Fulfillment Definitions

Acronyms, Abbreviations & Terminology

The retail and ecommerce fulfillment industry is continually evolving, making it difficult to stay informed of the latest trends and terminology. To make things simpler for anyone navigating this world, we’ve compiled a list of acronyms, abbreviations and terminology you may come across when working with a fulfillment provider or self-fulfilling orders. This resource is designed to help get an understanding of the intricacies of online order fulfillment – handy if you’re getting started! We hope it makes the process more manageable and makes your experience smoother.

A third party logistics provider, more commonly known as a 3PL, is a company that provides outsourced logistic services such as inventory storage, order fulfillment, and transportation.
Active Stock
The level of stock in the warehouse that is ready to be shipped is called active stock.
Advanced Shipping Notice
A Delivery document is a record that includes information about products being shipped, such as quantity and type of product.
Bar Code
A barcode is a machine-readable representation of data typically associated with an item or product. A strip of printed lines in varying widths can represent information like a company's name, product ID and price. Barcodes are scanned through optical scanners in order to read the contained information and facilitate tracking and other various processes. Barcode technology has been proven to provide better speed, accuracy and reduced labor costs compared to manual entry in many contexts. It is an essential tool for a variety of industries today and continues to be improved to perform even more sophisticated tasks.
Container ships are used to transport goods. This is called break bulk shipping.
Product bunding is a group of two or more products that are sold together for a single price.
Bill of Lading (BOL)
A bill of lading is a document that contains all the information needed to process a freight shipment.
Back Order
A request to a supplier or wholesaler for an additional stock of a sold-out item to satisfy an outstanding customer order.
Customer Returns
Items that were sold in a store or online, and then returned by the customer in different conditions.
Cross Docking
Cross Docking is when you supply products from a manufacturing plant to customers without storage in between. This usually happens when the products go straight from the factory to the customer.
Ways a business can distribute its products is through a retail or distribution channel. This could be done through a call center or web-based electronic storefront.
A carrier is a company or person who legally transports goods by land, water or air. Carriers usually work with shippers to get the goods from one place to another.
Carrier Liability
Carrier liability means that the carrier is responsible for any shipment loss, damage, or delay. This responsibility comes with some exceptions, such as when something happens because of a public authority, the shipper, or the nature of the goods themselves.
Commodity Code
A commodity code is a code that describes a product or group of products. The code may be used to classify goods for shipping or to regulate them.
Chargeable Weight
The chargeable weight is what airlines use to determine how much it will cost to ship something. There are two types of chargeable weight- volumetric weight and gross weight.
A consignee is a party or person who is receiving goods or merchandise that has been shipped.
Cumulative Lead Time
The time it takes to find the parts, build the product, and then ship it.
Delivered Duty Paid means that the person or company sending the order pays the fees, taxes, and duties.
Delivered Duty Unpaid are taxes or duty charges that the recipient of the shipment has to pay when they receive it.
Delivery Order
A Delivery Order is a document that orders the release of cargo to be transported to another party.
Demurrage charges are applied when rail freight cars and ships are kept past a certain time limit for loading or unloading.
Distributed Inventory
Splitting up goods and having them sent to different fulfillment centers in different parts of the country is called distributed inventory.
Dock Receipt
A dock receipt is a document used to accept materials or equipment. This document is also proof that the carrier has delivered the materials or equipment.
Dunnage is a packing material that is used to protect a product during transport. It helps to keep the product from becoming damaged.
Duty Free zone
A duty free zone is an area where you can store goods without having to pay import customs duties. This is a good option if you are waiting to transport the goods to a different location.
Drop shipping
Drop shipping is when you sell products on your website that come from one supplier. That supplier will ship the products directly to the consumer.
Emergency Stock
Emergency stock is a set amount of products that you keep on hand in case something bad happens. This might be an event that you didn't plan for, like a natural disaster.
Expediting means moving shipments through regular channels quickly.
Export Broker
An export broker is an agent who helps buyers and sellers connect with each other to trade goods and services. The broker typically charges a fee for this service.
Fulfillment is the process of getting a customer's order ready and delivered.
First in First Out
The "First in, First Out" inventory accounting method means that the cost of the first units to enter are the first units sold.
Finished Goods Inventory
Products that are completely manufactured, packaged, stored, and ready for distribution are called finished goods inventory.
Fixed Order Quantity
A fixed order quantity is an inventory control system in which you set a maximum and minimum number of items that you want to have on hand.
