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GlossaryofInventoryManagementandWarehouseOperationTerms
AlldefinitionswrittenbyDavePiasecki
Belowaresomeoftheterms,acronyms,andabbreviationsyoumayrunintoonthissiteandothersonthewebrelatingto
InventoryOperationsConsulting
inventoryoperations.Thedefinitionsarebasedonmyunderstandingofthetermsandmaydifferfromothersopinions.Ifyou
LLCprovidesFast,Affordable,
disagreewithadefinitionorhaveadditionaldefinitionstosubmitpleaseemailmeatemail@inventoryops.com.
Expertassistancewith
Copyright.ContentonInventoryOps.comiscopyrightprotectedandisnotavailableforrepublication. InventoryManagementand
WarehouseOperations.
2waypallet Econsultingoptionsare
SeePallet available.

3PL
Thirdpartylogistics(seeseparatelisting)
MyBooks
4waypallet
SeePallet
Activitybasedcosting
usuallyreferstocostingmethodthatbreaksdownoverheadcostsintospecificactivities(costdrivers)inorderto
moreaccuratelydistributethecostsinproductcosting.Hasalsobeenappliedtocustomerandvendormanagement.
ABCstratification
methodusedtocategorizeinventoryintogroupsbaseduponcertainactivitycharacteristics.ExamplesofABC
stratificationswouldincludeABCbyvelocity(timessold),ABCbysalesdollars,ABCbyquantitysold/consumed,
ABCbyaverageinventoryinvestment,ABCbymargin.ABCstratificationsareusedtodevelopinventoryplanning
policies,setcountfrequenciesforcyclecounting,slotinventoryforoptimizedorderpicking,andotherinventory
managementactivities.
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Actualcost
inventorycostingmethodusedinmanufacturingenvironmentsthatusestheactualmaterialscosts,machinecosts,
andlaborcostsreportedagainstaspecificworkordertocalculatethecostofthefinisheditem.
ADC
Automateddatacollection.SeeAutomatedDataCollection
Advancedplanningandscheduling
softwaresystemdesignedtointegratewithERPandMRPsystemstoenhancetheshorttermproductionplanning
andschedulingsystemsthatarenotoriouslyinadequateinMRPsystems.APSsystemshaveextensiveprogramming
logicthatallowsthemtobemoreeffectiveindealingwithrapidlychangingcustomerdemands.
Advancedshipmentnotification
advancedshipmentnotifications(ASNs)areusedtonotifyacustomerofashipment.ASNswilloftenincludePO
numbers,SKUnumbers,lotnumbers,quantity,palletorcontainernumber,cartonnumber.ASNsmaybepaperbased,
however,electronicnotificationispreferred.Advancedshipmentnotificationsystemsareusuallycombinedwithbar
codedcompliancelabelingwhichallowsthecustomertoreceivetheshipmentintoinventorythroughtheuseofbar
codescannersandautomateddatacollectionsystems.
AIDC
Automaticidentification&datacollection.SeeAutomatedDataCollection
Allocations
allocationsininventorymanagementrefertoactualdemandcreatedbysalesordersorworkordersagainsta
specificitem.Theterminologyandtheactualprocessingthatcontrolsallocationswillvaryfromonesoftwaresystem
toanother.Astandardallocationisanaggregatequantityofdemandagainstaspecificiteminaspecificfacility,Ihave
heardstandardallocationsreferredtoasnormalallocations,softallocations,softcommitments,regularallocations.
Standardallocationsdonotspecifythatspecificunitswillgotospecificorders.Afirmallocationisanallocation
againstspecificunitswithinafacility,suchasanallocationagainstaspecificlocation,lot,orserialnumber.Firm
allocationsarealsoreferredtoasspecificallocations,frozenallocations,hardallocations,hardcommitments,holds,
reservedinventory.Standardallocationssimplyshowthatthereisdemandwhilefirmallocationsreserveorholdthe
inventoryforthespecificorderdesignated.
APS
seeAdvancedPlanningandScheduling
ASN
seeAdvancedShipmentNotifications
ASRS
seeAutomatedStorageaRetrievalSystems
ASP,Applicationserviceprovider
atwistinsoftwaremarketinginwhichthesoftwarelicensesareownedbytheASPandresideontheirsystemwhile
theclientrentstherightstousethesoftware.TheASPmaybethesoftwaremanufacturerorathirdpartybusiness.
 ThebenefitstoanusinganASParelowerupfrontcosts,quickerimplementations,andthereductionoftheneedfor
internalISpersonnelandmainframe/serverhardware.ItishopedthatASPswillallowsmalltomidsizebusinesses
greateraccesstotechnologythanwaspreviouslyavailable.MorerecentlythetermsSaaSS(SoftwareasaService)
andOndemandSoftwarehaveemergedtodescribethissamescenario.(SoftwareasaService)andOndemand
Softwarehaveemergedtodescribethissamescenario.
Autodiscriminationn
thefunctionalityofabarcodereadertorecognizethebarcodesymbologyybeingscanned,thusallowingareaderto
readseveraldifferentbeingscanned,thusallowingareadertoreadseveraldifferentsymbologiessconsecutively.Read
myarticleconsecutively.ReadmyarticleADCBasics
Automateddatacollection
systemsofhardwareandsoftwareusedtoprocesstransactionsinwarehousesandmanufacturingoperations.Data
collectionsystemsmayconsistoffixedterminals,portableterminalsandcomputers,Radiofrequency(RF)terminals,
andvarioustypesofbarcodescanners.a.k.a.Automateddatacapture,)terminals,andvarioustypesofbarcode
scanners.a.k.a.Automateddatacapture,AIDC,Automaticidentification&datacollectionReadmyarticle,Automatic
identification&datacollectionReadmyarticleADCBasics.
Automatedguidedvehiclesystem(AGVS))
describessystemsofvehiclesthatcanbeprogrammedtoautomaticallydrivetodesignatedpointsandperform
preprogrammedfunctions.Guidancesystemmayconsistofawireembeddedinthefloor,opticalsystemorother
typesofguidance.Automatedguidedvehicle(AGV)Moreinfoon)MoreinfoonAutomatedEquipment
PicssPagePage.
Automatedstorageandretrievalsystems
asystemofrowsofrack,eachrowhavingadedicatedretrievalunitthatmovesverticallyandhorizontallyalongthe
rackpickingandputtingawayloads.a.k.a.ASRS,AS/RS,UnitloadASRSandMiniloadASRS.Moreinfoon
AutomatedEquipmentPicsPage.
Available
referstothestatusofinventoryasitrelatestoitsabilitytobesoldorconsumed.Availabilitycalculationsareused
todeterminethisstatus.Availabilitycalculationsvaryfromsystemtosystembutbasicallysubtractanycurrent
allocationsofholdsoninventoryfromthecurrentonhandbalance.Anexampleofanavailabilitycalculationwouldbe:
[QuantityAvailable]=[QuantityOnHand][QuantityOnHold][QuantityAllocatedToSalesOrders][Quantity
AllocatedtoProductionOrders].
Availabletopromise
availabletopromisetakesthesimpleavailabilitycalculation,addstimephasingandtakesintoaccountfuture
scheduledreceipts.Availabletopromisemaybecalculatedforeachdayorbrokendownintolargertimebuckets.The
firsttimeperiodwilltakeonhandinventoryandaddanyscheduledreceiptsforthatperiod.Itwillthendeductany
allocationsscheduledpriortothenextscheduledreceipt(whichmaybeseveralperiodsinthefuture).Subsequent
periodswithoutanyscheduledreceiptswillhavethesameavailabletopromiseasthepreviousperiod.Subsequent
periodswithscheduledreceiptswillgenerallystartwithafreshcalculation,ignoringanyremainingavailabletopromise
frompreviousperiods.Therearemanyvariationsonexactlyhowavailabletopromiseiscalculatedanditisalso
importanttonotethatavailabletopromiseoftenworksindependentlyofallocationsystems.Thiscansometimes
createconflicts.SeealsoAvailable,Allocations.
Averagecost
inventorycostingmethodthatrecalculatesanitem'scostateachreceiptbyaveragingtheactualcostofthereceipt
withthecostofthecurrentinventory.
Backflush
methodforissuing(reducingonhandquantities)materialstoamanufacturingorder.Withbackflushing,thematerial
isissuedautomaticallywhenproductionispostedagainstanoperation.Thebackflushingprogramwillusethequantity
completedtocalculatethroughthebillofmaterialthequantitiesofthecomponentsused,andreduceonhandbalances
bythisamount.Thereareusuallyoptionsduringthebackflushprocesstoreportscrap.Inoperationsusing
backflushingitisadvisabletosetupspecificmachinelocationsandhavematerialstransferredfromstoragelocations
tomachinelocationswhentheyarephysicallypickedforproduction.Thebackflushoperationwillthenissuethe
materialfromthemachinelocations.ReadmyarticleonBackflushing.
Backhaul
transportationtermthatdescribestheactivityofpickingup,transporting,anddeliveringanewloadonareturntrip
fromdeliveringanotherload(knownasthefronthaul,thoughthetermfronthaulisnotusedveryfrequently).
Backorder
aspecificquantityofaspecificitemthatcouldnotbefilledontherequesteddate.
