Fulfillment Glossary: Terms You Need to Know - Fulfillment-Box Skip to main content
Fulfillment Glossary: Key Definitions and Terms

The fulfillment glossary is a valuable resource for all representatives within this industry. Whether you’re a warehouse manager, logistics coordinator, or a fulfillment company representative, our 3PL terms glossary will help you navigate the terminology of your field. It covers all aspects of the order fulfillment process – from warehousing and inventory management to order processing and delivery.

Please familiarize yourself with the main fulfillment and 3PL definitions and terms. This will enable you to communicate effectively with colleagues and clients and make informed decisions regarding each order fulfillment operation.

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Z


А

ABC analysis is an inventory management method that classifies items into categories (A, B, and C) based on their importance.

Acceptable Quality Level (AQL) – the maximum allowable level of defects in a batch of products during quality inspection.

Accessorial Charges – these are extra charges beyond standard transportation costs, covering additional services.

Accumulation Bin – a designated storage area specifically for temporarily storing goods before their processing or shipment.

Active Stock – inventory items that are currently available and being utilized for sale.

Actual Time of Arrival (ATA) – the exact time at which cargo arrives at its destination point.

Actual Time of Departure (ATD) – the exact time when cargo or a transportation vehicle departs from the point of origin.

Additional Labeling – the process of affixing extra labels or markings to provide information that may not fit on the primary label or to address specific issues or requirements.

Advance Shipping Notice (ASN) – a document sent by a supplier to a buyer containing detailed information about an upcoming shipment.

Advanced Planning and Scheduling System (APS) – a technology used for optimizing and automating planning and scheduling processes in manufacturing and logistics companies. They integrate various algorithms and models that allow for consideration of multiple factors such as operation lead times, resource availability, customer requirements, and other variables.

Air Waybill (AWB) – a shipping document used in air cargo transportation. It contains detailed information about the cargo, including the origin, destination, and contents.

Aisle – in warehouse management, it refers to a designated path between racks or shelves, allowing for the movement of equipment and materials within the warehouse.

Amazon Standard Identification Number (ASIN) – a unique identifier assigned to products on the Amazon platform, facilitating search and linking for both sellers and buyers.

Application Programming Interface (API) – a set of protocols and tools that enable different software applications to interact and exchange data with each other.

Assemble to Order (ATO) – a manufacturing strategy involving the production of goods based on customer orders and specifications while maintaining a certain level of standardization in the production process. With ATO, companies can offer a wide range of product options and variations that meet specific customer requirements without the need for extensive customization or long lead times.

AutoID – encompasses technologies such as barcodes, RFID, and QR codes, which enable automatic identification and tracking of goods in the supply chain.

Automated Guided Vehicle System (AGVS) – a system utilizing automated guided vehicles or mobile robots for transporting goods within a facility.

Automated Storage and Retrieval System (AS/RS) – an advanced technology used in warehouses and distribution centers to automate the process of storing and retrieving goods. The system is controlled by a central computer, which receives instructions from the Warehouse Management System (WMS) and coordinates the movement of robots.

Available-to-promise (ATP) – the quantity of inventory available for allocation and delivery to customers, taking into account existing orders and reservations.

Average Order Value (AOV) – a key metric used in e-commerce to measure the average value of orders made by customers. It is calculated by dividing the total revenue generated from all orders by the total number of orders.


B

Back Order – a situation where a customer places an order for an item that is currently out of stock. Instead of canceling the order, the company delays it and promises to fulfill it as soon as the item becomes available again.

Barcode – a visual representation of data encoded as a series of parallel lines or bars. It is used for storing and retrieving information about a product, such as its price, quantity, or manufacturer.

Barcode Parsing – the process of extracting information from a barcode.

Barcode Scanner – a device equipped with optical sensors or cameras that can scan and decode barcodes. It converts encoded data into digital information for inventory management, tracking, and identification purposes.

Batch Picking (multi-order picking) – a strategy used in warehouses to enhance efficiency and productivity. It involves picking multiple orders or items simultaneously. This saves time and reduces the number of trips needed to retrieve items from different locations within the warehouse.

Batch Production Manufacturing – the process by which goods are produced in batches or groups, typically with a fixed quantity of identical items.

Biaxially Oriented Polypropylene (BOPP) – a type of polymer film widely used for packaging purposes due to its high transparency, strength, and moisture resistance. It is ideal for wrapping products to protect them during storage and transportation.

Bill of Lading (BOL) – a legal document that serves as evidence of a contract between a shipper and a carrier. It is used to provide detailed information about the shipped goods, including their quantity, description, and destination. The BOL acts as a receipt for the cargo and serves as evidence that it has been received by the carrier. It also serves as a title document, allowing the transfer of ownership rights of the goods from the shipper to the consignee.

Bin Center – a specially designated area within a warehouse or distribution center where goods are stored, organized, and readily accessible for picking, packing, and shipping.

