Glossary of terms

Commonly Used Terms and Definitions Warehousing and Logistics Supply Chain

3PL

A common abbreviation: stands for Third Party Logistics Provider. (See Third Party Logistics)

Advanced shipment notification (ASN)

Advanced shipment notifications (ASNs) are used to give visibility of an order prior to arrival at the warehouse. The information might include: PO number, pallet count, number of pallets, content of pallets, weight etc.

Allocations

Product which has been assigned or allocated to a given order in a warehouse management system (WMS).

Available

All inventory which is eligible to be shipped and is not damaged, on hold, or allocated.

Backorder

A term used to describe an overallocation of an item.

  • Example: there are a total of 48 cases of item X in a warehouse, but an order calls for 57 cases of that item. 9 cases would be considered on backorder.

Batch picking

A picking method whereby one stock keeping unit (SKU) is picked one time for all applicable orders and then distributed across multiple orders in a staging or packing location.

Bill of Lading (BOL)

Legal documentation for any load of product travelling by land, air, or sea freight. This document includes data such as PO number, unit of measure and quantity, weight and value.

Bonded warehouse

A warehouse utilized for the storage of merchandise that is on hold until import duty is paid.

Box/carton

Term for units of goods which are packed in corrugate packaging.

Fine picking

Method of picking where individual cartons are packed, to be added to a mixed pallet of product prior to dispatch.

Chargeback

Monetary term used predominantly in cases of vendor compliance issues, where product was not shipped correctly via the given guidelines for a consignee.

Cold storage

Temperature controlled storage designed to keep the temperature of the warehouse consistent with products which need a lower temperature than ambient.

Commodity

Term used to describe the type of product being stored.

Container

Term typically used to refer to ocean shipping containers. These come in two common sizes: 12 meters and 6 meters. Intermodal containers can also be 13.716 meters.

Cross-dock

Product or orders that are brought into the warehouse but not put-away, rather held at the dock for a short period of time before being loaded out of the warehouse onto another truck.

Cube

This term refers to shipment volume (Length X Width X Height), and most commonly means cubic foot or cubic meter.

Cubed out

This term refers to a container of trailer being at maximum capacity (or very close to it)

Cycle count

Refers to the act of doing inventory for a set of items. These are physical verifications of what the system is showing to check accuracy.

Cycle time

Cycle time is the amount of time it takes to get an order from order entry to a shipping dock.

DC

The abbreviation for distribution center or warehouse.

Dead stock

Product that has been in inventory for an extended period of time without being moved or ordered.

Dunnage

Packaging supplies used to ensure safety in transit. Can include paper, bubble wrap, air bags, etc.

EDI

Abbreviation for Electronic Data Interchange. Refers to the interactions between multiple computer systems to expedite and streamline communication of logistics feeds.

FIFO

Abbreviation for “First in, first out”. If no other guidelines are given, standard protocol is to ship the oldest unit of a given item first to ensure that product does not sit for too long.

FILO

Abbreviation for “First in, last out”.

Floor load

Here the product is stacked directly onto the floor of a trailer without pallets or slip sheets; product must be unloaded manually with or without the use of a forklift.

Food-grade warehouse

Is a warehouse that is certified to store food and edible ingredients. These certifications can come from a variety of sources, and are subject to auditing on no less than a yearly basis.

Forecast

Estimated volumes for inbound and outbound activity.

Forklift

Vehicle used to move pallets of product in, out, and through a warehouse.

FTZ (Free Trade Zone)

A special zoning designation wherein goods can be brought in, stored, reworked, and shipped out again without being subject to customs regulations. This can be an entire warehouse, or a portion of one.

Full Truck Load (FTL)

Transportation terminology for a container or trailer that is deemed as filled, or cubed out.

Handling charge

Charge for normal warehouse handling (inbound or outbound, or both) to customer.

HazMat

Short for “hazardous material”.

Honeycombing

The situation that occurs when a lot (see lot) is partially depleted and the remaining space is wasted because it cannot be utilized.

 

In/Out Fee

Same as Handling Charge to receive and dispatch a pallet.

Interlinked

Truck and trailer combination that usually measure 22 meters.

Intermodal

Refers to multiple forms of transportation

  • For example: If a container is put on a train, and then picked up by a long haul truck to complete transit, it has used two modes of transport.

Inventory

All stock for a customer (damaged, hold, allocated, or available).

Inventory Management

Tracking of inventory from inbound, storage, location moves or putaway, through to outbound shipping.

Just-in-time (JIT)

An inventory system that aims to coordinate the arrival of materials or supplies at a facility at the moment that they are needed in an effort to reduce storage and holding costs.

Less-than-truckload (LTL)

Terminology used to refer to a partial shipment of pallets that does not fill a trailer. Typically this refers to 10 pallets or less, though it is not a defined cut off. 

Loading Dock

The receiving or dispatch portal area at the warehouse.

Load locks

Adjustable bars which are used to secure a load for transit.

Locations

Refers to a specific section within a warehouse, used to quickly find product.

Lot

A group or product with the same run or manufacturing date.

Master Carton

Outer carton, often with markings from origin, that contains smaller inner cartons.

Pallet (Skid, Board)

Equipment designed for which to stack goods on in order to be easily transported, having easy access slots for forklifts. Can be made from wood, plastic, metal, or composite materials.

Pallet ID

The bar code tag that is placed on a pallet for tracking purposes.

Pallet picking

Full pallet picking is also known as unit-load picking. A system or operation in which full pallet quantities are ordered and shipped.

Palletization

A picking operation where individual pieces are picked and shipped, as opposed to case or full pallet. Mail order catalog companies and repair parts distributors are good examples of piece pick operations.

Pinwheel

Pinwheeling is a packing process of arranging pallets on a truck or product on a pallet to make the best use of space when dealing with items of different sizes.

Radio frequency identification

Commonly referred to as RFID, this refers to a method of paperless scanning of inventory.

Seasonality

Refers to varying levels of inventory throughout the year (peaks and valleys).

Storage rate

Charge to client for all storage costs, usually on a month-to-month basis.

SKU

Abbreviation for Stock Keeping Unit. This is a unique identifier for an item down to size, color, and style (if applicable).

Tare Weight

The weight of an empty shipping vessel (container, trailer, or packaging), Used to determine the actual weight of product only

  • Example: The gross weight of a container is 6,000 kg, and the tare weight on the empty container is 1,500 kg. The weight of product only is 4,500 kg.

Third-party logistics

Commonly abbreviated to 3PL, this refers to companies who offer warehousing solutions and services for multiple customers. These services can include, but are not limited to: warehousing, trucking, value added services, labeling, cross-dock, transload, etc. These companies often require long-term contracts with customers to ensure security.

Third-party warehouse

Warehouse operated by an entity that houses the products of various clients.

Transportation Service

Can be abbreviated to U/M. Refers to the measure of how an item will be shipped

  • Examples: Carton, case, unit, pallet, bag,sack

Warehouse management system (WMS)

Software programs designed for the specific task of tracking inventory and movement of product.

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