cycle Time

The amount of time required to complete one cycle of a production or supply chain process.

D

Data Analysis

The process of examining and interpreting data to draw conclusions and make informed decisions.

Defective Goods Inventory (DGI)

Inventory that consists of defective or damaged products that are not fit for sale. DGI may be held separately from other inventory and may require special handling or disposal.

Delivery Appointment

A pre-arranged time and date for the delivery of goods or services.

Delivery Confirmation

A confirmation that a shipment has been delivered to its destination. Delivery confirmation may be provided through a signature, email, or other communication method.

Demurrage

A fee charged by a carrier for the delay of a ship or other transportation vehicle beyond the agreed-upon time for loading or unloading.

Destock

The process of reducing or eliminating inventory levels of a particular product or product line.

Devanning

The process of unloading goods from a container or other transport vehicle.

Dimensional Factor (DIM Factor)

A representation of the amount of space one unit of weight occupies in the carrier’s transportation network.

Dimensional Weight (DIM Weight)

A pricing method to account for the space a package occupies in relation to its actual weight.

Direct Fulfillment

A logistics strategy in which products are shipped directly from the manufacturer or supplier to the end customer, bypassing traditional retail channels.

Direct Store Delivery (DSD)

A method of distribution in which products are delivered directly to retail stores from the manufacturer or supplier.

Discrete Manufacturing

Like repetitive manufacturing, however, instead of creating the same product every time, discrete manufacturing will often switch the setup of the machine to create custom products.

Discrete Picking

A picking method in which each order is picked individually from storage locations.

Dispatch Confirmation

A confirmation that a shipment has been dispatched or sent out for delivery.

Distribution Center (DC)

A warehouse or facility used for the storage, processing, and distribution of goods to retail stores, wholesalers, or end customers.

Distribution Channel

The path through which goods or services flow from the manufacturer or supplier to the end customer.

Distribution

The process of moving goods or services from the manufacturer or supplier to the end customer.

Distribution Warehouse

A warehouse used for the storage and distribution of goods to retail stores, wholesalers, or end customers.

Distributor

A company that buys products from manufacturers or wholesalers and sells them to retailers or end customers.

Dock Door

An opening in a warehouse or facility that allows access for loading and unloading of goods from trucks or other transportation vehicles.

Dock Receipt

A document used to acknowledge the receipt of goods by a carrier at a shipping dock.

Drayage

The transport of goods over a short distance, typically from a port to a warehouse or other destination.

Drop

The delivery of goods to a specific location without the need for an appointment or prior arrangement.

Dropshipper

Person or business that uses the dropshipping fulfillment method

Dropshipping

A fulfillment method in which the retailer or seller does not keep goods in stock but instead transfers customer orders and shipment details to a manufacturer, wholesaler, or another retailer who then ships the goods directly to the customer.

Dry Sampling

Sending samples home with consumers to try on their own.

Dunnage

The material used to protect goods during transport or storage.

E

Each

A unit of measure used to indicate individual items, often used in retail and ecommerce settings.

Ecommerce Fulfillment

The process of receiving, processing, and delivering online orders to customers.

Economic Order Quantity

A formulaic inventory valuation approach that calculates the optimal order quantity to minimize total inventory costs, including carrying costs and order costs.

Electronic Data Interchange (EDI)

The exchange of business documents between companies in an electronic format, typically used to automate supply chain processes.

End Item

A finished product or final assembly that is ready for sale to the end customer.

Enterprise Resource Planning (ERP) System

A software system that integrates and manages various business processes, such as finance, human resources, and supply chain management.

EPC or ePC: Electronic Product Code

A unique identifier used to track individual products throughout the supply chain.

Expediting

The process of accelerating the movement of goods or services to meet a deadline or delivery schedule.

Experiential Marketing

A process for brands to connect with customers through experiences

Export Processing Zone

A designated area within a country that is used for manufacturing and exporting goods.

F

Facilities

Physical spaces used for various business operations, including production, storage, and distribution.

FAST (Flow, Accessibility, Space, Throughput)

A set of principles used to optimize warehouse and distribution center operations, including efficient flow of goods, easy accessibility, adequate space, and high throughput.