Blanket Purchase Order (BPO) – a long-term agreement that allows a company to make multiple purchases from a supplier over a specified period of time. Unlike a regular purchase order, which is issued for a single transaction, a BPO is designed to streamline the procurement process by establishing pre-negotiated terms and conditions.

Blanket Rate – a fixed fee charged for a specific service or transportation route, regardless of the quantity or volume of the shipped product.

BOPAC (Buy Online, Pick-Up at Curbside) – is a retail service that allows customers to make purchases online and then collect the items at designated locations at the store’s curb.

BOPIS – Buy Online, Pick-Up In Store, a retail service that allows customers to purchase items online and collect them at a physical store.

Bottleneck – a point in a system or process where the flow of goods, information, or operations is limited or restrained. This leads to delays, inefficiencies, or disruptions in overall throughput or performance.

Break Bulk – goods or materials that are transported unpackaged, freely or as individual units, rather than in containers or consolidated.

Break-Bulk – the process of unloading, sorting, and distributing individual parts of cargo from a consolidated batch, allowing for the handling of various goods with different destinations or recipients.

Bulk Area – a designated area within a warehouse intended for storing a large quantity of unpackaged or bulk goods.

Bullwhip Effect – a phenomenon observed in supply chains where small fluctuations in consumer demand lead to amplified fluctuations in inventory levels and orders further up the supply chain.

Business Process Outsourcing (BPO) – the practice of transferring specific business functions or processes to external service providers. This allows organizations to focus on their core competencies, leveraging specialized expertise and resources.

Business-to-Business (B2B) – transactions involving goods, services, or information exchanged between two or more companies. They typically involve larger volumes and higher sums compared to Business-to-Consumer (B2C) transactions.

Business-to-Consumer (B2C) – commercial transactions conducted between businesses and end consumers.

Buy Box – a section on the Amazon product page containing the product description, where the buyer can directly add the item to the cart. Essentially, it’s the “Buy Now” button that allows customers to easily make a purchase. For sellers, winning the Buy Box is an opportunity to increase visibility and enhance the chances of making a sale.

Buyer – an individual or entity that purchases goods or services from a seller for personal use, resale, or as raw materials for production or activities.


C

Cargo – goods, products, or materials transported by various modes of transportation, both in bulk and packaged form.

Carnet – a customs document that permits the temporary importation of goods into a foreign country without the payment of duties and taxes.

Carrier – a company or individual that provides services for transporting goods. These can include shipping lines, airlines, trucking companies, or courier services.

Cartage – the transportation of goods over short distances, typically within a local area or between nearby towns, often using trucks or other vehicles.

Carton Flow Rack – a storage system equipped with sloped shelves or rollers that allow boxes to move under the force of gravity from the loading area to the picking area.

Case Erector – a machine used for the automatic assembly and formation of cardboard boxes or cartons from flat sheets, preparing them for filling with goods.

Case Picking – the process of selecting and retrieving individual cases or boxes from storage locations to fulfill customer orders. This method is typically used for fulfilling wholesale orders.

Cash on Delivery (COD) – a payment method where payment is collected by the carrier upon delivery of the goods to the recipient.

Centralized Inventory Control – an approach to management where inventory levels and decisions regarding replenishment are monitored and coordinated from a central location or system.

Channels of Distribution – various paths or routes through which goods or services are delivered from the manufacturer to the end consumer. They may include wholesalers, retailers, distributors, agents, and even online platforms.

Chargeable Weight – the weight of a shipment used to calculate the transportation cost. It differs from the actual weight of the cargo and is calculated based on the volumetric weight.

Clearance – a process of obtaining official permission from customs authorities or regulatory organizations for the import, export, or transit of goods across international borders.

Cold Storage – a specialized warehouse facility or area with controlled temperature and humidity. It is used for storing perishable goods, pharmaceuticals, and other temperature-sensitive products.

Collaborative Robot (cobots) – robotic systems designed to work collaboratively with humans, assisting in tasks such as assembly, processing, or inspection.

Collect Freight – a term used in the logistics industry to denote the transportation of goods where the cost of delivery is collected from the recipient upon the arrival of the cargo.

Commercial Invoice – a document used in customs clearance, containing a detailed description of the goods being shipped from the seller to the buyer.

Commodity Code (HS Code) – a standardized digital code used for the classification and identification of goods in international trade. It consists of six digits, each representing a specific category or level of classification.

Complete and On-Time Delivery (COTD) – a performance metric that measures the percentage of customer orders delivered in full and on schedule.

Compliance Label – an adhesive label affixed to a product, package, or shipment to indicate compliance with regulatory or industry standards, requirements, or specifications.

Consignee – the party to whom goods are shipped and delivered, typically the buyer or recipient of the goods in a commercial transaction.

Consignment Inventory – goods or products owned by a supplier but stored and managed by a retail seller until the point of sale. In this arrangement, the supplier retains ownership rights until the goods are sold or utilized.

Consignor – the party who ships or sends goods to the consignee, typically the seller or supplier in a commercial transaction.

