Third-Party Logistics and Warehousing Glossary

Warehousing and Logistics Industry Terminology 

 

Comprehensive Logistics & Supply Chain Glossary

Whether you’re a new warehouse owner just starting out in logistics, or an experienced 3PL operator looking for a comprehensive list to share with warehouse teams, our handy warehouse glossary resource shares all the information you need in one place.

3PL Central has worked with countless 3PL warehouses and knows the ins and outs of the logistics and supply chain industries. Below you’ll find a glossary of industry terms and phrases of warehouse terminology.

Please navigate to the letter you’re searching for by clicking the corresponding letter below.

 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

 

 

2D barcode:

Two-dimensional barcode based on a flat set of rows of encrypted data in the form of bars and spaces, normally in a rectangular or square pattern.

3D barcode:

Three-dimensional barcode based on a physically embossed or stamped set of encrypted 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):

This is a business’ use of a third-party company to manage warehouses activities/inventories including distribution, warehousing, and fulfillment services.

4PL (4th Party Logistics Provider):

Provides 3PL Services with additional services such as consulting, IT resources etc.

ABC Analysis:

To assign importance to a classification of items in an warehouse’s inventory based on certain criteria like sales or order volume.

Acceptable Quality Level (AQL):

During quality assurance management, when a continuing series of product lots are considered, AQL will represent a quality level limit that, if failed, will deem the entire lot unsatisfactory.

Accessibility:

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

Accessorial Charges:

Fees from a carrier for certain logistics services such as: loading/unloading, pickup, delivery, or any other relevant charge.

Accumulation Bin:

A physical location used to accumulate all the parts that go into an assembly before it’s sent out to the assembly floor.

Active Stock:

Goods in active pick locations of the warehouse that are ready for order fulfillment.

Advanced Shipping Notification (ASN):

A document that’s sent to a warehouse management system (WMS) from a supplier that provides detailed information about an incoming shipment.

Aging:

The categorization and ordering of invoices, orders, inventory, and lots based on due dates, receipt dates, expiration dates, or other criteria. Aging is used to focus a warehouse’s attention on past due and urgent items.

Anniversary Billing:

An annual recurring bill date that is resolved on the same day of the year as their initial sign-up or charge date.

Any-Quantity (AQ) rate:

A carrier rate that applies to shipments of any size; no discount rate is available- even for large shipments.

API (Application Programming Interface):

A set of functions and procedures that allow applications to access the data of an operating system, application, or other service.

Assemble to Order:

A production environment where a product can be assembled after receipt of a customer’s order. The key components (bulk, semi-finished, intermediate, etc.) used in the assembly or finishing process of production are planned and usually stocked in anticipation of a customer order. Assembly of the product starts once the receipt is processed.

ATA:

An acronym standing for “actual time of arrival”, or also known as the American Trucking Associations.

ATD:

An acronym standing for “actual time of departure”.

Auto ID:

Referring to an automated identification system. This includes technology such as barcoding and radio frequency tagging (RFID)

Automated Guided Vehicle System (AGVS):

A computer-controlled materials handling system consisting of small vehicles (carts) that move along a guideway.

Automated Storage/Retrieval System (AS/RS):

A high-density rack inventory storage system with unmanned vehicles automatically loading and unloading products to/from the racks.

B2B:

An acronym standing for “business-to-business” and refers to dealings between two businesses.

B2C:

An acronym standing for “business-to-customer” and refers to dealings between a business and end consumer.

Back Order:

A product that’s been promised to ship when it first becomes available because it was out of stock when initially ordered.

Bale:

A large compressed, bound, and often wrapped bundle of a commodity, such as cotton or hay.

Barcode:

A series of alternating bars and spaces printed or stamped on products, labels, or other media, representing encoded information which can be read by electronic readers called bar.. A popular example is the UPC code used on retail packaging.

Barcode Parsing:

The extraction and of multiple data values from a single barcode.

Barcoding:

A method of encoding data for fast and accurate readability and turning such data into a barcode.

Basing-Point Pricing:

A pricing system that includes a transport costs from a city or location, even though the shipment does not originate at the basing point.

Batch Picking:

The process of fulfillment order picking from a warehouse in which all the items for multiple orders are picked by a single picker.

Batch Terminal Communications:

The connection and transfer of information between the batch handheld and PC for purposes of warehouse management systems integrations.

