Glossary of Terms

for Third Party Logistics, Supply Chain Management & Fulfillment Operations

Many of the terms used in the world of third-party logistics do not appear in a standard dictionary, nor is there a dictionary of fulfillment or warehouse management definitions. We offer this glossary to help you better understand our business. If you have a term you would like defined, or have a definition that you would like to share with us, please send us an e-mail.

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Jump to terms:

- ABC stratification and classification
- Activity Based Costing (ABC)
- ADC
- accuracy audit
- advanced shipment notification
- AIDC
- aisle
- alliance
- allocation
- APS
- ASN
- automated data capture
- automated data collection

A

ABC stratification and classification
Method for categorizing inventory into groups based upon certain criteria. Examples of ABC stratifications would include classification by turnover, by size of product or storage space required, by sales dollars, and by amount of product sold. ABC stratifications help to determine inventory-planning policy, to optimize inventory turnover and maximize order picking efficiency.

ABC
see activity based costing

Activity Based Costing (ABC)
Costing method that breaks down operations costs into specific activities, called cost drivers, to measure product processing times and their related expenses. Often, time and motion studies are part of activity based costing, to help determine the cost of performing an operation to complete a 3PL or third party fulfillment bid, or to help establish a baseline for improving operational efficiency.

ADC
see automated data collection

accuracy audit
Verification of inventory accuracy, reconciling physical counts of inventory with the inventory data.

advanced planning and scheduling
(definition coming soon)

advanced shipment notification
see ASN

AIDC (automatic identification and data collection)
see automated data collection

aisle
the physical passageway in a warehouse for transit of material handling equipment, such as forklifts, pallet jacks, and people. Aisle also is the location designation of a product on a particular side of an aisle.

alliance
a carrier with which another carrier has formed a partnership to expand the share of ships, planes, or trucks it can offer its clients.

allocation
In inventory management within a 3PF or 3PL operation, allocations are based on actual demand created by sales of a specific item. A standard allocation is the total quantity of a specific item needed for either a specific order or for a specified time period. A firm allocation reserves the inventory for the specific order or time period designated.

APS
see advanced planning and scheduling

ASN (advanced shipment notification)
advanced shipment notifications are used to notify a customer of a shipment. An ASN will often include purchase order (PO) numbers, stock keeping unit (SKU) numbers, lot numbers, quantity, carton number, and pallet or container number. An ASN can be on paper, but most are via electronic notification, principally via EDI (Electronic Data Interchange). Advanced shipment notification (ASN) systems are often combined with bar-coded compliance labeling which allows the customer to receive the shipment into inventory through the use of bar-code scanners and automated data collection (ADC) systems.

automated data capture
see automated data collection

automated data collection (ADC)
Also known as Automated Data Capture and AIDC (Automatic Identification and Data Collection). Computerized systems to automate transactions in warehousing and shipping operations. Data collection systems require interface to collect the data such as scanners and Radio Frequency (RF) receivers (RFID readers), and related terminals and software.