Glossary of Terms
Term | Explanation | Usage |
|---|---|---|
3PL | Third Party Logistics, which is a business’s use of an outside company to manage a warehouse or group of warehouses. | Business |
4PL | As primary managers of supply chain operations of an organization, the services offered by a 4PL include basic 3PL services, along with the following:
| Business |
Advanced Shipping Notification (ASN) | A document that is sent to a warehouse management system from a supplier that provides information about a pending shipment. | Inbound |
Aisle | Walking space between racks | Storage |
Back order | A purchase order for an item that is currently out of stock. When a particularly popular item sells quickly, sometimes the warehouse runs out of stock before they get more from the supplier or manufacturer. Retailers will often continue to sell these items to consumers with a note that they are “on backorder” and will be delivered later than normal. When this happens, warehouse teams need to fulfil existing orders as soon as new stock arrives rather than first moving that inventory to storage. | Order |
Backhaul | The process of moving goods from what was originally their final destination back to their origin point. In warehousing, backhauls can also be truckloads of goods that customers have returned or for which they have requested an exchange. An incoming backhaul will typically need to be inspected for damage and then, once approved for quality, restocked. Learn more about backhauling and reverse logistics. | Storage |
Bar coding | The machine-readable identification system used to track, scan, and process inventory. | Stock |
Barcode | A marking made up of a series of bars and spaces used for identification of products in which a scanner is used to read the encoded information. Barcodes come in different dimensions and types - 1D, 2D, 3D including QR codes | Stock |
Batch picking | A picking process in which a batch of multiple customer orders containing similar items is gathered from warehouse shelves at the same time. For instance, three separate customer orders including a box of pencils could be batched so the picker needs to walk to the pencil-box storage location only one time rather than three. Learn more about warehouse picking processes. | Picking |
Best Before Date (BBD) | Best before date is used for ensuring units are picked according to the requirements of the order. It is important that putaway is done to maximise efficiency of picking operations | Storage |
Bill of lading (BOL) | An official document detailing items contained in a shipment. The bill of lading moves with a shipment from the sender to the shipper and then to the consignee (final recipient). When a warehouse receives a shipment from a supplier, it comes with a bill of lading that processing clerks use to verify that the delivered goods match the purchase order. | Business |
Bin | Any storage type within a location that contains one or more spaces or slots for product (i.e. a bin of nails, a bin containing slots of a particular document type, etc.). Typically, it is the most specific a warehouse location can get. | Storage |
Cantilever rack | Storage device with prongs rather than shelves that are used to store long and/or oddly shaped items. Cantilever racks may be free-standing or mounted to a wall. | Stock |
Cartonisation | Companion to wave picking. Cartonisation automatically determines the number of shipping cartons required for a single order based on product and carton dimensions. It also takes into account the weight tolerance of both cartons and shippers. Pickers are then instructed to place product into the specific shipping carton that was predetermined by the cartonisation function. The advantage of cartonisation is that orders being shipped by common carriers like UPS or FedEx can be picked into their final, labelled shipping containers. Even if there are multiple boxes on a shipment, there is no need to consolidate the order in a staging area prior to shipment. In addition, warehouses may be configured to automatically ship and manifest sales orders without any additional physical handling by shipping staff. | Picking |
Cluster picking | Workers travel through the warehouse retrieving SKUs on multiple pick lists and placing them into separate bins/containers. Each container is associated with a separate order/pick list. This eliminates repeated trips to the same pick location and removes the need for sorting since this is done by pickers at each pick location. However, it requires the use of sophisticated WMS solutions for proper scheduling and assignment of clusters. | Picking |
Cold storage | A section of a warehouse in which refrigerated or frozen products are stored. Cold storage is most commonly found in food-grade warehouses. | Stock |
