The logistics industry is extremely broad with numerous micro-industries within it. Each facet of logistics contains unique jargon which is specific to the operations of that each sector. In order to effectively sell warehousing and fulfillment services, it is important to be able to use and understand the following terms:
FIFO
(first in, first out) A stock management technique used to prevent inventory spoilage or to maximize product warranties. The units which have been in storage the longest are the first units to ship out.
Fulfillment
The activities performed once an order is received; includes pulling orders, labeling, and staging for transportation pick-up.
Inventory Turns
The number of times per year inventory is moved out of the warehouse through order fulfillment
Third Party Warehouse
An outside, contract warehouse where goods are stored and transported for a fee, typically without long-term commitments.
Shrinkage
A misallocation of inventory due to software miscalculations, stock mismanagement, orders being sent incorrectly, theft, or improper receiving counts. Shrinkage is usually discovered when inventory is depleted and physical inventory counts do not match perpetual counts.
SKU (Stock Keeping Unit)
This number is used to identify an individual product. Often a unique SKU is used for color / size / combinations.
Supply Chain
The overall system that covers the flow of material and information from a business to its customer. Includes the suppliers, transportation, storage, fulfillment, etc.
WMS (Warehouse Management System)
The technology platform which is designed to control the movement and storage of materials, typically giving the customer visibility of orders and inventory.