1st Party Logistics (1PL) - A company or organization that internally manages its own warehousing and shipping activities. These companies have their own packing and storage facilities, as well as their own fleet of trucks.
2nd Party Logistics (2PL) (*See also - Carrier and Common Carrier) - Also known as Carriers, 2PLs are transportation companies that manage fleets of trucks, trains, container ships, and other vehicles. They exclusively deal in the movement of products. Pick up, drop off, payment processing, and customer service related to the shipments are the responsibility of the third party using their service.
3rd Party Logistics (3PL) - Here, eCommerce logistic operations are outsourced to an external organization. These companies provide a range of services, including product storage, inventory management, order management and fulfillment, light assembly, kitting, and return processing. A 3PL can provide smaller businesses with access to lower shipping rates, more favorable contracts, reduced order timelines and improved customer satisfaction typically associated with larger businesses with more resources.
4th Party Logistics (4PL) (*See also- Lead Logistics Provider) - An external organization that handles all aspects of a business’s supply chain and logistics. 4PLs offer a single point of contact that manages relationships with manufacturers, 3PL providers, and shipping companies. These groups often have established relationships with various service providers that allow a smaller company access to better rates and timelines than they could achieve independently.
Abnormal Demand - Request for products or purchase orders that run contrary to the expectations or estimations of a business. Buyer behavior that is not consistent with expected demand based on historical sales data.
Accelerated Commercial Release Operations Support System (ACROSS) - A Canadian Customs system designed to speed up the release of shipments by allowing the electronic transmission of data to and from the Canada Border Services Agency.
Acceptable Quality Level (AQL) - A set limit on the maximum number of defects within a shipment from a vendor or manufacturer, that if exceeded, leads to the wholesale rejection of the shipment. Terms are negotiated with the vendor, by the purchaser, prior to purchase.
Accessibility - A measurement that defines the relative complexity of shipping between two points.
Accounts Payable (AP) - Refers to money your business owes that you've not paid yet.
Accounts Receivable (AR) - Refers to money owed to your business that has not yet been received.
Accreditation - A certification awarded by a governing body attesting to a quality of a business as it relates to their industry or service levels. The award defines aspects of the business's capacity, facilities, competence, integrity or customer service level based on a set standard.
Accuracy - The relationship between the desired result or condition of a product and the obtained result or condition of a product.
Acknowledgement - When a vendor or supplier advises the purchaser that their order has been received.
Acquisition Cost - The final amount spent to obtain a product or products, typically calculated as order quantity multiplied by unit cost.
Active Stock - A term used in warehousing to identify product available for order fulfillment.
Actual Cost - The cost of a final product after factoring in the price of each included unit, cost of shipping, cost of labor, any materials required for processing or packing, and overhead.
Actual Demand - Current customer purchasing behavior.
Actual Time of Arrival (ATA) - When a transportation vehicle was determined to have arrived at its intended destination.
Actual Time of Departure (ATD) - When a transportation vehicle was determined to have departed its site of origin.
After-Sale Service - Customer service and support provided after products have been delivered, including maintenance, repairs and software subscriptions.
Agent - An individual or organization authorized to transact business on behalf of another organization.
Air Cargo - Freight moved by air transport.
Air Carrier - An organization that transports freight via the air.
Air Taxi - For-hire air transportation that moves people or cargo on demand.
All-Cargo Carrier - Air transportation that exclusively moves goods.
Amazon Packaging Support and Supplier Network (APASS) - A network of amazon-certified packaging companies that help sellers meet the packaging standards required by the Fulfilled By Amazon (FBA) program.
Amazon Standard Identification Number (ASIN) - A 10-character alphanumeric code that Amazon assigns to every product sold on their storefront. Similar to a UPC or SKU number.
American National Standards Institute (ANSI) - A United States based organization created to develop, maintain, and promote standardized measurements. ANSI is the US representative to the International Standards Organization (ISO).
American Society for Quality (ASQ) - A United States based organization created to provide training and certification for quality management professionals.
American Society of Transportation & Logistics - A professional organization in the field of logistics and shipping which provides professional training and certifications.
American Trucking Associations - The largest United States trade association representing the trucking industry. This group influences politics to advance interests related to profitability and safety.
American Waterway Operators - A national trade association representing maritime carriers including tugboats, towboats, and barges.
Application Program Interface (API) - A type of software that allows different computer programs to communicate with each other.
Arrival Notice - Communication from a delivering carrier that informs specific parties of the date and time of an order's arrival.
Assemble to Order - A production strategy where the end product is not assembled until a customer places an order. Useful for products assembled from common components to create customized end products.
Assembly - A group of parts that are put together to become an end product or a higher level assembly.
Asset-Based Carriers - Carriers that own their own trucks, warehouses, tools and other equipment. These carriers offer more reliable service and pricing.
Asset-Light LTL Carrier - Carriers that maximize their coverage area while minimizing the number of trucks, drivers, and terminals that they own. This is accomplished through contracts with other LTL carriers and hubs that are providing service in specific areas. These groups do not always provide insight into the specifics of a shipment's movement and delivery times may be longer than other options. They are however typically more cost effective than a standard LTL carrier.
Attributes - Additional classifications of a product based on physical specifications. Also information about a resource, activity or object like what may be found in an instruction manual.
Audit - To examine, verify and adjust payment records, inventory, and billing to reconcile discrepancies and make all accounts consistent with each other.
Audit Trail - A date and time-stamped sequential record of the history and details of a specific product or set of inventory used to track movement, sales and shrink.
Auditability - A measure by which data about a transaction, processes, or event can be substantiated by tracing it to source documents.
Auditing - The process of examining, verifying and adjusting payment records, inventory, and billing to reconcile discrepancies and make all accounts consistent with each other.
Automated Broker Interface (ABI) - A program of United States Customs that allows brokers, importers, carriers and port authorities to voluntarily transmit data about imported goods.
Automated Tariff Filing Information System (ATFI) - Software that creates, files, processes and retrieves ocean freight and terminal tariff information and the essential terms of service contracts created by the Federal Maritime Commision.
Available to Promise (ATP) - Available inventory not committed to other orders, customers, or planned production.
Average Cost - A formula used to determine how much it costs to produce a product. (Average Cost = Total Cost of a Production Run / Total number of units produced).
Back Order - Products that are out of stock, but are expected to be available for future order fulfillment. Such orders are paid ahead of time and reserved for the paying customer when stock is replenished.