Collaborative picking mobile robots | Robots assist in order picking activities by handling the manual task of moving products around. On getting to a pick location, workers retrieve items from their storage location and place them in a bin/container on the robot. Collaborative mobile robots help minimize walking through real-time route optimization and can be programmed to follow discrete, batch, zone and cluster picking methods. Collaborative mobile robots also leverage artificial intelligence and machine learning to optimize picking routes and tasks in real-time. | Picking |
Cross-docking | A distribution process in which goods are received from a supplier and immediately sorted, packed, and shipped to a customer rather than being moved to a warehouse shelf for storage. Cross-docking is often used in warehouses to fulfill customer orders for items that were on back order. | Inbound |
Cycle count | An auditing process in which inventory is counted on a cyclical basis. Inventory is counted in sections on a regular basis to make auditing more manageable and ensure that inventory records are accurate. To learn more, check out our guide to warehouse auditing. | Stock |
De-kitting | De-kitting Is the reverse process, returning kitted SKUs into individual items, often needed when kits are returned, or more kits were created than were actually needed. | Stock |
Dimensional weight (DIM) | A measurement used by couriers and shipping carriers to determine the cost of sending goods. To calculate the dimensional weight of a package, you multiply the length times the width times the height. | Stock |
Directed Advance Allocation | In Warehouse Management Systems any sort of Advanced Allocation can significant add functionality to sales orders, purchase orders, and better inventory management in the warehouse. Enhanced functionality in warehouse operations can expand to many areas including picking, receiving, stock locator, counting, order allocation, and wave planning enhancements: Some of the various functionality inside Warehouse Management Systems (WMS) with Directed Advanced Allocation could include: Picking Enhancements
Receiving Enhancements
Stock Locator Enhancements
Order Allocation Enhancements
Wave Planning Enhancements
| Orders |
Directed Putaway | A process in which the WMS determines where a given receipt of goods should be stored in the distribution centre. Directed putaway is tightly connected to the concept of “zoning” in which storage locations are group together, examples being “fast-movers” or “HAZMAT” products. With direct putaway, companies use a WMS to configure a hierarchical set of rules to identify the best location to store a receipt of inventory. If there is no space available in the preferred zone (e.g., fast-movers), the WMS would look for the next best available zone (e.g., medium-movers). Typically, a warehouse associate would receive a message on a wireless device informing him or her of the preferred storage location, which would be confirmed with a scan of the location bar code as the product is putaway. In some cases, the associate may be asked to put some of the received inventory directly into a forward pick location rather than reserve storage, say if the warehouse was previously depleted of that SKU before the receipt. | Inbound |
Discrete picking | A process of order picking in which the picker pick all the items for one particular order. | Picking |
Dispatching | The process of organizing, scheduling, and managing vehicles and drivers. Warehouses that have an in-house local delivery team often have a fleet dispatcher who coordinates packing, vehicle loading, and delivery scheduling. Learn more about fleet dispatching. | Outbound |
Distribution Centre (DC) | A specialized warehouse or fulfillment center where goods are sorted, packed, and processed for shipping to their final destination (the customers). Many warehouses are also distribution centers, meaning they not only store or warehouse goods but also offer picking, packing, and even delivery services. | Business |
Drop tailer | A truck trailer that is dropped off for loading and then picked up at a later time. Sometimes couriers will have a driver drop off an empty trailer and pick up a full one to maximize efficiency. | Outbound |
Drop shipping | A dropshipper is a person or business that uses the dropshipping model of buying inventory and fulfillment logistics from a third party, instead of warehousing and shipping the products themselves. Because dropshipping relies on a third-party supplier to handle inventory warehousing and order fulfillment, a dropshipping operation may be managed by dozens of employees or a single business owner. How dropshipping works The dropshipping process is a relationship between a customer-facing store and a supplier. There are two common approaches to adopting a dropshipping business model. The first is to seek out one or more wholesale suppliers on your own using a supplier database. Examples of popular online supplier databases include AliExpress, SaleHoo, and Worldwide Brands.