Consolidation – the process of combining multiple shipments or smaller loads into one larger shipment for transportation or distribution purposes.

Container – a standardized, reusable packaging used for transporting goods or cargo via various modes of transportation.

Container Freight Station (CFS) – a facility or warehouse used for handling, consolidating, or deconsolidating cargo or freight containers.

Continuous Flow Distribution – a distribution strategy that involves the continuous movement of goods from the point of origin to the point of consumption.

Contract Manufacturing – an outsourcing agreement in which a company hires another firm to manufacture its products. The third-party manufacturer, also known as a contract manufacturer, is responsible for producing goods according to the specifications and requirements provided by the company.

Contract of Affreightment – a contract between a shipper and a shipping line for the transportation of goods or cargo for several voyages or a specified period of time.

Contract Warehouse – a large corrugated cardboard box or container used for storing and transporting large volumes of goods or materials.

Contract Warehouse – a warehouse facility owned by a third-party organization, used by a company for storing and managing its inventory according to a contracted agreement.

Conveyor – a mechanical device consisting of belts, rollers, or chains that move goods or materials from one place to another within a facility.

Counter Balanced Truck – a type of forklift truck designed to balance heavy loads using a counterweight located at the rear of the machine.

Critical Stock – inventory of goods necessary for the uninterrupted operation of a business. Typically, they include items that are in high demand, have long procurement lead times, or are susceptible to supply chain disruptions.

Cross-Docking – a logistics strategy where incoming goods or materials are directly transferred from an inbound transport vehicle to an outbound one. This eliminates the need for warehousing the goods.

Cubage – the capacity of a container, warehouse space, or the total volume of cargo, measured in cubic units such as cubic meters or cubic feet.

Cube out – a situation in which the available space in a container or truck is completely filled with cargo, reaching its maximum capacity in terms of volume.

Cube-Per-Order Index (COI) – a metric used in logistics and warehouse management to assess the efficiency of order picking and storage processes. It is based on the ratio of warehouse volume (cubic feet or meters) to the number of orders processed.

Cumulative Lead Time (CLT) – the total time required for a product to pass through the entire supply chain from order placement to delivery to the customer, including production time, transportation, and order processing time.

Customer order – a request from a customer to purchase goods or services from a seller or supplier, specifying the desired products, quantities, prices, delivery terms, and other conditions of the transaction.

Customer Service – the support and assistance provided to customers before, during, and after a purchase or transaction.

Customization – the process of adapting products, services, or experiences to meet specific individual requirements or preferences of the customer.

Customs Broker – a licensed intermediary authorized to represent the interests of importers or exporters when interacting with customs authorities.

Customs Value – the declared or assessed value of imported or exported goods for customs purposes.

Customs Warehouse – a facility authorized by customs authorities for storing imported goods under bond. This allows the deferment of duty payments until the goods are ready for internal distribution.

Cycle stock – a portion of inventory held to satisfy regular demand or orders between replenishment cycles.

Cycle Time – the total time required to complete a specific process, operation, or production cycle from start to finish.


D

Dark Store – a warehouse format resembling a traditional store but exclusively designed for fulfilling online orders, without allowing visits by customers.

Dead stock – reserves that have become outdated, lost relevance, or are no longer in demand. This leads to low or zero sales activity and consumes valuable warehouse space and capital.

Declaration of Dangerous Goods – an official document provided by shippers or carriers for declaring the presence of hazardous goods or materials in the cargo.

Defective Goods Inventory (DGI) – a special category of inventory consisting of products considered defective or unsuitable. They cannot be sold or used as intended and require disposal or repair.

Delivery-Duty-Paid (DDP) – a term in international trade where the seller is responsible for all expenses up to the point of delivering the goods to the designated location.

Delivery-Duty-Unpaid (DDU) – a term in international trade where the seller is responsible for delivering the goods to the designated location. However, the buyer is responsible for paying any applicable customs duties, taxes, or fees for customs clearance.

Demurrage – a penalty imposed on shippers, consignees, or carriers for delays in loading, unloading, or holding transportation equipment.
Devanning – the process of unloading cargo or goods from containers, trailers, or transport vehicles upon arrival at the destination point.

Direct Fulfillment – a method of order fulfillment in which products are delivered directly from the manufacturer or supplier to the end customer, bypassing traditional distribution networks.

Direct Retail Locations – physical retail stores owned and operated by the manufacturer for selling their products directly to consumers.

Direct Store Delivery (DSD) – a distribution method in which manufacturers or suppliers deliver products directly to retail stores or points of sale, bypassing distribution centers or warehouses.

Distribution – the process of moving goods from manufacturers to end consumers through various channels, networks, or intermediaries.

Distribution Center – a facility used by businesses for storing and distributing their products. It serves as a central hub for receiving, storing, and shipping goods to customers or retail locations.

Distributor – an entity that purchases goods from manufacturers and resells them to retail, wholesale, or end customers.

Dock – a platform or area in a warehouse where trucks, trailers, or containers are loaded or unloaded.

