ABC Analysis
ABC analysis is a stock management technique that enables items to be classified and organized based on their rotation. This makes it easier to plan the appropriate strategy for allocating resources in the warehouse and reduce effective picking times. It is based on the Pareto principle which states that 20% of the items generate 80% of the handling operations, while the remaining 80% of the goods are responsible for only 20% of goods handling operations.
Access Index
The access index identifies the degree of accessibility of an item inside the warehouse.
Access opening
Entry and exit point for trays contained within an automatic storage system with shifting trays.
Accessibility
The various opportunities to access an item stored in the warehouse.
Accuracy of delivery
The ability of the supplier to comply with the conditions agreed for deliveries. This can be measured as a percentage of deliveries which are subsequently disputed by customers with regards to how much the order conforms to what they ordered, the suitability of the load units shipped and any accompanying documentation.
Advanced Planning & Scheduling (APS)
Production planning system which can take into account any restrictions in the process (finite capacity scheduling).
AGVS
Transport system using automated guided vehicles. Driverless vehicles equipped with automated guiding devices that follow a pre-defined route, stopping at each machining or assembly station to allow for automatic or manual loading and unloading of material.
Allocation of production
The allocation, to various manufacturing sites, of the types and quantities of a range of products that need be produced.
Amplification of the effects (Bullwhip Effect)
An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being in excess
ASN (Advanced Shipping Notice)
Electronic notification of the arrival of a cargo of goods at the next step in the supply chain.
ASRS (Automated Storage and Retrieval System)
Automated goods storage and retrieval system which requires high initial investments, but on the other hand can offer a considerable increase in handling potential.
Assembly
The stage of production in which the components are put together into a finished product that complies with the process in question.
Assortment
Set of items managed in a specific warehouse, whose composition is determined by precise market choices.
ATO (Assembly To Order)
Type of manufacturing environment in which the components or sub-assemblies are assembled and customized only upon receipts of the customer’s order.
ATP (Available To Promise)
The capacity to promise the delivery, for a specific date, of a quantity of goods that are not available at the time of the order.
Auto ID (Automatic Identification)
Method used by devices to identify a code (and automatically upload this data into a computer). The most widely used technology at present is the barcode.
Automatic Identification
See also “AUTO ID”
Automatic vertical system with rotating carriers
Method used by automatic storage systems with carriers, which rotate to bring goods directly to the operator.
Available stock
The quantity of goods in stock and ready to meet demand.
Average stock
The ratio between the daily inventories and the number of working days.
Backflushing
Method for issuing (reducing on-hand quantities) materials to a manufacturing order.
Badge
An identification badge or just badge is a card made of PVC or other plastic material (PET/ABS/Polycarbonate) used for personal identification.
Barcode
Set of vertical bars that contain information. Each bar corresponds to a value or code which can be read by optical readers and transformed into messages or information.
Batch
Data processing methods used by the management system, including updating archives, printing documents, consulting archives etc. at fixed time and at variable time intervals (hourly, daily, weekly etc.)
Batch picking
Picking method which can be the fulfilment of a batch of complete orders or a batch of partial orders.
Batch Quantity
The number, volume or weight of products or parts of a batch.
Bay
Space between two uprights of racking within which one or more pallets can be allocated.
Bill of Lading
Transport document that certifies the entry of a given quantity of goods into a warehouse.
Bill of Materials
List of all the materials, that are necessary to manufacture an item with the relative quantities that are required.
Blank loading list
A loading list that doesn’t contain any specifications regarding the apparent order and condition of the goods to be transported (Hague Rules)
Blockchain
The blockchain is a complex, structured database which is organized according to the rules and dictates of peer-to-peer technology and is responsible for storing and tracking all the operations performed. The blockchain is widespread on the web and can be consulted by anyone who is a link in the chain.
BOM (Bill Of Materials)
List of all the parts, sub-assemblies and raw materials that make up a particular assembly, indicating the quantities required of each part.
Bonded warehouse
Free warehouse or customs-controlled warehouse, that operates on behalf of third parties and can be used to store a consignment of goods that are left as a guarantee by their owner in exchange for a bond, or alternatively goods that are awaiting delivery, but require the buyer to produce the necessary documentation.
Booking
Activity carried out by the management system aimed at booking: a space in the warehouse for the subsequent storage of a pallet; a pallet for subsequent handling or picking; a variable number of parcels for subsequent manual picking.
Break-Bulk
The separation of a consolidated�bulk load�into smaller individual shipments for delivery to the ultimate consignee on two or more smaller vehicles, as happens in a transit point.
Brick and click
Business model used by retailers that integrates the physical store with the e-commerce site.
Buffer Stock
A buffer of stock or in other words the quantity of raw materials, semi-finished or finished products that are kept in stock in case of shortages in supplies.
Bulk
Term used to describe unpackaged goods such as commodities (e.g., coal, wheat, Kaolin, petroleum etc.) which can be solid (dry-bulk) or liquid (liquid-bulk) in character.
Business to Business (B2B)
The various online business transactions between companies. Electronic Commerce that deals with transactions between companies and not those between a company and the final consumer (for example the dispatch, processing and fulfilment of orders between a manufacturer and its distributors).
Business to Consumer (B2C)
The various online commercial transactions between businesses and end consumers. Electronic Commerce that deals with the transactions between a company and its final consumers (for example the possibility to purchase consumer products from a “virtual supermarket”).
Carrier
Operator who physically carries out a shipment using vehicles owned or managed by their own company (this is the case of the transporter in the traditional sense of the courier). In more general terms, it means any person who, by contract, undertakes to carry out transportation operations by rail, road, air, sea or inland waterway or any combination of these modes.
Cash on Delivery
Payment for goods on delivery
Category Management
Management of products by category (fresh etc) and by final destination (large-scale retail trade, hypermarkets, supermarkets etc.).
City Logistics
Urban logistics or City Logistics refers to all of the economic and ecological solutions, simplified as eco-eco solutions, which can be used for the secondary distribution of goods in urban centres.
City Logistics Centre
Infrastructure intended for the urban distribution of goods in other words a structure in which flows of goods can be concentrated in order to optimize routes and deliveries within the urban area. Equipped with a terminal, it can be used as the premises of carriers, freight forwarders and goods collection and distribution companies, who carry out the consolidation of loads collected in the neighbouring metropolitan area in order to send them to their destinations. They can also deconsolidate incoming loads, so that they can then be distributed in the metropolitan basin itself.