FBA Prep

A necessary preparation step before products can be sold on Amazon’s platform.

Finished Goods Inventory (FG or FGI)

The inventory of completed products ready for sale to customers.

First Expired, First Out (FEFO)

A method of inventory management that prioritizes the sale and distribution of products based on their expiration date.

First In, First Out (FIFO)

A method of inventory management that prioritizes the sale and distribution of products based on the order in which they were received.

Floor Loaded Container

Shipping container stacked with freight that has been loaded from the floor up without utilizing a shipping pallet.

Floor Stacking

A LIFO (Last in, first out) system where pallets are placed on the floor in organized rows.

Flow Wrap

Product packaging wherein a product is wrapped in transparent or printed polyethylene (PE), polypropylene (PP) or polyethylene terephthalate (PET) packaging.

Food and Drug Administration (FDA)

A government agency responsible for regulating food, drugs, and medical devices in the United States.

Forklift

Industrial truck with pronged device used to lift and move heavy loads.

Free on Board (FOB)

A shipping term indicating that the seller is responsible for the goods until they are loaded onto the transport vehicle at the shipping point.

Freight

Goods that are transported by air, sea, or land, typically for commercial purposes.

Freight Broker

Acts as an intermediary between shippers and carriers, connecting those in need of transportation services with available trucking companies. They are primarily responsible for negotiating rates, arranging the movement of cargo, and handling the paperwork associated with shipments.

Freight Forwarder

An intermediary between shippers and carriers that arranges transportation and handles documentation for the movement of goods.

Fuel Surcharge

Additional fee once the cost of fuel exceeds the agreed-upon level.

Fulfillment By Amazon (FBA)

A program by Amazon where third-party sellers can use Amazon’s fulfillment and delivery network to store, pick, pack, and ship their products to customers.

Fulfillment

The process of receiving, processing, and fulfilling customer orders.

Fulfillment Center

A warehouse or distribution center where products are stored, processed, and shipped to customers.

Fulfillment Services Provider

A third-party logistics provider that offers fulfillment services, which include storing inventory, processing orders, picking, packing, and shipping products to customers.

Full Container Load (FCL)

A shipment that occupies an entire shipping container.

Full Truck Load (FTL)

Like FCL, a shipment that occupies an entire truckload.

Functional Acknowledgement (FA):

An electronic message that serves as a response to a received EDI (Electronic Data Interchange) message. The FA indicates that the received message has been successfully processed and acknowledges any errors or exceptions encountered during processing.

G

Global Product Sourcing

A procurement strategy in which a business buys goods from international market.

Glue Tipping

Method of attaching a product, product sample, or gift card to a printed envelope or literature card with adhesive glue.

Goods

Physical items that are traded or exchanged in the market. Goods can be raw materials, finished products, or anything in between.

Government Warehouse

Warehouses mainly used to store supplies for local governments, schools, and hospitals.

Gross Weight

The total weight of a shipment, including the weight of the goods and the packaging material.

GSM

A specification that describes the thickness of paper

GTIN (Global Tracking Identification Number or Global Trade Item Number):

A unique identification number used to identify products in the supply chain. GTINs are commonly used in barcodes and other forms of product labeling.

Guerilla Sampling

Using field marketing to promote products in places where the promoter doesn’t seek approval

H

Holding Cost

The cost of holding inventory in a warehouse or distribution center.

Hybrid Fulfillment

Order fulfillment strategy where a merchant uses more than one fulfillment model to fulfill and ship orders

Hybrid Warehouse

A type of warehouse that has both public and private warehousing space. When extra space is available, they will rent out the space to other customers.

I

Import

The process of bringing goods, products, or materials into a country from another country.

In-House Fulfillment

Involves the ecommerce business handling all operations internally. This includes everything from warehousing and inventory management, to the final shipping of products to consumers.

Inbound logistics

The process of managing and coordinating the movement of goods, materials, and resources into a business or organization.

Information Technology (IT)

The use of computers, networks, and other electronic devices to enable the efficient handling of information and support of business operations.

Intermodal Transportation

A type of transportation that involves the use of multiple modes of transportation, such as trucks, trains, and ships, to move goods and materials across long distances.