Batchpicking
orderpickingmethodwhereordersaregroupedintosmallbatches,anorderpickerwillpickallorderswithinthebatch
inonepass.Batchpickingisusuallyassociatedwithpickerswithmultitieredpickingcartsmovingupanddownaisles
pickingbatchesofusually4to12orders,however,batchpickingisalsoverycommonwhenworkingwithautomated
materialhandlingequipmentsuchascarousels.SeealsoZonepicking,Wavepicking.ArticleOrderPicking
Billofmaterial
listsmaterials(componentsoringredients)requiredtoproduceanitem.MultilevelBOMsalsoshowsubassemblies
andtheircomponents.OtherinformationsuchasscrapfactorsmayalsobeincludedintheBOMforuseinmaterials
planningandcosting.
Blanketorder
atypeofpurchaseorderthatcommitstopurchaseaspecificquantityoveraspecificperiodoftime,butdoesnot
necessarilyprovidespecificdatesforshipments.Blanketordersareplacedforthequantityofanitem(orgroupof
items)thatyouexpecttopurchaseoverextendedperiodoftime(3months,6months,ayear,etc).Ablanketpurchase
ordermayprovideestimatedrequireddatesforspecificquantities,butactualreleasestoshipagainsttheblankedorder
aretriggeredbyseparaterequestsfromthecustomertothesupplierthespecificquantitiesanddatesofthese
separaterequests(releases)mayormaynotbesimilartotheestimateddatesandquantities.Providingablanket
ordertoasuppliermayreduceleadtimesandincreaseontimeshipmentsfromthesupplierandmayprovideagreater
discountonpurchases.
Blanks
generallydescribesdiscreteunits(usuallyuniformsizedunits)thatareusuallyproducedthroughacuttingprocess
butarenotyetfinisheditems.Forexample,ifadiecuttingmachinecutssheetsofsteelintosmallrectangularpieces
 thatwilllaterbemachinedandpainted,theunfinishedrectangularpiecesmaybereferredtoasblanks.Stampingsare
sometimesreferredtoasblanks,however,allblanksarenotnecessarilystampings.SeealsoStamping
Blindcounts
describesmethodusedincyclecountingandphysicalinventorieswhereyouprovideyourcounterswithitemnumber
andlocationbutnoquantityinformation.SeearticleonCycleCounting,alsocheckoutMybookoninventory
accuracy.
Blindshipment
a.k.ablindload,blinddropship.Ablindshipmentisatypeofdirectshipment(dropshipment)wherethesourceof
thesupplierishiddenfromthecustomer.AlsoseeDirectShipment
BOM
seeBillofmaterial
BondedWarehouse
afacilityoradedicatedportionofafacilitywhereimportedgoodsarestoredpriortocustomsdutiesandtaxesbeing
paid.Thesefacilitiesareoftenusedtodelaythepaymentofimportfeesuntiltheproductsareactuallysold/shipped
(whentheyphysicallyleavethebondedfacility).Thiscanbeparticularlyusefulwhenproductsarereceivedwellin
advanceofsaleorwhenaportionoftheproductreceivedmayeventuallybereturnedorscrapped(thuspreventing
payingimportfeesonitemsnotsold).Bondedwarehousesarelicensedbythegovernment.Ibelievethesame
conceptcanalsobeappliedtospeciallytaxeddomesticproductssuchasalcoholandtobaccoproducts.SeealsoFTZ
(ForeignTradeZone)
Breakbulk
thoughitcanbeappliedtodomesticshipments,thetermbreakbulkismoretypicallyusedtodescribeoverseas
shipmentswherethecargobeingshippedconsistsofsmallerunits(individualcartons,crates,bales,bags,etc)that
mustbehandledindividuallyatsomepointintheshipping/transportationprocess.
Browserbasedapplications
softwaredesignedtorunwithinawebbrowser(i.e.InternetExplorer).Thisallowsausertoaccesstheapplication
fromanylocationthathasinternetaccessandawebbrowser(noadditionalsoftwareisneededonthecomputer
accessingtheapplication).ReadmyarticleonSoftwareSelectionforadditionalinformation.
Bulk
theclassicuseofthetermbulk(bulkmaterials,bulkinventory,bulkstorage)ininventorymanagementand
distributionreferstorawmaterialssuchascoal,ironore,grains,etc.thatarestoredortransportedinlargequantities.
Thiswouldincluderailcars,tankertrucks,orsilosfullofasinglematerial.However,thistermcanalsohaveavariety
ofotherdefinitionsbaseduponthespecificindustryorfacility.Forexample,asmallpartspickingoperationmayrefer
toacasestorageareaas"bulk",whileacasepickingoperationmayrefertothefullpalletareaasthe"bulkarea".
CantileverRack
rackingsysteminwhichtheshelvingsupportsareconnectedtoverticalsupportsattherearoftherack.Thereare
noverticalsupportsonthefaceoftherackallowingforstorageofverylongpiecesofmaterialsuchaspipingand
lumber.AlsoseeRackingPicsPage.
Capacityrequirementsplanning
processfordeterminingamountofmachineandlaborresourcesrequiredtomeetproduction.
Carousel
typeofautomatedmaterialhandlingequipmentgenerallyusedforhighvolumesmallpartsorderpickingoperations.
Horizontalcarouselsareaversionofthesameequipmentusedbydrycleanerstostoreandretrieveclothing.They
haverackshangingfromthemthatcanbeconfiguredtoaccommodatevarioussizestoragebins.Verticalcarousels
consistofaseriesofhorizontaltraysonaverticalcarousel.Verticalcarouselsarefrequentlyusedinlaboratoriesand
specialtymanufacturingoperations.MoreinfooncarouselsonAutomatedEquipmentPicsPage.SeearticleonOrder
Picking.
Carryingcost
alsocalledholdingcost,carryingcostisthecostassociatedwithhavinginventoryonhand.Itisprimarilymadeup
ofthecostsassociatedwiththeinventoryinvestmentandstoragecost.ForthepurposeofEOQcalculations,ifthe
costdoesnotchangebaseduponthequantityofinventoryonhanditshouldnotbeincludedincarryingcost.Carrying
costisrepresentedastheannualcostperaverageonhandinventoryunit.SeearticleonEOQformoredetailedinfo
oncarryingcost.
Cartonclamp
lifttruckattachmentthatoperateslikeapaperrollclampexcepttheclampingsurfaceisflatratherthancircular.
Case
describesaunitofmeasureandthewaymultiplephysicalunitsarepackaged.Acasewouldtypicallybeasealed
corrugatedcartonwhereastandardizedquantity(greaterthanone)ofaspecificitemispacked.
Casepicking
casepickingdescribesaprocesswherecasesarepickedfororders.SeearticleonOrderPicking.
Casting
generallydescribesanunfinisheditemmadeofmetalthatisproducedthroughpouringmoltenmetalintoamold.A
castingislatermachinedintoafinishedorsemifinisheditem.Alsodescribestheprocessusedtoproducecastings.
Catchweight
usedprimarilyinthefoodindustryforproductssuchasseafood,meats,andcheesescatchweightsrefertothe
actualweightofvariableweightitemsthatuseweightasthesalesunitofmeasure.Catchweightsaregenerally
recordedduringtheorderpickingorshippingprocess.Systemsusingcatchweightsmustbeabletocorrectlyprocess
salesorderlineitemsbasedonthecatchweightsbeingwithinspecifictolerancesofthe"orderquantity".
CCD
seeChargedCoupledDevice
Chargeback
chargebacksarebecomingmorecommonthesedaysascustomersbecomemorespecificwiththeiragreements
withsuppliers.Achargebackisbasicallyafinancialpenaltyplacedagainstasupplierbyacustomerwhenashipment
tothecustomerdoesnotmeettheagreedupontermsandconditions.Examplesofwheresuppliersmaybecharged
backwouldincludelateshipments,lackofproperpackagingandlabeling(compliancelabels),incorrectshippingterms
(shippingcollectinsteadofprepaidornotusingthecorrectcarrieroraccount).
Chargedcoupleddevice
usedtodescribeatypeofbarcodescannerthatactslikeasmalldigitalcameratakingadigitalimageofthebarcode
asopposedtothestandardbarcodescannerthatusesalaser.CCDscannersarealowcostoptionforscanning
barcodesatashortdistance(usuallywithinafewinches).
Clearheight
distancemeasuredfromthefloortothebottomofthelowesthangingoverheadobstruction.Sometimesrealtorswill
usethedistancetothebottomoftherooftrussestocalculateclearheighteventhoughportionsofthebuildingmay
havelowerclearheightsduetoHVACunitsorotherequipmentsuspendedfromtheroof.
COGS
CostofGoodsSold(seeseparatelisting)
Coldstorage
inwarehousing,coldstoragetypicallydescribesstorageofperishablefoodproductsthatrequirerefrigeration.Cold
storagecanbeeitherrefrigeratedstorage(abovefreezingtemps)orfrozenstorage(belowfreezingtemps).Seealso
Drystorage
Compliancelabels
standardizedlabelformatsusedbytradingpartners.Compliancelabelsareusedasshippinglabels,container/pallet
labels,cartonlabels,orpiecelabels,andusuallycontainbarcodes.Manybarcodelabelingsoftwareproductsnow
havethemorecommoncompliancelabelstandardssetupastemplates.
Commodity
ininventorymanagement,thetermCommodityhasacoupleofdefinitions.Standardproductscommonlyavailable
fromvarioussourcesareoftencalled"commodityitems".Specializedorcustomproductsnotwidelyavailableor
proprietaryproductsonlyavailablefromasmallnumberofsourceswouldnotbeconsideredcommodityitems.The
termCommodityisalsousedtodescribeclassificationsofinventory.Inthiscase,"commoditycodes"areusedto
distinguishgroupsofinventoryitemstobeusedforreportingandanalysis.Notethatcommodityclassificationscanbe
usedtodescribeanyinventoryitemandarenotlimitedtoitemsthatfallunderthepreviousdefinitionofcommodity
items.