Classification
Process by which a document or item is classified by attaching a code to it.
Clean Bill of Lading
Document used in maritime transport which indicates a bill of lading that does not contain any record of damage to the cargo.
Clean on Board
Status that is assigned when goods have been loaded on board the ship and the document issued is clean (in apparent good order and condition with no damage).
Clearing house
Service provider acting as an email container or in other words it uploads and stores data until the recipient is ready to receive it.
Click&Collect
Offers the possibility to order a product online and collect it at the point of sale or other authorized location.
Cloud
IT platform that can provide resources such as processing, archiving and data transmission through a series of pre-existing and configurable structures that are capable of guaranteeing on-demand access to the structure.
Co-Loading
The loading of goods onto the same vehicle or container together with other goods that are going to the same destination.
Co-Markership
Long-term relationship, for example between a supplier or a transporter and a customer, based on mutual trust and collaboration.
Co-packing
The overall process of assembling, packaging and labelling a product or goods into its final finished packaging for a client, food producer or large distribution company.
Coding
Process of numbering which involves fixing a label to a product to make it easier to find a document.
Cold chain
The term cold chain indicates the process used to maintain frozen products at a constant temperature, or in other words below -18�C along its entire distribution path, from production to sale, including the transport, storage and display phases.
Combined Transport Bill of Lading
Bill of lading issued with the total transportation carried out includes not only shipment by ship, but also other means such as rail or road.
Commodity box rate
Freight rate classified by type of goods, but applied to the full container
Consignment Note
Shipping note.
Consignment Stock
Agreement that commits a supplier to make a certain quantity of goods available to their customer at or in the vicinity of the purchasing company’s premises. The goods remain the property of the supplier until the customer consumes them or sells them to their customers. When the contract expires, the unsold goods are returned to the supplier.
Consolidation
The unification of loads in a single large intermodal transport unit for easier handling.
Container
Stackable loading unit for the intermodal transportation of goods. The Institute of Standardization Organization (ISO) has established four main dimensions (10, 20, 30 and 40 feet) that differ only in length. There are various types of containers, those for air, sea and land, with large and very large storage capacity.
Container List
Document that specifies the contents of a particular container or other transport units and which is prepared by the party responsible for loading the container.
Continuous Replenishment
System where a point of sale is supplied directly by the manufacturer with the aim of keeping the distributor’s stocks at a minimum level of safety.
Cross Docking
A warehouse strategy of moving of goods directly from the receiving dock to the shipping dock, reducing the handling and storage steps in between to a minimum. In practice, the goods pass through the warehouse only from an administrative point of view, while physically they are not even placed on the shelves. In these cases, the goods are accepted and “taken on” administratively when a barcode is read as items are unloaded from the supplier’s truck. A radio frequency system communicates the arrival of the goods to the processors and the same radio frequency system sends instructions to “re-label” the goods and load them on a departing vehicle, sometimes indicating which “order” the goods must be loaded on the vehicle with. Cross docking happens very frequently and is typical employed in the distribution of food products and more specifically perishable items such as dairy products, vegetables and fruit.
Cross Merchandising
The definition of Cross Merchandising in the retail sector refers to the strategy of displaying or putting together products from different product categories to drive sales.
CTD (Combined Transport Document)
Negotiable or non-negotiable document which defines a contract for the transport services and/or supply of transport services for the combined transportation of goods.
Customer Experience
The Customer Experience (abbreviated to CX) is the overall experience that customers experience throughout their relationship with a company along all phases of their Customer Journey. It is the result of how the customer perceives his overall interaction with the company.
Customer Journey
Quite literally the journey that the customer takes and all the points of contact between the consumer and a brand. This begins with the perception of need and may or may not end in the act of purchasing a product or service.
Customer Service
The variety of activities that a company must carry out to satisfy the customer, such as order management, billing, management of returns, complaints, communication with the customer and so on. The responsibility for all this is typically assigned to a specific corporate department.
Customization
This is the personalization process by which a certain product or service is adapted to the needs of an individual, a group or people or an organization.
Customs clearance
Verification of goods arriving from another State, and involving the payment of different levels of charges, where required. Once paid, the goods can be made freely available.
Data Entry
The insertion of identification or search keys for an item into the management software system.
Database Management System (DBMS)
Software designed for data storage and management.
Days of Coverage
The ratio between average stock and average daily consumption. This indicates the time of autonomy of the warehouse and the average time that goods reside in the warehouse, known as the throughput time.
DC (Distribution Centre)
Central structure of a chain of hypermarkets, supermarkets and large commercial activities which is used for the receipt, storage and delivery of goods to points of sale.
Dedicated Zones (Class Based Storage)
Physical allocation logic for the ULD according to which the storage area is divided into zones and a pre-determined class of items is dedicated to each area.
Degroupage
Logistics operation in which a group of packages are separated and sent out to multiple different delivery points.
Delivered Duty Paid (DDP)
Incoterm which means that the seller transports the goods, already cleared for import but not unloaded from the vehicle, to the destination. Unlike DDU (Delivered Duty Unpaid), the seller is not only responsible for all the costs and risks related to the transport operation, but also assumes the risks and charges associated with the completion of the customs import formalities. The seller is not responsible, however, for unloading the goods from the vehicle which is used to transport them to the agreed destination.
Delivering carrier
The carrier that physically transports the goods.
Delivery
Delivery and distribution.
Delivery conditions
The conditions agreed between the carrier and the customer regarding the delivery of goods and / or services.
Delivery Cycle time
The time interval between the moment an order is received and the moment the goods that comply with this request are delivered.
Delivery Flexibility
The ability of a supplier to meet urgent and unforeseen customer needs. It can be measured as a percentage of urgent requests fulfilled with reference to the variation in the quantity of individual items with respect to the agreed values, the variation in the mix of items compared to what was agreed by contract and modification of the date of shipments.
Delivery Frequency
The number of scheduled deliveries in the unit of time taken as reference (days, weeks, months etc).
Delivery instructions
Document issued by a buyer giving instructions regarding the details of the delivery of the goods ordered.
Delivery note
Document that certifies that a given quantity of goods are leaving the warehouse.
Delivery plan
A plan which is authorized by the sales and technical departments and establishes the quantity per unit of time for the finished product to be shipped.
Delivery Time
The time between an order and delivery
Demand management
Activities ranging from forecasting demand to receiving order.