Backhaul - A cost saving practice where a carrier's truck will pick up a shipment at or near a destination that is to be moved back to the carrier's origin.
Barcode (*See also - GTIN-14 and UPC) - A series of printed black and white bars that when translated via specialized scanners correlates to alphanumeric characters. In retail and eCommerce, these codes are often translated to a UPC or GTIN to rapidly identify the product in computerized systems.
Barcode Scanner - A handheld optical reader device that directs a beam of light acros a barcode and measures the amount of light reflected back to decode alphanumeric characters read by a computer.
Bar Coding - The process of creating a barcode from alphanumeric characters for computerized readability.
Barrier to Entry - The factors that could prevent an organization or individual from entering a particular market.
Base Currency - During a transaction involving multiple currencies, one monetary denomination is chosen to represent the value of "1".
Bay - A physical location, either in a warehouse or a store front, where goods are stored.
Best Practice - A process or group of processes which have been recognized by industry authorities as providing the desired balance between efficiency, time commitment, cost, performance difficulty, quality, and safety. Often defined by an accepted governing body.
Bill of Lading (BOL) - Similar to a shipping label for LTL carriers, this document provides information about the carrier, the shipment, the starting location and the destination. Typically 3 copies are made, one for the driver, one the driver signs and is kept, and one that gets attached to the pallet being shipped.
Bill of Lading Number (BOL Number) - A series of numbers created by the carrier that allows them to identify a specific bill of lading.
Blanket Purchase Order - A long-term commitment between a business and a supplier that ensures regular purchases and regular deliveries of products over a set period of time.
Booking - The act of reserving goods, space or services.
Bottleneck (*See also - Constraint) - A point of constriction or limited resource availability in a process that limits the effectiveness, output or utilization rate of a production line or service, whether intentionally or unintentionally.
Branding - A unique combination of identifying information (including a name, symbol, design or tagline) created by a business to ensure they are recognized by their customers.
Break-Bulk - Separating a consolidated bulk load into smaller shipments for delivery.
Broker - A third party individual or organization that connects businesses who are seeking each others’ services for a fee.
Bulk Freight - Products that are not contained during transport such as bulk oil and wheat. Such products are shipped in tankers, grain trailers or regular van trailers.
Bundle - A grouping of products shipped together as an unassembled unit.
Bundling - A process in which multiple units are combined into one product for a single combined price.
Business Logistics - Strategies, processes and operations necessary to create, sell and ship goods locally, nationally or internationally.
Business Plan - A document consisting of a brand's long-range strategy, expected revenue sources, and profit objectives accompanied by an estimated balance sheet and budget.
Business to Business (B2B) - A business model that sells goods to other businesses including wholesalers.
Business to Customer (B2C) - A business model that sells goods directly to customers, including retail store fronts and eCommerce web stores.
Buyer - An individual or organization that arranges for the acquisition of goods and services and agrees to the payment terms.
Capacity - A measure of the maximum ability to meet customer demand based on resources, facilities, and personnel.
Capital - Money or other financial resources required to fund the cost of doing business.
Cargo - Product or supplies carried during shipping.
Carrier (*See also - 2PL and Common Carrier) - An organization used to move products or people to a final destination. Also known as a 2PL. e.g. FedEx, UPS, USPS, DHL
Carrier Agreement (Also - Carrier Contract) - A contract that outlines the terms and conditions in which a carrier provides services to a customer.
Carrier Contract Negotiation - The process of setting terms and making mutually beneficial agreements regarding cooperative efforts between a business and a carrier.
Carrier Errors - A mistake in shipping or damage caused during the shipping process.
Carrier Liability - A carrier is liable for all losses, damages and delays caused by their facilities, personnel, and equipment with the exception of harm caused by an act of god, an act of a public enemy, an act of a public authority, an act of the shipper, or the good’s inherent nature.
Cartage Company - A carrier specializing in local pickup and delivery.
Central Dispatching - When one location within an organization is the informational hub for routing shipments, including scheduling pick up and delivery.
Certificate of Compliance - Acknowledgement awarded by the supplier that a good or service meets specified requirements.
Certificate of Insurance - Documentation that insurance has been purchased to cover loss or damage to a shipment while in transit.
Certificate of Origin - Documentation that verifies the origin of imported goods.
Channel Obsolescence - Aging allowances paid to partners as specified in buy-back agreements. Includes materials that become obsolete or goes bad while in a distribution channel.
Channels of Distribution - A series of organizations or individuals that participates in the flow of goods from the raw material suppliers to the end user.
Chargeable Weight - The weight used to determine pricing for shipping. This may be the dimensional weight, or the gross weight of the shipment minus the weight of the container itself.
Chock - A rubber or steel wedge placed firmly under the wheel of a trailer or truck to stop it from rolling. Used in addition to the vehicle's brakes.
Claim - A documented complaint against a carrier or vendor for damage, deficit or other errors within, or caused to, a shipped order that requests reimbursement. Claims must be filed within a predetermined amount of time, but as soon as possible is preferred. Documentation includes photos of the damage, inventory counts, and any other information available including time of delivery and personnel involved in moving the product.
Class Rates - The freight costs that apply to goods during shipping based on size and weight.
Classification - The category a shipment is placed in by a carrier based on its size and weight.
Collect on Delivery (COD) - A delivery agreement where the carrier is responsible for collecting the sale price of the goods at the time the shipment arrives at its destination.
Commercial Drivers License (CDL) - A vehicle operations license which allows the individual to legally operate a commercial motor vehicle over 26,000lbs in weight.
Commercial Invoice - The final bill for the sale value, inventory breakdown and all related shipping costs and charges related to a shipment. Used to inform customs agents about which duties will need to be assessed.
Commodities - Any item commercially exchanged, most often refers to raw materials used in manufacture.
Common carrier (*See also - Carrier and 2PL) - An organization that provides transportation of goods services to the public.
Compliance - A term that refers to how products, services and procedures meet standardized requirements established by a governing authority.
Component - Items that make up a finished product but are not the finished product itself.
Concealed Loss (Also Concealed Damage) - Deficits caused to a shipment that are not immediately visible upon delivery and initial receipt. These errors are common and so best practice is to examine each shipment upon delivery while the carrier is present.
Consignee - The receiver of a transported shipment.
Consignor - The party that originates a shipment, generally the seller.
Consolidation - The process of combining multiple different shipments into a single shipment generally to lower the costs of shipping.