Configurationprocessing
softwarefunctionalitythatallowsaproducttobedefinedbyaselectingvariouspredefinedoptions,ratherthan
havingeverypossiblecombinationofoptionspredefinedasspecificSKUs.Placinganorderforacomputerand
specifyingharddrive,processor,memory,graphicscard,soundcard,etc.wouldbeanexampleofconfiguration
processing.
Consignmentinventory
inventorythatisinthepossessionofthecustomer,butisstillownedbythesupplier.Consignmentinventoryisused
asamarketingtooltomakeiteasierforacustomertostockaspecificsupplier'sinventory.Readmyarticleon
ConsignmentInventory.
Consumergoods
productssoldtononbusinessendusers.Clothing,food,MusicCDs,areexamplesofconsumergoods.
ConsumerPackagedGoods
describesinventorythatisinsuchaformthatisreadyforsaletoconsumers(endusers).
Container
althoughacontainercanbeanythingdesignedtohold(contain)materialsforstorageortransport,themostcommon
definitionforContainerinlogisticsreferstothespecifictypesofcontainersusedforintermodaltransportation,often
referredtoas"OceanContainers".Standardexternaldimensionsforcontainersarewidthof8',heightof8'6"or9'6"
(HighCube),andlengthsof20',40',45'(deduct4"fromwidth,9"fromheightand7"to9"fromlengthtodetermine
insidedemensions).MorespecsandinfooncontainersatSeaboardMarine,MaerskSealand,andaniceindependent
siteTheIntermodalContainerFAQputoutbyacommercialphotographer.
Containerization
fromtheJITmovementinmanufacturing,containerizationreferstousingstandardizedcontainersforthestorageand
transportofmaterialswithinamanufacturingfacilityaswellasbetweenvendorsandmanufacturers.Materialsare
orderedinmultiplesofthecontainerquantityoftenusingKanban.Thebenefitsofcontainerizationincludereduced
productdamage,reducedwaste(byusingreusablecontainers),lesshandling,andgreaterlevelsofinventoryaccuracy
bysimplifyingcountingprocesses.
Contractwarehouse
acontractwarehouseisabusinessthathandlesshipping,receiving,andstorageofproductsonacontractbasis.
Contractwarehouseswillgenerallyrequireaclienttocommittoaspecificperiodoftime(generallyinyears)forthe
services.Contractsmayormaynotrequireclientstopurchaseorsubsidizestorageandmaterialhandlingequipment.
Feesforcontractwarehousesmaybetransactionandstoragebased,fixed,costplus,oranycombination.Alsosee
articleonPublicWarehousesand3PLs.
Coproduct
thetermcoproductisusedtodescribemultipleitemsthatareproducedsimultaneouslyduringaproductionrun.
Coproductsareoftenusedtoincreaseyieldsincuttingoperations,suchasdiecuttingorsawing,whenitisfoundthat
scrapcanbereducedbycombiningmultiplesizedproductsinasingleproductionrun.Coproductsarealsousedto
reducethefrequencyofmachinesetupsrequiredinthesesametypesofoperations.Coproducts,alsoknownas
byproducts,arealsocommoninprocessmanufacturingsuchasinchemicalplants.Althoughtheconceptof
coproductsisfairlysimple,theprogramminglogicrequiredtoprovideforplanningandprocessingofcoproductsisvery
complicatedandmostofftheshelfmanufacturingsoftwarewillhaveproblemswithcoproductprocessing.
Costingmethod
referstothecalculationsusedtodetermineinventorycost.SeealsoAverageCost,CurrentCost,StandardCost,
ActualCost,LandedCost,Firstinfirstout,Lastinlastout.
Costofgoodssold
accountingtermusedtodescribethetotalvalue(cost)ofproductssoldduringaspecifictimeperiod.Since
inventoryisanasset,itisnotexpensedwhenitispurchasedorproduced.Itinsteadgoesintoanassetaccount
(usuallycalledInventory).Whenproductissold,thevalueoftheproduct(thecost,notthesellprice)ismovedform
theassetaccounttoanexpenseaccountcalledcostofgoodssoldorCOGS.COGSappearsontheprofitandloss
statementandisalsousedforcalculatinginventoryturns.
Countingscale
 aspecialscaleusedtodeterminequantities(ratherthanjustweight).Thebasicscalefunctionisthesameasother
typesofscales,howeveracountingscalewillhavefunctionalitytocalculateapieceweightbasedonasampleand
thenusethatpieceweighttocountproductbasedontotalweight.Thebasicprocesswithacountingscaleistoplace
anemptycontaineronthescale,pressthetarebuttontozerooutthescale,countoutasampleandplaceitinthe
container,tellthescalethesizeofthesample,countanothersampletoverifyaccuracy,thendumptherestofthe
productintothecontainertogetthefullcount.IcovertheuseofcountingscalesinmoredetailinmybookInventory
Accuracy:People,Processes,&Technology
CPG
ConsumerPackagedGoods(seeseparatelisting)
Crossbeltsorter
conveyorsortingsystemthatusesaseriesofdevices(carriers)mountedonaconveyortosortmaterials.Each
devicehasasmallbeltconveyormountedontopofitthatrunsperpendiculartothedirectionofthemainconveyor.
Whenitarrivesatasortpoint,theconveyoronthecarrierwillspin,movingthematerialstothesideofthemain
conveyor(usuallyontoanotherconveyor,droppingdownachute,orintoacontainer).
Crossdocking
initspurestformcrossdockingistheactionofunloadingmaterialsfromanincomingtrailerorrailcarand
immediatelyloadingthesematerialsinoutboundtrailersorrailcars,thuseliminatingtheneedforwarehousing
(storage).Inreality,purecrossdockingisrareoutsideoftransportationhubsandhubandspoketypedistribution
networks.Many"crossdocking"operationsrequirelargestagingareaswhereinboundmaterialsaresorted,
consolidated,andstoreduntiltheoutboundshipmentiscompleteandreadytoship.Thisstagingmaytakehours,
days,orevenweeksinwhichcasethe"stagingarea"isessentiallya"warehouse".
CRP
Capacityrequirementsplanning(seeseparatelisting)
Cube
ameasureofthevolumeofrectangularshapedthreedimensionalobjectsorspaces.Cubeiscalculatedmy
multiplyingthelengthtimesthewidthtimestheheightoftheobjectorspace.
Cubelogic
termusedinWarehouseManagementSystems.CubelogicisoftenincorporatedbutseldomusedinWMSsystems
becauseofitstendencytotreatyourproductasliquid(fittingaroundpeginasquarehole).SeearticleonWarehouse
ManagementSystems.
Cubedout
describesaconditionwhereallspaceinatrailerorcontainerhasbeencompletelyfilled.Theterm"cubedout"is
oftenusedwhenyouhavecompletelyfilledthetrailerorcontainerbutarestillbelowtheweightcapacity.Alsosee
Weightedout.
Cubeutilization
inwarehousingandlogistics,cubeutilizationreferstotheuseofspacewithinstoragearea,trailer,orcontainer.Cube
utilizationisgenerallycalculatedasapercentageoftotalspaceoroftotal"usable"space.
Cubicvelocity
ameasureusedinwarehouseslottingtodeterminetheappropriatesizeoflocation.Cubicvelocitygenerally
measuresthevolume(cubicfeet/cubicinches)thatmovesoutofalocationduringapredefinedperiodoftimes(days,
weeks,etc).Thisisprimarilyusedwithpickinglocations,soyouwouldmultiplytheaverageunitssoldduringaperiod
bythecubeofeachunittodeterminethecubicvelocity.
Currentcost
inventorycostingmethodthatappliesthecostofthemostrecentreceipttoallinventoryofaspecificitem.
Cyclecount
referstoprocessofregularlyscheduledinventorycounts(usuallydaily)that"cycles"throughyourinventory.User
determineshowoftencertainitems/locationsarecounted.ReadmyarticleonCycleCountingandcheckoutmybook
oncyclecounting..
BACKTOTOPOFPAGE
Copyright.ContentonInventoryOps.comiscopyrightprotectedandisnotavailableforrepublication.

Datacollection
SeeAutomatedDataCollection(ADC)
DC
DistributionCenter
Demand
theneedforaspecificiteminaspecificquantity.SeeDependentDemandandIndependentDemand.
Dependentdemand
demandgeneratedfromscheduledproductionofotheritems.