Internet of Things (IoT)

A network of connected physical devices that collect and exchange data using sensors, software, and other technologies, enabling them to communicate and interact with each other.

Intrusion Detection Systems (IDS)

Analyze network traffic and detect suspicious activity or anomalies, alerting security personnel to potential security breaches.

Inventory

The goods, products, or materials that a company holds in stock and intends to sell or use in its operations.

Inventory Cost

The cost associated with holding and managing inventory, including costs related to storage, handling, insurance, obsolescence, and depreciation.

Inventory Management

The process of overseeing and controlling the flow of goods, materials, and resources into and out of a business or organization.

Inventory Management Systems

A specialized piece of software designed to oversee and control inventory levels, helping maintain the right amount of stock to meet customer demand without incurring excess costs.

Inventory Master File

A database or system that contains detailed information about a company’s inventory, including item descriptions, stock levels, locations, and other relevant data.

Invoice

A document that itemizes the goods or services provided by a seller to a buyer and specifies the payment terms, including the amount due and the due date.

ISO

The International Organization for Standardization is an independent, non-governmental organization that develops and publishes international standards for a wide range of industries and applications.

ISO 13485

Specifies requirements for a quality management system where an organization needs to demonstrate its ability to provide medical devices and related services that consistently meet customer and applicable regulatory requirements.

Item Alias

Name of an item that is different from the name used in the warehouse

Item Number

A unique identifier assigned to a specific item or product, often used in inventory management and control to track and manage inventory levels.

J

Job Shop Manufacturing

Manufacturing process that uses production areas or workstations instead of an assembly line to create small-batch, custom-made goods with a heavy emphasis on product quality.

Just In Time (JIT)

A production strategy in which materials and components are delivered to a manufacturing plant or assembly line just in time to be used in the production process, reducing the need for inventory storage and management.

K

Kata

A manufacturing approach that involves consistent practice and scientific thinking to improve procedures.

Key Performance Indicator (KPI)

A measurable value that indicates how well a company or organization is achieving its business objectives and goals, such as customer satisfaction, profitability, or productivity.

Kitting

The process of assembling or packaging individual components or items into a single unit or kit, often used in manufacturing, distribution, or e-commerce.

L

Landed Cost

The total cost of a product to reach a customer’s door.

Last In First Out (LIFO)

An inventory management method in which the most recent items received or produced are the first to be sold or used, often used to account for inventory costs and tax purposes.

Last Mile

The final stage of delivery, in which products or packages are transported from a local warehouse or hub to their ultimate destination, such as a customer’s home or business address.

Last Mile Problem

The final stage of delivery, in which products or packages are transported from a local warehouse or hub to their ultimate destination, such as a customer’s home or business address.

Lead Time

The amount of time required for a product or component to be produced, shipped, and delivered to its final destination, including any processing, manufacturing, and transit time.

Less-Than-Container-Load (LCL)

A shipping method used for goods that do not fill an entire shipping container, allowing multiple shippers to share the same container space and reduce shipping costs.

Less-Than-Truckload (LTL)

Same as LCL, goods that do not fill an entire truckload.

Loading Dock

A raised platform or area where goods are loaded and unloaded from vehicles.

Locator System

A system that assigns specific locations for products within a warehouse or distribution center.

Logistics

The process of planning, implementing, and controlling the flow of goods, services, and information from the point of origin to the point of consumption in order to meet customer requirements.

Logistics Center

A facility where goods are received, sorted, stored, and shipped as part of the logistics process.

Logistics Data Interchange (LDI)

The electronic exchange of logistics-related data between different companies or entities, such as purchase orders, shipping notifications, and invoices.

Lot

A specific quantity of a product or material produced or packaged together.

Lot Sizing

The process of determining the optimal quantity of items to produce or order in order to minimize costs while meeting demand.

M

Machine Learning

A subset of AI where computer systems learn and improve from experience without being explicitly programmed, by analyzing patterns in data.

Make-To-Assemble (MTA)

A strategy that involves the production of component parts in anticipation of orders for assembly.

Make-To-Order (MTO)

A production strategy that only happens after an order has been received (often involving a signed contract, like a purchase order).