Constraint (*See also - Bottleneck) - A point of constriction or limited resource availability in a process that limits the effectiveness, output or utilization rate of a production line or service, whether intentionally or unintentionally.
Consumer Protection & Safety Commission (CPSC) - A governmental agency in the United States that regulates product safety.
Container - A large metal box for transporting freight via railcar, ocean liner, or a container chassis trailer truck. Standard containers are 8 feet wide, and either 10, 20 or 40 feet long.
Contract - A documented agreement between two or more competent persons or companies willing to provide products or services to each other.
Contract Carrier - A freight transporter that offers their services on an as-needed basis.
Cost - The monetary value per unit of measure of an item obtained.
Cost and Freight (C&F) - Refers to when the seller quotes a price that includes the price of the goods and the price of transportation. The buyer takes over responsibility for damage, loss, and insurance.
Cost of Lost Sales - Profits considered lost due to not having available stock.
Cost–benefit Analysis - A systematic approach to estimating the strengths and weaknesses of a given option, plan, or procedure. Used to determine what potential outcome offers the best balance of rewards versus costs.
Count Method - One of three strategies used to maintain accurate inventory numbers. These strategies include cycle counting (periodic counts often completed with scanners), spot counting (counting as needed, often with scanners), and tag counting (counting by hand, tagging the bay with the count, and tallying the result later).
Country of Destination - The final destination country for goods.
Country of Origin - The country where the goods are manufactured.
Courier Service - A door-to-door service for locally delivering parcels or documents weighing less than 50 lbs.
Cross Docking - A distribution system in which stock is received and stored temporarily while redistribution is coordinated.
Crossdock - A warehouse designed for receiving large quantities of goods and separating it into smaller parcels to be moved to multiple destinations.
Cubic Space - The measurement of space used or available in transportation and warehousing.
Customer Acquisition or Retention - The rate new customers are obtained and existing customers relationships are maintained.
Customer Facing - Employees whose job description involves direct interaction with customers.
Customer Relationship Management (CRM) - The practices, strategies, technologies and guidelines an organization uses to interact with, engage and retain customers throughout the lifecycle of the relationship.
Customer Service - The series of responsibilities required to provide an acceptable level of support and service to people who buy or use a company's products.
Customer Service Representative (CSR) - Employees who are designated to provide customer service and support and act as the primary point of contact for customers.
Customers - Any person or organization that initializes a transaction with another organization for the purposes of receiving a good or service.
Customs - The governmental authorities designated to collect duties levied by a country on imports and exports.
Customs House Broker - A third party entity that can be contracted to oversee the movement of international shipments through customs, ensuring complete and accurate documentation.
Customs Invoice - A document containing a declaration by the shipper as to the monetary value of the shipment. Necessary for calculating duties.
Customs Value - The monetary value of an imported good. Used to calculate duty payment.
Cycle Counting - An inventory system where sections of inventory are counted on a regular schedule, often based on rate of sales.
Dangerous Goods (*See also - Hazardous Goods) - Substances that pose a significant risk to health, safety or property during transport due to explosive, corrosive, flammable, infectious, or toxic properties.
Days of Inventory - The number of days where the current rate of sales can be met with the amount of inventory on hand.
Deadhead - Refers to the travel costs of an empty truck or trailer as it returns to it's point of origin.
Declaration of Dangerous Goods - A special notice given by the party organizing the transportation of potentially or actively hazardous materials that declares the materials present. Typically, this is denoted on the transport documentation as well as on the container itself.
Declared Value for Carriage - The value of the goods, declared by the shipper and listed on the bill of lading, for the purposes of determining insurance liability.
Defective Goods Inventory (DGI) - Items not meeting the minimum quality requirements to be sold due to defect or damage.
Delivery Order - A document issued by customs to an ocean carrier allowing the release of their cargo.
Density - A calculation of a shipment's weight divided by the cubic feet it covers. Used for determining shipping rates through the freight classification system.
Destination - The location of a shipment's final delivery point.
DHL (Dalsey, Hillblom and Lynn) - A German logistics company offering international courier services, package delivery, LTL, FTL, and maritime shipping services.
Dimensional Weight (DimWt) - Also called volumetric weight, this is a measurement of weight based on a package's length, width, and height.
Direct-to-Store (DTS) Delivery (Also Direct Store Delivery (DSD)) - A supply chain model in which a manufacturer or supplier delivers directly to a retail storefront rather than a centralized warehouse owned by the customer.
Dispatching - The activities involved in coordinating fuel, personnel, vehicles and equipment required for shipping.
Distribution (Also Outbound Logistics) - The movement of goods from component manufacture to point of sale. Involves transportation, warehousing, inventory control, order management, tracking, data processing, and communication networks.
Distribution Center (DC) - A warehouse facility that offers value-added services such as cross docking, order fulfillment and packaging.
Distribution Network - A series of interconnected storage facilities and transportation systems that moves physical goods through the supply chain.
Distributor (*See also - Wholesaler) - A third party entity that does not produce its own products, instead purchasing them from manufacturers and selling them to retail outlets.
Dropship (Also Dropshipping) - A eCommerce sales strategy where the seller outsources the manufacture, shipping and customer service of a product. The retailer promotes the product and when a sale is made, the order is forwarded to a manufacturer, wholesaler, or another retailer and is then shipped directly from the manufacturer/wholesaler to the customer.
Dunnage - Packing material used to protect or stabilize goods during transport.
Duty (*See also - Tariff) - A tax that governments put on goods being imported to, and exported from, their country.
Duty Free Zone (DFZ) - An area where goods and cargo can be stored and sold without any import, sales, or duty taxes applied. Products are sold to international travelers in these areas with the expectation that they will take the products to their home country at which time duty or other taxes may be applied.
eCommerce - The practice of doing business and selling goods and services via an internet hosted webstore.
Economy of Scale - When larger volumes of production reduce unit cost as a result of fixed costs to manufacture being dispersed over a larger quantity of units.
Electronic Data Interchange (EDI) - The electronic exchange of business documents between companies or software. A common and standardized way for businesses to exchange invoices and purchase orders. Readable with specialized EDI translation software such as TrueCommerce EDI, MuleSoft, Anypoint Platform, and Jitterbit.
Enroute - A term used to describe goods or vehicles in transit to a destination.
Enterprise Resource Planning (ERP) - A type of software used to manage day-to-day business activity including accounting, procurement, project management, risk management and compliance, and supply chain operations. ERP systems can be locally based or cloud based, the latter of which allows users to access this data and perform these activities remotely.
