Understanding the different elements of the supply chain can seem difficult. This glossary of common terms used in our industry will help you get started.
Advanced Shipping Notification (ASN)
A number or code assigned to an incoming shipment designed to speed up the receiving and turn-around time.
Application Programming Interface (API)
An API is a set of programming instructions and standards. It’s often used to help different software applications work together.
Taking orders while waiting on stock to arrive in the warehouse.
Bill of Landing (BOL)
A BOL is used to indicate where a shipment is going, the weight of the shipment, the commodity, etc. There are usually 3 copies for reference—one for the transportation company, one for the 3PL, and one for the customer.
An inventory keeping method in which the person that counts the stock is only provided with a description and SKU, but not with the count that should be in inventory. This method can help reduce bias and errors during physical count inventory.
A document created by the seller with their contact information, and information on the products being shipped such as their value for customs and insurance. (We fill these out for our clients based on the information they have on the product).
Dead stock refers to inventory that has not been sold or shipped in a long time.
The term ‘drop shipping’ is often used interchangeably with ‘order fulfillment’. In many cases, however, a ‘drop shipper’ is a company that offers products for sale, and that delivers them to the seller’s customers. This practice is very much in use with eBay and other auction sellers, where the seller will offer the drop shipper’s products for sale, and collect a commission if and when the product is sold.
Emergency or Rush Order
For a number of reasons, a particular order can be assigned priority, and treated and processed ahead of other orders in the queue. These ‘emergency orders’ can be assigned by the merchant, or by the fulfillment centre, for example in the case of damaged merchandise that must be replaced.
Kitting refers to grouping several different items under a single SKU, and shipped as such. For example, as a merchant you may offer a ‘Widget Variety Pack’ composed of a blue widget, a red widget and a yellow widget. The order fulfilment centre receives separate shipments of widgets, and ‘kits’ them together under a single SKU when required.
Logistics refer to the organization, processes and services needed to ensure the efficient flow of merchandise and orders from storage to shipment and delivery.
Less than a truckload (LTL)
LTL is the transportation of small freight. LTL shipments typically weigh between 151 and 20,000 lb (68 and 9,072 kg). LTL carriers collect freight from various shippers and consolidate that freight onto enclosed trailers for linehaul to the delivering terminal or to a hub terminal. The main advantage to using an LTL carrier is that a shipment may be transported for a fraction of the cost of hiring an entire truck and trailer for an exclusive shipment. Also, a number of accessory services are available from LTL carriers, which are not typically offered by FTL carriers such as; liftgate service at pickup or delivery, residential service at pickup or delivery, inside delivery, notification prior to delivery, freeze protection, and others.
An order is a directive issued by the inventory owner, or merchant, to ship one or several items or SKUs to a particular customer. Orders can be received manually, either individually or through bulk upload, or in real-time through shopping cart integration.
Order fulfillment represents the steps that need to be taken in order for a customer to receive his or her order, after they complete their purchase. It generally involves packing the order in the appropriate, safe packaging, and dispatching the purchase through a carrier service.
State-of-the-art software allows the merchant to track, in real time, individual orders as they are processed by the order fulfillment company. Order tracking can also refer to email confirmations that can be sent to both merchant and end-user customer when the order has shipped, complete with carrier tracking number.
A list included with every order that details the SKU, description and unique identifiers of every item or unit of sale included in an order. This list is produced by the fulfillment centre and typically enclosed with the order.
Perpetual Inventory System
A system by which a constant inventory is maintained by collating initial inventory count, orders shipped and inbound orders. This allows merchants to know at all times their inventory levels. Occasional spot checks can be required to maintain the integrity of the perpetual inventory system.
Pick and Pack
Pick and Pack refers to packaging several different SKUs from the same merchant into a single box for one customer. For example, a customer may order 2 blue widgets and 3 red widgets from the same merchant, in a single order. The order fulfillment centre will then pick and pack the order as required; both customer and merchant can benefit from lower proportional shipping costs, known as combined shipping.
Return Merchandise Automation (RMA)
Code or number issued by the owner of the merchandise which allows for the end-user to return an order to the fulfillment centre.
Serial or Lot Codes
The number or code assigned to a single item or a group of items to differentiate it from others. This differs from Stock-Keeping Units, or SKUs, as those are used to represent a type of item rather than an individual one. For example, a SKU may represent blue widgets in general which is referred to by a lot code, while each individual blue widget is referred to by a serial number.
Stock-Keeping Unit (SKU)
An SKU, or Stock-Keeping Unit, is a unique identifier that refers to a type of item or items for sale. It is used for sales, shipping and inventory-keeping purposes. A SKU can also be used to refer to several different items sold as a single unit.
Shopping Cart Integration
Go Direct can integrate its software with your existing shopping cart solution, allowing us to receive the order information within seconds of payment being approved by the merchant’s credit card processor. This allows for almost immediate packing and shipping, reducing processing time and increasing customer satisfaction.
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