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Industry terms

Glossary

DC

Distribution Center.

Distributor

A company that buys goods in bulk from manufacturers and sells them to retailers or directly to customers.

Inbound shipment

A shipment of goods coming into a warehouse or distribution center from a supplier or manufacturer.

Outbound shipment

A shipment of goods leaving a warehouse or distribution center to a customer or retailer.

Order fulfillment

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

Forecast

An estimate of future demand or sales for a product or service.

Freight

Goods transported in bulk by truck, train, ship, or airplane.

Freight brokerage

An intermediary between shippers and carriers that helps arrange transportation and logistics services.

Freight forwarder

A company that arranges transportation and logistics services for shippers.

Third-party logistics (3PL)

A provider of outsourced logistics services

Third-party warehouse

A warehouse operated by a third-party logistics provider.

Unit of measure

A standardized unit used to measure and track inventory, such as pounds, cases, or units.

Advanced shipment notification (ASN)

A notification sent by a supplier or manufacturer to a customer or distributor to inform them that a shipment is on its way.

EDI

Electronic Data Interchange, a system for exchanging business documents electronically.

Inventory management system (IMS)

A software system used to manage inventory levels and track inventory movements.

Order management system (OMS)

A software system used to manage customer orders and the order fulfillment process.

Platform

A software or technology system that supports business operations.

Transportation management system (TMS)

A software system used to manage transportation and logistics operations.

Warehouse management system (WMS)

A software system used to manage warehouse operations.

B2B

Business-to-business, a model of commerce between businesses.

B2C

Business-to-consumer, a model of commerce between businesses and consumers.

Brick and mortar

A physical retail location.

D2C

Direct-to-consumer, a model of commerce where products are sold directly to consumers without an intermediary.

Drop ship

A fulfillment method where a retailer or distributor ships products directly from the manufacturer or supplier to the customer.

Omnichannel

A retail strategy that integrates multiple channels, such as online, brick-and-mortar, and mobile, to create a seamless shopping experience for customers.

Pure play

A company that operates solely in the digital space, without a physical retail presence.

Allocations

The process of allocating inventory to different locations or customers.

Available

The amount of inventory that is currently in stock and available to sell.

Backorder

An order that cannot be fulfilled immediately due to insufficient inventory and will be fulfilled at a later time.

Batch picking

The process of picking multiple orders at once by grouping them together by common characteristics, such as product or destination.

Case/carton

A standard packaging unit for certain products, such as beverages or food.

Case picking

The process of picking orders by the case or carton.

Cycle time

The time it takes to complete one cycle of a process, such as order fulfillment.

FIFO/FEFO

First-In, First-Out/First-Expired, First-Out, inventory management methods that prioritize the oldest inventory first.

LIFO/LEFO

Last-In, First-Out/Last-Expired, First-Out, inventory management methods that prioritize the newest inventory first.

Kitting

The process of assembling individual items into kits or packages for sale or distribution.

Picking/mis-picking

The process of selecting items from inventory for order fulfillment, and the occurrence of selecting the wrong item or quantity.

Pallet picking

The process of selecting items from inventory by pallets.

Pick-to-carton

The process of selecting items from inventory and placing them directly into a carton or package for order fulfillment.

Pick-to-tote

The process of selecting items from inventory and placing them directly into a tote or container for order fulfillment.

Piece picking

The process of selecting individual items from inventory for order fulfillment.

Vendor compliance/retail compliance

The requirements and standards that suppliers or vendors must meet to sell their products to retailers.

Wave picking

The process of selecting items from inventory in waves or groups, typically organized by product or destination.

Bonded warehouse

A warehouse where goods are stored under customs supervision, typically for import/export operations.

Cube

The measurement of the total volume of a package or shipment.

Cold storage

A type of storage facility used to store perishable goods at low temperatures.

Cross-dock

A logistics operation where goods are received, sorted, and immediately shipped out to their final destination without being stored.

Cycle count

A process of counting a portion of inventory regularly, typically to ensure accuracy and prevent stockouts or overstocks.

Dead stock

Inventory that is not selling or moving and is at risk of becoming obsolete or losing value.

Floor storage

The practice of storing goods on the floor of a warehouse or distribution center.

Rack storage

The practice of storing goods on racks or shelves in a warehouse or distribution center.

Bin storage

The practice of storing goods in bins or containers in a warehouse or distribution center.

Pack station

An area of a warehouse or distribution center where orders are packed and prepared for shipping.

Food-grade warehouse

A warehouse that meets specific standards for storing and handling food and beverage products.

Free trade zone (FTZ)

A designated area where goods can be stored or processed without being subject to customs duties or taxes.

HazMat

Hazardous materials, such as chemicals or explosives, that require special handling and storage.

Honeycombing

The practice of leaving empty spaces between pallets or packages to maximize storage space in a warehouse or distribution center.

Inventory

The total amount of goods or materials held in stock by a business.

Inventory shrinkage

The loss of inventory due to theft, damage, or other causes.

Just-in-time (JIT)

An inventory management strategy where goods are produced or delivered just in time to meet demand.

LPN

License Plate Number, a unique identifier used to track inventory in a warehouse or distribution center.

Lot

A group of products that were produced or received at the same time and have a common set of attributes.

Master carton

A larger carton that contains several smaller cartons or packages.

Mixing center

A logistics facility where products from different suppliers or manufacturers are mixed together for shipment to customers or retailers.

Mixed pallet

A pallet that contains multiple products or SKUs.

Pallet (skid, board)

A flat platform used for storing or transporting goods, typically made of wood or plastic.

Pallet ID

A unique identifier used to track pallets in a warehouse or distribution center.

Pinwheeling

The practice of rotating or turning pallets or products in a warehouse or distribution center to maximize space utilization and accessibility.

Putaway

The process of moving goods from the receiving area to their designated location in a warehouse or distribution center.

Receiving

The process of accepting and recording incoming goods or materials at a warehouse or distribution center.

Reverse logistics

The process of managing the return of goods from customers or retailers to the manufacturer or supplier.

SKU

Stock Keeping Unit, a unique identifier used to track individual products in a warehouse or inventory system.

Stockout

A situation where inventory of a particular product is completely depleted, resulting in unfulfilled orders or lost sales.

TMS

Transportation Management System, a software system used to manage and optimize transportation operations.

Transloading

The process of transferring goods from one mode of transportation to another, typically between truck and rail or truck and ship.

Warehouse management system (WMS)

A software system used to manage and optimize warehouse operations, including inventory control, order fulfillment, and labor management.

Yard management system (YMS)

A software system used to manage and optimize the movement of trailers and other vehicles within a distribution center or warehouse yard.

Zone picking

The process of dividing a warehouse or distribution center into zones and assigning order pickers to specific zones to fulfill orders.

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