EPC (Also ePC) - A universal product identifier similar to a UPC but offering greater degree of specificity than a traditional UPC. Whereas a UPC is specific to the US and doesn’t necessarily have to include the GTIN, a EPC is worldwide and contains the GTIN.
Estimated Time of Arrival (ETA) - The probable time that a vehicle carrying a good or product will arrive at its destination.
Estimated Time of Departure (ETD) - The probable time that a vehicle carrying a good or product will leave its origin point.
Expediting - A term referring to moving shipments through the regular channels at an accelerated rate, often at an increased cost.
Export - Goods shipped outside of the country of origin.
Exporter Identification Number (EIN) - A numeric identifier required for exporting. A corporation may use their federally issued Employer Identification Number, and an individual may use their Social Security Number.
Express - The shipping service level of overnight or 2nd day delivery through the use of priority marked packaging and shipping labels.
Fabricator - A type of manufacturer that turns unprocessed raw materials into goods for sale.
Fair Value - Refers to the estimated market value of product or shipment. This estimate is made by accounting for the original cost of the materials minus depreciation, replacement cost, and value on the market if sold immediately. These calculations help carriers set rates for service.
Federal Trade Commission (FTC) - A United States organization that regulates international and interstate trade to prevent anti-competitive actions and deceptive practices.
FedEx (Federal Express) - A small parcel carrier doing business as FedEx Express, FedEx Home Delivery and FedEx Freight.
Field Service Parts Obsolescence - Occurs when inventory kept at locations outside of a manufacturing plant, such as at a distribution center or warehouse, are no longer made by the original manufacturer, no longer align with accepted standards, or are no longer used. The original manufacturer or another vendor may create a replacement item or offer discounted upgrades.
Final Mile (*See also - Last Mile) - Describes the last leg of a product's journey. Final mile services often use smaller, more fuel efficient trucks and will help offload pallets or boxes.
Finished Goods - Product that has been manufactured, assembled and packaged and is ready for retail sale.
Finished Goods Inventory (FG or FGI) - Refers to the amount of completed product that is available for immediate sale.
First In First Out (FIFO) - An inventory management strategy where product is shipped from a facility based on when it was received to ensure product is rotated.
Fixed Costs - Costs which do not change, regardless of the volume of items made or processed.
Fixed Overhead - Costs of maintaining a business space, equipment and personnel that will be required regardless of the volume of items made or processed.
Floor-Ready Merchandise (FRM) - Products that have all of the necessary tags, pricing, and security devices attached. This product can be placed on store shelves with no further adjustment.
Flow-Through Distribution - Where a distribution center or crossdock receives products from multiple sources, resorts the products based on established parameters, and ships it out with minimal storage and handling time.
For-Hire Carrier - A carrier that provides shipping services on demand or as-needed.
Forklift Truck - A class of powered industrial trucks, this vehicle is designed to raise and lower pallets of freight and move it to different locations. They are electric or propane powered, and have a variety of configurations and weight limits. Each state has their own regulatory body for licensing prospective drivers.
Freight Carriers - Companies that haul large quantities of products, ranging in size from a pallet to a cargo container.
Freight Class - LTL Freight is priced based on shipping distance, transport requirements (refrigeration or special handling for example) and density. There are 18 shipping classes numbered 50 to 500.
Freight Forwarder (*See also - Logistics Brokerage Provider) - An organization that acts as an intermediary between a shipper and a carrier, typically on international shipments. Their specialty allows them to respond quickly to changing customer service expectations and international shipping requirements.
Freight - Large quantities of goods being transported from one place to another.
Frustration-Free Packaging (FFP) - Amazon specific packaging that minimizes waste materials, is recyclable and is branded by the seller.
Fulfilled By Amazon (FBA) - Refers to the 3PL service offered by Amazon including warehouse space, inventory tracking, order management, and order fulfillment. Products sent to Amazon must be packaged based on requirements outlined by Amazon's Seller Central, including packaging parameters, specific labeling and documentation.
Fulfillment - The process of packaging and shipping products to complete a customer’s order.
Fulfillment by Merchant (FBM) - A service level offered by Amazon to their sellers where inventory and orders are packaged and shipped by the seller themselves instead of Amazon.
Full Container Load (FCL) - When one shipment fills an entire cargo container.
Full Truckload (FTL) - When one shipment fills an entire semi-truck trailer.
Global Positioning System (GPS) - A navigation and survey system that uses satellites to locate a precise position on earth.
Global Trade Identification Number (GTIN) - A globally unique numeric key that is used to identify a product, established by the international body GS1. Also called a UPC.
Global Trade Identification Number 12 Digit (GTIN12) - Refers to a standard UPC, contains 12 digits
Global Trade Identification Number 14 Digit (GTIN14) - Refers to a UPC on a case of product. Contains 2 more digits than a standard UPC
Goods - Moveable property, merchandise or wares.
Gross Weight - The total weight of a truck, its trailers, its cargo, and passengers.
Handling Costs - The monetary requirements needed to move, prepare, package and ship inventory.
Hazardous Goods (*See also - Dangerous Goods) - Substances that pose a significant risk to health, safety or property during transport due to explosive, corrosive, flammable, infectious, or toxic properties.
Hub - A centralized location that is home to key logistical operations including warehousing, sorting and shipping.
Hundredweight (CWT) - A pricing unit used in transportation based on 100 pounds of weight.
Import - The movement of goods into a country that is not the country of origin.
In-Transit Inventory - The number of products that are currently in the process of being moved geographically.
Inbound Freight and Duties - Costs associated with the movement of product from a supplier to a buyer, including taxes and the cost of administrative tasks.
Inbound Logistics - The transportation of goods and products into the portion of a supply chain controlled by your own company.
Incoming Inspection - Also known as a receiving inspection, the process of verifying the quality and the quantity of an inbound shipment.
Indirect Cost - The cost of doing business that is not directly tied to a particular product but necessary for the product.
Information - Data and the analytical tasks required to process and understand it.
Inherent Advantage - The cost and service benefits of one mode compared with other modes.
Inside Pickup (Also Inside Delivery) - When a driver for a carrier is required to go beyond the front door or loading dock of a building to pick up or deliver a shipment.
Integrated Logistics - A business model that views and manages all parts of a supply chain as if they were part of a single entity.
