Glossary
A-B | C-D | E-J | K-P | Q-T | U-Z | see all
- A -
ABC Stratification and Classification
Process of categorizing inventory into groups based on criteria such as turnover, size of product, required storage space, sales dollars and amount of product sold. This process helps determine the inventory management policy and optimizes inventory turnover.
Accuracy Audit
Process of verifying the accuracy of inventory. This involves reconciling the inventory data with a physical count of stored inventory.
Address Standardization
Process of correcting and standardizing addresses in a file according to the United States Postal Service (USPS) standards.
Allocation
In inventory management, allocations are determined by the demand created by usage of a particular item. The total quantity of a specific item needed for an order or for a specific time duration is known as standard allocation. The company normally reserves the inventory for the specific order or time period.
Alternate Delivery Method
Method of delivering sample products or direct mail items to households without using the United States Postal Service.
ASN (Advanced Shipment Notification)
Notification of shipment to a customer. Data such as purchase order (PO) numbers, stock keeping unit (SKU) numbers, quantity, lot numbers, carton numbers, and container or pallet numbers. The notification is generally sent via electronic data interchange (EDI).
- B -
Backorder
An order that is past its specified ship date because the required items are out-of-stock.
Bar Code
A series of vertical bars and half bars encoded to correspond to the nine-digit zip code that can be read by scanners and converted easily into data. Mailers use barcodes to expedite the process of sorting mail and gain discount on postage.
In warehousing, bar codes are used to identify SKU's for location and pick purposes.
Batch Picking
A style of order picking where all orders are grouped into small batches. All orders in the batch are then picked in one pass.
Benchmark
A measurement used to gauge factors such as efficiency for comparison purposes. Benchmarking The process of comparing an internal measurement with a benchmark. Benchmarking helps companies improve quality and increase efficiency. Some of the measurements that are commonly used for benchmarking in a 3PF or 3PL firm are operational efficiency, inventory accuracy, and picking accuracy.
Internal Benchmarking compares internal measurements to previous historical internal measurements.
External Benchmarking is used to compare a firm's internal measurements to that of an external source such as a competitor.
BOL (Bill of Lading)
Written receipt issued to a shipper by a carrier to list and confirm the receipt of goods to be transported and specify the items for delivery.
BOM (Bill of Material)
Document listing materials required to produce a specific item. Multilevel BOMs also depict subassemblies and their components.
Bin
A storage container used to store multiple units of the SKU number. Bins are commonly made of metal, corrugated cardboard or plastic.
Bonded Liquor Warehouse
A warehouse authorized by the Customs authorities in which liquor is generally stored, assembled and shipped out but the payment of duties on the liquor is not made until the liquor is removed from the warehouse.
Bundle
A group of packages fastened together in a single unit under the standards applicable to the rate claimed.
Business-to-Business (B2B)
Activities between two or more businesses. 3PF or 3PL B2B activities include the warehousing and storage of products, order processing on behalf of a client, etc.
Business-to-Consumer (B2C)
Activities channeled from a business to a consumer. 3PF or 3PL B2C activities include warehousing or storage of products, order processing and customer service (for items shipped directly to customers) on behalf of a business.
BRM (Business Reply Mail)
A mail system that allows pieces of mail printed with a specific address and indicia to be returned to the addressee without payment of postage by the sender. The postage is generally collected when the mail is delivered to the addressee who originally distributed the BRM.
BRC (Business Reply Card)
A card that is mailed back, generally to the marketer, by a prospective customer, at no cost to the customer. A specific address and indicia are printed on the card so that the postage is collected from the marketer.
- C -
Caging
The process of opening and sorting of orders and handling checks, credit cards and cash.
Call Centre
A department that handles telemarketing operations; e.g. for processing inquiries or orders over the phone.
Case
A storage container that contains multiple units of a product.
CASS (Coding Accuracy Support System)
A service that is offered to software vendors, mailers and service bureaus to enhance the accuracy of zip codes, delivery point codes and carrier route information on mail pieces. CASS provides a benchmark to measure the quality of address matching software.