Dimweight
seeDimensionalweight
Dimensionalweight
formulausedtodeterminefreightchargeswhentheminimumweighttovolumeratiohasnotbeenmet.Actualweight
anddimweightarecompared,andthelargerweightisusedforthefreightcalculation.Dimweighthadhistoricallybeen
calculatedby:Dimweight=(LengthxWidthxHeight)/194(Alldimensionalmeasurementsareininches)andoriginally
onlyappliedtoairshipments.However,recentlythecarriershavebeencreatingmorecomplexdimweightpolicies.So
dependingonthecarrier,destination,andservice,youmayusingadifferentdivisor.Forexample,asof2011,UPS
uses166(insteadof194)forairshipments,and139forexports,thenlaterstartedusing166forgroundshipmentsbut
onlyiftheyareover5,184cubicinches(itlookslikein2015theywilleliminatetheexclusionforpackages5,184cubic
inchesorsmaller).Thepurposeofdimensionalweightsistoallowthecarrierstomoreeffectivelyapplyfreightcharges
whenverylightweightbutbulkyshipmentsoccur.Theselightweightbutbulkypackagescanquicklyfillupanairplane
ortrailer,yetnotprovideenoughrevenue(basedonweightbasedfees)tocovercosts.a.k.a.Dimweight
Directship
directshippinganddropshippingaretwotermsgenerallyusedinterchangeably.Theydescribeaprocesswhereby
threepartiesinteractwiththesalestransaction(thebuyer,theseller,andthesupplier).Thebuyerinitiatesapurchase
 fromtheseller,whothenarrangeswiththesuppliertoshiptheproductdirectlytothebuyer.Thesellerdoesnotcarry
inventoryoftheproductandthesupplierdoesnothaveanydirectcommunicationwiththebuyer.Thebuyerpaysthe
sellerandthesellerpaysthesupplier.Inthecaseofa"Blind"directshipment,thesupplierinformationisintentionally
hiddenfromthebuyer.Thoughbothterms(directshipanddropship)aregenerallyusedtodescribethesameprocess,
I'vealwaysconsideredasmalldistinctionbetweenthetwothatrelatestowhereyouareinthesupplychain.Tothe
seller,directshippingdescribesboththeprocessandaninventory/salesstrategy,however,thesupplierwillfrequently
justusetheterm"dropship"todescribetheprocesswherebyheisshippingtheproducttoanaddressotherthanthat
ofhiscustomer(thebusinessthatispayinghimfortheproduct).Sometimesthetermdropshipalsodescribesthe
processofshippingtoanylocationthatisdifferentfromthecustomer'snormalshippinglocation.Thissubtle
distinctionissometimesevidentintheterminologyusedinsoftwaredocumentation.Directshipment,Dropshipment.
Directstoredelivery
directstoredelivery(DSD)describesadistributionmethodusedprimarilyingrocery/retailwherethesupplierdelivers
productdirectlytothestores.Thisbypassestheretailersdistributionnetwork.Insomecasesthisismorethanjusta
deliverymethod,butalsoavendormanagedinventorymethodwherebythesuppliermanagestheinventoryprocess,
physicallydeliversandstockstheproductontheretailer'sstoreshelves.
Discretemanufacturing
describesmanufacturingofdistinctitems(itemsyoucaneasilycount,touch,see)suchasapencil,alightbulb,a
telephone,abicycle,afuelpump,etc.DiscreteasopposedtoProcessmanufacturing.AlsoseeProcess
Manufacturing.
Distribution
describestheprocessofstoring,shipping,andtransportinggoods.Alsodescribesthefacilities(distribution
operations,distributioncenters)thatconducttheseactivities.Instatisticalanalysis,describesthemeasurementofa
groupofeventsoroccurrences(seeNormaldistribution).
Distributionrequirementsplanning
processfordetermininginventoryrequirementsinamultipleplant/warehouseenvironment.DRPmaybeusedfor
bothdistributionandmanufacturing.Inmanufacturing,DRPwillworkdirectlywithMRP.DRPmayalsobedefinedas
DistributionResourcePlanningwhichalsoincludesdetermininglabor,equipment,andwarehousespacerequirements.
Dockleveler
devicethatprovidesabridgetothetraileraswellasaramptofacilitatethetransitioninheightfromdocktotrailer.
Docklevelersareratedbyweightcapacityandbytheservicerange.Theservicerange,alsoknownastheheight
differential,ratesthesaferangeaboveandbelowdocklevelyoucanusethelevelertotransitiontothetrailerheight.
SeealsoarticleDockSafety
Docktostock
docktostockhasnumerousmeaningsdependingontheindustryandcontext.Docktostockoftendescribesa
programwherematerialsarereceivedintostockwithoutanyincominginspection.Thisoftenrequirescertificationof
supplierstoensuretheycanadequatelymeetqualitystandards.Docktostockmayalsodescribeaperformance
measurementwhereyoutrackthetimeittakesforinboundreceiptstogetfromthedock,throughthereceiving
process,andtotheirstockinglocationwithalltransactionscompleted.ThesearethetwomostcommonusesIhave
runinto,butIhaveencounteredotherusesoftheterm.
Doubledeeprack
atypeofpalletrackdesignedtobeusedwithdoubledeepreachtrucksthatallowstorageofpalletizedloads2deep
inrack.Doubledeeprackmaybeauniquedesign(designedspecificallyfordoubledeepstorage)ormayjustbea
doubledeepconfigurationofstandardselectivepalletrack.AlsoseeReachtruckandcheckoutarticleonAisle
Widths.
DRP
Distributionrequirementsplanning(seeseparatelisting)
Driveinrack
rackingsystemdesignedtoallowalifttrucktodriveintothebaycreatingveryhighdensitystoragefornon
stackableloads.UsefulforoperationswithlimitedSKUsandhighquantitiesofpalletsperSKU.FIFOisdifficultto
maintainindriveinrackingsystems.a.k.a.DrivethruRack.AlsoseeRackingPicsPage.
Dropship
seeDirectship.
Drumhandlingattachments
describesthevariousdesignsoflifttruckattachmentusedtohandle55gallondrums.Somearesmallerversionsof
apaperrollclampwhileothersmayengagetheupperrimofthedrum,orthelowerrings.Somedrumattachmentsare
capableofpickingupmultipledrumsatthesametime.
Drystorage
thoughdrystoragecanhaveothermeaningsindifferentindustries,inwarehousingitistypicallyusedtodescribe
nonrefrigeratedstorageoffoodproducts(cannedgoods,drygoods,etc).SeealsoColdstorage
DSD
Directstoredelivery(seeseparatelisting)
Dunnage
fillmaterial.Typesofdunnageincludeloosefill(packingpeanuts),papar,bubblewrap,foam,andairpillows.
Duty
Dutiesarefeescollectedbycustomsauthoritiesuponentryintoacounty.Dutiesarenotthesameastaxes,which
mayalsobecollectedbythecustomsauthority.
Dynamicslotting
thisisatermsometimesusedbyWMSproviderstodescribeahigherlevelofslottingfunctionality.Unfortunately,
thereisnotastandarddefinitionforthis,butitusuallyreferstotheabilitytochangeslottingrecommendationsasitem
profiles,orderprofiles,orotheroperationalcharacteristicschange.Insomecasesitinvolvestemporaryslottingto
supportknownorders(itemswithmanypickswillbemovedintoatemporaryslotbytheorderpicker).
Each
eachoreachesreferstotheunitsyouareusing(eitherinphysicalprocessesorinyourinventorysystem).Inmost
caseseachesimpliesyouareusingthesmallestpossibleunitofmeasure(theindividualpieces).
Economicorderquantity
 resultofacalculationthatdeterminesthemostcosteffectivequantitytoorder(purchaseditems)orproduce
(manufactureditems).Theformulabasicallyfindsthepointatwhichthecombinationofordercostandcarryingcostis
theleast.ThestandardformulaisEOQ=SquareRoot[2*(AnnualUsage)*(OrderCost)/(AnnualCarrying
Cost/unit)].Thedifficultpartofimplementingtheformulaisgettingaccuratevaluesforordercostandcarryingcost.
FormoreinfoonEOQseemyarticleOptimizingEOQorcheckoutmybookoninventorymanagement.
EDI
ElectronicDataInterchange(seeseparatelisting).
Effectiveleadtime
effectiveleadtimerepresentsaperiodoftimethatincludestheleadtime(seeLeadtime),plusadditionaltime
factorsthatmayoccurbetweenthetimetheneedforanorderinknown,andtheinventoryisinstockandavailable.
Forexample,afixedorderingschedule(ordersareonlyplacedonspecificdaysforspecificvendors)mayaddsome
timetotheleadtime,asmaysomeinternalprocessing.
Electronicproductcode
EPCistheRFIDversionoftheUPCbarcode.EPCisintendedtobeusedforspecificproductidentification.
However,EPCgoesbeyondUPCbynotonlyidentifyingtheproductasanSKU,butalsoprovidingaccessto
additionaldataabouttheoriginandhistoryofthespecificunits.TheEPCtagitselfidentifiesthemanufacturer,
product,version,andserialnumber.It'stheserialnumberthattakesEPCtothenextlevel.Thisisthekeytodata
relatedtospecificlots/batchesaswellaspotentiallytrackingthespecificunit'shistoryasitmovesthroughthesupply
chain.Thisdataisstoredsomewhereelse(theinternetorothernetwork)butastandardizedarchitectureallowsyouto
accessthedatamuchlikeyouwouldaccessawebpage(thoughthiswouldbehappeningautomaticallybehindthe
scenes).SeemyarticleonRFIDformoreinfo.
Electronicdatainterchange
Asthenameimplies,EDIisanelectronicmeansofexchangingdata.Ininventorymanagement,EDIisoftenusedto
exchangedatasuchaspurchaseorderdetailsandadvancedshipmentnotifications.SeeWikipediapageforEDI
Enterpriseresourceplanning
describessoftwaresystemsdesignedtomanagemostorallaspectsofamanufacturingordistributionenterprise(an
expandedversionofMRPsystems).ERPsystemsareusuallybrokendownintomodulessuchasFinancials,Sales,
Purchasing,InventoryManagement,Manufacturing,MRP,DRP.Themodulesaredesignedtoworkseamlesslywith
therestofthesystemandshouldprovideaconsistentuserinterfacebetweenthem.Thesesystemsusuallyhave
extensivesetupoptionsthatallowyoutocustomizetheirfunctionalitytoyourspecificbusinessneeds.Unfortunately,
intherealworld,ERPsystemsrarelyaresufficienttomeetallbusinessneedsandamyriadofothersoftware
packagessuchasCustomerRelationshipManagement(CRM),ManufacturingExecutionSystems(MES),Advanced
PlanningandScheduling(APS),WarehouseManagementSystems(WMS)andTransportationManagementSystems
(TMS)arebeingsoldtomakeupforthesedeficiencies.