Intermediate Destination - A stopping point for a shipment before the final destination.
Intermodal Shipping - A system that uses a standardized container that can be transported effectively on multiple modes of transportation.
Internal Customer - A customer within the same organization as the supplier making a request on behalf of another department.
International Standards Organization (ISO) - An organization within the United Nations that sets international standards on units of measure that allow businesses to cooperate more effectively.
Interstate Commerce - The transportation of goods across a state boundary.
Inventory - Every component used to create a product including raw materials, the items required to store, maintain, package or ship other items, and the finished product itself.
Inventory Accuracy - When the on-hand quantity is equal to the expected or estimated quantity.
Inventory Carrying Cost - The total cost of maintaining inventory in a sellable condition.
Inventory Cost - The cost of storing goods, expressed as a percentage of the inventory value including the cost of warehousing, taxes, insurance, depreciation, and obsolescence.
Inventory Location - A place or area that is designated to store goods.
Inventory Management - The process of ensuring the availability of products through maintenance strategies.
Inventory Management Software (IMS) - Software that documents inventory changes over time including sales tracking.
Inventory Planning Systems - Software programs used by purchasers to track retail sales and predict buying patterns. This effort allows businesses to make educated decisions related to which items to stock, in what quantities, and when through demand forecasting. Can also be used to determine when is the right time to plan sales, promotions and other marketing campaigns.
Inventory Turnover - A calculation of how many times a company has sold through their entire stock of product determined by the total cost of goods sold / average inventory value.
Inventory Velocity - The rate at which inventory moves through a stage in the supply chain, including how fast an item remains available for retail sale prior to purchase.
Invoice - A commercial document that contains an itemized list of goods sold, descriptions of payments due and any terms or conditions.
Issuing Carrier - The carrier who has agreed to execute the movement of goods.
Item - A unique manufactured or purchased part or material.
Just in Time - An inventory control system that tracks demand and supply to ensure that items are delivered when they are needed to prevent back stock.
Kitting - Light assembly of components into a defined set of units or end product.
Lading - The cargo or freight being moved by a transportation vehicle.
Laid-Down Cost - The sum of the product plus the transportation cost. Useful for comparing the total cost of a product shipped from different supply sources.
Last In First Out (LIFO) - An inventory management strategy that requires product leave the facility based on when it was received, specifically newest product leaves first.
Last Mile (*See also - Final Mile) - Describes the last leg of a product's journey. Final mile services often use smaller, more fuel efficient trucks and will help offload pallets or boxes.
Lead Logistics Provider (LLP) (*See also - 4PL) - An external organization that can manage the supply chain for another organization.
Lead Time - The total time it takes between when an order is placed and when it is received.
Leg - Describes a segment of a product's journey.
Less Than Truckload (LTL) Carrier Types - National, multi-regional, regional, sub-regional, asset-light, load-to-ride, and reefer
Less-Than-Container (LCL) - Describes an amount of freight that does not fill an entire container.
Less-Than-Truckload (LTL) - Describes an amount of freight that does not fill an entire semi-truck trailer.
Lift Gate Service - A mechanical assembly on the back of a truck that raises and lowers so that freight can be more easily loaded and unloaded.
Load-to-Ride LTL Carrier - These carriers focus on long haul orders and limit the number of stops at terminals and transfers between drivers. This ensures that the product is handled the fewest number of times, reducing the likelihood of damage occurring.
Logistics - Commercial activity involving the transportation of goods to customers.
Logistics Brokerage Provider (*See also - Freight Forwarder) - An organization that acts as an intermediary between a shipper and a carrier, typically on international shipments. Their specialty allows them to respond quickly to changing customer service expectations and international shipping requirements.
Logistics Channel - The segments of a supply chain that are engaged in storage, handling, transfer, transport, and communication functions that contribute to the flow of goods.
Logistics Data Interchange (LDI) (*See also - EDI) - Similar to EDI, an LDI is a computerized system that transmits logistics information related to the movement of goods, inventory levels, shipping schedules, and customer orders. It is typically integrated with other software such as warehouse management software and transportation management systems.
Logistics Management - Strategically managing the procurement, movement, and storage of materials, parts, and finished inventory as well as the related flow of information throughout an organization and its marketing channels to achieve maximum profitability through the cost-effective fulfillment of customer orders.
Low Quantity Threshold - The inventory count at which a "re-order" alert is set to be generated to encourage a reorder.
Lumping - The unloading of trucks and trailers, usually by hand. Can also apply to when a carrier has to assist with loading and unloading a trailer's contents.
Maintenance, Repair, and Overhaul (MRO) - The items that are necessary to create your product, but not used in the product itself. For example safety goggles, batteries, and printer paper.
Make to Order (Manufacture to Order) - A manufacturing strategy where production of a product begins at the time a customer order is received.
Make to Stock (Manufacture to Stock) - A manufacturing strategy where product is manufactured and stored based on forecast demand and replaced as needed.
Manifest - A document listing all goods present within a transportation vehicle, including information about that vehicle and its route.
Material Acquisition Costs - The total cost related to the purchase and receipt of goods including commodity management and planning, purchase price, inbound freight and duties, incoming inspection, receiving and storage.
Material Safety Data Sheet (MSDS) (*See also - SDS) - A document containing information on potential hazards for chemical products encountered in the workplace and care instructions in the event of exposure.
Materials (Commodity) Management and Planning - A strategy related to acquiring commodities with the primary goal of purchasing quality goods and services at the lowest possible prices.
Minimum Weight - A weight set by the carrier used to determine the amount payable for transporting shipments.
Movement of Goods - Product being transferred from one location to another or up or down the supply chain.
Multi-Regional LTL Carrier - A shipping company that operates in more than one region but does not cover the entire country.
Must-Arrive By Date (MABD) - The date set by a purchaser that specifies when a product or order from a vendor must arrive at the retailer's facility.
National LTL Carrier - A shipping company that is able to provide service across the nation by operating dense freight networks including hundreds of trucks and shipping hubs across the country.
National Motor Freight Classification (NMFC) - A standard that sorts a product’s transportability into one of 18 classes based on density, handling, stowability, and liability. The lower the class, the easier the product is to ship, and the lower the rate charged to move it.
Negotiable Bill of Lading (Also Order Bill of Lading) - This bill of lading signifies that the ownership of the goods being shipped is transferred from the consigner to a third party.
Net Weight - The weight of product to be shipped excluding any containers or packing.
