WAREHOUSE GLOSSARY
Allocations: Actual demand created by sales orders or work orders against a specific item.
ASRS: Automated storage and retrieval system, system of racks
in which each row has a retrieval unit that picks and puts away items.
Backorder: Order for which the merchandise is not available.
Cantilever rack: Racking system that allows for storage of
very long items.
Carousel: Automated equipment generally used for picking of
small, high-volume parts.
Carry cost: Cost associated with having inventory on hand.
It is primarily made up of the costs associated with the inventory investment
and storage; also called holding cost.
Cross-docking: Unloading materials from an incoming trailer
and then loading them into an outbound trailer without sorting and distributing
the items in the warehouse.
Cycle count: Process of regularly scheduled inventory counts
(usually daily) that “cycle” through your inventory.
DC: Distribution center
Distribution requirements planning (DRP): Process for determining
inventory requirements in a multiple plant/warehouse environment.
Dock leveler: Device that acts as a bridge between a truck
or trailer and the loading ramp.
Drive-in rack: Racking system that accommodates a lift truck
into the bay.
Dunnage: Package filling material.
FIFO: First in first out, method of rotating inventory so that
the oldest products are used first.
Flex conveyor: Portable conveyor that can be expanded, contracted,
and curved.
Flow rack: Racking system that incorporates sections of a conveyor
so that cartons or pallets can flow to the front.
Forecast: Estimate of future demand.
Gravity conveyor: Conveyor, usually with wheels or rollers,
that uses gravity to move items.
High-density storage: Storage in which pallets or cartons are
stored more than one unit deep or high.
Inventory turn: Number of times inventory is replenished in
a year; generally calculated by dividing the average inventory level (or current
inventory level) into the annual inventory usage (annual cost of goods sold).
Just-in-time (JIT): Usually thought of as describing inventory
arriving or being produced just in time for the shipment or next process; actually
a process for optimizing manufacturing processes by eliminating wasted steps,
wasted material, and excess inventory.
Lead time: Amount of time required for an item to be available
for use from the time it is ordered. Should include purchase order processing
time, vendor processing time, in-transit time, and receiving, inspection, and
prepack times.
LIFO: Last in first out, method of using the newest inventory first rather than
rotating it so that the oldest is shipped out first.
Min-max: Inventory system in which once a product has reached
the predetermined minimum quantity enough replacement product is order to bring
the level up to the predetermined maximum quantity.
Open order: Order that has not yet been fulfilled.
Order cycle: Time between orders of a specific item; also called
replenishment cycle.
Order management system: Software that receives customer order
information and inventory availability from the warehouse management system
and then groups orders by customer and priority, allocates inventory, and determines
delivery dates; also called order processing system.
Pick-to-light: System in which each pick location is connected
to lights and LED displays; software turns on the light where the next pick
should be and indicated the quantity to pick.
Pop-up sorter: Equipment integrated into a conveyor to move
products off the conveyor belt at fixed points.
Radio frequency (RF) devices: Portable data collection devices
that use radio frequency to transmit data from scannable tags to the host system.
Real-time locator system (RTLS): System that used RFID technology
to track the location of tagged objects.
Reverse logistics: Processing of returns.
RFID: Radio frequency identification, systems that use transponders
to transmit significant amounts of data to a receiver; often used as part of
a real-time locator system.
Safety stock: Quantity of inventory used in inventory management
systems to allow for deviations in demand or supply.
SKU: Stock-keeping unit, a specific item in a specific unit
of measure
Slotting: Determinng the optimal placement of inventory for
picking efficiency.
Tilt-tray sorter: Conveyor system that uses a series of tilting
devices to sort items.
Wave picking: Method of order picking in which items are picked
first and then sorted into individual orders.
Warehouse management system (WMS): Computer software designed
to manage the storage and movement of items throughout the warehouse.
Zone picking: Method of picking orders in which the warehouse
is divided into several zones; pickers are assigned a specific zone and pick
only items in that zone before moving the order (usually via a conveyor system)
to the next zone; also called pick-and-pass.