Fulfillment Services Provider
A fulfillment services provider is a company that provides order fulfillment services for another company. This means that they will take care of shipping and handling products for the other company.
Flow Rack
A storage method where products are stored on a rack and presented to picking operations from one end. The products are then replenished from the opposite end.
Forward picking
Forward Picking is a storage area where you can pick new inventory from the reserve storage.
General-Merchandise Warehouse
A warehouse is a place where you can store goods that are easy to handle and don't need a special environment.
GTIN (Global Trade Item Number)
Global Trade Item Number: A unique number assigned to products and services that allows them to be tracked globally.
Gross Margin
The amount of money you make from selling a product, minus the cost of making and selling that product.
Holding Costs
The cost of holding a unit of an item in stock is the amount of money spent to keep that item for a certain amount of time.
Handling Costs
The cost of moving, transferring, preparing, and handling inventory.
Inbound logistics
This is the process of getting materials from suppliers and vendors into the production process. This also includes moving materials to storage facilities.
Integrated logistics
The process of managing the entire supply chain as a single system, from the procurement of raw materials to the distribution of finished goods.
Item coding
Item coding is a way of tagging every package of material to identify it. This is done by using a bar code on the tag.
Joint rate
A rate that is more expensive than a regular rate, but is cheaper than the cost of shipping the item multiple times. This is used when a shipment needs to go over multiple routes.
Item coding
Item coding is a way of tagging every package of material to identify it. This is done by using a bar code on the tag.
Just-in-Time Logistics
The process of getting products to customers as quickly as possible, while also minimizing the time needed to get the products.
Kitting is the process of putting together a set of components or parts to create a defined unit.
Logistics is the process of organizing and planning the efficient and effective movement of goods and services. This includes organizing inbound, outbound, internal, and external movement.
Logistics Data Interchange
A system that electronically transmits information about logistics.
Locator system
The locator system is an inventory tracking system that helps you assign locations to your inventory. This makes it possible to store your goods in an organized way. The system uses number sequence, by vendor, by product.
Landed Cost
The landed cost of a product includes the costs of getting the product from where it is made to where you will buy it. This includes transportation, warehousing, and other handling costs.
Management information system
A management information system is a system that controls the flow of information throughout an organization so that everyone has access to the right information and can work together efficiently.
A manifest is a document that describes all of the items in a shipment.
Maximum Order Quantity
A modifier to the order quantity that limits the number of items that can be ordered.
Merge in Transit
Merging in Transit - The process of combining shipments from suppliers and sending them directly to the buyer or store, instead of the seller.
Net Weight
The weight of the merchandise, not including the weight of any containers.
A node is a fixed point in a company's logistics system where goods can be found. This includes places like plants, warehouses, and suppliers.
A request to send or receive goods as specified on a customer order, purchase order, or shop order.
Order Fulfillment
Order fulfillment is the process of receiving goods, then processing and delivering orders to customers.
Outbound Logistics
The process of moving and storing products from the final stage of production to the customer is called outbound logistics.
The way a customer interacts with a retailer through different channels, such as stores or websites.
Parcel insurance
Parcel Insurance is a type of insurance that covers packages during transit in case they are lost or damaged.
Pick and pack is an efficient logistics process that involves the identification and separation of items from a warehouse or inventory storage, followed by preparing them for shipment. It is often used in distribution centers to streamline the picking, packing, and shipping of outbound orders to their assigned addresses.
Purchase order
A purchase order is a document that a buyer creates to indicate the items they want to buy from a seller.
Queue time
The amount of time it takes for the inventory to be processed.
Receiving dock
A receiving dock is a place where semi trucks can unload their cargo.
Re-Order Point
The minimum number of products that a business should have in stock before they need to order more.
Reverse Logistics
Reverse logistics is a type of logistics that focuses on the movement and management of products and resources after they have been delivered to the customer.
Return Merchandise Authorization
A Return Merchandise Authorization (RMA) is a document you receive from a store that allows you to return an item or items you bought. The RMA will have information on it about the items you're returning, such as the reason for the return and the contact information for the store.
Supply Chain
A company's supply chain is a network of suppliers who produce and distribute a product to the final buyer.
Safety Stock
Extra stock that is kept in case of shortages.
SCOR is a model that helps measure how well the different parts of a supply chain are working together.

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