Best Practice:

A specific process or group of processes which have been recognized by the community at large as the most efficient or effective method for accomplishing a specific goal.

Big Data:

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

Bill of Lading (BOL):

A document that details items in a shipment that acts as a receipt given by the carrier of the shipment to the recipient of the shipment.

Bill of Materials:

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 costing. Commonly known as a BOM or just a Bill.

Billing Schedule:

The cadence that a warehouse generates an invoice to their customer.

Bin Center:

A drop off 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 satisfy requirements. Oftentimes, blanket orders cover only one item with predetermined delivery dates.

Blanket Rate:

A flat rate that does not increase depending on the distance shipped.

Blind Receiving:

Receiving goods in warehouse without any purchase order or advanced shipping notice.

Bracing:

Securing cargo inside a carrier’s vehicle to prevent damage to said cargo.

Break-Bulk:

Separation of a consolidated load into smaller individual shipments for delivery to the final consignee. The freight may be moved intact, or it may be interchanged to connecting carriers.

Break-Bulk Cargo:

Cargo that is shipped as a unit or package. Examples include: pallet cargo, boxed cargo, large machinery, trucks, etc. and are not held in a container.

Buffer Stock:

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

Bulk Area:

A storage area for large items which at a minimum are most efficiently handled by the pallet load.

Business Intelligence (BI):

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, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.

Business Process Outsourcing (BPO):

The practice of outsourcing non-core internal functions to third parties. Functions typically outsourced include logistics, accounts payable, accounts receivable, payroll, and human resources. Other areas can include IT development or complete management of the IT functions of the enterprise.

Cage:

(1) A secure enclosed area for storing highly valuable items (2) A pallet-sized platform with sides that can be secured to the tines of a forklift and in which a person may ride to inventory items stored well above the warehouse floor.

Caged:

Referring to the practice of placing high-value or sensitive products in a fenced off area within a warehouse.

Cargo:

Goods and merchandise by a means of a transportation carrier.

Carrier:

The business that is used for delivery of goods or cargo.

Carrier Liability:

A common carrier is liable for all shipment loss, damage, and delay with the exception of that caused by act of God, act of a public enemy, act of a public authority, act of the shipper, and the goods’ inherent nature.

Carrying Costs:

The costs associated with having 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:

The movement of product locally (over short distances).

Carton Flow Rack:

A storage rack consisting of multiple lines of gravity flow conveyors.

Case Picking:

Retrieval of full carton loads of each item or inner packs of items from cartons (the latter a.k.a. split-case picking).

Catch 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. It is 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 can result from a revised date, quantity order, or specification by the customer.

Channel Conflict:

This occurs when various channels within a company’s supply chain are in competition with one another for the same business. An example would be a retail channel in competition with a web-based channel that was set up by the same company.

Channel Partners:

Members of a supply chain (i.e., manufacturers, suppliers, distributors, etc.) who work in conjunction with one another to manufacture, distribute, and sell a specific product.

Chargeable Weight:

The shipment weight used in determining freight charges; including both dimensional weight or 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 of delivery, or overcharge.

Confirmation:

With regards to EDI, a formal notice indicating that a message sent to a trading partner has reached its intended mailbox or has been retrieved by the addressee of said message.

Consignee:

The party to whom goods are shipped and delivered. They are the receiver of a shipment.

Consignor:

The party who originates a shipment of goods (shipper), often times the seller.

Consumables:

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

Conveyor:

A materials handling device that moves products or consumables from one area of the warehouse to another. Roller conveyors utilize gravity, whereas belt conveyors use motors.

Critical Stock:

An amount of a good that must be maintained in inventory, though rarely used, to respond to expressed need.

Cross Docking:

Refers to the practice of moving products directly from the receiving area to the shipping area for distribution rather than being put away and stored for a period of time. Cross docking requires close synchronization of all inbound and outbound shipment movements. By eliminating the put-away, storage, and selection operations, it can significantly reduce distribution costs.

Cubage:

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

Data Analysis:

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

Defective Goods Inventory (DGI):

Items that have been returned, have a freight claim outstanding due to damage upon delivery, or have been damaged in some way during warehouse handling.

Delivery Appointment:

The time agreed upon between two enterprises for goods or transportation equipment to arrive at a selected location.