EOQ
Economicorderquantity(seeseparatelisting).
EPC
Electronicproductcode(seeseparatelisting)
ERP
Enterpriseresourceplanning(seeseparatelisting)
ESFR
Earlysuppressionfastresponse.Sprinklersystemtechnologythatexecutesfasterandwithasubstantiallygreater
volumeofwater.ESFRsprinklersmayeliminatetheneedforinracksprinklersystemsinmanywarehouses,thus
reducingthecostofinstallationand,moreimportantly,theriskofwaterdamagecausedbydamagetoinrack
sprinklers.RetrofittingESFRintoolderwarehousesisnotalwaysfeasibleduetolimitedwaterpressureinoldsystems.
Eventmanagement
softwarefunctionalitythattriggersspecificactionsbasedupontheoccurrenceofaspecificeventorcombinationof
events.Thisisanotheroneofthosetermsusedprimarilybysoftwarevendorsandconsultantstopush"new"
technology.Inreality,businesssoftwarehasbeenprovidingeventmanagementfunctionalityforyears.Ifinventory
droppingbelowapredeterminedlevel(reorderpoint)triggersamessagetoaplanner(orevenalistingonareorder
report),thisisessentiallyeventmanagement.
ExcessInventory
inventoryquantitiesaboveaspecificneed.Somebusinessesmaydesignateexcessinventoryasinventorybeyond
acertaintimeperiodofdemand.Forexample,anyinventorygreaterthan60day'sdemand.Othersmaydesignateitas
inventorybeyondtheircurrentsafetystockpluslotsize(orderquantity).Thesecondmethodassumesyouhave
formulasforadjustingsafetystockandlotsizesasdemandchanges.Thismethodbasicallycalculateshowmuch
moreinventoryyouhavethanyouwouldhaveifyoustartedwithnothingandstockedbasedoncurrentdemandand
orderingpractices.Youwillgenerallyusetoleranceswiththe2ndmethod.SeealsoObsoleteInventory
Explosionprooflifttrucks
lifttrucksdesignedtoworkinhazardousenvironmentswherehighlycombustiblematerialsarepresent.Vehiclesare
designedtoavoidsparksandcomponentsreachingcombustibletemperatures.Specialelectricalsystemsand
materialsareusedtoachievethis.
Exponentialsmoothing
forecastingmethodthatisessentiallyavariationofaweightedmovingaverage.Thedatainputstotheexponential
smoothingincludethepreviousperiodsdemand,thepreviousperiodsforecast,andasmoothingfactor.The
smoothingfactorisanumberbetweenzeroandone(0.01,0.02,...0.99)thatisusedtoweightthemostrecent
periodsdemandagainsttheforecastforthatperiodtoproducethenextperiodsforecast.Thecalculationis[Next
periodforecast]=([Previousperiodsdemand]*[Smoothingfactor])+([Previousperiodsforecast]*(1[Smoothingfactor]
SeearticleonExponentialSmoothing.
Extrusion
generallydescribesanitemmadeofmetalorplasticthatisproducedbyforcingtherawmaterialthroughadie
(extruding).Theresultbeingalongitemwithauniformshapethroughoutthelength.Extrusionswilloften(thoughnot
always)requirecuttingandothermachiningprocessestoturnthemintoafinisheditem.
FastCharging
Methodforquicklyrecharginglifttruckbatteriesonthevehicleduringshortperiodswherethevehicleisnotbeing
used(lunches,breaks,shiftchanges,etc).Thisprocessfor"opportunitycharging"eliminatestheneedtochange
batteriesinmultishiftoperations.Fastchargingrequiresspecialchargers(calledfastchargers).Fastchargersare
 significantlymoreexpensivethanstandardbatterychargersandthereisstilldebateastowhetherornotfastcharging
causesanyharmtothebatteries.Thecostofthefastchargerscanbeoffsetbylaborandequipmentsavingsrelated
totheeliminationofchangingbatteries.
FastMovingConsumerGoods
(FMCG)descriptionofcommonhighvolumeproductssuchasfood,hygieneproduct,orcleaningsupplies.These
wouldbeproductsthattheaverageconsumerwouldfrequentlypurchasesuchassoda,toothpaste,ordishsoap.
Fastpick
referstofastmovingitems,orthelocationsdesignatedforfastmovingitems.
FIFO
Firstinfirstout.Inwarehousingdescribesthemethodofrotatinginventorytousedoldestproductfirst.Actuallyan
accountingtermusedtodescribeaninventorycostingmethod.SeeLIFO
Fillrate
Salesorderprocessingmeasurementthatquantifiestheabilitytofillorders.Therearevariouswaysofmeasuringfill
rate.Linefillcomparesthenumberoflineitemsshippedcompletetothetotalnumberoflinesordered(95lineitems
shippedcompleteoutof100linesorderedwouldresultina95%linefillrate).Orderfillcomparesthenumberoforders
shippedcompletetothetotalnumberofordersshipped.Otherexamplesoffillrateswouldincludedollarfillrate
(comparingdollarsshippedtodollarsordered),unitfillrate(comparingunitsshippedtounitsordered).Infulfillment
operationsandsomedistributionoperationswhereordersaregenerallyshippedwithin24hoursofreceiptoforder,fill
ratesreflecttheabilitytoimmediatelyshipfromstock.Inmanufacturingoperationsanddistributionoperationsthat
haveleadtimesforproducts,fillratesreflecttheabilitytoshiptoanagreedtodate.Intheseenvironmentsfillrate
measurementsaresometimescalledOntimeandComplete(OTC)orOntimeDelivery(OTD)measurement.
Tolerancesaresometimesusedinfillratemeasurementstoallowlinesorordersthatarenotshippedcompletebutare
withinthetolerancetobeconsideredas"shippedcomplete".Thetolerancesmaybebasedonunits,dollars,lines,or
dates(shippedwithincertaintoleranceofrequireddate).
Fixedleadtime
asetleadtimethatdoesn'tchange.AlsoseeLeadtime,VariableLeadtime.
Flexconveyor
portableconveyorthatcanbeexpanded,contracted,andflexedaroundcurves.SeeConveyerPics.
Floorload
amethodofloadingtrucks,trailers,orcontainerswhereyouloadthegoodsdirectlyonthefloorratherthanusing
palletsorothercontainers.Floorloadingtendstobeverylaborintensive,butprovidesthegreatestopportunityfor
utilizingthefullcubeofthetruck,trailer,orcontainer.
Floorstock
inventorythatisconsumedinproductionbutisnottrackedintheperpetualinventorysystem.Floorstockisdifferent
fromnonstockinventorysinceitdoesactuallyhaveanSKUnumberanditemmasterrecord,butratherthantracking
quantitiesintheinventorysystem,thematerialsareexpensedastheyarereceived
Flowrack
rackingsystemthatincorporatessectionsofconveyortoallowthecartonsorpalletstoflowtothefaceoftherack.
Stockingisperformedfromtherearoftherack.AlsoseeRackingPicsPage.
Fluespace
SeeLongitudinalfluespaceandTransversefluespace.
FMCG
FastMovingConsumerGoods(seeseparatelisting)
Foodgradewarehouse
AFoodgradewarehouseisawarehousethatmeetsspecificrequirementsforthestorageofedibleproductsor
materialsthatwillmakeupedibleproducts(ingredientsorevenpackaging).Tomyknowledge,"foodgrade"isnota
singledesignationorcertification,butinsteadisabroaddesignationusedtodescribethesetypesoffacilities.And
whiletheremaybegovernmentalrequirementsforfoodstoragebasedonthelocationofthefacility,actual
"certification"offoodgradeisusuallycompletedbyprivate(nongovernment)organizations,andrequiredbasedonthe
specificcustomerbasebeingserved.Forexample,theindustryyouservemayrequireinspectionsandcertification
fromAIB(theAmericanInstituteofBaking).Themostvisuallynotablefeatureofatypicalfoodgradewarehouseis
the18inchwidewhitelinepaintedonthefloorfollowingtheentireperimeterofallwallsinthefacility.Thisareamust
bekeptclearandcleanatalltimes(primarilyrelatedtopestcontrol).Foodgradefacilitiesmaybemadeupofdry
storageand/orcoldstorage.
Forecast
AForecastisanestimationoffuturedemand.Mostforecastsusehistoricaldemandtocalculatefuturedemand.
Adjustmentsforseasonalityandtrendareoftennecessary.Forecastingisallaboutturningunknownsintoknowns(or
reasonableapproximations).Formoreinfoonforecasting,checkoutmybookoninventorymanagement.
Forecastconsumption
describesthemethod(s)yourinventorymanagementsoftwareusestoreduceforecasteddemandbytheactual
demandthatoccursduringtheforecastperiod.Incorrectlysetupforecastconsumptionparametersorlackof
functionalityrelatedtoforecastconsumptioncanoftencreateseriousproblemswithplanningsystems.
Forecasterror
thedifferencebetweentheforecastquantityforaperiodandtheactualdemandexperiencedduringthatperiod.