Make-To-Stock (MTS)

Production strategy where the factory produces a standardized product based on a forecast of demand. The inventory of the product is then held and distributed to retailers to meet consumer demand.

Manifest

A document that lists the details of a shipment, including the contents, origin, destination, and other relevant information.

Manufacturers

Transform raw materials and components into finished products. They are responsible for the production process, quality control, and meeting production schedules.

Manufacturing

The process of producing goods from raw materials or components, typically involving a series of operations and assembly.

Marketing Activations

 The execution of specific marketing tactics aimed at engaging consumers

Market-Positioned Warehouse

A warehouse that is located in close proximity to a specific market or customer base in order to reduce transportation costs and improve delivery times.

Material

Any physical substance or product that is used or processed in the manufacturing or distribution process.

Material Flow

The movement of goods, materials, and components through a production or distribution system.

Material Handling

The movement, storage, and control of materials and products within a manufacturing or distribution facility.

Movable Unit

A container, pallet, or other unit of goods that can be easily moved or transported within a warehouse or distribution center.

N

Net Weight

The weight of a product or shipment excluding any packaging, containers, or other materials used to transport or store it.

O

Obsolete Inventory

Inventory that is no longer useful or sellable due to being outdated, damaged, or unusable.

Omnichannel Fulfillment

A fulfillment strategy that integrates multiple sales channels (e.g. physical stores, e-commerce websites, mobile apps) to provide customers with a seamless shopping experience.

On-Demand

A production and delivery model where goods or services are provided to customers immediately upon request, rather than being produced or stocked in advance.

Operating Ratio

A financial metric that measures a company’s operating expenses as a percentage of its revenue. A lower operating ratio indicates better cost management and efficiency.

Order Cycle

The time it takes from when an order is placed to when it is delivered to the customer.

Order

A request made by a customer to purchase goods or services from a supplier or retailer.

Order Fulfillment

The process of receiving and processing customer orders, picking and packing products, and delivering them to the customer.

Order Management

The process of managing customer orders, including receiving and processing orders, inventory management, and fulfillment.

Order Management Systems (OMS)

Software that facilitates the order fulfillment process, from order entry to delivery. The primary function of an OMS is to manage and process customer orders efficiently, ensuring that each order is accurately captured, processed, and fulfilled in a timely manner.

Order Processing

The process of managing and executing customer orders, including verifying order details, checking inventory availability, and generating packing and shipping labels.

OSHA

The Occupational Safety and Health Administration, a US government agency responsible for establishing and enforcing workplace safety regulations.

Outbound Logistics

The process of managing the movement of goods from a company’s warehouse or manufacturing facility to its customers or distribution partners.

Overhead

A company’s indirect expenses that are not directly tied to the production or sale of a specific product or service, such as rent, utilities, and administrative costs.

Overwrap

Overwrap is a packaging method that wraps and heat-seals products with flat sides, such as cylinders and cube-shaped boxes.

P

Packing

The process of preparing products for shipment, including selecting appropriate packaging materials, packing products securely, and labeling packages with shipping information.

Packing List

A document that lists the items included in a shipment, along with quantities and descriptions of each item.

Pallet In/Pallet Out (PIPO)

A material handling method where materials are received and shipped on pallets, and are not unpacked until the final destination.

Pallet Jack

Machine used to move small loads of pallets in a warehouse.

Pallet

A flat platform used for storing, handling and moving materials and products. Typically made of wood, plastic or metal and can be lifted using a forklift or pallet jack.

Pallet Picking

A method of order picking where entire pallets of a single SKU are picked instead of individual cases or items.

Pallet Racks

Storage aid system designed to store palletized goods.

Palletized

Refers to goods or materials that have been stacked or arranged on a pallet for easier handling, transportation and storage.

Paperless Warehouse

A warehouse or distribution center where all documentation, records and processes are managed electronically, without the use of paper.

Parcel Shipping

The shipping of small packages or parcels, typically weighing less than 150 pounds, using a carrier such as UPS, FedEx, or USPS.

Physical Inventory

A periodic count and verification of all inventory items and quantities held in a warehouse or storage facility.

Physical Supply

The movement of materials from a supplier to a warehouse or manufacturing facility, including transportation, receiving and storage.