Dock Door – a large opening in a building providing access to a loading platform. It is typically used for loading and unloading goods from trucks or vans.

Dock Receipt – a document issued by a carrier or logistics provider to acknowledge the receipt of goods or cargo at a dock or terminal for transportation.

Domestic Trunk Line Carrier – a transportation company that provides services for transporting goods over long distances within a single country.

Double-Pallet Jack – a loading and unloading device for lifting, moving, and transporting two pallets simultaneously.

Drayage – a term used in the transportation industry to refer to the movement of goods over short distances, typically from a port or railroad station to a nearby distribution center or warehouse.

Drop-and-hook – a logistics practice in which a truck driver drops off an empty trailer at a facility and immediately picks up a pre-loaded one. This eliminates the need for the driver to wait for the loading or unloading of the trailer, saving time for both the shipper and the driver.

Dropshipping – a business model in which a retailer acts as an intermediary between the buyer and the supplier, accepting orders and passing them on for fulfillment. This eliminates the need for the retailer to store and manage inventory, as well as handle delivery and fulfillment processes.

Duty Free Zone (DFZ) – a specially designated area within a country where imported goods are stored, processed, or manufactured without the imposition of customs duties, taxes, or tariffs.


E

Ecommerce order fulfillment – the process of receiving, processing, picking, packing, and shipping online orders.

Economic Order Quantity (EOQ) – a calculation used to determine the optimal order quantity that minimizes total inventory costs.

Electronic Data Interchange (EDI) – a standardized method of electronic communication used by businesses to exchange business documents.

Emergency Stock – additional inventory held as a precautionary measure to mitigate the risk of shortages or disruptions in the supply chain.

Enterprise Resource Planning (ERP) – a software solution that enables organizations to manage and optimize key business processes, including finance, human resources, and production.

Expedited Order – a customer order that requires special attention or priority processing to accelerate delivery or meet delivery deadlines.


F

FBM (Fulfillment by Merchant) – a method of order fulfillment in e-commerce where the seller is responsible for storing, picking, packing, and shipping orders directly to customers.

FEFO (First Expired, First Out) – an inventory management method where items with the earliest expiration dates are sold first to minimize waste and avoid expired products.

FIFO (First In, First Out) – a method of inventory management where the items that are first received into the warehouse are the first to be shipped out.

Fill Material – a substance used to fill empty spaces, voids, or gaps in packaging to protect goods during transportation.

Fixed Reorder Point – a predetermined inventory level at which a replenishment order is placed.

Floor Loaded Container – a transportation container into which goods are loaded directly onto the container floor without the use of pallets.

Floor Stacking – a warehousing practice where goods are stored directly on the warehouse floor without the use of pallets or racks. It is typically used for oversized items or goods with irregular shapes.

FOB (Free on Board) – a term indicating the point at which the seller’s responsibility for the goods ends and the buyer assumes ownership and risks during transportation.

Forklift – an industrial vehicle used for lifting, moving, and stacking goods in a warehouse.

Freight – goods that are transported by various modes of transportation, such as trucks, trains, ships, or airplanes.

Freight Bill – a document provided by the carrier to the shipper or consignee containing detailed information about the freight charges for transporting goods.

Freight Charge – the cost of transporting goods from one place to another using a freight carrier or delivery service. The freight cost may vary depending on the carrier, method of delivery, and specific terms of the transportation contract.

Freight Forwarder – a logistics company or intermediary that specializes in organizing and managing the transportation of goods on behalf of shippers.

Fuel Surcharge – an additional fee charged by transportation carriers to compensate for fluctuations in fuel prices.

Fulfillment – the process of receiving, processing, and delivering customer orders.

Fulfillment By Amazon (FBA) – a service offered by Amazon that allows sellers to store their products in Amazon fulfillment centers.

Fulfillment center – a warehouse or distribution center where goods are received, stored, processed, and shipped to fulfill customer orders.

Full Container Load (FCL) – cargo that fills the entire transportation container.

Full Truck Load (FTL) – cargo that occupies the entire capacity of a truck trailer.


G

General-Merchandise Warehouse – a type of storage facility used for storing a wide range of goods from various industries or categories.

Global Product Sourcing – the process of identifying, evaluating, and procuring goods from international suppliers or manufacturers.

Goods – tangible items or products that are produced, sold, purchased, or used to satisfy human wants and needs.

Government Warehouse – a storage facility owned and operated by a government institution for the purpose of storing, processing, and distributing goods.

Gross Weight – the total weight of a shipment, including the weight of the goods as well as any packaging materials or containers used during transportation.


H

Hazardous Material – substances or materials that pose a risk to health, safety, property, or the environment due to their chemical, physical, or biological properties.

Hub – a central location or facility where goods or materials are consolidated, sorted, processed, and redistributed to various destinations within a transportation network.

Hybrid Fulfillment – a logistics strategy that combines multiple methods of order fulfillment, such as in-house fulfillment, third-party logistics (3PL), and dropshipping.