Forecasterroriscalculatedaftertheperiodhaspassedandisusedtoevaluatetheforecastandmakeadjustments.
Forging
generallydescribesanunfinisheditemmadeofmetalthatisproducedthroughaprocessthatheatsthemetal(notto
meltingpoint)thenusespressureorhammeringtochangetheshapeofthemetalintoashapethatcloselyresembles
thefinisheditemthatwillultimatelybemade(throughmachiningprocesses)fromtheforging.
Forklift
a.k.aForkLift.SeeLiftTrucks.
Forkliftfreeplants
astrategytoeliminateorreduceforkliftuseinoperations.Usedmainlyinmanufacturingoperations,forkliftfree
usuallyinvolvesfindingwaystoeliminateforkliftuseinspecificareas(mainlytheproductionareas).Akeybenefitis
 thesafetyofworkers,butotherbenefitssuchasbetterspaceutilizationandreductionofcostsassociatedwithlift
trucksmayalsobefactors.
Forkpositioner
lifttruckattachmentsthatallowtheoperatortoadjustthedistancebetweentheforkswithoutgettingoffofthetruck.
Usedprimarilyinhighvolumeoperationswherethereisagreatvarietyofpalletandcratesizeshandled.
Forwardpicklocation
thesearelocationsinawarehouseusedspecificallyfororderpicking.Whenyouuseforwardpicklocationsitis
assumedthatyoualsohavereservestoragelocations.AlsoseeReserveStorageLocations.
Freelift
inlifttruckspecifications,freeliftdescribesthedistancetheforkscantravelverticallybeforethemaststartsto
extend.Freeliftisimportantifyouneedtostackorunstackloadswithinanareawithalowceiling,suchasintrailersor
containers.
FTZ
ForeignTradeZone(alsoknownasFreeTradeZone),issimilartoaBondedWarehouseinthatithasaspecial
statusthatallowsproductstobeimportedintoitwithouttaxesordutiesbeingpaid.However,aForeignTradeZone
actuallyhaslessrestrictionsplaceduponitthanastandardbondedwarehouseandactivitiessuchasmanufacturing
canoccurwithinanFTZ.Hereisanicelinktoasitethatexplainsthesedifferenceingreaterdetail
http://www.inzone.org/?&section=basics&subsection=bonded.AlsoseeBondedWarehouse
Fulfillment
theactivityofprocessingcustomershipments.Thoughmostmanufacturigandwarehouseoperationswillprocess
customershipments,thistermusuallyreferstooperationsthatshipmanysmallorders(usuallyparcels)toendusers
asopposedtooperationsthatprocesslargershipmentstoothermanufacturers,wholesalers,orresellers.Examplesof
fulfillmentoperationswouldincludeoperationsthatprocessshipmentsformailordercatalogs,internetstores,orrepair
parts.
BACKTOTOPOFPAGE
Copyright.ContentonInventoryOps.comiscopyrightprotectedandisnotavailableforrepublication.

Gaylord
alargecorrugatedcontainerusuallysizedtomatchthelengthandwidthdimensionsofapallet.Gaylordisactuallya
tradenamethathasbecomesynonymouswiththisspecifictypeofcontainer.AlrightBeavis,youcanstopsnickering
now.
GMApallet
AlsoknownasaGroceryPallet,aGMApalletismadetothespecificationsoftheGroceryManufacturer's
Association.Itisbasicallya4waypalletthatis40incheswide,by48inchesdeep,by5inchesinheightandhasthe
deckboardsandbottomboardsmountedflushwithwiththeoutsidestringers(moredetailedspecsareavailablefrom
theGroceryManufacturer'sAssociation).AlsoseePallet
GMROII
GrossMarginReturnonInventoryInvestment.Calculationthatshowsyourmarginrelativetoyouraverageinventory
investment.Calculatedbydividingyourannualgrossmargin(dollars)byyouraverageinventory(dollars).Particularly
usefulindeterminingwhichitemsprovidethegreatestprofitpotentialrelativetoyourinvestmentininventory.Aswith
allcalculationsthatuse"grossmargin"asaninput,theoutputmaybeflawedifothercostsnotincludedinthegross
calculationmayvarysignificantlyfromoneitemtoanother.
Guidancesystems
guidancesystemsareusedtoguideautomatedguidedvehiclesthroughplants,guidelifttrucksinverynarrowaisle
storageareas.WireguidedandRailguidedtendtobethemostcommonguidancesystems,butothersincludinglaser,
opticalsystems,andmagnetictapearealsoavailable.SeealsoWireguided,Railguided,Laserguided,Optical
guided.
Gravityconveyor
typesofconveyorthatusegravitytomovematerials.Skatewheelconveyerandrollerconveyorarethemost
commontypesofgravityconveyorused,however,evenasimplesteelchuteisessentiallyagravityconveyor.
Highdensitystorage
describesstoragemethodswhereunitizedloadsarestoredmorethanoneunitdeepand/orhigh.Stackedbulkfloor
storage,drivein/drivethrurack,pushbackrack,flowrack,and,toalesserextent,doubledeeprack,areexamplesof
highdensitystorage.
Highpiledcombustiblestorage
termusedinfirecodestorefertocodesrelatingtofloororrackedstorageexceeding12feetinheightorhighhazard
commoditystorageexceeding6feetinheight.SeearticleWarehouseFireSafety,
Honeycombing
referstotheunusedpalletpositionsinhighdensitystoragethatresultwhenthenumberofunitloadsforanitem
doesnotcompletelyfillthestoragelane.SincemixingSKUsinhighdensitystorageisnormallynotdone,these
unusedpalletpositionsarenotavailabletostoreothermaterials.
Impactalarm
a.k.ashockalarm,shockswitch.Impactalarmsaredevicesthatcanbeattachedtolifttruckstosenseimpacts
(collisions).Therealityofimpactalarmsisnotnearaswonderfulastheconcept.SeemyarticleonLiftTruckSafety
formoredetails.
Inchingpedal
onlifttruckswithinternalcombustion(gasoline,liquidpropane,diesel)enginesitisnecessarytorevtheenginein
ordertogetthepowerneededtoliftaloadwiththehydraulics.Aninchingpedalactslikeacombinationofaclutch
pedalandbrakepedal.Whenslightlydepressed,itputsthetransmissioninneutralallowingtheoperatortorevthe
engine.Whencompletelydepresseditengagesthebrakes.Aninchingpedalmaybeaseparatepedalfromthebrake
pedalorbepartofthemainbrakepedal.
IndependentDemand
demandgeneratedfromforecasts,customerordersorserviceparts.
IndustrialTruck
 vehiclesusedforindustrialpurposes.Generallyusedtotransportmaterialsandpersonnelwithinindustrialfacilities.
Lifttrucks(forklifts)arethemostwellknowntypeofindustrialtruck.
Innerpack
anadditionallevelofmultiunitpackagingwithinacase,carton,orotherlargerpackaging.Forexample,youmay
haveacasethatcontains600unitsofanitem,butwithinthatcaseyouhave24smallerboxesorbagsthateach
contain25units.Thesesmallerpackagesarecalledinnerpacks.
Intermodal
transportationtermdescribingtheuseofmultiplemodesoftransportationforashipment.Oceancontainersthatare
pickedupbyatruck,deliveredtoport,transportedbyship,andthenpickedupbyanothertruckareacommon
exampleofintermodaltransportation.Inthetruckingindustry,intermodalusuallyreferstothecombinationoftrucking
andrailtransportation.
Inventory
anyquantifiableitemthatyoucanhandle,buy,sell,store,consume,produce,ortrackcanbeconsideredinventory.
Thiscoverseverythingfromofficeandmaintenancesupplies,torawmaterialusedformanufacturing,tosemifinished
andfinishedgoods,tofuelusedtopowerequipmentusedinthebusiness.
Inventorymanagement
thedirectionandcontrolofactivitieswiththepurposeofgettingtherightinventoryintherightplaceattherighttime
intherightquantityintherightformattherightcost.
InventoryTurn
numberoftimesinventoryisconsumedorsoldduringaoneyearperiod.Generallycalculatedbydividingthe
averageinventorylevel(orcurrentinventorylevel)intotheannualinventoryusage(annualCostofGoodsSold).Inmy
opinion,InventoryTurnsisprobablythemostoverused,misused,andabusedinventorymetric.That'sprimarily
becauseitdoesn'treallytellyouahellofalot,yetcompaniesinsistonbuildingorderpoliciesonit.
Item
seeSKU
ItemProfile
datathatdescribesthecharacteristicsofanitem.Mayincludephysicalcharacteristicssuchassizeandweight,
transactionalcharacteristicssuchastimessold/consumedandunitssold/consumed,orgroupcharacteristicssuchas
saleschannel,commodity,hazardousclassification,etc.Itemprofilesareusedinwarehousedesignandslotting.
JackpotLine
thisisoneofthosefunkytermsthathassomehowachievedwidespreadacceptanceinthematerialhandling
industry.Usuallyusedwithautomatedsystemssuchasautomatedconveyorsystems,aJackpotLinereferstoan
areawhereexceptionsarerouted.Exceptionsmayincludeordersthatcouldnotbecompleted(shortagesorWMS
error),ordersrequiringspecialprocessing,orweightorsizeexceptions.ThetermsJackpotLane,orJackpotAreaare
alsousedtodescribesimilarexceptionareas.