Chargeback
A credit card transaction that is debited back to the customer from the merchant after a return has been settled.
COD (Cash on Delivery/ Collect on Delivery)
The type of shipment to a business or consumer in which the payment for the item and its freight expense is paid on delivery.
COMET™ (Complemar Order Management E-Technology)
Complemar' in-house proprietary order and inventory management software customizable and accessible 24 x 7 on-line. Customers can also track order fulfillment along each step of the way. And with shipping integration, customers get a real-time view into shipping statuses.
Compliance Labels
The standardized label formats used by business partners. Compliance labels generally contain barcodes and are used as piece labels, container or pallet labels, carton labels or shipping labels.
Consignment Inventory
The inventory owned by the supplier but in possession of the customer. Suppliers often use consignment inventory as a marketing tool to make it easier for a customer to stock their inventory. The customer only pays for the inventory after it is used or resold.
Container
Containers are standardized metal compartments that are used for intermodal transportation of items in supply chain management.
Contract Warehouse
A business that provides shipping & receiving services as well as storage of products on a contract basis. Clients are generally required to commit to a specific time period (number of years) for the warehouse services.
Count Frequency
The number of times an item is counted each year. Count frequency is used to calculate the cycle count period.
Cycle Count
The process used to verify the accuracy of the physical quantity of inventory. Normally performed by counting portions of the inventory on a regular basis.
Cycle Time
The time it takes from start to finish of a particular task. Cycle time is used in benchmarking, budgeting and staffing.
- D -
D2C (Direct to Consumer)
Operations oriented toward marketing and shipment of items directly to the consumer.
Direct Mail
A tool of direct marketing. It is used by businesses to communicate directly with customers through mail, to sell a product or service or to solicit a donation. Sometimes businesses also distribute retail coupons and advertisements through direct mail. It generally requires a recipient to respond directly to the sender via mail, telephone, fax or email.
DR (Direct Response)
Advertising used to trigger a response from the viewer or recipient of the advertisement. It is usually B2C but can also be B2B. A direct response fulfillment house usually specializes in shipping individual order directly to the consumer or the end user.
Distribution
Storing, handling, shipping and transporting items.
Distribution Centre
A warehouse used to ship products to retail establishments or to the end users. 3PL fulfillment houses also help retain chain stores with presorting the merchandise to the individual store level prior to shipment to their distribution centers.
Dunnage
Term used to describe the package filling material such as bubble wrap, paper, Styrofoam peanuts, paper and corrugated inserts
- E -
EDI (Electronic Data Interchange)
An exchange of business transaction data from computer to computer using internationally standardized protocols. Most business use EDI for B2B transactions such as receiving advanced shipping notifications and invoicing. 3PL providers generally use EDI in processing orders on behalf of their clients to execute the operation seamlessly.
E-Commerce
Electronic Commerce. E-commerce refers to online commerce in which the consumer purchases a product or service electronically via email or a website. E-commerce can also be through EDI, peer-to-peer applications, intranets and other electronic media.
ERP System (Enterprise Resource Planning System)
An ERP system is designed to integrate all processes and information within an organization into a single consolidated system. ERP systems generally utilize a single unified database for storage and maintenance of data derived from a variety of system modules.
- F -
Fill Material
Dunnage such as Styrofoam peanuts, bubble wrap, air pillows, paper, etc.
Floor Load
A shipping container loaded with freight from floor up rather than on pallets. Full floor-loaded containers are able to hold more freight than a palletized load but take longer to load and unload.
Fulfillment
The process set up to receive, execute and track orders that are distributed via direct marketing. There are various different types of fulfillment systems that are based on either the product or the service that is distributed such as literature, product and subscription fulfillment.
Fulfillment House
A 3PL warehouse that specializes in order fulfillment.
- G -
Gravity Conveyor
Type of roller conveyer that relies on gravity over which to move materials or items.