Delivery Confirmation:

An electronic message sent by the carrier to confirm that the shipment has been successfully delivered. Depending on the carrier service, this may be the final delivery status update message.

Demurrage:

The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time.

Dispatch Confirmation:

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

Destock:

To reduce the amount of stock held in a warehouse.

Devanning:

The unloading of cargo from a truck carrier container.

Direct Store Delivery (DSD):

Process of shipping direct 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 the items for one 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 administration, 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 made through one or more levels of field warehouses. The systematic division of a whole into discrete parts having distinctive characteristics.

Distribution Center (DC):

A warehouse facility which holds inventory from manufacturing or another warehouse before it’s distributed to the appropriate retail locations.

Distribution Channel:

One or more companies or individuals who participate in the flow of goods and services from the manufacturer to the final user or consumer.

Distribution Warehouse:

A finished goods warehouse from which a company assembles customer orders.

Distributor:

A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory. Synonym: Wholesaler.

Dock Door:

The garage door-like gateway on a loading dock that allows access to a transport vehicle for unloading and loading operations of goods coming to and from a warehouse.

Dock Receipt:

A document used to accept materials or equipment at an ocean pier or accepted location. Provides the ocean carrier with verification of receipt and the delivering carrier with proof of delivery.

Dock Scheduling:

Also known as dock door appointment scheduling, is the use of scheduling tools or software to automate and manage the schedules for receiving and sending of goods entering and leaving warehouse yards. With the use of dock scheduling, a dock calendar is maintained, showing all delivery logistics, such as open/close time, delivery appointments, and commodities to be accepted through the dock door/yard, making the loading and unloading of goods as efficient as possible.

Drayage:

The service offered by a motor carrier for pick-up and delivery of ocean containers or rail containers. Drayage agents usually handle full-load containers for ocean and rail carriers.

Drop:

When a trailer or boxcar at a facility is deposited at a location so as to be loaded or unloaded.

Dunnage:

The packing material used to protect a product from damage during transport.

Each:

Pluralized to eaches, it refers to a single unit or widget item within a warehouse.

Ecommerce:

Also known as electronic Commerce or EC. Conducting business electronically via traditional EDI technologies, or online via the Internet. In the traditional sense of selling goods, it’s possible to do this electronically because of certain software programs that run the main functions of e-commerce support, such as product display, ordering, shipment, billing, and inventory management.

Electronic Data Interchange (EDI):

An inter-company, computer-to-computer transmission of electronic information in a standard format. An EDI transmission consists only of business data, not 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 completed item or repair part; any item subject to a customer order or sales forecast.

Enterprise Resource Planning (ERP) System:

A class of software for planning and managing enterprise-wide the resources needed to take customer orders, ship them, account for them, and replenish all needed goods according to customer orders and forecasts. Often includes ecommerce with suppliers.

EPC or ePC: Electronic Product Code:

An electronically coded tag that is intended as an improvement to the UPC barcode system. The EPC is a 96-bit tag which contains a number called the 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 identifying number, giving greater accuracy in tracking.

Expediting:

Moving shipments through regular channels at an accelerated rate.

Facilities:

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

FAST (Flow, Accessibility, Space, Throughput):

The set of principles used to describe the optimal layout of a warehouse for optimal efficiency. Making sure the structure in place allows for efficient flow, easy access to inventory, space allotted to inventory and room to move, and throughput, or the adaptability of your space.

First In First Out (FIFO):

In inventory control and financial accounting, this refers to the practice of using stock from inventory on the basis of what was received first and is consumed first. Antonym: Last In First Out.

Flow Rack:

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

FOB:

A term of sale defining who is to incur transportation charges for the shipment, which is to control the shipment movement, or where title to the goods passes to the buyer; originally meant “free on board ship.”

Forward Picking:

A storage area designed for efficient piece and case order picking that is usually replenished from reserve storage, but sometimes directly from receiving.

Freight:

Goods being transported from one place to another, often via container.

Fulfillment:

The act of fulfilling a customer order, often referring to ecommerce. Fulfillment includes all of the the following processes: order management, picking, packaging, and shipping.

Fulfillment Services Provider:

A fulfillment services provider is an organization that operates on behalf of a business to receive delivery of stock from their suppliers, store inventory, and fulfill customer orders. May also be referred to as a fulfillment house, fulfillment company, or a 3PL.

Full Container Load (FCL):

When goods occupy a whole container.