JIT
Justintime.Termusuallythoughtofasdescribinginventoryarrivingorbeingproducedjustintimefortheshipment
ornextprocess.Actually,JITisaprocessforoptimizingmanufacturingprocessesbyeliminatingallprocesswaste
includingwastedsteps,wastedmaterial,excessinventory,etc.
JobShop
amanufacturingslangtermthatcanhaveavarietyofmeanings,butgenerallyreferstoamanufacturingoperation
thatdoesprimarilycustomfabricationtoacustomer'sspecs.Theseareoftensmallermachineshoptypeoperations,
butthetermcanbeusedtodescribelargeroperations.Itbasicallycomesdowntoaprocesswherebyacustomer
ordersaquantityofsomethingbuilttoacertainspec,thisbecomesajob.Thatitembuilttothatspecmayormaynot
havebeenrunbeforeormayormaynotberepeatedinthefuture.
Justinsequence
Acombinationofjustintimedeliverywithproductionlinesequencingofdelivereditems.Acustomerwillnotifya
supplieroftheitemsneededandthesequencebasedonthecustomer'smanufacturingschedule,thesupplierwillthen
puttogethertheshipmentwiththeitemsintheappropriatesequenceanddeliverthemtothecustomer(sometimes
directlytotheassemblyline).Thisismostcommonintheautomotiveandsimilarassemblylineindustrieswhereeach
unitontheassemblylinecanbeconfigureddifferently(componentoptions).
Kanban
usedaspartofaJustInTimeproductionoperationwherecomponentsandsubassembliesareproducedbased
uponnotificationofdemandfromasubsequentoperation.Historically,Kanbanhasbeenaphysicalnotificationsuchas
acard(kanbancards)orevenanemptyhopperortotesentupthelinetothepreviousoperation.Kanbanisactuallya
simplisticmeansofbothsignalingtheneedforinventoryaswellascontrollingtheinventorylevels(bylimitingkanban
cardsorcontainers).
LandedCost
inventorycostingmethodthatincludesthepurchasedcostplustransportationcosts,importfees,duties,taxes,and
othercostsincurredinobtainingtheinventory.
Laserguided
guidancesystemusedwithAGVsthatusesarotatinglaser(mountedontopofthevehicle)todeterminethe
vehicleslocation.Reflectivetargetsneedtobestrategicallyplacedalongthevehicle'sroute.Mustalwaysmaintain
clearlineofsitetoreflectivetargetsforthesystemtoworkproperly.
Laserscanner
devicethatusesamovinglasertoreadbarcodes.Devicescanbeportablehandheldunits,orfixedunits.
Leadtime
amountoftimerequiredforanitemtobeavailableforusefromthetimeitisordered.Leadtimeshouldinclude
purchaseorderprocessingtime,vendorprocessingtime,intransittime,receiving,inspection,andanyprepacktimes.
However,basedonthewaymanyinventorysystemswork,theremaybeproblemsincorporatinginternalfactorssuch
aspostreceiptprocessinginLeadtime,soinmanysystems,theleadtimejustrepresentstheperiodoftimefrom
whichtheitemisorderedtothetimeitarrivesatyourdock.AlsoseeEffectiveleadtime,Fixedleadtime,Variable
leadtime.
Leadtimedemand
forecasteddemandduringtheleadtimeperiod.Forexample,ifyourforecasteddemandis3unitsperdayandyour
leadtimeis12days,yourleadtimedemandwouldbe36units.
Leanmanufacturing
alternatetermusedtodescribethephilosophiesandtechniquesassociatedwithJustintime(JIT)manufacturing.
Legacysystem
impliesabusinesscomputer/informationsystemthatisoldoroutdated.Oftenusedtodescribehomegrown(custom
built)mainframesystems,however,softwarecompanieswillusethetermlegacysystemtodefineanysystemthatis
notbasedonthecurrentversionofabusinesssoftwarepackage.
Lessthantruckload
transportationtermthatdescribesshipmentsthatarelessthanatrailerloadinsize.LTLalsoisusedtodescribethe
carriersthathandletheseloads.LTLcarriersgenerallyusestrategicallyplacedhubstosortandconsolidateLTL
shipmentsintofulltruckloadshipments.
LicensePlate
Licenseplatesareoftenusedwithwarehousemanagementsystems.TheyarebasicallyanIDnumberplacedona
pallet,tote,cartonorothercontainer,andareusedtotrackthecontentsofthatcontainerasitmovesthroughthe
warehouse.ThelicenseplatewillalmostalwayshaveabarcodethatcontainsthisIDnumber.Sobyscanningasingle
barcodeonthepalletyoucaninitiateorcompletemovementtransactionsforallitemsandquantitiesonthatpallet.
LIFO,Lastinfirstout
inwarehousing,describesthemethodforusingthenewestinventoryfirst(I'veneverseenanoperationthatuses
this).Inaccounting,it'satermusedtodescribeaninventorycostingmethod.SeeFIFO
Lifttruck
vehiclesusedtolift,move,stack,rack,orotherwisemanipulateloads.Materialhandlingworkersusealotofterms
todescribelifttruckssometermsdescribespecifictypesofvehicles,othersareslangtermsortradenamesthat
peopleoftenmistakenlyusetodescribetrucks.Termsinclude,industrialtruck,forklift,reachtruck,motorizedpallet
trucks,turrettrucks,counterbalancedforklift,walkie,rider,walkierider,walkiestacker,straddlelift,sideloader,order
pickers,highlift,cherrypicker,Jeep,Towmotor,Yale,Crown,Hyster,Raymond,Clark,Drexel.SeeLiftTruckPicsand
articlesonLiftTruckBasicsandLiftTruckSafetyformoreinfo.
Lightsoutwarehouse
a.k.a.Lightsoutfacility.Describesfullyautomatedfacilities.Theideabeingthatifthefacilityrequiresnohuman
operators,youcanrunitwithnolights.UseofAS/RSunits,AGVs,automatedconveyors,robots,etcmakesthis
possible.
Lineitem
asingledetailrecord.Thetermlineitemismostcommonlyusedtodescribethedetail(eachlinethatreflectsan
itemandaquantity)onsalesordersorpurchaseorders.Forexample,ifacustomerorders20redpens,50blackpens,
and10greenpens,thisequatestoanorderwiththreelineitems.
Load
inmanufacturing,describestheamountofproductionscheduledagainstaplantormachine.Inwarehousing,
describesthematerialsbeinghandledbyapieceofequipment.Intransportation,describesthematerialsbeing
transported.
Loadlocks
adjustablesupportbarsusedinsidetrailerstopreventmovementoftheload.a.k.aLoadbars,Cargobars
Locatorsystem
locatorsystemsareinventorytrackingsystemsthatallowyoutoassignlocationstoyourinventorytofacilitate
greatertrackingandtheabilitytostoreproductrandomly.Priortolocatorsystems,warehousesneededtostore
productinsomelogicalmannerinordertobeabletofindit(storedinitemnumbersequence,byvendor,byproduct
description,etc.)Byusinglocatorsystemsyoucanincreasespaceutilizationbyslottingyourproductbymatchingthe
physicalcharacteristicsoftheproducttoalocationwhosephysicalcharacteristicsmatchthatoftheproduct.Youcan
alsoincreaseproductivitybylocatingfastmovingproducttocloser,moreaccessiblelocations,andincreaseaccuracy
byseparatingsimilaritems.Locationfunctionalityinsoftwarecanrangefromasimpletextfieldattachedtoanitem
thatnotesasinglelocation,tosystemsthatallowmultiplelocationsperitemandtrackinventoryquantitiesbylocation.
Warehousemanagementsystems(WMS)takelocatorsystemstothenextlevelbyaddingfunctionalitytodirectthe
movementbetweenlocations.SeearticleonWarehouseManagementSystems,alsocheckoutMybookoninventory
accuracywhichcoverslocatorsystemsinmoredetail..a.k.a.Locationsystem,Binlocations
Lockout/Tagout
theprocessofdisabling(lockout)andidentifying(tagout)equipmentandenergysourcesduringmaintenanceor
servicetopreventinjuryofpersonnelfromanunexpectedstartuporpowerup.
Longitudinalfluespace
termusedbyfirecodestodescribethespacebetweentherowsofbacktobackracking.Fluespacesallowthe
waterfromanoverheadsprinklersystemtoreachlowerlevelsoftherack,andalsoprovidethefireameansorrising
towardsthesprinklersratherthanspreading.Normallyalongitudinalfluespaceofatleast6inchesisusedthoughthis
requirementmayvarybasedonrackheightand"TransverseFluespacing".Itisimportanttonotethatthefluespace
ismeasuredasthedistancebetweentheloads,notthedistancebetweentheracks.AlsoseeTransverseFlueSpace
SeearticleWarehouseFireSafety,
Lotforlot
anordermethodthatisdrivenbyforecastperiods.Orderquantitieswillmatchdemandineachspecificforecast
period.
Lotsize
alsoknownasorderquantity,lotsizerepresentsthequantityofanitemyouorderfordeliveryonaspecificdate,or
manufactureinasingleproductionrun.Formoreinfoonlotsizing,checkoutmybookoninventorymanagement.
LTL
Lessthantruckload(seeseparatelisting)
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Maintenance,repair,andoperatinginventory
(MRO).Inventoryusedtomaintainequipmentaswellasmiscellaneoussuppliessuchasofficecleaningsupplies.
Manup
 termusedtodescribelifttrucksdesignedtoraisetheoperatorwiththeload.Orderselectorsandturrettrucksarethe
mostcommontypesofmanupvehicles.