Node - A fixed point in an organization's logistics systems where product rests. Includes production plants, warehouses, supply sources and markets.
Non-Negotiable Bill of Lading (Also Straight Bill of Lading) - This bill of lading does not signify ownership of the product listed, and must be accompanied by other documentation if the ownership of the product is transferring upon delivery.
North American Free Trade Agreement (NAFTA) - A trade agreement involving Canada, the United States, and Mexico between 1994 and 2020 which lifted the tariffs on most goods traded between the signatory nations allowing free international trade. Replaced by the United States, Mexico, Canada Agreement (USMCA) in July of 2020.
Notify Party - The organization or individual who shall be notified when a shipment reaches its destination.
Obsolete Inventory - Product that is expired, no longer meets regulatory standards or has no demand.
On-hand - Inventory not already promised to an order or defective. Ready to sell.
On-Time In-Full (OTIF) - The standard retailers use to grade a supplier's ability to meet their order quantities within their expected timeframe.
Opportunity Cost - The concept that considers losses that may arise from using a resource in one way over the next highest valued use of that resource.
Optimization - The process of making something as efficiently and effectively as possible within the constraints of given resources and business capacity.
Order - A request for goods or services.
Order Cycle - The time and processes that begin when an order is placed and end upon the customer's receipt of the product.
Order Entry and Scheduling - The process of receiving an order from the customer and entering it into the company’s order management system. This includes confirmation that the order has been received in accordance with company policy, no fraud is taking place, and confirming availability of inventory.
Order Fill - A percentage of the number of orders processed without stock-outs or back orders compared to the total number of orders placed.
Order Management - Monitoring and controlling the processes related to customer orders including stock promising, order entry, picking, packing, shipping, billing and reconciliation of customer accounts.
Order Management Costs - Expenditures related to acquiring orders and fulfilling them. This includes new product phase ins, order entry, customer maintenance, contract and supply channel management, order fulfillment, distribution, transportation of goods, customer invoicing and accounting.
Order Picking - Pulling product from a warehouse's shelves to fulfill a customer's order.
Order Processing - Any activity related to fulfilling a customer's order.
Outbound Logistics - The movement of product from a production line to an end user.
Outsource - Utilizing a third-party to perform a necessary business function instead of performing it in-house.
Over-box - The process of putting a boxed or packaged item inside of another box for additional protection during shipping.
Over, Short, and Damaged (OS&D) - A report created when a shipment is received with damage or a discrepancy in the quantity received compared to the quantity expected.
Packing List - A document confirming the shipment of goods, broken down line by line to define the contents. Generally a large order from a vendor or manufacturer will have multiple packing lists, one for each box shipped.
Pallet (Also Skid) - A 48 inch by 40 inch wooden base that multiple items are staged upon during shipping. Typically wrapped in plastic to prevent movement in transit.
Parcel Invoice Audit - Review of a company’s shipping bills and invoices with the intention to locate incidents of overcharging and service failures associated with errors in the shipping process.
Parcel Shipment - The shipment of one or more packages that are less than 100 pounds and can be moved by one person. Usually moved via USPS, UPS, and FedEx.
Perpetual Inventory - A form of inventory record keeping where sold items are subtracted and received items are added to a running total.
Personal Protective Equipment (PPE) - Clothing worn to protect personnel against injury in the workplace including gloves, steel-toed boots, safety goggles, hard hats, and high visibility vests.
Physical Supply - The storage and movement of raw materials coming from a source location and being transported to a manufacturing facility.
Pick & Pack - The process of locating and pulling an item from stock to fill a customer's orders and preparing it for immediate shipment.
Pick List - An itemized list of items to be pulled for the fulfillment of outstanding orders.
Picking - The process of locating and pulling an item from stock to complete a customer's order.
Picking by Aisle - A picking method by which items are picked by warehouse location rather than destination or order. Items are sorted into pick-bins during the picking process or after picking. Useful for large numbers of orders that contain few items as it allows traffic in the warehouse to continually flow in the same direction.
Picking by Source - A picking method by which items are picked by order needs regardless of where the product is stocked in the warehouse. Useful for smaller groups of larger orders as it keeps the items in the order together and can be packed without needing to sort the items in the order out later.
Plan-Do-Check-Action (PDCA) - A four-step process for quality improvement. Plan = An improvement strategy is created. Do = The strategy is carried out. Check = The effects are observed. Action = The results are studied to determine what was learned and what can be done better.
Point of Sale (POS) - The time and location at which a retail transaction occurs.
Port of Entry - A maritime port where goods are imported into the country.
Prep-Free Packaging (PFP) - Tier 3 in the APASS system, this is packaging that is branded but can not be shipped without additional protection such as an exterior box.
Prepaid - When shipping charges are paid by the shipper rather than the consignee.
Price - The monetary value per unit of measure of an item for sale. e.g. A hat costs $10. $10 is the Price of the Hat, the hat is the unit of measure.
Private Label - Products that are designed, produced, controlled by and carry the name of a store or a brand owned by a store.
Private Warehouse - A storage facility owned and operated by the business working within it.
Pro Number - A serialized number assigned by a carrier to reference and track a shipment. Can also be used by the consignee to track the location and status of the shipment.
Product Based Businesses - A type of business which earns its revenue based on the sale of physical items such as clothing.
Product Identification Number - Also called a SKU, item code or product number. This is a standardized value used within a specific system to identify an item without using a full description. This value may only be relevant to the originator, requiring translation as the product moves through the supply chain.
Proof of Delivery (POD) - A document that provides information about a shipment, usually given by the driver to the consignee and requiring a signature to confirm receipt.
Public Warehouse - Similar to a 3PL, this is a warehouse where space is rented by a third-party to meet their storage and order fulfillment needs.
Purchase Order (PO) - A document authorizing a transaction between a purchaser and a supplier specifying what is being bought, how it will be shipped, and when it will be expected.
Purchasing - Buying goods and services that an organization requires to do business, including items for resale.
Put Away - Moving product from the location of receipt to the intended storage space.
Quality Circle - A group of people who work together and solve problems related to the quality of items produced, production capacity, and process control.
Quality Control - Management functions that ensure products produced or purchased by the organization meet defined standards.
Quantity - A number and a unit of measure related to the amount of an item. 10 hats, for example.
Quarantine - The setting aside of product, separate from other like items, for the purpose of ensuring quality control tests and measures are completed prior to commingling or sale.