- H -
High Density Storage
Palletized storage where pallets of materials are stored more than one-pallet deep from the aisle in a warehouse. It is preferred by consumers in case of long term storage of relatively inactive merchandise.
- I -
Indicia
A printed impression such as a postal permit on a piece of mail that verifies payment of postage. It is generally used in place of a stamp.
Inventory
Stock of finished products, product components, raw materials used for production, collaterals and other supplies.
Inventory Accuracy
The degree to which the physical inventory in the supply chain matches with the quantity of inventory in the computer database.
Item Number
An identification number that is assigned to an item or a product. The item number is also referred to as the SKU or the product number.
Invisible Backroom
A 3PL fulfillment operation that works so seamlessly with the client operation that it is difficult to pinpoint the work of the external fulfillment house.
ISO 9000 (International Organization for Standardization)
Globally accepted standards for quality management systems that are administered by independent accreditation and certification bodies validating consistent business processes are being applied.
ISO 9001:2000
The ISO standard to which Complemar is certified.
- J -
JIT (Just-In-Time)
Style of inventory management in which the materials are brought in just in time for the final preparation and shipment. JIT is widely used due to its beneficial features such as optimized warehouse space and reduced inventory holding costs.
- K -
Kitting
Term is generally used to describe the preparation of a shipment. Kitting normally involves the picking and packing of order components and accompanying materials into a complete package or kit that is then ready for shipment. It can sometimes involve light assembly.
- L -
Lead Time
The time required for an item to be available for use from the time it is ordered by the consumer.
LTL (Less Than Truckload)
A shipment that is less than a standard full truckload. LTL shipments usually require more logistics management than full truckloads.
Location
Place where the inventory is physically stored in a warehouse or the item number in the electronic database that corresponds to the location.
- M -
Merchant Account
An account that a merchant obtains from an issuer of credit cards. A merchant uses this account to process credit card purchases from his customers.
Middleware
Software that integrates both software and hardware systems. Middleware often involves data mapping and data transfer from one format to another.
- N -
Nixies
Mail returned by the post office as "undeliverable as addressed".
- O -
Order Picking
A warehouse process involving the selection and assembly of inventory for shipment.
Outsourcing
Process of a business hiring an outside firm to do something on its behalf. Businesses usually outsource to 3PL or 3PF fulfillment houses to allow the backroom operations to be handled by experts in the fulfillment industry. Outsourcing fulfillment operations allows a business to cut costs, expedite delivery times and gain increasing end-consumer satisfaction while the business focuses on its core operations.
- P -
Pallet
(also known as skid) Device used for moving and storing freight. It is also used to describe a unit load of freight.
Pallet Rack
A storage rack used to store palletized items.
Past Due Orders
Orders for which the fulfillment tasks are not completed by the specified ship date.
Perpetual Inventory System
Inventory management system that uses transactions to adjust on-hand balances to match the demands of the ongoing fulfillment activity
Pick
Process of receiving products from their storage locations in the warehouse so they can be packed and shipped to the consumer.
Pick and Pack
A part of order fulfillment where the fulfillment house receives products from their warehouse locations and packs them so they are ready to be shipped out to the customer.
Pick Accuracy
The accuracy of the order picking process.
Pick List
A computer generated list of items that are required to be picked for the fulfillment of an order.
Pick-to-Carton Logic
Software used to calculate each order's combined weight and dimensions for the selection of the appropriate shipping carton before order picking.
Point-of-Use Inventory
Materials (including packing materials) used in production that are stored at the location of their use.
Poly Bag
Polythene bag used for storage or packaging of a product.
Predistro (Predistribution)
B2B fulfillment in which items are sorted and packed in accordance to the end-user specifications. These packages are then sent to a distribution centre to be consolidated with other packages that are being sent to the same retail stores.
Presort
Sorting mail by postal/zip codes to qualify for postal discounts.
Priority Mailing
Mail sent out at Priority mail rates to expedite delivery. Also, first-class mail that weighs more than 13 ounces.