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Dry storage | A section of a warehouse in which products are stored in a nonrefrigerated environment that is at or around 50 degrees Fahrenheit. Dry storage may still be temperature-controlled to combat extreme outdoor weather conditions. | Storage |
Electronic Invoicing (e-Invoicing) | Electronic invoicing (VAT Notice 700/63) - GOV.UK (www.gov.uk) contains all the legal information required Electronic invoicing is the transmission and storage of invoices in an electronic format without duplicate paper documents. The electronic format may be a structured format such as XML or an unstructured format such as PDF. It offers many advantages over traditional paper invoices. The rapid electronic transmission of documents in a secure environment may provide for:
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European Article Number (EAN) | A European Article Number (EAN) is the name given to the standard barcode image you see on most products sold around the world. It represents the number – or GTIN – you see beneath it. Retailers and marketplaces often ask for ‘EANs’ when you list your products with them. What they are really asking for is the GTIN, or barcode number, which you can create when you join GS1 UK. EAN uniquely identifies products and ensures seamless operations across the supply chain. EANs have 13 digits (including an additional country code). | Stock |
Estimated time of arrival (ETA) | The expected time a vehicle or vessel will get to its final destination. Warehouses typically receive an ETA for trucks carrying incoming stock. Warehouses may also need to provide an ETA for delivery of outgoing stock. Learn more about delivery estimates. | Inbound |
Estimated time of delivery (ETD) | The expected time goods will be delivered. Suppliers and manufacturers may supply receiving clerks with an estimated time of delivery instead of an estimated time of arrival for incoming inventory. Learn more about delivery estimates. | Outbound |
Estimated time of departure (ETD) | The expected time a vehicle or vessel will leave its point of origin. Warehouses often use this to note when a delivery truck or courier vehicle will be completely loaded and depart a loading bay. Learn more about delivery estimates. | Outbound |
First in, first out (FIFO) | An inventory management strategy based on the principle that the first items into the warehouse should be the first ones to leave. Food warehouses often employ this strategy to ensure that products expiring the soonest are the first to be shipped out. A combination of Date Controlled and Lot controlled inventory control method for products with shelf life, in which first product to arrive are first product to be taken out of stock | Stock |
Forward-pick location | An easily accessible storage area in which small quantities of frequently purchased items are placed. Forward pick locations are used to make picking faster when orders come in. Pickers can quickly access items in the forward pick location and then replenish that supply from a secondary location when it won’t impact customer turnaround times. | Storage |
Gaylord box | A bulk shipping and storage box sized to fit on top of a pallet. Gaylord boxes are frequently used in the logistics industry to transport and easily store goods of many shapes and sizes. | Stock |
Goods Received Notification (GRN) | A document that serves as confirmation that the goods have been delivered and received at the Warehouse | Stock |
Importer of Record IOR / Exporter of Record | Importer of Record IOR and Exporter of Record EOR are services established to provide a single organization to fulfil international trade requirements. Importer of Record IOR / Exporter of Record EOR ensures faster, simpler and more reliable importing/exporting worldwide. They are responsible for everything from documentation to understanding the relevant laws and regulations for the countries involved in the export. The company that provides Importer of Record IOR services and Exporter of Record EOR services can be the owner, the purchaser/seller of foreign merchandise or the freight forwarder. In the case of an Importer of Record IOR, it may also be a customs broker with a power of attorney (POA) to assume the activity of the importer. In order to manage and supervise import and export operations, Importer of Record IOR / Exporter of Record EOR include some direct responsibilities as:
An importer of record (IOR) provides a service to help facilitate the import of goods into a country where it has no representation. They also provide a service if the exporter, shipper or origin company wants the asset that is being imported to remain their property. The role of importer of record to ensure that goods are imported legally following the relevant laws and regulations of the importing country and is responsible for filing legally required documents as well as ensuring that any assessed import duties and taxes are paid. The IOR has responsibility for all of the supporting documentation that goes along with an import. This may include export and import licences, permits, local rules and regulations, as well as other paperwork and more. The IOR will also be responsible for calculating and paying duties, taxes, tariffs and fees. These will all require additional paperwork and forms to be filled out. The importer of record has a very important role to play in the entire customs compliance process. If you’re intending to export goods into any country outside of a free trade zone, then an in-country presence may be required to import the goods into that country. If you don’t have a presence in the country, then this can create problems. In some instances, it may make it impossible for you to ship the goods to your intended destination country. An importer of record facilitates these trades while ensuring the customs process is carried out appropriately. By appointing an IOR you can avoid potential confusion about who has ownership of the goods. Typically, an import transaction might involve suppliers, distributors and end-users. The IOR, in effect, becomes the temporary owner of the goods until they have been accepted by a distribution centre or the end-user has taken ownership of the goods.
