A plain-English guide to the terms and concepts that matter most in modern supply chain management, logistics, and eCommerce fulfilment.
3PL (Third-Party Logistics) A company that manages outsourced logistics services on behalf of another business, including warehousing, order fulfilment, and freight. See also: Fourth-Party Logistics (4PL).
ABC Analysis A method of classifying inventory into three categories — A (high value, low volume), B (moderate), and C (low value, high volume) — to prioritise stock management effort and resources.
Advance Shipping Notice (ASN) A document sent by a supplier to a buyer ahead of a delivery, detailing what is being shipped, in what quantities, and when it will arrive.
Agile Supply Chain A supply chain designed to respond quickly to changes in demand, disruption, or market conditions, prioritising flexibility over rigid efficiency.
Available to Promise (ATP) The quantity of a product that can be committed to a customer order based on current inventory and confirmed production or supply schedules.
Backorder An order for a product that is currently out of stock but will be fulfilled once inventory is replenished.
Batch Picking A warehouse picking method where a single operative picks items for multiple orders at the same time, improving efficiency in high-volume fulfilment operations.
Bill of Lading (BOL) A legal document issued by a carrier to a shipper that records the type, quantity, and destination of goods being transported.
Bonded Warehouse A secure facility where imported goods can be stored without paying customs duties until the goods are released for sale or export.
Buffer Stock See: Safety Stock.
Bullwhip Effect The tendency for small fluctuations in consumer demand to cause increasingly large swings in orders further up the supply chain, leading to overstocking or shortages.
Carrier A company that transports goods on behalf of shippers, either by road, rail, air, or sea.
Click and Collect A fulfilment model where a customer orders online and collects the goods from a physical location — a store, locker, or designated pick-up point.
Cold Chain A temperature-controlled supply chain used for perishable goods such as food, pharmaceuticals, or chemicals, maintained from production through to final delivery.
Consignment Stock Inventory held by a seller or distributor but owned by the supplier until it is sold or used, reducing upfront costs for the holder.
Contract Logistics A long-term outsourcing arrangement in which a logistics provider takes responsibility for specific supply chain functions under an agreed service contract.
Cross-Docking A logistics process where incoming goods are transferred directly from inbound to outbound transport with little or no storage in between, reducing handling time and cost.
Customs Clearance The process of complying with import or export regulations, including the submission of documentation and payment of any applicable duties or taxes.
Cycle Count A regular, rolling audit of a portion of inventory — rather than a full stock count — used to maintain accurate records without disrupting operations.
Dark Store A retail fulfilment centre that is closed to the public and operates solely as a picking and despatch hub for online orders.
Dead Stock Inventory that has not been sold or used within a given period and is unlikely to be sold, tying up working capital and warehouse space.
Demand Forecasting The process of predicting future customer demand using historical data, market trends, and analytical models to inform purchasing and production planning.
Demand Planning A broader process that uses demand forecasts to align inventory, production, and supply chain capacity with anticipated customer needs.
Despatching The process of preparing and sending out goods from a warehouse or fulfilment centre to the end customer or distribution point.
Direct-to-Consumer (D2C) A model where a brand sells and ships products directly to the end customer, bypassing wholesale or retail intermediaries.
Distribution Centre (DC) A warehouse facility used to receive, store, and redistribute products to retail locations, other warehouses, or directly to consumers.
Drop Shipping A fulfilment method where the retailer does not hold stock but instead passes customer orders directly to the supplier or manufacturer, who ships the goods directly to the buyer.
eCommerce Fulfilment The end-to-end process of receiving, picking, packing, and delivering orders placed through an online channel, including returns management.
EDI (Electronic Data Interchange) The structured, electronic exchange of business documents — such as purchase orders and invoices — between companies in a standardised format, without manual intervention.
ERP (Enterprise Resource Planning) Integrated business management software that connects functions such as finance, inventory, procurement, and operations into a single system.
Excess Inventory Stock held in quantities beyond what is needed to meet current or near-term demand, resulting in increased holding costs.
Fill Rate A measure of the proportion of customer orders fulfilled from available stock without delay or backorder. A high fill rate indicates strong inventory performance.
First In, First Out (FIFO) An inventory management method where the oldest stock is used or sold first — particularly important for perishable or time-sensitive goods.
Freight Audit The process of reviewing carrier invoices against shipment records to identify billing errors, overcharges, or discrepancies.
Freight Forwarder An agent who arranges the transportation of goods on behalf of shippers, coordinating carriers, customs documentation, and logistics across international or domestic routes.
