Supply Chain Glossary

P4W Warehouse Management System Logistics & Supply Chain Glossary

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.