Glossary

A storage rack that is made to store goods in boxes or cartons and designed to speed up the picking process. May be used in conjunction with gravity flow conveyors.

A payment method for goods in which the documents transferring title are given to the buyer upon payment of cash to an intermediary acting for the seller.

The time it takes for a company to convert its investments (in raw materials or inventory) into cash flows from sales. Also called the net operating cycle.

When the buyer pays the seller in advance of shipment of goods. The funds are held by the seller as a deposit, or by an escrow service, until the goods are shipped.

When the buyer pay the seller at the time of order, and the transaction becomes binding on both buyer and seller.

The time period from the spending of money (in raw materials or inventory) to receiving it back in sales receipts. See Cash Conversion Cycle.

An order processing facility or call center that receives orders from customers based on catalog offerings, and ships directly to the customer.

Treating product categories as strategic business units. Also, in procurement segmenting spend into similar or related products areas to improve service and costs.

A graphical tool used to display a list of causes associated with specific effects. Also known as a fishbone diagram or an Ishikawa diagram.

The location, or container slot, where a container is stored on a vessel.

Supply chain planning method for locating distribution centers to minimize transport costs. The analysis excludes other factors, though, like labor and storage costs.

Consolidates the dispatch function into one location.

Restricting the authority to make decisions to a few managers.

Consolidates inventory decisions to one office or department for the company. Often also includes warehouse operations being managed from a single location.

Certification that the supplies or services in question meet specified requirements.

A document issued by an insurance company that is used to verify specified coverage, such as loss or damage to a shipment while in transit.

A document that confirms the origin of goods and most often used for customs and foreign exchange purposes.

The grant of operating authority that common carriers receive. It may specify commodities the carrier may haul, and the routes it may use, and other parameters.

A certification awarded by a buyer to a supplier who consistently meets predetermined quality, cost, delivery, financial, and count objectives.

Customers who consume the output of each other, forming a chain. Ex: Raw materials supplier - to manufacturer - to store - to the buyer of the finished product.

The methods through which a company describes, implements, and manages change within both its internal and external processes.

A notification to modify an order (e.g., purchase order) along with specifying what needs to be changed (quantity, delivery date, etc.).

Converting from one system or product type to another. The process of making the adjustments to switchover.

In logistics, a distribution system, the method through which a company gets its product to the customer.

A dispute between two or more channel partners, where one partner's activities negatively affect the business of the other channel partner.