Fulfilment Centre A warehouse facility dedicated to processing and despatching customer orders, typically used by eCommerce businesses. Different to a traditional warehouse in that it focuses on speed and order accuracy rather than long-term storage.
Goods In The process of receiving and checking incoming stock at a warehouse or distribution centre before it is put away or made available for picking.
Goods Receipt A record confirming that goods have been received from a supplier, often matched against a purchase order and invoice as part of a three-way match process.
Gross Margin Return on Investment (GMROI) A metric that measures how much gross profit a business earns for every pound invested in inventory. A useful tool for assessing the profitability of stock decisions.
Hub and Spoke A logistics distribution model in which goods are consolidated at a central hub and then distributed outward to multiple smaller locations or delivery points.
Hybrid Fulfilment A model that combines in-house and outsourced logistics, using a 3PL for some functions (such as overflow storage or specialist deliveries) while managing others internally.
Inbound Logistics The processes involved in receiving, transporting, and storing goods from suppliers before they enter production or distribution.
Incoterms A set of internationally recognised trade terms (published by the International Chamber of Commerce) that define the responsibilities of buyers and sellers for the delivery of goods, including who bears the risk and cost at each stage.
Inventory Management The process of tracking, controlling, and optimising the flow of goods into and out of a business to meet demand while minimising costs.
Inventory Optimisation The use of data and analytical models to determine the most cost-effective stock levels, balancing service levels against holding costs and supply risk.
Inventory Turnover A measure of how often a business sells and replaces its stock within a given period. A higher turnover generally indicates efficient inventory management.
Just-in-Time (JIT) A supply chain strategy in which goods are ordered and delivered as close as possible to the time they are needed, minimising stock holding costs — but increasing exposure to supply disruption.
Kanban A visual inventory management method, originating in lean manufacturing, that uses signals (physical cards or digital triggers) to prompt stock replenishment only when needed.
KPIs (Key Performance Indicators) Measurable metrics used to evaluate performance across supply chain functions — such as on-time delivery rate, order accuracy, or warehouse throughput.
Last Mile Delivery The final stage of the delivery process — from a distribution centre or local depot to the end customer’s door. Often the most costly and complex part of eCommerce fulfilment.
Lead Time The time elapsed between placing an order and receiving the goods. Accurate lead time data is critical for effective inventory planning.
Lean Supply Chain An approach focused on eliminating waste — including excess inventory, unnecessary movement, and overproduction — to reduce cost and improve efficiency.
Less than Truckload (LTL) A shipping arrangement where multiple shippers share space in a single vehicle, used when a shipment does not require a full truck.
Logistics The process of planning and managing the movement, storage, and flow of goods, services, and information from origin to final destination.
Manifest A document that lists the contents of a shipment or vehicle, including product descriptions, quantities, and destination details.
Marketplace Fulfilment The process of picking, packing, and shipping orders placed through online marketplaces such as Amazon, eBay, or Not On The High Street — either from a seller’s own facility or via a marketplace’s own logistics network.
Master Data Management (MDM) The practice of creating and maintaining a single, consistent source of key business data — such as product, supplier, or customer records — across all systems.
Multi-Channel Fulfilment The management of orders and deliveries across multiple sales channels — such as a brand’s own website, retail stores, and online marketplaces — from a single inventory pool.
Near-Shoring The practice of moving supply chain operations to a nearby country rather than a distant one, balancing cost savings with reduced lead times and geopolitical risk.
Non-Inventory Item A product or material that is purchased and consumed directly without being tracked through a formal inventory system.
Omnichannel Fulfilment A fulfilment approach that provides a seamless customer experience across all sales channels — online, in-store, and via mobile — with unified inventory visibility.
On-Time In-Full (OTIF) A supply chain performance metric measuring whether orders are delivered on time and in the correct quantity. Many major retailers mandate minimum OTIF levels and impose penalties for non-compliance.
Order Management System (OMS) Software that tracks and manages orders from placement through to fulfilment and delivery, providing visibility across all sales channels and fulfilment locations.
Order Picking The process of locating and retrieving items from a warehouse to fulfil a customer order. Picking accuracy and speed are key drivers of fulfilment cost and customer satisfaction.
Outsourcing The practice of contracting a third party to manage specific business functions — such as warehousing, transport, or customs compliance — rather than managing them in-house.
Outbound Logistics The processes involved in storing, picking, packing, and delivering finished goods from a warehouse or production facility to the end customer or retail destination.