Deposit warrant
A document which represents good deposited in general warehouses. It is an instrument of credit that gives the holder the right to be returned the items deposited, as well as the right to dispose of them by transferring the title to third parties.
Digital Transformation
The term Digital Transformation indicates the impact of digital technology on society in general and on the business world in particular.
Direct Delivery
The transportation of goods directly from the seller to the buyer. Frequently used if a third-party acts as an intermediary buyer and seller.
Direct Shipment
Direct shipment by the supplier to the final customer, without using either their own platform or that of a logistics provider (this can be implemented when you want to avoid intermediate reloading).
Distribution channel
Chain of companies that make a supplier’s product accessible to the final consumer via a series of commercial transactions. This channel is generally characterized by its length (short or long channel) according to the number of intermediaries between the manufacturer and the supplier.
Door-to-Door Transport
The transport of a load from the sender’s premises to the recipient’s premises.
Drop Shipping
This refers to an agreement between the Retailer and a manufacturer or distributor, where orders are processed directly to the end customer. In other words, the seller does not keep any stock, but sends orders and information to the producer who then ships to the customer.
E-business
Electronic business is an expression that indicates the digital ways in which business is carried out.
E-commerce
Electronic commerce or any type of transaction relating to the sale or purchase of a product or service in which the interested parties interact electronically through the Internet.
E-logistics
This includes the management and fulfilment of the entire order cycle, the management of purchasing, stock and warehouses, the management of shipments, payments and returns.
E-marketplace
Literally the “electronic market place”, this term describes a virtual marketplace where real products and services are traded, as opposed to the electronic marketspace. Marketplaces are characterized by ownership (supplier managed, buyer managed, market markers), the trading model (how buyers and sellers interact), the pricing model (how the price of the goods is established), the revenue model (as a source of revenue for the same marketplace).
E-procurement
Method of procuring goods and services via the Internet.
E-Supply Chain (and E-Logistics)
The integrated and collaborative management of the logistics process (and the supply processes in general) which is made possible by new technology. It includes the management and fulfilment of the entire order cycle, the management of procurement, the management of stock and warehouses, the management of shipments and payments and returns.
E-tailer
Company or trader who operates on the web via online shops.
Economic Order Quantity (EOQ)
An inventory management model that determines how much to order by determining the amount that will meet customer service levels while minimizing total ordering and holding costs.
EDIFACT
Electronic Data Interchange For Administration Commerce and Transportation. The electronic exchange of data for administration, commerce and transport. It is the international EDI standard, sponsored by the UN/CEFACT and defines the syntax for the transmission of electronic data.
Engagement
This is the ability of a product (a brand, a blog, an app) to create solid and lasting relationships with its users by establishing a link between the brand and the consumer.
Engineer to Order
When a partial or total design process is initiated following an order from a customer.
Enterprise Resource Planning (ERP)
A class of software for planning and managing enterprise-wide the resources needed to take customer orders, ship them, account for them, and replenish all needed goods according to customer orders and forecasts. Often includes electronic commerce with suppliers.
Equal Space Supply (ESS)
Replenishment logic used in the picking area, where the same picking volume is assigned to each item. The supply frequency is proportional to the flow of each item expressed in cubic metres.
Equal Time Supply
Replenishment logic used in the picking area, where the same frequency is adopted for all items. Each item is assigned a picking volume proportional to its flow expressed in cubic metres.
Express Courier
Large transport company, usually operating on a continental or global level, whose typical service is the “door to door” transportation of parcels and small packages. The recent evolution of the activities of these companies has extended their operations in increasingly important sectors of the postal services and integrated logistics services, where it is essential to have information on the position of goods, sometimes in real time, especially for JIT management. This activity is normally carried out by integrating local services, carried out by road, with international and intercontinental services, which use their own fleet of aircraft.
EXW (Ex Works)
This term refers to a clause whereby the seller undertakes to make the goods available on the ground at one of their pre-determined or agreed manufacturing units or warehouses and the buyer assumes all costs and transport risks. Unless otherwise agreed and included in the contract with an explicit agreement between the parties, the seller is not required either to clear the goods for export or to load them on the means of transport provided by the buyer. The buyer must therefore bear all the costs and risks of bringing the goods from the seller’s premises to the desired destination.
FCA (Free Carrier)
The term “free carrier” refers to the clause whereby the seller makes the goods available at a given place at the premises of a carrier (or at a warehouse of a forwarding agent) that has been appointed by the buyer, and agrees with the buyer that all of the costs and risks of loading and subsequent transport are the responsibility of the buyer. This formula can be used for all types of transportation operations.
Federtrasporto
Federation of transport companies which belong to Confindustria (the main association representing manufacturing and service companies in Italy)
First mile
The first mile of the journey of goods from a logistics hub to their final destination.
First-In First-Out (FIFO)
Inventory valuation method based on the concept that older materials are the first to be used.
Fixed Order Quantity
Batch sizing technique used in MRP mode when the inventory management system will always cause planned or actual orders to be generated for a fixed pre-determined quantity.
Fixed Re-order Period
Inventory management model which states that replenishment orders are issued at fixed time intervals “T” and in which the quantity that is re-ordered is designed to restore stock to predetermined levels to ensure availability for the entire period.
Fixed Re-order Point (Method)
Inventory management model based on the issuing of an order when availability is equal to the fixed re-order point, OP (Order Point). The supply batch is constant and equal to the economic order quantity (EOQ).
Foot
This is a unit of length, with anthropometric origins, which is not part of the International System of Units or SI. It is used in Anglo-Saxon countries, greatly in the United States and more sporadically in Great Britain. The dimensions of the Anglo-Saxon foot (to distinguish it from other historical units) is 0.3048 m = 30.48 cm. In the Anglo-Saxon system a foot is divided into 12 inches and represents 1/3 of a yard. It is also generally used to indicate heights in the world of aeronautics.
Forward Reserve Problem (FRP)
A problem concerning the identification of items to be placed in the picking area, how to determine the receptive potential of this area and the distribution of the available volume of the picking area among the variety of items.
Fourth Part Logistics Provider (4PL)
Operators who carry out the activities that are typically outsourced to a 3PL, but adds on additional activities (which can be administrative, checking or financial in nature) at a strategic and operational level which is connected to the logistics or in some way associated. These activities are carried out on behalf of a company who has no skills, possibility or willingness to carry them out in-house.