| Shipping |
Incoterms | The Incoterms® are a set of 11 individual rules issued by the International Chamber of Commerce (ICC) which define the responsibilities of sellers and buyers for the sale of goods in international transactions. Of primary importance is that each Incoterms rule clarifies the tasks, costs, and risks to be borne by buyers and sellers in these transactions. Familiarizing yourself with Incoterms will help improve smoother transactions by clearly defining who is responsible for what and each step of the transaction. The Incoterms® 2020 rules are the latest and are grouped into two categories reflecting modes of transport. Of the 11 rules, there are seven for ANY mode(s) of transport and four for SEA or LAND or INLAND WATERWAY transport. See Incoterms. | Business |
Just in time (JIT) | In warehousing, “just in time” is a supply-chain management method with which products are ordered, stored, assembled, or manufactured to fulfill an order just in time. No matter how skilled you are at calculating demand, you will run into incidents where demand exceeds your supply. Many companies store safety stock, or more stock than their predicted demand requires, to cover them when these demand surges occur. The JIT method of inventory management doesn’t use safety stock to cut down on storage costs. | Inbound |
Kit to Order | Build kits on the fly if the requested kits are not in stock but the components that make up the kit are in stock. Sales Orders can be loaded with kits. If the kit is in stock, then this will be allocated. If the Kit is not in stock then Seko 360 will attempt to use the components that make up the kit if stock is available for all these components. A sales order can be sent with individual items and kits. In addition, each of the individual items ordered can also appear as items within the requested kits. | Orders |
Kitting | Kitting is the process of combining two or more individual items/SKUs into a one new item for shipping, with the kitted package often receiving its own SKU number. A WMS should be able to manage the kitting process while maintaining visibility into the component SKUs of the kit. De-kitting Is the reverse process, returning kitted SKUs into individual items, often needed when kits are returned, or more kits were created than were actually needed. | Stock |
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Last mile delivery | The process of transporting goods from a warehouse or distribution center to their final destination (the customer). Last mile delivery refers exclusively to the final stage of the logistics supply chain (and happens after packing and vehicle loading). | Outbound |
Lead time | The time it takes to complete a logistics process. Lead time for final delivery, for instance, would include the time it takes for picking, packing, vehicle loading, and last mile delivery. The lead time for inventory replenishment includes the time required to fulfill a purchase order, transport goods from supplier to warehouse, inspect the shipment, and then restock that inventory. | Business |
Less than truckload (LTL) | A type of freight shipping in which goods that weigh more than 150 pounds but take up less than a full truckload are transported. Shipping carriers use LTL shipping to move goods for multiple retailers in the same truckload. Each retailer pays only for the cargo space their items take up. | Outbound |
Lights-out warehouse | A warehouse that employs machines and automated systems to manage and move products rather than human labor. | Warehouse |
Line | The products in an order that share the same SKU or UPC number | Order |
Location | A labelled, designated area in a warehouse where a picker goes to retrieve product (SKU) for an order. It’s typically identified with a series of alphanumeric barcodes that pickers use to scan in and out product to ensure accurate quantities and locations (see Bin within location) | Storage |
License Plate Number (LPN) | A value usually in the form of scannable barcode for grouping and managing inventory in the form of a container/bin boxes | Storage |
Lot No. | Manufacturing number use to track and to identify a specific batch of products that were manufactured under the same conditions. Can be used for picking specific product batches rather than any of the products available with that SKU. | Product |
LTL | Less than truckload (see less than truckload for definition). | Outbound |
Manifest |
| Shipping |
Mobile scanner-based picking | Workers are equipped with mobile scanners that display pick lists as well as the location of each SKU on the list. Pickers scan each item as they are picked — if they scan items not on the pick list, the mobile scanner notifies them of the error. This error-detection feature helps improve picking accuracy. Warehouse managers can also provide workers with optimized picking routes to increase efficiency. | Picking |
Multi-batch order picking | Simultaneously picking items for multiple orders. Workers typically use multi-tiered picking carts to pick multiple SKUs for several orders at a time. This picking system is used for orders coming from different areas in the warehouse and minimizes overall travel time since workers go through the facility once to fulfill multiple orders. | Picking |
Order | All the products that are including on one transaction from a customer. | Order |
