Glossary of ERP, warehouse and supply chain terms
Short definitions of the terms that come up in software scoping conversations.
- 3PL (third-party logistics)
- A company that stores, picks, packs and ships goods on behalf of other businesses.
- Three-way match
- Checking a vendor invoice against the purchase order and the goods receipt before paying it.
- 810 (EDI invoice)
- The X12 EDI document that carries an invoice from a supplier to a customer.
- 850 (EDI purchase order)
- The X12 EDI document a customer sends to place an order.
- 855 (EDI PO acknowledgment)
- The supplier's electronic confirmation of what it will ship against an 850.
- 856 (EDI ship notice)
- See ASN.
- 997 (functional acknowledgment)
- An EDI receipt that confirms a document arrived and was readable.
- ASN (advance ship notice)
- An electronic notice, sent when a shipment leaves, that lists exactly what is in it and how it is packed.
- ATP (available-to-promise)
- The quantity you can commit to new orders: on-hand plus scheduled receipts, less quantities already committed.
- BOM (bill of materials)
- The list of components and quantities needed to make a product. Multi-level BOMs nest sub-assemblies.
- Cross-dock
- Moving goods from receiving to shipping with little or no storage in between.
- CPQ (configure, price, quote)
- Software that builds a quote from product options, price rules and approvals.
- Cycle counting
- Counting a small set of locations or items on a schedule instead of counting the whole warehouse once a year.
- Demurrage and detention
- Charges for keeping a shipping container beyond its free time at the port (demurrage) or outside the terminal (detention).
- EDI (electronic data interchange)
- Standardized business documents exchanged between computers, most often in the X12 or EDIFACT formats.
- ERP (enterprise resource planning)
- Software that holds a company's orders, inventory, purchasing and financial postings in one database.
- FEFO (first-expired, first-out)
- Picking the stock with the earliest expiry date first.
- FIFO (first-in, first-out)
- Using or selling the oldest received stock first.
- GS1-128
- A barcode standard used on logistics labels, including the SSCC pallet label.
- Landed cost
- The full cost of an imported item at your door: product, freight, insurance, duty, fees and handling.
- Lot
- A group of items produced or received together and tracked by a common code, used for recalls and expiry.
- MRP (material requirements planning)
- Calculating what to buy or make, and when, from demand, stock and bills of materials.
- Order-to-cash
- The flow from a customer order through fulfillment and invoicing to collecting payment.
- Procure-to-pay
- The flow from a purchase request through ordering and receiving to paying the vendor.
- Slotting
- Deciding where each item is stored in a warehouse, usually by how fast it moves.
- SSCC (serial shipping container code)
- A unique 18-digit code on a pallet or carton label that identifies that shipping unit.
- VAN (value-added network)
- A service that routes EDI documents between trading partners.
- WMS (warehouse management system)
- Software that directs receiving, put-away, picking, packing and shipping, and tracks stock by location.
Still unclear?
Ask us about any term in your project.
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