Radio Frequency (RF) - Wireless communication that lets a user relay information via electromagnetic energy from a terminal to a base station which is linked to a computer. The terminal can be fixed, such as at a cashier’s station, or carried in a worker’s hand, such as a hand-held RF Scanner. When combined with a barcode system of inventory management, an RF system can be used to update inventory records in real time.
Radio Frequency Identification (RFID) - The identification of products or other items through the use of radio-frequency devices and specialized, item specific tags.
Rationing - The controlled allocation of product among customers, or components among manufactured goods during periods of short supply.
Raw Materials - The materials that are used to create a sellable product. For example, for someone knitting wool socks, the skein of yarn is a raw material.
Receiving - The process of physically receiving an order from a vendor or a carrier, inspecting the order for conformance with the purchase order and invoice, and preparation of receiving reports including adding the product(s) into inventory.
Receiving Dock - The location within a distribution center or warehouse where shipments and deliveries are brought by carriers.
Refrigerated Carrier (Also Reefer LTL Carrier) - Operates similarly to a load-to-ride carrier but works exclusively with temperature controlled substances such as frozen foods.
Regional LTL Carrier - A shipping company that operates within a specific region such as the Pacific Northwest or New England.
Replenishment - The controlled movement of inventory from a vendor or supplier, to a stocking location in the warehouse, then to a designated retail bay to meet demand.
Request for Information (RFI) - A document for gathering information from vendors about products or services prior to placing an order.
Request for Proposal (RFP) - A document that solicits proposals from potential suppliers, asking them to provide information about capacity and their ability to address customer expectations.
Request for Quote (RFQ) - A document created to solicit price information when a vendor and products have been selected.
Resellers - An intermediary organization that purchases goods from a manufacturer or wholesaler in bulk and earns revenue by offering the goods at lower quantities and a higher unit price.
Resources - Economic elements used to support cost objectives or in the performance of activities. Includes people, materials, supplies, equipment, technologies, and facilities.
Restock - To replenish inventory in a warehouse or retail space.
Retailer - A business that acquires products from suppliers or wholesalers for the express purpose of selling them to end users.
Return Goods Handling - The processes required to accept defective, inadequate or otherwise undesired goods from a customer and remit them to the manufacturer or supplier for a refund or exchange.
Return Material Authorization (Also Return Merchandise Authorization (RMA)) - A number produced by a manufacturer or vendor to authorize a return of product, usually included with the return and listed on the bill of lading.
Return to Vendor (RTV) - Product that has been rejected by the customer and is awaiting shipment back to the supplier for replacement for refund.
Reverse Logistics - The handling and movement of goods backwards along the supply chain, including repairs and customer returns.
Routing (Also Routing Guide) - Determining how a shipment will move between origin and destination. Routing includes designating the carriers involved, the route of the carrier, and a planned amount of time en route.
Safety Data Sheet (SDS) (*See also - MSDS) - A document containing information on potential hazards for chemical products encountered in the workplace and care instructions in the event of exposure.
Safety Stock - The inventory held above expected sales needs as a buffer against delayed future restock orders or sudden increases in customer demand.
Scalability - How quickly a supplier can increase productivity to meet increased demand.
Scan - A computer term referring to translating an image or 3d object into data readable by a computer.
Seasonality - Fluctuations in sales caused by annual changes in weather.
Secure Electronic Transaction (SET) - Protocol that guarantees the security of purchases made over the internet. Many eCommerce websites implement this to secure electronic payments made using debit and credit cards.
Self Billing - When the purchaser issues an invoice for goods or services rendered, eliminating the need for the vendor to generate and send an invoice.
Serial Number - A unique number or alphanumeric code that identifies a product, or a component of a product, in order to identify where, when and how it was made.
Service Levels - A description of the range of services offered by a company that details their ability to fulfill requests in a timely manner.
Shelf Life - The amount of time inventory may be held in storage before it becomes unable to be sold. Mainly a consideration for food and drugs which expire and electronics that may become obsolete.
Shipper-Carriers - Companies that sell goods and manage their own vehicle fleet.
Shippers - The business that owns the product being moved.
Shipping - The movement of product and supplies from one location to another for any reason.
Shipping Analytics (Also Shipping Insights) - Data (also called metrics) that describes logistics performance, inventory management, order fulfillment and shipping outcomes used to make timely, informed decisions.
Shipping Consolidator - An organization that collects packages from multiple different shippers and combines them into larger loads that are shipped as a unit to a destination.
Shipping Zone - Shipping zones are used to determine the cost of moving goods based on distance. There are eight zones in the United States.
Ships-In-Own-Container (SIOC) - Tier 2 in the APASS system, this is packaging that requires no prep before final delivery. The product is in its branded, travel safe packaging when it arrives at an Amazon warehouse.
Short Shipment - A shipment in which part of the agreed upon order is missing at time of delivery.
Shrinkage - The loss of items in stock through breakage, loss, theft or obsolescence, and the costs associated with managing those losses.
Slotting - The placement of products within a warehouse facility with the objective of increasing picking efficiency and reducing warehouse handling costs.
Small Parcel Shipping - The movement of packages under 70 lbs that are able to be carried without assistance.
Split Delivery - When an order is placed for a higher quantity to secure a price break, but fulfillment of the order is split into smaller quantities spread out over several dates.
Spot Counting (Also Ad Hoc Counting) - The process of counting products on an as needed basis.
Spot Demand - When interest in a product spikes unexpectedly causing an immediate need for large amounts of the product to get to market.
Staging - Pulling product for an order ahead of ship date. Often used for larger orders to ensure availability of product and readiness to ship on time.
Standard Components - Parts of a product that are considered common and typically easily acquired.
Standard Operating Procedure (SOP) - Step-by-step guidelines made by a business to assist employees in performing specific operations to a defined standard. This ensures uniformity in quality while reducing ambiguity and training time. There are four types of SOPs - checklists, step-by-step lists, hierarchical lists, and process flow-charts.
Stickering - The placement of adhesive marketing labels on packages of a product prior to shipping.
Stock - The supply of finished product available for use or sale direct to the customer.
Stock Keeping Unit (SKU) - An identification code assigned to a product internal to a business. Either numeric or alphanumeric, this code is used for the quick identification of products in all departments ranging from receiving to point of sale.
Sub-Regional LTL Carrier - A shipping company that operates exclusively within a distinct part of a region.
Subcontracting - Outsourcing business functions to an external company or individual.