I

In-transit Quantity – the amount of goods, materials, or products currently being transported from one location to another within the supply chain or logistics network.

Inbound Logistics – processes related to managing the flow of goods from suppliers to enterprises or manufacturing facilities. It involves sourcing suppliers, procurement, transportation, receiving, and inventory control.

Inner Pack – the packaging used to contain and protect individual units of a product within a larger package or transport container.

Inspecting – the process of examining, evaluating, and verifying the conformity of goods, materials, or products to established standards, specifications, or regulatory requirements.

Interchange – the transfer of freight containers or trailers between different modes of transport at designated transfer points or facilities.

Intermodal Transportation – the transportation of goods or cargo using multiple modes of transport within a single route.

Inventory – the stock of goods, materials, or products that a company holds and utilizes at various stages of the supply chain.

Inventory accuracy – the degree of precision or correctness of the recorded quantities of inventory compared to the actual inventory levels in the warehouse.

Inventory Cost – the expenses associated with maintaining, storing, and managing inventory in a company’s supply chain.

Inventory Management – planning, control, and optimization of inventory levels to meet customer demand.

Inventory Management System (IMS) – an automated system for tracking, managing, and controlling inventory levels, their movements, and operations throughout the supply chain.

Invoice – a commercial document issued by a seller to a buyer, detailing the goods or services, their quantities, prices, terms of sale, and payment date. It serves as an official demand for payment and acts as evidence of the transaction between the buyer and the seller.

IOSS (Import One-Stop Shop) – a simplified customs declaration system for e-commerce sellers supplying goods to the EU with a value not exceeding a certain threshold. Enterprises eligible to participate in the program can collect and remit value-added tax (VAT) on their goods at the point of sale.


J

Just In Time (JIT) – a philosophy of production and inventory management in which materials and components are supplied to the production line or assembly area exactly when they are needed. This eliminates excess inventory and reduces losses associated with overproduction, excess inventory, and obsolescence.


K

KPI (Key Performance Indicator) – a metric that indicates how effectively an organization is achieving its key objectives or strategic goals.


L

Labels – tags or stickers attached to products or packaging to convey important information.

Last Mile – the final stage of delivery where goods are transported from a distribution center or transportation hub to the ultimate destination point.

Lead Time – the time required to fulfill an order from the moment it is placed until it is delivered to the customer.

Leg – the distance from the point of departure of goods to the destination point.

LIFO (Last In, First Out) – a method of handling goods where it is assumed that the most recently received inventory items will be sold or used first.

Loading Dock – a designated area on the premises of a facility where trucks and other vehicles can be loaded and unloaded.

Lost Sales – potential revenue that a business does not generate due to unmet customer demand caused by product unavailability or insufficient inventory.

Lot – a specific quantity of goods or materials produced or acquired together under uniform conditions.

Lot Tracking – a method in inventory management that involves monitoring and tracking the movement of individual batches throughout the supply chain.


M

Make-To-Assemble (MTA) – a production strategy where components and parts are manufactured in advance and then assembled into the final product just before its use or delivery.

Make-to-Order (MTO) – a manufacturing strategy in which products are produced only after a customer places an order.

Make-To-Stock (MTS) – a manufacturing strategy in which goods are produced in advance and stored in inventory in their finished form awaiting customer orders.

Manifest – a document containing detailed information about the cargo being transported by ship, aircraft, train, or another mode of transportation.

Manufacturing – the process of transforming raw materials or components into finished products using specific methods and technologies.

Marshalling Area – a designated space within a warehouse or distribution center where goods are organized before shipping or loading.

Material – a raw material, component, or ingredient used in the manufacturing process to create the final product.

Maximum Order Quantity – the highest quantity of goods that a customer can order at one time from a supplier or seller.

Merchant Account – a business account designed to accept credit and debit card payments from customers for goods or services sold by the company.

Mileage Rate – the tariff or rate charged for each mile traveled by a vehicle.

Minimum Order Quantity – MOQ – the lowest quantity of products or goods that a customer can order from a supplier or seller.

Mixed Loads – various types of goods combined into a single shipment for transportation.

Multi-sales Channel – a sales strategy in which a company utilizes multiple different sales channels to distribute its products or services.


N

Net Profit – a financial metric representing the total profit of a company for a specific period of time after subtracting all expenses, taxes, and other costs.

Net Weight – the actual weight of the goods or cargo without considering any additional elements.

Niche – a specialized segment of the market targeted toward a narrow audience or specific consumer segment.

Non-stock Inventory – a category of assets not intended for regular sale or use in the production process.


O

Occupational Safety and Health Administration (OSHA) – a management body within the United States Department of Labor responsible for the development and regulation of workplace safety standards, as well as ensuring their compliance.

Omnichannel Fulfillment – a strategy that allows customers to make purchases and receive services through various sales channels. Its goal is to provide a seamless and consistent customer experience regardless of the chosen channel.