FPO (Fast Perfect Order)
Orders which are processed complete and on time with respect to the delivery date.
Free at destination
It indicates that the seller retains liability for loss or damage until the goods are delivered to the buyer
Free on truck (FOT)
A contractual clause of international shipping documents that deals with delivery conditions. The risks and shipping costs are borne by the supplier until the goods are loaded onto the vehicle.
Freight
Freight refers to: 1. any type of goods, items or commodities that are transported in bulk via air transport, surface transport or sea/ocean transport. 2. the amount paid for the transportation of goods via any means or the combination of transport systems.
Freight village
Infrastructure that includes a rail link, facilities for haulers and freight forwarders and warehouses for the handling and storage of goods. Many operators use this centre to exploit the advantages that come from such close proximity and also to integrate their activities. These structures are intended for intermodal transport and are not generally large. They are often managed by private individuals and tend to choose their names by borrowing heavily from the names of higher-ranking structures.
Full Container Load (FCL)
A term used to describe when a transport occupies a full container.
General Cargo
Also referred to as semi-bulk, it includes all goods with loads that require special housing. These goods are generally packed, or at least contained (tied together or arranged in a specific order). It also includes so-called parcels, pallets, big cartons, rolls or barrels. As the load cannot normally be carried out with pumps or fully automated systems cranes operated by hold and quay personnel are required, which is obviously more costly than bulk transport.
General order warehouse
Bonded warehouse where the goods, if not claimed within five days, are returned at the owner’s expense.
General warehouses
These allow the exchange of goods and also offer storage, deposit, safe-keeping, warranty and commercial credit support functions.
Goods Received Note
Document prepared in-house, on paper or on a video terminal, which is used to help the warehouse staff check the goods. It also testifies the quality and quantity of the goods which were actually delivered by the supplier have been processed into the warehouse.
Grippers
Arms with hydraulic drive mounted on a spreader and suitable for lifting intermodal transport units for combined road-rail transport. They are equipped with a special grip for the clamps.
Groupage
Logistics operation that allows goods that come from different sources/carriers to be combined in a single transport. Various types of goods transported on behalf of several customers with a single vehicle.
Half container
Container with low sides which can be loaded up to 1.10 metres.
Handling
The operations and auxiliary freight services that relate to the handling of goods such as the loading and unloading of goods.
Handling Index
Number of Load Units taken from the storage area.
Haul
The distance travelled during transport (long haul = long distance, short haul = short distance).
Haulage / cartage
The transport of a load by road between defined points.
Haulier
Carrier who transports via road
High density – Low profile cargo
Goods with a high specific weight
Hub
Central point for the collection, sorting and distribution for a particular region or geographic area.
Hub and Spokes
The H&S logic makes it possible to reduce the connections necessary for the interchange of goods and the negative impacts on cost and service generated by cargo shortages. The H&S method requires the concentration of traffic in a few points (hubs) that fan the goods out towards peripheral structures (spokes) from which the final deliveries can be sent out.
Huckepack
Railway service that allows a trailer and possibly also a truck on special low-floor wagons. See also “Piggyback”.
Identification Code
Plate showing the identification of the load unit and all the necessary information about it.
In-Bound Logistics
Logistics process that concerns the flow of products from the supplier to the manufacturing plant.
Incoterms
Set of international regulations issued by the International Chamber of Commerce and used to interpret the shipping conditions used in commercial contracts with foreign countries. Incoterms define the right and obligations of the supplier and customer.
Independent System
Allocation logic for the safety stock in a two-level distribution network which sees the stock stored partly in the peripheral warehouses and partly in the central warehouse.
Industrial Logistics
Process of planning, implementation and control of the efficient and effective flow and storage of raw materials, semi-finished and finished products, and the accompanying information, from the point of origin to the point of consumption, with the aim of satisfying customer needs (definition from the Council of Logistics Management). Logistics therefore includes both the field of materials management and that of physical distribution.
Integrated Logistics
This term indicates the evolution of industrial logistics, where the concept of integration aims to underline that it doesn’t refer to the sum of traditional activities (order management, transport and storage), but to a managerial approach aimed at systematically optimizing the entire logistics chain.
Integrated Logistics Support
Iterative and integrated process aimed at developing a strategy and obtaining the human and material resources necessary for optimizing logistical support. It also influences and guides the engineering project of a product with the ultimate goal of reducing its Life Cycle.
Integrated Supply Chain
The network of companies and businessmen and women who work closely together in the manufacture, transport, distribution and sales of retail goods. Unlike a regular supply chain, an integrated supply chain is more collaborative and can involve the joint development of products, shared information and common systems.
Intelligent Transport System (ITS)
Intelligent transport systems based on telematics.
Intermediate Point
Location where cargo is transferred from one means of transport to another
Intermodal transport
The transportation of goods that uses multiple modes of transport (rail, road, air, sea) but with the same load unit, whether it’s a road vehicle or an intermodal transport unit, without breaking up the load itself.
Inventory holding costs
The total cost associated with holding stock. These costs consist of the cost of the purchase unit, the reordering cost, management costs and stock-out costs.
Inventory Turnover Index
This expresses the degree and time of immobilization of warehouse stocks. It is a tool for solving the problem of sizing the inventory (optimal stock). The “value” inventory turnover index comes from the following ratio: cost of goods sold / stock. Meanwhile the “quantity” inventory turnover index comes from the following ratio: Sold quantity / average level of stock.
ISO (International Standardization Organization)
Geneva-based global standardization body with more than 90 participating countries.
Issue rules
The set of instructions for ordering goods which includes parameters, for example the re-ordering levels by category and quantity per order.
Item or article
Physical item managed by a warehouse, a production unit or a sales network which refers to a well-identified physical object (product, group, component or material) because it is registered in the company data with its own code number and its specific description, so much so that it is also commonly called an item code or simply a code.
ITU (Intermodal Transport Unit)
Containers, swap bodies and semi-trailers.
Just in Time
Industrial organization of production methods for which components are produced and delivered according to the immediate assembly needs, at the right time. It tends to reduce warehouse stocks as much as possible. In practice it translates into the organizational capacity of the company upstream to keep a safety level of stock in order to be able to have a product ready at the time it is desired by the downstream user.
KIT
A number of individual units of items that are supplied or used as one piece.