Subhauler - A tractor truck driver under contract for a company who is either a truck owner/operator or who works for a smaller company hired by a larger carrier.
Supplier Quality Engineering - The costs and activities associated with determining and monitoring a supplier's capacity to meet customer expectations and quality guidelines.
Supplier-Owned Inventory - Similar to vendor managed inventory and consignment inventory, the supplier owns and manages the product available for sale in a retail space.
Suppliers (*See also Vendors) - An organization or individual that provides goods or services to another business.
Supply Chain - The pathway a product takes from unprocessed raw materials to the end user. Includes all aspects of manufacture, movement, warehousing and retail sales. All vendors, service providers, and customers are links in the supply chain.
Supply Chain Design - The process of structuring a supply chain by selecting products, production partners, storage locations, modes of transportation and shippers, as well as necessary information systems.
Supply Chain Event Management (SCEM) - The process of simulating, responding to, and controlling exceptions to planned and unplanned events within the supply chain by monitoring the sequence of steps in a business process and comparing reported events against their corresponding milestones.
Supply Chain Execution (SCE) - One of the most basic and critical functions in customer focused business, the ability to move product through the supply chain.
Supply Chain Management (SCM) - The planning and management of all activities involving collaboration between supply chain partners such as suppliers, carriers, customers, and other third-party service providers.
Supply Planning - The process of anticipating demand and coordinating material and component acquisition, production, and distribution to meet that demand.
Supply Warehouse - A storage facility dedicated to hosting raw materials that are unrefined or unassembled.
Tag Counting - Marking locations to be counted with a paper tag, doing a physical count, then tallying the counts in an inventory system.
Tare Weight - The weight of a container and the packing material minus the weight of the content.
Target Costing - Designing a product based on a desired selling price and profit margin. The target selling price minus the desired profit margin is the amount remaining that should be spent on manufacturing the product.
Tariff (*See also - Duty) - A tax that governments put on goods being imported to, and exported from, their country.
Tender - A document that invites another organization to bid on a project.
Terms and Conditions (T&C) - Rules, expectations and obligations that apply to how a contract for goods or services will be fulfilled.
Throughput - A measurement of the overall productivity of a warehouse calculated as the total number of units received plus the total amount shipped, divided by two.
Total Average Inventory - The sum of normal use stock plus lead stock plus safety stock.
Total Obsolescence for Raw Material, Works In Process, and Finished Goods Inventory - Inventory counts for products no longer fit for their original purpose due to expiry dates, obsolescence, and lack of demand.
Touch Labor - Labor that adds value to the product via assembly, packaging or manufacturing. Does not include tasks related to inventory maintenance or technical maintenance.
Tractor - The driving portion of a semi-truck, containing the engine, steering and passenger compartments.
Trading Partner - Organizations that do business with each other through the exchange of goods, services, information or money.
Trailer - The portion of a semi-truck that carries goods. Can be detached or fixed to the cab.
Trailer Drops - When a carrier leaves a trailer at a destination.
Transaction - A singular exchange of goods, money, data or information.
Transit Time - Time that passes while a product is in the process of being shipped.
Transportation Management Systems (TMS) - Software that tracks and manages shipments and shipping routes.
Truckload Carriers (TL) - Carriers that specialize in moving full truck loads of freight.
Truckload Lot - A carrier shipment that qualifies for a lower freight rate because it meets the minimum weight requirement.
Turnover - In inventory management, the rate at which your stock is sold and replaced.
Types of Inventory - The four types include raw materials, work-in-process, finished goods, and maintenance, repair, and overhaul.
Uniform Code Council (UCC) - A United States based organization that provides UPC codes and offers a set of rules governing sales, contracts, bank deposits and collections.
Unit Cost - The monetary value of a single product found by dividing the total cost of a set of products by the number of units.
Unit of Measurement - The quantity of a product described by a denomination.
Unitize - To consolidate several packages or products into a single unit.
Universal Product Code (UPC) (*See also - GTIN) - An alphanumeric code used by the retail industry to identify products. Provided by the Uniform Code Council. Can be found via GS1.
UPS (United Parcel Service) - A small parcel carrier and courier service that operates internationally. UPS Freight was purchased by Canadian company TFI in 2021 and was rebranded to T-Force Freight.
Upsell - The practice of getting a customer to purchase an additional or higher value item.
Upstream - The direction away from the customer and towards the retailer and vendors. Customer orders and returns flow upstream.
USPS (United States Postal Service) - An independent agency of the United States federal government's executive branch, this organization is responsible for delivering post and parcel nationally, including to rural areas and non-contiguous states. Its function is explicitly authorized by the U.S. Constitution. Also called the Post Office, U.S. Mail, and Postal Service.
Value Added - Goods or services that increase the worth, functionality, or usefulness of an item.
Value-Added Network (VAN) - A third party company that acts as an intermediary between two businesses for the purposes of holding and sharing data securely between them.
Value-Added Partner - A strategic partner that gives benefits beyond those received from a transaction.
Velocity - The rate at which product moves through a location.
Vendor Scorecard - A tool retailers use to grade their suppliers’ ability to deliver products on time and in full.
Vendor-Managed Inventory (VMI) - When a vendor is responsible for determining the size of business to business orders as well as the management of their products on retail sites.
Vendors (*See also Suppliers) - An organization or individual that provides goods or services to another business.
Wall-to-Wall Inventory - An inventory management strategy where raw materials are moved through a processing facility until they become finished goods.
Warehouse - A storage facility for products that provides services including the receipt of product, storage of product, shipping management, and order picking.
Warehouse Management Systems (WMS) - Software and policies that are used to coordinate the operations of products and personnel within a storage facility.
Waste - The inevitable by-product of a product's production run requiring special management and control.
Waybill (*See also - Bill of Lading) - A document containing the description of the goods, the origin, destination, consignee and amount charged.
Weight Break - The minimum weight at which an LTL shipment charge is equal to the charge for a full truck load delivery.
Weight Confirmation - When receipt of a complete shipment is validated based on weight.
White Glove Service - A service level that provides extra assistance, elevated levels of care, and increased attention to detail.
White Label Service - When a manufacturing company that makes a product offers a retailer the option to add their branding to said product.
Wholesaler (*See also - Distributor) - A business that purchases and resells products to other businesses.
Work-In-Process - Product that is in a transition stage between raw materials and finished product.
Yield - The percentage of non-defective items produced compared to the total input of raw materials.