Packing | Preparing purchase goods for last mile delivery. Packers put purchased items into boxes and prepare them to be loaded onto delivery vehicles. | Outbound |
Pallet | A flat structure, typically made out of wood, used to move goods. Pallets make is easier to move and store large items (or large quantities of items). They can be easily maneuvered with a forklift, pallet jack, or other machinery. | Outbound |
Pick and pack | A common way to refer to the processes of picking and packing within a warehouse (see picking and packing for definitions). | Picking |
Pick list | The list of items pickers need to retrieve from warehouse shelves or storage. Customer orders are broken down into lists of purchased items or “pick lists,” which are given to pickers to retrieve. | Picking |
Picking | The process of gathering or picking purchased items from warehouse shelves. When a customer makes a purchase, pickers gather those purchased items from their storage location and bring them to packers. Learn more about warehouse processes. | Picking |
Pick-to-light | Automated picking system requiring the installation of pick-to-light LEDs and barcode scanners on racks and shelves throughout the warehouse. Once a picker scans a barcode attached to a shipping carton (that holds the contents for a single order), the LEDs for SKUs listed in the order begin to glow. Workers follow these lights to retrieve SKUs on their pick list. | Picking |
Purchase order (PO) | A purchase order is a document that is sent from a buyer to a supplier requesting an order for merchandise. The purchase order usually lists the type of item, quantity, and agreed-upon price. | Business |
Put-away | Removing incoming orders from the location where it is received to the final storage area and recording the movement and identification of the storage location where it has been placed. If done manually this requires the operator to find bins which require replenishment. Directed put-away is far more efficient. | Inbound |
QR Code | A Quick Response (QR) code is a scannable code, made up of various black and white squares, that allows cameras or smartphones to read it and take the user to a stored URL or other information. | Stock |
Rack / Section | Large sections of shelving units that store products. Racks/units might be identified as an entire shelving unit spanning one side of an aisle or as small sections within a long until of shelving. | Storage |
Radio-frequency identification (RFID) | A wireless tracking and data-transfer system. In warehousing, RFID tracking is used to monitor inventory. RFID tracking tags are placed on inventory as it comes in, and sensors throughout the warehouse are able to then track those goods as they are moved throughout the facility. | Stock |
Receiving | The process involving the physical receipt of merchandise, its inspection for accuracy and to identify any damage, the determination of where the stock will be stored, delivery to that location, and the completion of receiving reporting. | Receiving |
Replenishment | The restocking of inventory. “Restocking” is used differently depending on which warehouse department you work in. Receiving clerks, for example, may refer to goods arriving from a supplier to fulfill a back order as replenishment. Pickers, on the other hand, often use replenishment to refer to stock that needs to be moved from a secondary location to a forward pick location. | Stock |
Reverse logistics | The process of moving goods backward from what was originally their destination (typically the customer) to their origin point. Reverse logistics is used when a customer returns or exchanges an item. The process of retrieving that returned item from the customer, bringing it back to the warehouse, inspecting it for quality, and then restocking it is reverse logistics. Learn more about reverse logistics. | Outbound |
RFID | Radio-frequency identification (see radio-frequency identification for definition). | Stock |
Route optimization software | Dispatch software used to simplify last mile delivery. Route optimization software, such as OptimoRoute, automatically calculates the most efficient routes for delivery teams. Many warehouses and 3PLs integrate route optimization software with the warehouse management system to give management teams end-to-end visibility across their supply chain. Learn more about route optimization software. | Business |
Row / Shelf | Horizontal space spanning across a rack. | Storage |
Safety stock | Extra inventory kept on hand (or stored in a secondary storage location within a warehouse) to mitigate stockouts if demand rises unexpectedly or a supplier experiences delays. Safety stock is most commonly used for popular products that do not expire. | Stock |
Serial No. | A unique identifier assigned to a specific product by the manufacturer which helps to distinguish the specific date and time or location that particular product was manufactured. Products can be serial number controlled in the DC. | Product |
Shelf / Row | Horizontal space spanning across a rack. | Storage |
Single order picking | Pickers move through the warehouse and retrieve SKUs one by one to fulfill one order at a time. This picking system works well for small warehouses that handle simple orders with just a few items. | Picking |
Small Package Shipping (SPS) | Small parcel shipping is designed for small packages to be delivered efficiently rather than in large trucks as a LTL (Less Than full Load) | Stock |