Kitting
Logistics process aimed at the preparation of kits. It consists of grouping the individual parts necessary for the assembly of a product into a set, creating a package that is called a “kit”. The assembled kit is delivered to other assembly line operators who will in charge of assembly the final product.
KPI (Key Performance Indicator)
Performance indicators are numbers or ratios that indicate the effectiveness and efficiency of part or all of a process, compared with a predetermined objective. They measure the status of a process over time and help to verify the current condition of a business, to change the trend and to find the starting point for subsequent improvements.
Labour
Group of people employed in handling operations within Distribution Centres or stores. It is defined as direct when the size of the labour force is directly proportional to the volumes of the goods to be handled
Land Carriage
Transport over land.
Last mile
The last mile is the route goods take from a logistics hub to their final destination
Last-In First-Out (LIFO)
Warehouse evaluation system. The concept rests on the idea that the latest goods in are the first to go out.
LCL (Less than Container Load)
A container filled at the expense and risk of the carrier. In operational terms, an LCL is considered to be a container in which multiple deliveries or part deliveries are loaded.
Lead Time
Total time between the time the order is placed by the customer and the actual delivery of the goods.
Lead Time
The time between an order and its delivery.
Lead time offset
The date on which a planned order needs to be fulfilled in to meet the planned delivery date
Lean Manufacturing
Lean manufacturing or lean production is the set of concepts that perfectly represent Process Management or the management of all the processes that were inspired by TPS Toyota Production System (see TPS Toyota Production System)
Lean Production
Concept based on the objective of reducing the complexity of production processes.
Legal Weight
Weight of the goods including packaging
Line of Balance
Technique used to plan and control the production of batches of speciality products that must be shipped sequentially over a period of time.
Load
Broken down into three types: full, drop (partial) and groupage (mixed pallets). This can be 1) Full Load; 2) Load Factor; 3) Loading Space; 4) /Payload
Load capacity
Total volume of the load compartment of a vehicle which is expressed in cubic metres or in litres. The three linear measurements of height, length and width usually provide a more useful understanding and evaluation of volume. / The overall weight that a vehicle or storage system can support, expressed in metric tons.
Load Unit (of Unit Load Device)
Generic terms to indicate the load modules used for transport. Three levels can be identified: single package (first level), pallet or similar (second level), container, swap body and semi-trailer (third level).
Loading area
Area of the loading deck used for transport. It is expressed in square metres or using the two linear dimensions.
Loading Dock
The dock where loading is carried out.
Loading unit
“Containers or swap bodie”� [UN / ECE] or in other words the containers without rolling axles for the loading of goods in intermodal transport.
Locker
Electric parcel lockers used for the delivery of purchases made online.
Logistics
The global management of both physical and information flows. Physical flows can be of raw materials (supply logistics), semi-finished products (industrial logistics) and finished products (distribution logistics).
Logistics channel
The appropriate resources and structures that enable the physical flow of goods and information from producers to customers and vice versa (the recovery of packaging and end-of-life product and after-sales technical support).
Logistics costs
There are six groups of costs inherent to the logistics activities of a company: costs for order processing and IT systems; staff costs; storage costs; inventory and maintenance costs; costs related to lots; transport and distribution costs.
Logistics Flow
The materials and information exchanged within the Supply Chain, from suppliers through to end customers, via procurement, production and distribution.
Logistics Operator (LO)
The logistics operator or provider is able to propose solutions for the management of the flow of goods from door to door, choose the most suitable forms of storage and combine the means of transport in the right way (see also Third Party Logistics Provider).
Logistics outsourcing
Process by which companies assign the management of one or more logistics functions or activities to external suppliers for a contractually defined period of time. This agreement may provide for an external third-party company (3PL) to collect the goods produced by the customer’s manufacturing units, store them and send them directly to the point of sale or to the end customers indicated by their customer, dealing with all administrative and customs aspects as well as those associated with transport and storage.
Logistics platforms
Specialised infrastructure where advanced logistics services are carried out. Usually located in catchment areas where the demand for logistics services is concentrated, they are intended to meet the needs of operators who offer outsourced logistics services. They can also be used by companies that produce or market goods and carry out these services themselves. They are therefore processing (almost manufacturing) and handling units which can generate high added value to goods.
Logistics Provider
Company that offers a set of services, combining simple transportation with services offering storage and management of physical and IT flows.
Logistics Service Centre
Public or private structure equipped with IT or telematic network tools and technology. They were designed to meet the IT, logistics and training needs for a specific community, company, district or geographical area.
Long combination vehicle
Commercial vehicle with a length that is greater than the norm.
LSA (Logistics Support Analysis)
Interactive analytical process, part of the product engineering process, which leads to the identification and evaluation of its logistical support making it possible to define the optimal support needs and make changes to the engineering.
LTL (Less than Truck Load)
Term used if the quantity (weight or volume) of one or more batches of goods does not fill the capacity of the standard means of transport, in other words a truck.
Make-to-Order
Production to customer order and order fulfilment direct from the factory.
Make-to-Stock
Production for the warehouse and fulfilment of customer orders from the availability of products in stock.
Map
Distribution map of storage locations within a warehouse, appropriately coded according to the location and function of each area and saved in the management system archives.
Material management
The planning and control of activities related to the flow of materials from suppliers to the end of the transformation process.
Material requirement planning
Materials planning technique in which production orders and the procurement of components depend on production programmes for the final items and use the bill of materials and take into account supply times etc.
Material Requirement Planning (MRP)
This algorithm schedules production and is very effective in producing standard products for repetitive batches. MRP systems take the main production plan as a starting point and make it possible to determine the quantity and relative timing of each requirement of materials and ensure they are all covered by a plan of orders, for the items of each level of the bill of materials. Processing is accomplished using the filter of any minimum lots, lead times etc.
Materials handling
The physical management of products and materials from the time they are purchased until the time they are shipped.
Materials management
The logistics of products arriving from suppliers governed by the production process. The handling and management of materials and products from acquisition to production.
Merchandise mix
Assortment of products.
Merchant
The trader who manages the purchase or sale of goods in large quantities.
MES (Manufacturing Execution System)
This indicates a computerized system that has the main function of managing and controlling the production of a company.
Midpoint return
Route through the picking area which sees it divided into two sections by cutting the work aisles in half. In each part the operator carries out picking operations with return-type paths. The mission is completed by two cross aisles which can be found in the first aisle to be visited on the left and in the last one to be visited on the right when viewed from the front I/O.