Full Truckload (FTL):

Similar to full container load, but references to truck carriers instead of containers.

Functional Acknowledgement (FA):

A specific EDI Transaction Set (997) sent by the recipient of an EDI message to confirm the receipt of data but with no indication as to the recipient application’s response to the message. The FA will confirm that the message contained the correct number of lines, etc., via control summaries, but does not report on the validity of the data.

General Order (GO):

A customs term referring to a warehouse where merchandise not entered within five working days after the carrier’s arrival is stored at the risk and expense of the importer.

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

GTIN is the globally-unique identification number, used for trade items (goods or products). It’s used for uniquely identifying the trade items sold, delivered, warehoused, and billed throughout 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 identifying number, giving greater accuracy in tracking.

Goods:

1) Common term indicating movable property, merchandise, or wares. 2) All materials which are used to satisfy demands. 3) Whole or part of the cargo received from the shipper, including any equipment supplied by the shipper.

Goods Receipt:

This is where the warehouse confirms that the products have been received from a supplier, as per an issued purchase order and are put into stock. On receipt, products may be checked against a packing list or ASN, go through QA, are labeled and put away in bin or shelf location.

Gross Weight:

The total weight of the vehicle and the payload of freight or passengers.

Holding cost:

The expense associated with holding an item in stock for a specified unit time.

Hybrid Warehouse:

A warehouse that is a combination of both private and public warehouse. They will house a products primarily for one customer only, but when extra space is available, will rent out the storage space to other customers.

Igloos:

Pallets and containers used in air transportation; the igloo shape fits the internal wall contours of a narrow-body airplane.

Import:

Movement of products from one country into another.

Inbound logistics:

The management of materials from suppliers and vendors into production processes or storage facilities.

Infinite Capacity Scheduling:

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

Inventory:

The products and their quantity that are stored on-hand in a warehouse, able to be sold to customers.

Inventory Cost:

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

Inventory Management:

The ability to account for and manage all the product 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 items stored in the warehouse. Used together like the location master file to control material transport operations.

Invoice:

A detailed statement showing goods sold or shipped and amounts for each. The invoice is prepared by the seller and acts as the document that the buyer will use to make payment.

Item:

Any unique manufactured or purchased part, material, intermediate, sub-assembly, or product.

Item Number:

The identification number assigned to an item. Also called the part number, SKU number, or SKU.

Just In Time (JIT):

An inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered just in time. Developed by the auto industry, it refers to shipping goods in smaller, more frequent lots.

Labels:

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

Lading:

The cargo carried in a transportation vehicle.

Last In First Out (LIFO):

In inventory control and financial accounting, this refers to the practice of using stock from inventory on the basis of what was received last is consumed first. This has limited use in stock keeping and is primarily a cost-accounting method. Antonym: FIFO.

Last Mile:

The final leg of a commercial delivery, wherein the carrier is responsible for final handover to the customer.

Lead Logistics Provider (LLP):

An organization that organizes other third party logistics partners for outsourcing of logistics functions.

Lead Time:

The total time that elapses between an order’s placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.

Less-Than-Container-Load (LCL):

When goods do not completely occupy an entire container. When multiple shippers’ goods occupy a single container, each shipper’s cargo is considered to be LCL.

Less-Than-Truckload (LTL):

Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.

Line:

The 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 enterprise.

Loading Dock:

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

Logistics:

A broad terms that encompasses anything related to the planning, implementing, or controlling of goods or resources as they are stored or delivered from one point to another.

Logistics Center:


Locations in the supply chain for performing logistic activities, often including stocks and warehousing.

Logistics Data Interchange (LDI):

A computerized system that electronically transmits logistics information.

Lot:

A production run or batch that can be isolate.

Lot Sizing:

Combining several small orders into larger ones for MRP.

Manifest:

A document that contain information about every order that’s transported within a shipment.

Market-Positioned Warehouse:

Warehouse positioned to replenish customer inventory assortments and afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.

Material:

Any resource that goes into the production of another product.

Materials Handling:

The physical handling of products and materials between procurement and shipping.

Movable Unit:

A single 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 merchandise, unpacked, outside of any containers.

Omnichannel:

Omnichannel is the way in which a warehouse management system (WMS) seamlessly interacts with different applications or software to manage multiple processes in the supply chain.

Order:

All the products that are including on one transaction from a customer.