Pick and Pack

The process of selecting products from inventory (picking) and then packaging them (packing) for shipment to customers.

Pick List

A document or electronic record that lists the items and quantities to be picked for an order or group of orders.

Pick Sequence

The order in which items are picked from inventory for an order, based on factors such as location, ease of access, and demand.

Pick Ticket/ Pick Instruction

A document or electronic record that provides instructions for the picking process, including the items to be picked, their locations, and any special handling instructions.

Picker

An employee who selects items from inventory to fulfill customer orders.

Picking

The process of selecting and removing items from inventory to fulfill customer orders.

Piece Picking

Piece picking is a type of order picking method in which individual items are picked one by one to fulfill a customer order.

Planned Order Receipt

Planned order receipt refers to the scheduled delivery of goods or materials that have been ordered and planned for in advance.

Polyethylene (PE)

Polyethylene is a thermoplastic polymer known for its flexibility.

Polypropylene (PP)

Polypropylene (PP) is a thermoplastic polymer known for it’s durability and strength

Port Authority

A port authority is a government agency or body responsible for managing and regulating the operations of a port.

POS

POS stands for point of sale, which is the location where a retail transaction takes place. This can refer to a physical cash register or electronic device used to process payments and record sales.

Pre-Kitting

Combining items at the end of the manufacturing process before sending them to a 3PL company to store and fulfill.

Prepaid Freight

Prepaid freight is a shipping term that refers to freight charges that are paid by the shipper or sender of the goods in advance of shipment.

Primary Packaging

Primary packaging is the layer of packaging that comes into direct contact with the product. It’s the first layer of protection from external factors such as moisture, light, air, and contamination.

Private Warehousing

Private warehousing refers to a type of warehousing where a company or organization owns and operates their own warehouse facilities. This is in contrast to public warehousing, where a company rents space in a warehouse owned by a third-party logistics provider.

Process Improvement

Process improvement refers to the ongoing effort to improve the efficiency and effectiveness of a business process.

Process Manufacturing

Process manufacturing is a type of manufacturing where goods are produced by combining raw materials or components through a chemical or biological process.

Process Yield

Process yield refers to the percentage of usable output produced in a manufacturing process compared to the total amount of raw materials or components used.

Procurement

Procurement is the process of acquiring goods, services, or materials from external suppliers.

Product

A good or service that is offered for sale to a customer.

Product Characteristics

Product characteristics refer to the unique features or attributes of a product that differentiate it from other products in the market.

Product Description

Product description refers to the written or spoken information that describes a product and its features or benefits.

Product ID

A unique code or number assigned to a product to identify it in a company’s inventory management system, supply chain, or marketplace.

Product Sampling

The practice of offering goods or services to your audience in exchange for increased brand awareness, feedback, and other revenue-boosting user-generated content (UGC).

Product Rework

The process of correcting or modifying products often through activities such as repackaging, relabeling, or any other necessary adjustments before they are shipped to customers.

Production Line

A sequence of activities or processes involved in the manufacturing of a product, typically consisting of multiple workstations and equipment.

Proof of Delivery (POD)

A document or electronic record that serves as evidence of the successful delivery of a shipment to its intended recipient.

Public Warehouse

A commercial facility that provides storage and other logistics services for a fee to businesses and individuals.

Public Warehouse Receipt

A legal document that serves as proof of ownership or control of goods stored in a public warehouse.

Purchase Order (PO)

A commercial document issued by a buyer to a seller that specifies the products or services to be purchased, quantities, agreed prices, and delivery terms.

Putaway

The process of transferring newly received or manufactured goods from the receiving or production area to a designated storage location within a warehouse or distribution center.

Q

QR Code

A two-dimensional barcode that can be scanned using a smartphone or other mobile device, containing information about a product, service, or website.

Quality Assurance (QA)

The process of ensuring that products or services meet or exceed customer requirements and quality standards, typically involving testing, inspection, and continuous improvement efforts.

Quality Control (QC)

The process of verifying that products or services meet established quality standards, typically involving inspection and testing at various stages of production or delivery.

Quarantine

A temporary hold or isolation of products or materials suspected of being defective, contaminated, or non-conforming, until they can be evaluated or corrected.