Miniload
Automated warehouse served by stacker cranes for small load units.
Minimum Bill of Lading
The minimum load agreed in a transport policy (especially naval ones). The charge can be either for a defined amount or per ton, based on the quantity.
Multimodal Transport Operator (MTO)
A multimodal transport operator is the company who is responsible for carrying out a transport using different vehicles and modes.
Net tare weight
The weight of an empty container excluding the weight of the goods contained in it.
Net tonnage
This corresponds to the sum of the volumes of all the spaces inside a ship that can be used for commercial purposes.
Net weight
The weight of a product without the container.
Nominated carrier scheme
Point of sale specifications that tell suppliers which carriers should be used to transport goods to their distribution centres.
OEM (Original Equipment Manufacturer)
A manufacturer who buys and incorporates other suppliers’ products into their own products.
Omnichannel approach
Strategy that involves the creation and management of different touch points and sales channels, both physical and digital, through which the customer can interact with the brand totally autonomously, enjoying a coherent and seamless shopping experience, whatever medium or channel is used.
Open top container
A container equipped with a solid removable roof or with a rubber tarpaulin so that it can be loaded and unloaded from above.
Order consolidation
Process by which Load Units from different picking operations are brought together and sent to individual customers or individual destinations. It includes the final checking operations when shipping documents are matched.
Order Cycling System
This method involves taking inventory at predetermined intervals, such as every 30, 60 or 90 days and then placing orders to ensure there is sufficient stock until the next inventory is taken.
Order Form
This is a form that is completed on the web in order to place a purchase order.
Order fulfilment
Term that indicates the complex procedure triggered by an Order Form, such as the collection of the ordered goods from the warehouse and their shipment by carrier. This process also includes any possible complications and exceptions such as errors in the orders, partial shipments, returns and replacements.
Order management
Acquisition and processing of data relating to orders. Note: order management is sometimes limited to orders to suppliers.
Order picking
Picking method in which the mission of each individual warehouse operator is to fulfil a complete order or a fraction of the order.
Order planning
The planning necessary to carry out orders over subsequent periods, given the delivery times agreed for the orders and the time necessary for the various operations that must be carried out for each order and dependent on the resources available and requested.
Order point
The management model for the material inventory using an order point involves re-ordering a purchase lot every time the stock drops to the level set as the order point.
Order processing
The series of activities required to process an order.
Order-notify
This is a shipment requiring the consignee to surrender the original endorsed bill of lading at delivery. A shipper may use this method to guarantee payment for goods shipped. It’s most commonly used with truckload shipments.
Out of stock (OOS)
This happens when the stock of a specific item in the warehouse or store runs out.
Outbound consolidation (Break-Bulk)
The consolidation of many small shipments for several customers into one larger load. This is then sent to a location close to the customer and broken down into small shipments to be distributed to customers.
Outlet planning
The selection of distribution channels, and the planning for the flow of goods for that selection in the distribution plan.
Outsourcing
The use of services and resources outside the company in order to streamline the production processes and optimize results on the market. In this way a company can enhance its distinctive skills by focusing on activities with greater added value.
Outward handling (Handling-out)
Physical or accounting operations carried out on outgoing goods. They can be carried out from the moment the orders are rolled out to the actual moment the goods leave the warehouse.
Packaging
Materials used for the containment, protection, handling, delivery and presentation of goods.
Packaging (or packing)
Material used to contain and protect certain goods, from raw materials to finished products in order to enable them to be handled and delivered from the producer to the consumer, including disposable items used for the same purpose.
Packing list
A list that indicates the contents of a container.
Pallet
Platform, usually made of wood, on which packages are stacked to facilitate the loading, unloading and storage of goods. It can be two-way or four-way, depending on whether it can be lifted by the forks of special lifting machinery on just two or all four sides. Sizes typically range from 1 x 0.80 m (the official Europallets) to 1 m x 1.20 m (ISO pallet).
Pallet Cage
Metal structure consisting of a base and two framed uprights, which is applied to the pallets to ensure better stability for the load during picking and shipping.
Pallet truck
In-house handling vehicle with or without electric motor, which can transport one or two caged pallets or two or three roll containers, depending on whether it�s equipped with a �short fork� or a �long fork�.
Parcel
First level of load units or in other words separate packages or packaging units of one or more items.
Parts List
The list of parts that make up a product or assembly.
Paternoster
Vertical storage system or carousel with rotating shelves for storage and intensive filing with shelving that slides vertical along an internal guide.
Peripheral Warehouse
Storage units located within the distribution network between the central warehouses and points of sale. They are characterized by the presence of safety supply of stock which can be used to meet the demand of end customers in their geographic area.
Perpetual inventory system
An inventory control system where a running record registers the available quantity of each item.
PGTL
General Plan of Transport and Logistics
Phygital Supply Chain
“Phygital” is a neologism which derives from merging the terms “Physical” and “Digital”. In logistics, it describes the perfect integration of the physical flow of materials and the digital flow of information along the entire purchasing and supply chain. The transformation of the Supply Chain in a “Phygital” key favours collaboration and communication between all the players in complex logistics chains.
Physical allocation of the ULDs
See Dedicated Zones, Picking Zones, Dedicated and Shared Positions.
Physical distribution management
The planning, execution and control of activities related to the flow of materials, from the end of production to delivery to customers.
Picking
Physical preparation of an order.
Picking
The process of taking items from stocks of finished products to be shipped to the customer, or taking components to manufacture products.
Picking List
List of packages of goods that are required to prepare an order.
Piggyback
The transport of loaded semi-trailers on railway wagons (combined road-rail).
Piggyback transport
The transport by rail of a suitably adapted semi-trailer on a special wagon called a “pocket wagon”
Planner
It is responsible for managing the stock of one or multiple Distribution Centres and responds to the relative level and service in the points of sale, in compliance with parameters set by the budget
Platform
Area where goods pass through to be organized for delivery. Here it’s possible to change the carrier, the size of the exchange unit or add tangible or in tangible services. There is no stock on the platform, the role of this area is to allow for groupage and degroupage operations.
Point of sale (POS)
Physical, logical or virtual location where a consumer can purchase a product or a service; Structure for the distribution of food or non-food products to the public, usually located inside, on the edge or outside of built-up areas.
Pop Up Store
These are short-term stores which come into existence over a given period of time and usually emerge without much prior notification. They attract crowds and then either disappear or turn into a different type of store.