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 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 in each order. It allows the person picking the order to quickly find the item he or she is looking for without a broad search of all packages. It also confirms the actual shipment of goods on a line item basis.

Pallet:

The platform which cartons or cases of specific goods are stacked and bundled together, and then used for shipment or movement as a group. Pallets may be made of wood or composite materials.

Pallet In/Pallet Out (PIPO):

The receiving, storing, and shipping of complete pallets- shipping them in the same state they were received.

Pallet picking:

Retrieval of full pallets of cartons, or layers of cartons from a pallet (a.k.a. unit-load picking).

Paperless Warehouse:

A warehouse that does not rely on manual or analog processes to run their warehouse, but instead uses software like warehouse management systems to record and operate all functions of a warehouse.

Parcel Shipment:

Small packages that are usually under 150 lbs. and are typically handled by providers such as UPS and FedEx to be delivered to the end recipient.

Physical Inventory:

The process of counting all inventories in a warehouse or plant in a single event. Also called a wall-to-wall inventory.

Physical Supply:

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

Pick/Pack:

Picking and packing immediately into shipment containers.

Pick Ticket/ Pick Instruction:

An instruction used in the warehouse that lists which products and their quantities need 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:

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

Pick Sequence:

The order of location travel within a warehouse when picking items.

Piece Picking:

Retrieval of individual units (or ‘eaches’) of an item, where each piece picked is the unit of issue to the final customer (a.k.a. broken-case picking).

Planned Order Receipt:

Term used within MRP and DRP systems to describe the date a planned order must be received in order to fulfill net requirements.

Planned order release:

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

POS:

An acronym standing for “point of shipment”, or “point of sale”.

Prepaid Freight:

Freight paid by the shipper to the carrier when merchandise is tendered for shipment that is not refundable if the merchandise does 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 business 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 of the elements that define a product’s character, such as size, shape, weight, etc.

Product Description:

The business’ description of the product for consumer use.

Product ID:

A method of identifying a product without using a full description. These can be different for each document type and must, therefore, 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 such names).

Proof of Delivery (POD):

Information supplied by the carrier containing the name of the person who signed for the shipment, the time and date of delivery and other shipment delivery-related information. 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 of multiple independent businesses while providing a variety of services for a fee or on a contract basis usually owned by a third-party logistics (3PL) business.

Public Warehouse receipt:

The basic document a public warehouse manager issues as a receipt for the goods a company gives to the warehouse manager. The receipt can be either negotiable or non-negotiable.

Purchase Order (PO):

A purchase order is a document that is sent from a buyer to a supplier requesting an order for merchandise. The purchase order usually lists the type of item, quantity, and agreed-upon price.

Putaway:

Removing incoming orders from the location where it is received to the final storage area and recording the movement and identification of the storage location where it has been placed.

QR Code:

A Quick Response (QR) code is a scannable code, made up of various 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:


Program planned to provide that goods purchased may be inspected and/or tested so that compliance with specifications may be determined.

Quarantine:

The setting aside of items from availability for use or sale until all required quality tests have been performed and conformance certified.

Queue Time:

The amount of time inventory is staged prior to processing.

Radio Frequency (RF):

A form of wireless communications that lets users relay information via electromagnetic energy waves from scanner to computer. When combined with a barcode system of identifying inventory items, a radio frequency system can relay data instantly, thus updating inventory records in real-time.

Radio Frequency Identification (RFID):

The use of radio frequency technology such as RFID tags and tag readers to identify objects. Objects may include virtually anything physical, such as equipment, pallets of stock, or even individual units of product.

Random-Location Storage:

In warehouses, a storage technique in which received material is put away in any available space rather than a specific decided logical criteria.

Rate Shopping:

The process by which shipping rates are shopped around to multiple carriers in order to find the optimal shipping solution.

Raw Materials (RM):

Crude 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 happens, as contrasted with storing data for input at a later time (batch processing).

Receiving:

The process involving the physical receipt of merchandise, its inspection for accuracy and to identify any damage, the determination of where the stock will be stored, delivery to that location, and the completion of receiving reporting.

Receiving Dock:

Distribution center location where the actual physical receipt of the purchased material from the carrier occurs.

Recurring Billing:

Automated billing charges that happen over a specified time interval (monthly, bimonthly, yearly, etc.).

Reorder Level:

The stock level at which it is time to place another order for materials (generally the lead time demand plus safety stock minus any stock on order).