Queue Time

The amount of time that a product, order, or task spends waiting in a queue or line before being processed or completed.

Quick Response

An inventory management and logistics strategy that emphasizes rapid response to customer demand by maintaining a lean inventory, utilizing fast and flexible manufacturing processes, and efficient logistics.

Quota

A government-imposed restriction on the quantity or value of goods that can be imported or exported, typically for economic or political reasons.

R

Rack

A structural framework with shelves, bins, or other supports that is used to store products in a warehouse or distribution center.

Radio Frequency (RF)

A wireless communication technology used in logistics operations to transmit data from handheld devices to warehouse management systems or other software applications.

Radio Frequency Identification (RFID)

A technology that uses radio waves to identify and track objects, such as products or inventory, in a supply chain or logistics operation.

Ramp

A sloping platform that connects a loading dock to the ground or to a trailer, making it easier to load and unload cargo or products.

Random-Location Storage

A method of inventory storage where items are placed in any available space in the warehouse rather than being assigned to specific locations or slots.

Rate Sheet

A document that lists the rates or fees charged for various shipping or transportation services, such as freight rates or carrier fees.

Rate Shopping

The process of comparing and selecting the most cost-effective shipping or transportation rates from multiple carriers or service providers.

Raw Materials (RM)

The basic materials or components used to manufacture products, such as metals, plastics, or chemicals.

Real-Time

Describes a system or process that operates or provides information immediately, without delay or lag time.

Receiving

The process of accepting and documenting the delivery of products or materials into a warehouse or distribution center.

Receiving Dock

A designated area of a warehouse or facility where incoming products or materials are received and processed.

Receiving Report

A document that records the details of an inbound shipment, including the date, time, quantity, and condition of the products or materials received.

Recurring Billing

A billing method used for products or services that are regularly provided or consumed, where the customer is charged automatically on a regular basis, such as monthly or annually.

Reorder Level

The minimum quantity of inventory that must be maintained in stock to ensure that products or materials are available when needed, without causing delays or stockouts.

Repetitive Manufacturing

Process that manufactures products repeatedly over a long period at a fixed production rate.

Replenishment

The process of restoring or replenishing stock levels in order to meet the demand for a product or materials.

Request for Information (RFI)

A document used to solicit information about a product or service from potential vendors or suppliers.

Request for Proposal (RFP)

A document used to solicit proposals from vendors or suppliers for a specific product or service.

Reserve Storage

A storage area used to hold items that are not yet needed for production or order fulfillment, but that are expected to be needed in the future.

Retail Distribution

Retail distribution encompasses warehousing, inventory management, order fulfillment, transportation and logistics, cross-docking, and reverse logistics.

Retail Inventory Method

Inventory valuation method that calculates the cost of goods sold and ending inventory based on the ratio of the cost of goods at retail prices to the total retail price of the goods.

Retailer

The points of sale where consumers buy products. Retailers manage inventory, pricing, and customer interactions. Retailers can be brick-and-mortar stores, e-commerce platforms, or other sales channels.

Return Goods Handling

The process of managing and processing returned items from customers.

Reverse Logistics

The process of managing the flow of goods from the point of consumption back to the point of origin or to a new destination for the purpose of capturing value or proper disposal.

Rewarehousing

The process of relocating products or materials from one warehouse or storage location to another for better organization, space optimization, or inventory management purposes.

Rolled Throughput Yield

Measures the probability of a product making it through the entire process without having a single defect.

Route Optimization

Determining the most efficient path for delivery, taking into account factors such as distance, traffic, and fuel consumption, to minimize costs and improve delivery times.

S

Safety Stock

The extra stock held in inventory to protect against unexpected demand or delays in supply.

Sales Order

A document that outlines the details of a customer’s order, including the quantity, product, price, payment terms, and delivery date.

Secondary Packaging

Secondary packaging is the outer layer of packaging that surrounds the primary packaging. Although it doesn’t ever come into direct contact with the product, secondary packaging is crucial to ensure products are secure and safe throughout the distribution process.

Secure Electronic Transaction (SET)

A protocol for secure electronic payments over the internet.

Serial Number

A unique identifier assigned to a specific product or item for tracking and inventory management purposes.