Postponement principle
The principle of deferral. Inserting a decoupling point as deep as possible inside the production cycle, separating management according to forecast and management according to orders. In this way it becomes possible to differentiate the products as much as possible in order to be able to reduce delivery lead times.
PPE
Personal Protective Equipment
Primary packaging
Packaging designed to be a sales unit for the end customer or consumer. Possible examples are boxes, cases, bags, blisters, cans, bottles, flasks, jars, tins and kegs.
Pro forma invoice
An invoice, issued by the supplier of a shipment, which informs the buyer about the kinds and quantities of goods to be sent and specifies their value and characteristics (weight, size etc.)
Procurement
The process of obtaining goods, services or functions from a supplier in the correct quantity and quality.
Production lead time
The time required to produce an item from the moment the order is received until the item is available for packaging.
Productivity
A number of operations of a certain kind, for example the picking of individual packages, carried out by employees over a specific unit of time, usually an hour. The unit of measurement in this case would be [packages / hour * employee].
Program Evaluation and Review Technique (PERT)
Economic-mathematical and graphic technique of linear programming (operational research) which is used for the programming of industrial production in the execution phase. It is based on the identification of the critical activities which helps to define the minimum and maximum times within which the required activities can be carried out. The network diagram highlights phases that are linked to constraints (time restrictions) and phases that allow saving in terms of time. The concepts of critical and grid paths are used (see CPM).
Pull Strategy
Management logic of the supply chain in which the product is pulled along the distribution channel by emerging demand. Production is governed by the final demand seen in the distribution process, so the entry of raw materials is not anticipated with respect to the orders.
Pull system
System in which the customer requests the supply of goods according to their stock level and the demand they are experiencing.
Purchasing lead time
The length of time between the decision to purchase an item and when it actually comes into stock.
Push Strategy
Management logic of the supply chain in which the product is pushed along the production-distribution channel according to requirements. The progress of the production is regulated according to the forecast of requirements in the distribution system and the synchronization of growing activities.
Quarantine Stock
Stock unavailable for use because of quality or health and safety checks.
Real-time
Management system access that involves information being processed and saved at the same time it is acquired from peripheral units, making it immediately available to interested users.
Record
Single element of an electronic archive which contains information relating to an item, a supplier, a storage cell or other.
Reorder level
Stock quantity level that is controlled by the issue of an order. The reorder level is usually calculated by considering the demand during the lead time and the safety stock.
Reordering costs
The total cost of issuing a repeat order of an item, externally from a supplier, or for an internal product. Costs may include elements to cover order preparation, administration and IT overheads etc.
Replenishment
The process by which the stock of a particular item is replaced in the warehouse or at the store.
Requested date
The date an item is required for use. In a Material Requirements Planning (MRP) system, this date is obtained by listing the items of Bill of Materials of a Master Production Schedule (MPS) and then calculating the net requirements of the quantity needed, while still taking into account the stocks that are already available.
Reserved stock
A certain quantity of stock that has been reserved, but not yet issued from stock.
Retailer
Anyone who buys a quantity of goods from a wholesaler and then resells them retail in their shop.
Return (Path)
Route tracing method in the picking area according to which the operator enters the aisles in which he needs to perform picking and travels through each aisle to the farthest picking position then returns back and leaves the warehouse by the same access aisle from which he entered.
Reverse Logistics
Management of the flows of returning materials (returns, packaging, hazardous waste) from customers to suppliers or to appropriately prepared collection centres. This needs to be managed in order to achieve savings and also safeguard the environment at the same time.
RFID (Radio Frequency Identification Device)
Technology for the identification and automatic storage of information relating to items (automatic identifying and data capture AIDC) based on the storage capacity of data in specific electronic labels known as tags (sometimes called transponders or electronic and proximity keys) and the ability of these tags to respond to remote scanning by special fixed or portable devices called readers (or sometimes interrogators).
Roller conveyor
A series of rollers, that can be fixed or automatic, along which pallets can slide into or out of an automatic storage system.
Safety stock
The minimum level of stock that must always be present in the management of a warehouse to protect against the difference between expected consumption and actual consumption and between expected delivery and actual delivery times. This therefore helps to protect against stock-outs during the replenishment process.
Saturation
The level of occupancy of a structure or of equipment, which must be maximized in order to optimize its use. This value is usually expressed as a percentage.
Scheduling
One of the phases of the planning process when planning times and priorities in terms of materials and human resources are scheduled in order for the production process to function correctly. It helps to set the times and location of components so that personnel and equipment are organized in the best possible way.
Secondary packaging
Packaging conceived to group a certain number of sales units at the point of sale, regardless of whether it is sold as such to the end user or whether it serves only to facilitate the replenishment of shelves in the point of sale, it can be removed from the product without altering its characteristics. Possible examples are cardboard boxes, packs, trays, baskets and crates.
Selectivity
The ratio between the number of directly accessible Load Units and the storage capacity stored.
Shipping Conditions
All the conditions agreed (or to be agreed) between a carrier and a forwarder or recipient regarding the type of shipment and the charges that need to be paid to the carrier. It also specifies whether these charges must be pre-paid or paid on collection.
Shipping costs
Costs incurred by the shipper in moving the goods from one place to another under the terms of the transport contract. In addition to transportation costs this may include elements such as packaging, documentation, loading, unloading etc.
Shipping document
A document prepared by the shipper which includes a contract of carriage. It contains details of the goods to be transported to the port of loading and is signed by the land-based carrier as acknowledgment of receipt.
Shipping Frequency
The number of times in the unit of time taken as reference, that shipments are or will be made.
SKU (Stock Keeping Unit)
Minimum indivisible unit of product placed in stock.
SLOT (Smart Locking Tool)
Innovative automated access opening system that allows selective access to a single compartment of the tray / case.
Sorting
A sorting operation in which the picked items are divided according to their destination (by customer or geographical area). It can be done at the same time as picking by depositing the items in different containers according to the destination. Alternatively, it can be deferred and performed in a second phase, after all the picking operations to fulfil the order have been completed and can be achieved manually or automatically using conveyor belts.
Splitting (in transport)
Part of the transportation that is assigned to one of the parties, for example a forwarder or agent, to book a carrier for a specific journey
Stacker crane
Three-axis electromechanical device with rotating forks and side guides at ground level. It is used in all intensive or automatic warehouses with heights of over 12 metres.