On-Demand – a service or goods delivery model where they become available for ordering and use at the moment of demand.

On-hand inventory – the total quantity of goods available in inventory or at the point of sale at any given time.

On-time delivery – fulfilling commitments to deliver goods or services according to a pre-agreed or expected time frame or deadline.

Online Arbitrage – a sales method where products are purchased at lower prices from online stores and then resold for a profit on other online platforms.

Operating Ratio – a financial indicator used to assess the efficiency and profitability of a company’s operations. It is calculated by dividing the company’s operating expenses by its net sales revenue.

Order – a request for the purchase of goods or services from a customer to a supplier. It includes information about the goods, quantity, price, and other terms of the transaction.

Order Cycle – the period of time starting from when an order is placed by the customer to the moment it is received.

Order Fulfillment – the process of handling an order from the moment it is received from the customer until the goods or services are delivered.

Order Management System (OMS) – software designed to manage the process of order processing from receipt to delivery.

Order picking – the process of locating and extracting items from the warehouse in accordance with a customer’s order.

Order Tracking – the process that enables buyers and sellers to monitor the movement of goods from the moment an order is placed until its delivery.

OS&D (Over, Short, and Damaged) – a report on the damage of received goods at the warehouse to file a claim against the carrier.

Outbound Logistics – a component of logistics responsible for organizing and managing the movement of goods from the point of production or storage to the final consumers.

Outsourcing – the delegation of certain business functions or processes to third-party vendors or specialized companies.

Overhead – the general costs incurred by a business that are not directly related to the production or sale of goods. These include administrative and other unavoidable expenses such as rent, staff salaries, office supplies, etc.


P

Packaging – the process of wrapping goods to protect them during transportation.

Packing List – a document that contains a detailed inventory of shipped goods.

Pallet – a rigid platform, usually made of wood or plastic, used for packaging, storing, and transporting goods.

Pallet Racks – structures consisting of vertical uprights and horizontal beams onto which pallets with goods are placed.

Pallet Wrapping Machine – a device used for automatically wrapping pallets with stretch film or other material to protect and stabilize the load during transportation and storage.

Palletized – cargo that is loaded onto pallets for ease of transportation and storage.

Paperless Warehouse – a warehouse where all documentation and warehouse management operations are carried out using digital technologies and systems.

Pareto Analysis – a method of inventory management based on the principle known as the “80/20 rule“. According to this principle, approximately 80% of results come from 20% of efforts.

Pay on Use – a payment model where charges are incurred only for the actual usage of a product or service, rather than for ownership or presence.

Perfect Order – a concept in logistics referring to an order that is fulfilled without any errors or delays from the moment it is placed until delivery.

Periodic Review Methods – an inventory management strategy where inventory levels are checked and replenished at predetermined intervals rather than continuously.

Perpetual Inventory – an inventory management system where changes in inventory levels are recorded continuously and automatically, providing real-time accurate data on inventory levels.

Physical Inventory – the process in which the actual quantity of all goods or materials in a warehouse or organization is counted and verified.

Pick List – a document or electronic file containing information about the items that need to be assembled to fulfill an order.

Pick to Light – an automated method of picking goods in a warehouse where each item on the shelf is equipped with a light-emitting diode (LED) indicator. During order picking, the LEDs illuminate to indicate to the worker which items need to be taken.

Pick-to-Carton Logic – a method of selecting goods where warehouse staff gather items into specific containers or boxes corresponding to an order.

Pick-Up Order – an order that a customer places to pick up items themselves from a store or warehouse, rather than for delivery.

Picker – a warehouse employee or an automated system responsible for gathering the necessary items to fulfill orders.

Piece Picking – a method of picking where each individual item is selected separately according to the requirements of the order.

Planned Order – an order created based on demand forecasts or recommendations from inventory planning systems.

Polyethylene – a polymer material widely used in the production of packaging materials, including film, bags, bubble wrap, and other types of packaging. It possesses a high degree of elasticity and flexibility.

Polypropylene – a polymer material used in the production of various packaging materials. It is characterized by good strength and resistance to high and low temperatures.

Prep center – a specialized center for preparing goods for shipment. It provides services such as quality control, packaging, labeling, and other necessary processes to ensure compliance with the requirements of an e-commerce platform or logistics partner.

Prepaid Freight – a type of shipment where the cost of transportation is fully or partially paid by the shipper before the goods are shipped.

Procurement – the process of acquiring goods or services from suppliers to meet the needs of an enterprise.

Product – the outcome of a production process or an item of trade intended to satisfy the needs or desires of a consumer.

Proforma Invoice – a document issued by a seller prior to the actual delivery of goods or services, containing information about the anticipated transaction.

Proof of Delivery (POD) – a document confirming the fact of delivery of goods or services to the recipient.

Public Warehouse – a warehouse facility available for use by various organizations or companies on a commercial basis.

Pull Ordering System – a method of inventory management where orders for new supplies or production are created based on actual demand or inventory levels in the warehouse.