Service Charges

Fees charged by a service provider for specific services or activities, such as shipping, handling, or installation. These charges are in addition to the cost of the product or service being provided.

Shipping Zone

A geographical location to which a carrier will ship to.

Shipping

The process of preparing products or materials for transport from one location to another. This includes packaging, labeling, and arranging for transportation.

Shopping Carts

An online feature that allows customers to select items for purchase and hold them in a virtual cart until they are ready to checkout.

Simultaneous Picking

A picking method where multiple orders are picked simultaneously by one or more pickers, rather than one order at a time.

Slotting

The process of determining the most appropriate storage location for products based on factors such as size, weight, demand, and accessibility to improve warehouse efficiency.

Small Parcel Shipping

A shipping method that involves sending packages or parcels weighing less than 150 pounds through carriers like FedEx, UPS, or USPS.

Smart Warehouse

A warehouse that leverages automation technology and equipment to replace human labor in warehouse operations.

Sourcing

The process of identifying and selecting suppliers for materials, goods, or services needed to produce or deliver a product.

Split Delivery

A delivery method where an order is divided into multiple shipments or deliveries, which may be sent to different locations or on different dates.

Stacking

The process of placing goods on top of each other in a storage space to maximize vertical space utilization while minimizing the required floor space.

Staging

The process of preparing goods for shipment, including picking, packing, labeling, and staging them in a designated area for loading onto a truck or other transportation mode.

Staging Area

An area within a warehouse used for the temporary storage of goods before they are loaded onto a truck or moved to their final destination.

Standard Costing

Inventory valuation method where costs are predetermined based on standard rates for materials, labor, and overhead. Actual costs are then compared to these predetermined standards.

Stock

The amount of goods or inventory on hand at any given time in a warehouse or store.

Stock-Keeping Unit (SKU)

A unique identifier assigned to a specific product type, which is used to track inventory levels, sales, and other product-related data.

Storage Billing

A charge assessed to a customer for storing their goods in a warehouse or storage facility.

Storage Cost

The cost associated with storing goods in a warehouse, including rent, utilities, insurance, and other expenses.

Storage Location

A specific location within a warehouse designated for storing goods, often identified by a code or number.

Strap Loading

A loading method that uses straps to secure goods to a pallet or container to prevent damage during transportation.

Supplier/Vendor

A person or company that provides their products or services to another business.

Supply Chain

The network of entities, people, and activities that are involved in the creation and delivery of products or services from the point of origin to the point of consumption. A supply chain includes all the activities involved in the transformation of raw materials into finished products, as well as the distribution and delivery of those products to customers.

Supply Chain Management (SCM)

The management of the flow of goods and services, involving the movement and storage of raw materials, work-in-progress inventory, and finished goods from the point of origin to the point of consumption. SCM involves the coordination and integration of various activities such as sourcing, procurement, production, inventory management, transportation, and logistics.

Supply Warehouse

A type of warehouse that is used to store raw materials, work-in-progress inventory, and finished goods.

Sustainable Disposal

The process of responsibly discarding waste materials in a way that minimizes environmental impact, often through methods like recycling or composting.

T

Tally

A system of counting or keeping track of inventory.

Tariff

A tax on goods and services that are imported into a country

Tertiary Packaging

Tertiary packaging refers to the packaging used for the bulk handling, storage, and transportation of multiple units of secondary packaged items. Its primary purpose is to protect the products during long-distance transit, storage, and distribution within the supply chain.

Third-Party Warehousing

A type of warehousing in which a company outsources its warehousing and storage needs to a third-party logistics provider (3PL). Third-party warehousing can help companies reduce costs and improve operational efficiency by leveraging the expertise of logistics professionals.

Total Average Inventory

The average value of all the inventory held by a company over a certain period of time. This includes both raw materials and finished goods inventory.

Total Quality Management (TQM)

Structured approach to organizational management that improves quality

Traceability

The ability to track and trace products or materials as they move through the supply chain.

Track-Bys

A system for tracking inventory that involves assigning a unique identifier or barcode to each item. Track-by systems can help companies improve inventory accuracy and visibility.

Transaction

Any exchange of goods or services between two parties. Transactions can involve the exchange of money, products, or services.