Stacking
A method of stocking goods that does not require the use of racking because the load device units are simply placed one on top of another on the floor.
Staging areas
The space around the entrance and exit doors in which packages or pallets of goods arriving and awaiting storage or waiting for collection or shipment can be stored.
Stock analysis
The process of analysis of stock and the model of management used in order to highlight any differences compared to the normal measures.
Stock coverage ratio
This is the number of days of stock consumption that the stock held is able to guarantee.
Stock discrepancy
The difference between the stock held currently and the stock calculated or recorded
Stock level
Quantity of stock in storage, which can be expressed in quantity, in packages, in weight, in pallets, in value, or in weeks of sale by dividing the relative amount by the average weekly output.
Stock Location System (SLS)
System where all the places in a warehouse are identified in order to facilitate the storage of and search for stock.
Stock management
Inventory planning and control in relation to their quantity, quality and positioning; The planning and control of the quantities, quality and location of stock.
Stock out
Out of stock situations when the stock of a particular item runs out in the warehouse or at the store.
Stock Turnover
A widely used measure to check stock performance expressed as the ratio of the costs of the units sold compared to the average value of the stock.
Stock-out costs (Shortage costs)
The economic consequences of an external or internal inability to satisfy a request from the warehouse. External impacts can include “backorder” costs, loss of profit due to lost sales and loss of future profits due to loss of customers.
Storage
The deposit of goods and products in a warehouse for a short period of time.
Supply chain
Overview of the processes of production, transformation, distribution and marketing which provides an approach that enables the integration of all the players, both upstream and downstream, in the various procurement stages that lead to the final market.
Supply Chain Management (SCM)
The philosophy of integrated supply chain management, from the procurement processes to physical distribution to the market. Each step is considered a link in a large chain and the SCM is a set of processes that incorporates a community of business partners who are committed to the common goal of satisfying the final customer.
Swap body
Transport units which are similar to containers, but come in a variety of dimensions (2.50 metres wide, 2.62 metres high and 7.15, 12.50 or 13.60 metres long) and are used for intermodal transport.
Systems Integrator
This term indicates a company that deals with systems integration.
TEU (Twenty-foot Equivalent Unit)
This is the standard measure of volume in the transport of an ISO container. Most containers have standard lengths of 20 and 40 feet: a 20-foot (6.10 m) container corresponds to 1 TEU while a 40-foot container corresponds to 2 TEU. Although the height of the containers may vary, this does not affect the TEU measurement. This measurement is used to determine the capacity of a ship in terms of the number of containers, the number of containers handled in a port in a certain period of time and can be the unit of measurement by which the cost of shipping is determined.
Third Party Logistics Provider (3PL)
An operator to whom a company can entrust all or part of its logistics activities (see also Logistics Operator).
Time charter
Time-based rental agreement.
Time to customer
The time between the moment a customer requests goods or a service to the moment he receives this product or service.
Time to market
The time between the beginning of the design process of a new product and its marketing.
Total Cost of Ownership
This is the sum of all the costs incurred for the design, construction and management of a point of sale.
Total lead-time
The total time that elapses between the decision to issue a replenishment order and when the goods become available for use. This is the sum of the Order Lead Time, the Purchasing Lead Time, the Transit Time and the Goods Inward Lead Time phases for a replenishment order.
Touchpoint
Touchpoints are channels through which the company and the customer can get in touch for example in a physical store or on a website.
Traceability
The identification of the goods and materials used in the manufacturing or production process in order to highlight the link between the materials and the production batch and to trace them in the event of any subsequent defects.
Tracking and Tracing
Logistics traceability and goods tracking. The first term tends to identify them in transit, while the second one deals with the moment they arrive at their destination. Tracing is intended as a continuous or on request verification of the position of a vehicle, a transport unit or goods in general. Tracking, meanwhile, indicates the route of a vehicle, a transport unit for goods in general.
Transit Point
Areas and storage points where the flow of goods from different origins can transit, without being stored, before it’s sent on to other different destinations.
Transit Time
The time it takes to physically move goods between different stages of the supply chain, or sideways to another facility.
Transport Contract
Contract by which a party, known as the carrier, undertakes to transport things from one place to another for a fee, within the time frame established by the contract. The carrier performs this transportation on behalf of one person (the sender) and undertakes to deliver the items to another person (the recipient).
Transport declaration
Document used for road transports, which shows the list of goods loaded on the vehicle and refers to the copies of the delivery note which are attached.
Transport of delivery document (Documento di Trasporto or DDT in Italian)
It replaces the packing slip and can be omitted if the goods travel together with the relevant invoices.
Transportation Hub
Buildings and facilities used for freight transportation services, for example transhipment equipment which can serve a number of freight companies. A transportation centre is often owned and operated by the many companies that use it.
Two-bin inventory system
Stock re-ordering system which consists of keeping the purchase quantity to be re-ordered fixed and re-ordering from one time to the next (with variable reordering periods).
Upright
Vertical metal frame that supports the shelves of racking/shelving.
VLM (Vertical Lift Module)
Vertical automated storage system using an automatic system for storing goods at height and for bringing them to an access opening positioned at an ergonomic height. It is the ideal solution for those that have very little floor space and need to stock a large quantity of goods.
VMI (Vendor Managed Inventory)
Agreement by which the supplier or manufacturer is responsible for maintaining a certain level of stock at the customer or distributor’s premises. The supplier receives data relating to sales and stock levels from the customer systematically and in real time. Based on this data, the supplier is fully and exclusively responsible for processing it and subsequently creating and complying with restocking plans.
Warehouse inventory
Warehouse inventory is an operation aimed at evaluating the stock of materials, products and semi-finished products at the end of the company year. This activity involves making a list of all the assets, grouped by homogeneous categories in order to determine their value, which must then be recorded in the balance sheet and represents a cost item for the company that affects their annual results.
Warehouse Management System (WMS)
This is a software system designed to support the operational management of the physical flows that pass through the warehouse, from checking incoming goods at goods in to the preparation of shipments for customers (but in inter-operational warehouses, this could also be other departments).
Warehousing
The activities related to the receipt, storage and handling of materials in a warehouse.
Workload
The amount of work that is assigned to a production unit to be done in the future, for example a workstation, etc.
Zone Picking
Picking system divided into areas and manned by different operators which has the primary objective of producing the routes and consequently the picking times.