Pull System – a procurement method based on actual demand or inventory levels in the warehouse.

Purchase Order (PO) – an official request from a buyer to purchase goods or services from a supplier. It contains information about the goods or services, their prices, quantities, delivery dates, and other terms of the transaction.

Push System – a procurement method based on demand forecasts or production plans, rather than actual needs.

Putaway – the process of placing received goods or materials in appropriate storage locations within a warehouse.


Q

QR Code – a two-dimensional barcode containing information about a product that can be scanned using a mobile device.

Quality Control (QC) – the process of inspecting and testing products or services to ensure they meet established standards and requirements.

Quarantine – the temporary isolation or restriction of access to a product due to suspected or actual presence of defects requiring additional inspection, correction, or disposal.

Queue Time – the time that products or materials spend in a queue or waiting for processing, movement, or utilization within a production or logistics process.

Quota – a quantitative limit on the import, export, or distribution of goods for a specific period of time or for a particular market.


R

Radio-Frequency Identification (RFID) – a technology for automatic identification and tracking of objects using radio-frequency tags that contain unique information about the item or product.

Ramp – an inclined surface used for moving cargo, vehicles, or equipment from one level to another.

Rate Sheet – a document containing information on tariffs, rates, and prices for freight transportation services or warehouse services to calculate the cost of services for clients.

Raw Materials – unprocessed or partially processed materials used in the manufacturing process to create finished products.

Receiving – the process of accepting incoming goods or materials at the warehouse, including checking them for compliance with the order, quantity, quality, and condition.

Receiving Dock – a specifically designated area where incoming shipments are accepted and processed.

Receiving Report – a document containing information about the receipt of goods or materials at the warehouse, including details about the supplier, quantity, condition, and other relevant data.

Recurring Billing – a payment method where customers automatically pay for services or goods at specific time intervals, such as monthly or annually.

Reengineering – a strategic approach to improving business processes that involves reviewing and restructuring existing operations and systems to enhance efficiency.

Refrigerated Carriers – a carrier specializing in transporting goods that require specific temperature control.

Replenishment – the process of replenishing stocks of goods or materials in a warehouse to ensure continuity of production or service provision.

Request for Quote – a request sent by a potential buyer to suppliers or sellers to obtain price quotations for specific goods or services.

Resellers – a company or individual who purchases goods from manufacturers or wholesalers for the purpose of reselling them to end consumers.

Reserve Storage – a specially designated area or space for storing items or materials that are not currently in use but may be needed in the future.

Return Merchandise Authorization – authorization for the return of goods to the supplier or manufacturer in accordance with warranty terms or return policy.

Returnable Transport Packaging – packaging designed for multiple uses and return to the sender or manufacturer after use.

Reverse Logistics – the process of managing the flow of products from the customer back to the manufacturer or retailer.

Rewarehousing – the process of moving goods or materials within a warehouse or between warehouses to optimize their placement and utilization.


S

Safety Stock – additional inventory held in a warehouse to ensure continuity of production or fulfillment of orders in case of unexpected increases in demand or delays in deliveries.

Sales Support – a set of activities and services provided by a company to assist the sales department in achieving its goals.

Sample – a unit of a product provided to a potential customer as a demonstration or trial before making a purchase.

Scalability – the ability of a business or system to grow and adapt to increased workload, changing requirements, or expanding markets without significant changes to its structure or processes.

Scrap – materials or products that do not meet quality standards and are subject to disposal or rework.

Seasonality – the fluctuation in demand for goods or services depending on the time of year or season, resulting in variations in sales volumes and consumption.

Semi-processed Materials – materials that have undergone some degree of processing but are not yet ready for use as final products.

Serial Number – a unique identifier assigned to each individual instance of a product or item, which enables tracking throughout the manufacturing, sales, and servicing process.

SET (Secure Electronic Transaction) – a protocol for secure electronic transactions that uses encryption to protect payment information on the Internet.

Shipping – the process of sending goods or batches of goods from their storage or production location to the end consumer or place of use.

Shipping Zone – a geographic area within which specific tariffs and delivery conditions for goods apply.

SKU (Stock-Keeping Unit) – a unique identifier assigned to each product in a warehouse or retail location for the purpose of unique identification and product tracking.

Slotting – the process of optimizing the placement of goods in a warehouse to improve accessibility, order picking speed, and space utilization.

Smart Warehouse – a warehouse that utilizes modern technologies to optimize warehouse operations and inventory management.

Sourcing – the process of finding and selecting suppliers who provide the necessary goods or services for a business.

SSCC (Serial Shipping Container Code) – a unique code assigned to each shipping container or package for the purpose of identifying and tracking its movements within the logistics chain.

Staging Area – an area in a warehouse or manufacturing facility designated for temporary storage of goods before their shipment or processing.

Stock – the total amount of goods or materials that a company has on hand or in stock at a specific point in time.

Stockout – a situation in which a company runs out of stock of a particular product or item.

Storage Billing – the fee for storing goods in a warehouse, based on specific criteria such as volume, weight, or duration of storage.