- Q -
Quantity Per
The quantity of a particular item required to make one unit of another item or product. Quantity per can be found on the materials list of a production order or a bill of material.
- R -
Rack
A shelf in a warehouse used for palletized freight.
Reverse Logistics
The system of processing returned items from B2B or B2C operations. It involves customer service, processing refunds and credits, restoring products back to the inventory stock, product refurbishing and repackaging or product disposal.
Refurbishing
The reparation or restoration of a product to its original condition according to the client's standards. The refurbishing process involves testing the returned item, replacing parts of the item, product repackaging and returning of products to the inventory.
Roller Conveyor
A series of rollers in a frame over which objects are moved by gravitational force or by power.
- S -
SCM (Supply Chain Management)
The process of managing the operations within the supply chain. These operations range from the storage and movement of raw materials, work-in-progress inventory and final products. An efficient SCM system helps clients increase their inventory turnover, improve transaction speed and increase final revenue.
Shared Labor Costs
Shared labor costs are a result of two or more client firms sharing labor costs due to simultaneous shared overhead within a warehouse in which their operations are executed.
Shipping Manifest System
Software system used to link shipments with the carrier, service, rate, etc. These systems create a physical or electronic report to be sent to the carrier for billing purposes. Shipping systems are used to create shipping documents such as a bill of lading, compliance shipping labels, etc.
Skid
Also known as pallet. A skid refers to the actual platform used to move or store items. A skid also refers to the goods that are on the skid. The standard measurement for a skid is 40" by 48" and a height of 4".
SKU (Stock Keeping Unit)
A number assigned to an item that is stored and tracked. A SKU can also be used to refer to the item itself.
- T -
3PF (Third Party Fulfillment)
The process of warehousing client inventory and processing customer shipments to end-consumers on behalf of a client. 3PF transactions are used for both B2B and B2C operations.
3PL (Third Party Logistics)
The business of providing supply chain logistics services to product manufacturers. Third party logistics services include product storage and warehousing, inventory management, order processing, pick/pack and ship processes, and distribution services including freight consolidation. Some 3PL firms also provide reverse logistics services including returns management. Companies prefer outsourcing logistics services to a 3PL firm because of the time and cost-efficiency provided by a 3PL firm.
Test Fixtures
All the pieces or components needed to run a test with an expectation of a certain outcome.
Truck Load
The amount of product or orders that equal one full standard trailer filled with the product or orders.
Trailer (Semi-Trailer, Tractor-Trailer)
In 3PL, the enclosed trailer of standard lengths used to ship items or materials to and from different locations. The standard lengths for trailers are 45, 48 and 53 feet. The standard internal width of a trailer is about 98 to 99 inches with a height of anywhere from 105 to 110 inches.
- U -
Unit Load
An amount of materials that can be moved as a single unit. A unit load is usually a filled pallet.
Universal Product Code (UPC Code)
A 12-digit code that is used to identify each unique product and its manufacturer. A UPC code is sometimes used in fulfillment houses as a SKU number for inventory management before the product is distributed.
- V -
Virtual Client
A third party firm that does business with its client's customers in such a way that it is indistinguishable from the client firm. A 3PL or 3PF firm seamlessly integrates its operations with the client's operations to perform all logistics functions on behalf of the client so that it appears as though the operations were executed within the client firm.
- W -
Wave Picking
Zone picking where orders are not moved from one zone to another but rather all zones are picked simultaneously. The items are sorted later and composed into individual orders. Wave picking is generally the fastest method to pick batches of multi-item orders.
WBE (Woman-owned Business Enterprise)
A for-profit organization headquartered within the United States which is owned and operated by one or more women. To be certified as a WBE, one or more women should own at least 51% of the total stock of the firm.
- Z -
Zone
A specific location in a warehouse that represents a storage area.
Zone Picking
A type of order picking in which a warehouse is divided into various pick zones. This method is generally used for orders that consist of various products of different sizes. The pickers are assigned to specific zones and the orders are passed down from one zone to another toward completion.