Stock-keeping unit (SKU) | A barcode and/or unique identification number assigned to products by a retailer. SKUs typically consist of a scannable barcode as well as a unique numeric or alpha-numeric number. SKUs are different from UPCs because they are managed and assigned by the company selling the product, not by the Global Standards Organization. Because of this, it is possible for products from two different retailers to wind up with the same SKU. It is common for products to have both a SKU and a UPC. | Stock |
Stockout | A stockout typically indicates that a warehouse has run out of inventory for a certain product, and a new purchase order has not been placed yet. Stockouts can also happen when retailers decide to stop carrying a certain product. Learn how to reduce stockouts using logistics scheduling. | Stock |
Supply chain | All of the processes used to produce and move products. A warehouse supply chain may consist of receiving, put-away, picking, packing, and vehicle loading. The full logistics supply chain includes manufacturing, warehousing, and last mile delivery. Learn more about the warehouse supply chain and material movement within your facility. | Business |
Station | Generic name for SEKO Branch, Location, Area where SEKO business happens. It may or may not be owned by SEKO | Business |
Temporary bin | Bin usually made from cardboard or corrugated plastic which are designed for when there is more stock as there is likely to be increased demand | Picking |
Third-party logistics (3PL) | A type of logistics provider that offers product transportation, management, and organizational services in addition to warehousing. A traditional warehouse is simply a space for retailers to store goods until they are purchased, but a 3PL often handles inventory management, picking, packing, and even last mile delivery. The growth of ecommerce has created more demand for 3PL’s. Learn more about third-party logistics. | Business |
Unit | One particular physical item or product. | Stock |
Universal Product Code (UPC) | The unique barcode and 12-digit number assigned to products and managed by the Global Standards Organization. Learn more about the Universal Product Code. | Stock |
Voice picking | Pickers receive verbal instructions on what items to pick and the items’ locations in real-time. These instructions are sent through headsets (worn by the pickers) connected to an order management system to speed up the picking process and improve accuracy. After they’re done, pickers verbally confirm that the picking task is complete. | Picking |
Warehouse management system (WMS) | Management software used by warehouse teams to track inventory and manage warehouse operations. This is the interface you’re likely to access from a scanner, an iPad, or another device while working in a warehouse. Learn more about warehouse management systems. The software solution that keeps track of all warehouse operations including receiving, putaway, picking, shipping, and inventory. | Business |
Wave picking | Variation of batch and zone picking that is particularly useful for large warehouses that regularly receive multiple high-volume orders. Orders are grouped into sets or waves according to factors like customer location, order frequency, order type, picking zones, delivery date, etc. Workers simultaneously pick SKUs from multiple zones and forward them for sorting and consolidation into individual shipments. Waves are assigned to pickers and schedules to maximize efficiency. | Picking |
Zone | Specific area of the warehouse containing a set of locations | Storage |
Zone picking | A picking process in which a team of pickers each picks products from a particular zone and then combines picked items before packing. Zone picking is often used in larger warehouses and those with clearly designated storage areas, such as cold and dry storage. Learn more about warehouse picking processes. | Picking |
SEKO Specific Terms
Supplier | Explanation | Usage |
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Labels up front | The courier must support this technology for it to be utilised. As soon as the order is received into the WMS the courier is contacted to request a label for the package which is being delivered. The document produced will be in pdf format with the main reasoning that if the label is produced “up front” it is available earlier to check for any errors. This helps to resolve the issue when typically a label is produced at the point of dispatch and there is a problem, for example with the address. This would hold up delivery and leave the packing bench filled with a package which can’t be dispatched. | Documents and labels |
Documents up front | Integrated Label and Gift Card - print label and gift card on the same document Support printing multiple documents in order regardless of number of queues utilised for the print to the printer Printing batches of documents | Documents and labels |
Third Party Integrations
Supplier | Description | Sector Classification |
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SPS Commerce | Provide Carrier Bespoke Labels | Retail Compliance |
Scurri | Delivery Management Software |
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Carriers | Goods carriers | |
Carrier Providers | Carrier Providers |
Compliance Terminology
Term | Explanation | Sector Classification |
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