Transloading

Logistics practice that involves transferring goods from one mode of transportation to another, typically from one type of vehicle to another.

Transportation Management System (TMS)

A software platform used to manage transportation operations and optimize the movement of goods through the supply chain.

U

Uniform Product Code (UPC)

A standardized barcode system used to identify and track products in the supply chain.

Unique Parcel Identifier (UPI)

A unique identifier assigned to each individual parcel or shipment. UPIs can be used to track shipments through the supply chain and facilitate data exchange between trading partners.

Unit

A single item or a group of items that are treated as a single entity for inventory or tracking purposes.

Unit Cost

The cost of producing or acquiring a single unit of a product or service. Unit cost is calculated by dividing the total cost of production or acquisition by the number of units produced or acquired.

Unit Load

A standardized grouping of items that is designed to be transported as a single unit.

Unit of Measure (UOM)

A standard unit that is used to quantify a product, material or service. Examples of UOMs include kilograms, pounds, pieces, boxes, pallets, etc.

Unitization

The process of grouping individual items or products into a single unit or container for easier handling, storage and transportation.

Unloading

The process of removing goods or materials from a vehicle or container, and transferring them to a storage or processing facility.

UPC (Universal Product Code)

A unique identifier code that is used to track and identify products in the supply chain. It is commonly used in retail and grocery stores for point of sale scanning.

V

Value Added Services

Additional services provided by a logistics provider or warehouse beyond basic storage and transportation, such as kitting, labeling, assembly, packaging, etc.

Velocity

The rate at which products move through the supply chain from the time they are ordered until they are delivered to the customer.

Vendor

A supplier or seller of goods or services.

Vendor-Managed Inventory (VMI)

A supply chain management strategy where the supplier manages the inventory levels of their customer to ensure that the right products are in the right place at the right time.

Visibility

The ability to track and monitor the movement of goods and materials through the supply chain in real-time.

Void Fill

Materials used to fill empty spaces or voids in packaging to protect the contents during shipping and handling.

W

Warehouse

A facility used for the storage and handling of goods and materials during the supply chain process.

Warehousing

The process of storing and managing goods and materials in a warehouse.

Warehouse Management System (WMS)

A software application used to manage and optimize warehouse operations, including inventory management, order fulfillment, and shipping.

Warehouse Occupancy Rate

Gauges the amount of space utilized in a warehouse compared to the total available storage area

Warehouse Receipt

A document that provides proof of ownership of goods that are stored in a warehouse. It contains information about the quantity, type and condition of the goods, and is often used as collateral for loans or other financial transactions.

Warehouse Utilization Rate

The degree in which a warehouse space is effectively used to store goods and manage inventory.

Wave Picking

A method of order picking in which orders are grouped into waves based on various criteria such as destination, delivery date or item priority, and then picked simultaneously to increase efficiency and productivity.

Waybill

A legal document issued by a carrier that details the shipment contents, origin, destination, and other pertinent information required for transportation of goods.

Weight Confirmation

The process of verifying the weight of a shipment, which is typically done through weighing scales or other measurement devices.

Weighted Average Cost

Inventory valuation method that is calculated by dividing the total cost of goods available for sale by the total number of units available for sale.

Wet Sampling

Giving consumers a sample that they try immediately in-store

Wholesale

The sale of goods in large quantities to retailers, other businesses, or institutional customers at a discounted price.

Work in Process (WIP)

The goods that are currently being produced or assembled in a manufacturing or production environment, but have not yet been completed or sold.

Y

Yield

The percentage of usable output produced from a given amount of raw materials or inputs, often used to measure manufacturing efficiency.

Z

Zone

A defined area within a warehouse or distribution center used for storage or other purposes such as order picking, replenishment, or packing.

Zone Picking

A method of order picking where order pickers are assigned to specific zones within the warehouse and are responsible for picking items only within their designated zone.

Zone Price

A pricing strategy where the cost of a product or service varies based on the geographical location of the customer, often used to account for differences in transportation or distribution costs.

Zone-Batch Picking

A method of order picking where orders are grouped into batches based on their location in specific zones of a warehouse, and then picked simultaneously to increase efficiency and productivity.

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