Packing List A document included with a shipment that details the contents of each package, including item descriptions, quantities, and weights.
Pallet A flat platform used to stack, store, and transport goods. Standard pallet sizes vary by region — UK and European pallets typically measure 1200mm x 1000mm.
Pick and Pack A fulfilment process where individual items are selected (picked) from inventory and then packaged (packed) for despatch to the customer.
Purchase Order (PO) A formal document issued by a buyer to a supplier, authorising the purchase of specified goods or services at an agreed price and delivery schedule.
Put-Away The process of moving goods from the goods-in area of a warehouse to their designated storage location after they have been received and checked.
Real-Time Inventory Visibility The ability to see accurate, up-to-date stock levels and locations across all warehouses and channels at any given moment, supported by technology such as WMS or RFID.
Replenishment The process of restocking inventory to agreed levels after it has been depleted through sales or usage.
Reverse Logistics The process of managing the return of goods from the customer back to the seller, manufacturer, or disposal facility — including returns handling, restocking, refurbishment, or recycling.
RFID (Radio Frequency Identification) A technology that uses radio waves to automatically identify and track tagged items in a warehouse or supply chain, enabling faster and more accurate stock management.
Safety Stock A buffer of additional inventory held to protect against unexpected spikes in demand or delays in supply. Also known as buffer stock.
Sales and Operations Planning (S&OP) A business planning process that aligns sales forecasts with production, inventory, and supply chain capacity to create a unified operational plan.
Service Level Agreement (SLA) A formal agreement between a service provider and a client that defines expected performance standards, such as order turnaround times or delivery accuracy rates.
SKU (Stock Keeping Unit) A unique identifier assigned to a specific product variant — such as a particular size, colour, or pack format — for tracking and inventory management purposes.
Stockout A situation where a product is unavailable because inventory has been depleted, resulting in lost sales or delayed fulfilment.
Supply Chain The end-to-end network of organisations, processes, and resources involved in creating and delivering a product from raw material to final customer.
Supply Chain Management (SCM) The active management of supply chain activities — including sourcing, procurement, production, logistics, and distribution — to maximise customer value and competitive advantage.
Supply Chain Resilience The ability of a supply chain to anticipate, adapt to, and recover from disruptions such as supplier failures, transport delays, or sudden changes in demand.
Supply Chain Visibility The ability to track and monitor goods, data, and processes across the entire supply chain in real time, enabling faster and better-informed decisions.
Third-Party Logistics (3PL) See: 3PL.
Total Cost of Ownership (TCO) A comprehensive assessment of all costs associated with a product or service over its lifetime, including purchase price, operating costs, maintenance, and disposal.
Track and Trace The capability to follow a product or shipment through each stage of the supply chain, providing full visibility of its location and condition at any point.
Transport Management System (TMS) Software used to plan, execute, and optimise the movement of goods, including carrier selection, route planning, and freight audit.
Two-Man Delivery A specialist delivery service for large or heavy items — such as furniture or appliances — requiring two operatives to carry and install goods at the customer’s premises.
Unit Load A quantity of goods assembled and secured together for transportation or storage as a single unit — typically on a pallet or in a container.
Unit of Measure (UOM) The standard quantity in which a product is bought, sold, or stored — such as each, case, pallet, or kilogram.
Value-Added Services (VAS) Additional services performed by a 3PL or logistics provider beyond basic storage and transport — such as kitting, labelling, repackaging, or quality inspection.
Vendor Managed Inventory (VMI) An arrangement where the supplier takes responsibility for monitoring and replenishing a buyer’s stock levels, based on agreed targets and real-time data.
Warehouse Management System (WMS) Software that controls and optimises warehouse operations, including goods-in, put-away, picking, packing, and despatch, providing real-time visibility of stock locations and movements.
Wave Picking A picking strategy where orders are grouped into “waves” and processed together at set intervals, allowing warehouse managers to balance workload and prioritise urgent orders.
Working Capital The capital a business has available for day-to-day operations, calculated as current assets minus current liabilities. Inventory represents a significant component of working capital in product-based businesses.
Zero Inventory A supply chain strategy that aims to eliminate the need for held stock by synchronising supply precisely with demand — most associated with just-in-time manufacturing.
Zone Picking A warehouse picking method where the facility is divided into zones, with each picker responsible for their own zone. Orders are assembled by passing through each zone in sequence.
This glossary is maintained by BlueHub Supply Chain Consultants. Terms are reviewed and updated regularly.