Storage Cost – expenses associated with storing goods or materials in a warehouse, including rent for warehouse space, equipment maintenance, and other operational costs.

Storefront – a physical or virtual space where a company sells its products or services directly to consumers.

Straight Truck – a type of truck, typically without a trailer, capable of carrying up to 12,000 pounds of cargo.

Supplier – a company or individual that provides goods or materials to another company for production, resale, or other purposes.

Supply Chain – the network of all organizations involved in the creation and delivery of goods or services from the manufacturer to the end consumer.

Supply Chain Management (SCM) – the management of all aspects of logistics and operations within a supply network, including planning, execution, and control of the flow of goods and information.

Supply Chain Strategic Planning – the process of defining long-term strategies and objectives for the supply chain, taking into account the business needs, customer requirements, and external factors to ensure its effectiveness and resilience.

Supply Warehouse – a warehouse for storing stocks of goods or materials required for the continuous operation of a business.


T

Tag – a label attached to a product or packaging for identification, tracking, or displaying specific information.

Tare Weight – the weight of packaging or container that is subtracted from the total weight to determine the weight of the goods or materials themselves.

Third-Party Warehousing – the average value of inventory across all warehouses or storage locations of a company over a specific period of time.

Total Make Cycle Time – the total time required to produce one unit of a product from the beginning to the end of the process.

Total Product Revenue – the total income obtained from selling all products of a company within a specific period of time.

Traceability – the ability to track and identify the origin, location, and movement history of products or components throughout the entire supply chain.

Track-Bys – a method of tracking and controlling the movement of goods or materials in a warehouse using special labels, barcodes, or RFID tags.

Trans-shipment – the process of transferring cargo through an intermediate warehouse on the way from the sender to the recipient, where the cargo is transferred to another mode of transport or redistributed for delivery by different means.

Transaction – the process or operation involving the exchange of goods, services, or financial assets between two or more parties.

Transit Time – the time required for goods to move from the sender to the recipient.

Transportation Management System – software used to manage and optimize all aspects of logistics, including planning, execution, and tracking of transportation activities.

Turnover – a metric that measures the speed of inventory turnover within a company.


U

Umbrella Rate – a tariff applied to cargo that may encompass multiple services or rates.

Unit – an individual object or a unit of goods that can be separately packaged, sold, or utilized.

Unitize – the process of combining multiple individual items or goods into a unified packaging or cargo to facilitate their transportation or storage.

Unloading – the process of removing goods or cargo from a transport vehicle.

Unplanned Order – a request for goods or services that arises outside of the regular planning or procurement schedule.

UPC (Universal Product Code) – a standard barcode used for identifying products and their manufacturers in retail trade.

UPI (Unique Parcel Identifier) – a unique identifier used for unambiguous identification of a specific parcel or cargo during the delivery or logistics process.


V

Value Added Services (VAS) – additional services provided by a company beyond the core product or service to enhance value for the customer or improve their experience.

VAT (Value-Added Tax) – a tax levied on the value added to goods and services at each stage of production and sale.

Velocity – the speed of movement or processing of goods along the supply chain.

Vendor Code – a unique identification number assigned to a supplier for identification within inventory management systems or accounting.

Vendor-Managed Inventory – a method of inventory management in which the supplier takes responsibility for managing the inventory of their customer at the customer’s warehouse.

Visibility – the degree of accessibility and transparency of information regarding the status and movement of goods, orders, or processes in the supply chain.


W

Warehouse – a physical facility used for storing goods or materials prior to their further processing, sale, or distribution.

Warehouse Management System – software that manages all warehouse processes, including receiving, storing, picking, and shipping goods, as well as inventory control and workforce management.

Warehousing – the process of storing and managing goods or materials in a warehouse.

Warning Labels – labels attached to packaging or products to warn users about potential hazards, safety instructions, or other important information.

Wave Picking – a method of picking goods by organizing orders into groups (waves), which are then picked and processed simultaneously to increase efficiency and productivity.

Waybill – a document accompanying a shipment that contains information about the contents of the cargo, the sender, the recipient, and the terms of delivery.

Wholesale – the sale of goods in large volumes directly from the manufacturer or supplier to retailers or other businesses.

Work in Process (WIP) – goods or materials that are in the process of being manufactured or processed and are not yet completed.


Z

Zone – an area in a warehouse or space for storage that can be designated for organizing and managing inventory.

Zone Picking – a method of order picking where each picker is responsible for specific zones or areas of the warehouse to expedite the process and enhance efficiency.

Zone Price – a pricing strategy where prices vary based on specific geographic zones or areas, potentially differing from prices in other zones due to variations in costs, demand, or other factors.

Zone-Batch Picking – a combined method of order picking where each picker is assigned to a specific zone and gathers all items from that zone for multiple orders simultaneously to increase efficiency.

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Julia Gordon

AuthorJulia Gordon

Head of the Fulfillment-Box Prep Centers network

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