Know Your Supply Chain Terms

When it comes to warehousing and logistics, it can seem like those in the business are speaking another language. However, familiarizing yourself with a few of the basic terms will help increase your understanding of supply chain operations.

Below are a number of phrases to build your supply chain knowledge base.

• KPI. Key Performance Indicator. This is a pre-established standard or standards used to gauge the performance of a supply chain.

• WMS. Warehouse Management System. A program that manages inventory and tracks inbound and outbound transactions, effectively managing and recording day-to-day operations.

• EDI. Electronic Data Interchange. This is a communication method that allows companies to exchange data through a standardized format. EDI helps streamline logistics by allowing computers, utilizing different systems, to talk to each other.

• TMS. Transportation Management System. This system pulls together all elements of shipping loads, helping automate processes and make cost effective decisions in planning transportation.

• BOL. Bill Of Lading. A BOL is the declaration of content within a shipment provided by a shipper to the carrier.

• MHE. Material Handling Equipment. MHE refers to lift trucks, reach trucks, etc. used in a warehouse for unloading stock or picking items for delivery.

• FTE. Full Time Equivalent. A unit of measurement for an operation that denotes one full-time employee.

• OTIF. On-Time, In Full. This is a type of KPI that looks at shipping performance.

• OS&D. Over, Short, & Damaged. A report, normally filed by the receiver of a shipment, that details product quantity or damage issues.

• LMS. Labor Management System. A system the tracks and reports on the productivity of a workforce.

• RF. Radio Frequency. RF barcode scanning is used for warehouse location signs to increase accuracy and speed in inventory management, including put away and picking functions.

• 3PL. Third Party Logistics. A 3PL provides logistics management services to shippers (vs. companies taking on these tasks in-house), which enables companies to focus more on their core competencies.