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):

A document used to solicit information about vendors, products, and services prior to a formal RFQ/RFP process.

Request for Proposal (RFP):

A document that provides information concerning needs and requirements for a manufacturer. This document is created in order to solicit proposals from potential suppliers. For example, a computer manufacturer may use an RFP to solicit proposals from suppliers of third-party logistics services.

Reserve Storage:

An area intended for the storage of material in full pallet load sizes from which both forward picking.

Return Goods Handling:

Processes involved with returning goods from the customer to the manufacturer. Products may be returned because of performance problems or simply because the customer doesn’t like the product.

Reverse Logistics:

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

Rewarehousing:

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

Sales Order:

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

Secure Electronic Transaction (SET):

In ecommerce, a system of guaranteeing the security of financial transactions conducted over the Internet.

Serial Number:

A unique number assigned for identification to a single piece that will never be repeated for similar pieces. Serial numbers are usually applied by the manufacturer but can be applied at other points by the distributor or wholesaler.

Service Charges:

An extra charge assessed for a service.

Shipping:

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

Shopping Carts:

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

Simultaneous picking:

Variation of zone picking and where the 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. Its objective is to increase picking efficiency and reduce warehouse handling costs through optimizing product location and balancing the workload.

Small Parcel Shipping:

Also known as small package shipping, is the shipping of goods or packages under the weight of 150lbs. These smaller packages can be shipped using less than truckload freight or by 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 is spread out over several dates to control inventory investment, save storage space, etc.

Staging:

Pulling material for an order from inventory before the material is required. This action is often taken to identify shortages, but it can lead to increased problems in availability and inventory accuracy.

Stock:

All the goods and materials that are stored by an organization until they are needed.

Stock-Keeping Unit (SKU):

A category of unit with a unique combination of form, fit, and function (i.e., unique components 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 the inventory, as well as storage equipment (racking, shelving) used to store the inventory.

Storage location:

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

Supply Chain:

(1) Starting with unprocessed raw materials and ending with the final customer using the finished goods, the supply chain links many companies together. (2) The material and informational interchanges in the logistical process, stretching from acquisition of raw materials to delivery of finished products to the end-user. All vendors, service providers, and customers are links in the supply chain.

Supply Chain Management (SCM):

Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which 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 major business functions and business processes within and across companies into a cohesive, high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives 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, staged, or sequenced at the warehouse to assemble plant orders.

Third-Party Warehousing:

The outsourcing of the warehousing function by the seller of the goods.

Track-Bys:

Inventory qualifiers assigned at receiving that provides an additional layer or 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 usage of the term in data processing in which a transaction can be an inquiry or a range of updates and trading 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 transportation management in various modes along with associated activities, including managing shipping units, labor planning and building, 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’s WMS.

Uniform Product Code (UPC):

A standard product numbering and barcoding 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 & widgets.

Unit Load:

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

Unit of Measure (UOM):

The unit in which the quantity of an item is managed, e.g., pounds, each, box of 12, package of 20, or case of 144. Various UOMs may exist for a single item. For example, a product may be purchased in cases, stocked in boxes, and issued in single units.

UPC (Universal Product Code):

The standard barcode for retail items in North America.

Unique Parcel Identifier (UPI):

A series of characters that are assigned to a specific parcel that enables it to be tracked throughout delivery by a carrier.

Velocity:

Rate of product movement through a warehouse.

Vendor-Managed Inventory (VMI):

The practice of retailers making suppliers responsible for determining order size and timing usually based on receipt of retail POS and inventory data. Its goal is to increase retail inventory turns and reduce stock outs.

Visibility:

The ability to access or view pertinent data or information as it relates to logistics and the supply chain, regardless of the point in the chain where the data exists.

Warehouse:

Storage place for goods or materials. Principal warehouse activities include receipt of product, storage, shipment, and order picking.

Warehousing:

The storage (holding) of goods.

Warehouse Management System (WMS):

The software solution that keeps track of all warehouse operations including receiving, putaway, picking, shipping, and inventory. Also includes support of 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 putaway processes.

Zone picking:

A process of order picking in which different pickers pick items of an order from specific assigned storage areas to be assembled for shipping later.

Zone-Batch Picking:

A combination of zone and batch picking, where multiple pickers each pick portions of multiple orders.

 

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