Manufacturingexecutionsystem
softwaresystemsdesignedtointegratewithenterprisesystemstoenhancetheshopfloorcontrolfunctionalitythat
isusuallyinadequateinERPsystems.MESprovidesforshopfloorscheduling,productionandlaborreporting,
integrationwithcomputerizedmanufacturingsystemssuchasautomaticdatacollectionandcomputerizedmachinery.
Masterproductionschedule(MPS)
Productionschedulespecifyingspecificitems,quantities,anddatesatwhichproductionisexpectedtotakeplace.
TheprimarypurposeofanMPSistomanagecapacitywhenyouhavesometimeperiodswheredemandisexpected
toexceedcapacity.YouwillthenuseMPStoproducesomeproductsinadvanceofdemand(forecastedoractual
orders)duringperiodswhencapacityexceedsdemand.
MES
Manufacturingexecutionsystem(seeseparatelisting)
Mezzanine
atieredstructurewithinabuildingusedtoprovideworkeraccesstovariouslevels.Mezzaninescanbefreestanding
structuressupportedbypostsandtrusses,orcanbeaseriesofwalkwayssupportedbystorageequipment(rack
supportedmezzanine).
Milkrun
I'veencounteredmayvariationsonthedefinitionofthistermbutbasicallyamilkrunconsistsofapickupand/or
deliveryroutewhereseveralstopsaremade.Usuallyitreferstoaregularlyrunroute,butitmayalsorefertoaone
timerunwhereseveralstopsaremade.Someconsideramilkruntomeanaroutewhereshipmentsaredeliveredand
inboundmaterialspickedupinthesamerun.
Minmax
asimplisticinventorysysteminwhichaminimumquantityandmaximumquantityaresetforanitem.Whenthe
quantitydropsbelowMinyouorderuptotheMax.AlsoseeOptionalreplenishment.
Motorizedpallettruck
motorizedpallettrucksarethemotorizedversionofthepalletjack.Theycomein"Walkie"versionsor"Rider"
versions.Asyouwouldexpect,thewalkieisdesignedfortheoperatortowalkalongwiththetruckastheymoveloads,
whiletheriderhasasmallplatformthattheoperatorstandson.Theridersworkgreatforfrequentmovingofloadsover
extendeddistanceswithinwarehousesandmanufacturingoperations.a.k.a.Walkie,Walkierider,Rider..AlsoseeLift
TruckPicsandLiftTruckBasicsformoreinfo
MPS
Masterproductionschedule(seeseparatelisting)
MRP/MRPII,Manufacturingresourceplanning
processfordeterminingmaterial,laborandmachinerequirementsinamanufacturingenvironment.MRPIIisthe
consolidationofMaterialRequirementsPlanning(MRP),CapacityRequirementsPlanning(CRP),andMaster
ProductionScheduling(MPS).MRPwasoriginallydesignedformaterialsplanningonly.Whenlaborandmachine
(resources)planningwereincorporateditbecameknownasMRPII.TodaythedefinitionofMRPIIisgenerally
associatedwithMRPsystems.
MRPgeneration
termusedtodescribetherunningoftheprogramsthatconvertdemandintoplannedorders.Dependingonthe
operation,MRPGenerationmayberundaily,weekly,orevenmonthly.Sincethisprocessingrequiresalotofsystem
resourcesitisgenerallyconfinedtooffhoursorweekendprocessing.
MRO
Maintenance,repair,andoperatinginventory(seeseparatelisting)
Multimodal
intransportation,multimodaldescribesasingleshipmentthatusestwoormoreformsoftransportationviaasingle
contract(billoflading).Forexampleacombinationoftruckandrail,ortruckandoceanfreight.
Multimodaldatacollection
usingtwoormoredatacollectiontechnologiestogethertoperformtasks.Forexample,usingavoicedirectedorder
pickingsystemcombinedwithabarcodescanner.ReadmyarticleonMultimodalDataCollection.
Narrowaisle
describeslifttrucksthatoperateinaislesof8'to10'.Narrowaisletrucksaregenerallystandupvehiclessuchas
reachtrucks.AlsoseeVaryNarrowAisle(VNA)andreadarticleTheAisleWidthDecision
Negativeinventory
aninventorysystem(computer)conditionwherebytheonhandinventorybalanceislistedasaquantitylessthan
zero.Checkoutmyarticleonnegativeinventory
Nonstockinventory
alsocallednoninventory,thisisinventorythatisnottrackedwithinyourperpetualinventorysystem.Nonstock
inventorywillnothaveanitemmasterrecordorinternalSKUnumber.
Normaldistribution
termusedinstatisticalanalysistodescribeadistributionofnumbersinwhichtheprobabilityofanoccurrence,if
graphed,wouldfollowtheformofabellshapedcurve.Thisisthemostpopulardistributionmodelfordetermining
probabilityandhasbeenfoundtoworkwellinpredictingdemandvariabilitybaseduponhistoricaldata.
ObsoleteInventory
inventorythathashadnosalesorusageactivityforaspecificperiodoftime.Theperiodoftimevariesbycompany
andindustryandmayevenvarybyproductlinewithinaspecificcompanyandmayrangefromweekstoyears.a.k.a.
DeadInventory.SeealsoExcessInventory
OpenSource
Softwarethathasthesourcecodefreelyavailableformodification.Inmostcases,opensourcesoftwareisalso
"Freesoftware"inthatitrequiresnolicensingfees.TheLinuxoperatingsystem,Apachewebserver,PHP
programminglanguage,MySQLdatabase,andOpenOfficeofficesuiteareamongthebestknownfreeopensource
products.However,whenincomestobusinesssoftware(suchasERPsystems),I'venoticedthatsomeofthe
 productsthatadvertise(that'saclue)asopensource,arenotexactlyfree.Somehavelicensingfees,whileothersare
builtondatabasesorotherprogramsthathavelicensingfees.
Operation
Iusethetermoperationfrequentlyinmywritingswithtwoverydistinctmeanings.Atagenerallevel,anoperationis
theoverallworkenvironmentthatincludesthefacility(s)andallactivitiesthatoccurwithinit.WhendiscussingMRP
andrelatedtopics,anoperationisaspecificstepthatexistsintheroutingofamanufacturingprocess.
Optionalreplenishment
theactionoforderingorproducinguptotheMaxinaMinMaxsystemeventhoughinventoryhasnotreachedthe
Min.Maybeusedtoavoiddowntimeonmachinesetc.
Opticalguided
guidancesystemthatusesaspecialstrip(tapedorpainted)onthefloortoguideanAGV.
Ordercost
alsoknownaspurchasecostorsetupcost,ordercostisthesumofthefixedcoststhatareincurredeachtimean
itemisordered.Thesecostsarenotassociatedwiththequantityorderedbutprimarilywithphysicalactivitiesrequired
toprocesstheorder.Forpurchaseditems,thesewouldincludethecosttoenterthepurchaseorderand/orrequisition,
anyapprovalsteps,thecosttoprocessthereceipt,incominginspection,invoiceprocessingandvendorpayment,and
insomecasesaportionoftheinboundfreightmayalsobeincludedinordercost.Inmanufacturing,theordercost
wouldincludethetimetoinitiatetheworkorder,timeassociatedwithpickingandissuingcomponentsexcludingtime
associatedwithcountingandhandlingspecificquantities,allproductionschedulingtime,machinesetuptime,and
inspectiontime.Ordercostisusedaspartofmostcostbasedorderquantity/lotsizingcalculations.Seearticleon
EOQformoredetailedinfoonordercost.
Ordercycle
alsocalledreplenishmentcycle,ordercyclereferstothetimebetweenordersofaspecificitem.Mosteasily
calculatedbydividingtheorderquantitybytheannualdemandandmultiplyingbythenumberofdaysintheyear.
Orderpoint
seeReorderpoint
Orderprofile
datadescribingthecharacteristicsofinbound,outbound,orinternalorders(outboundismostcommon).Examplesof
characteristicsincorporatedintoanorderprofilecouldinclude:lineitemsperorder,piecesperorder,weightperorder,
cubeperorder,timeofday,destination,shipmentmethod,ordertype,etc.Characteristicsareoftenbrokenintological
groupssuchasbreakinglineitemsperorderintogroupsof1lineitem,24lineitems,510lineitems,1125,26+.
Orderselector
a.k.a.OrderPicker.Lifttruckdesignedspecificallyformanualhandlingoflessthanpalletloadquantitiesinracking.
Manupdesignhasfixedforksattachedtoaplatformthatelevatestheloadandtheoperatortofacilitatemanual
loadingandunloadingfromracking.Orderselectorsareverynarrowaislesvehiclesthatoperateinaislesoflessthan
6'AlsoseeLiftTruckPics,LiftTruckBasics,andTheAisleDecisionformoreinfo.
Outsideoperation
termdescribingastepinthemanufacturingprocessthatisperformedbyanoutsidevendor.Systemsetupfor
outsideoperationscangetfairlycomplicatedandgenerallyrequireslinkingapurchaseorderfortheoutsideprocessing
toaspecificoperationintherouting.Theintegrationofthepurchaseorderprocessandtheworkorderprocessto
ensureaccounting,productionplanning,andinventorymanagementsneedsaremetcanbeconfusingandisoften
problematic
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Paperless
whenreferringtoprocessinginthewarehouse(paperlesspicking,paperlessreceiving)orontheshopfloor,
paperlessgenerallysuggeststhatthedirectionoftasksandexecutionoftransactionsareconductedelectronically
withouttheuseofpaperdocuments.Thisisusuallyaccomplishedthroughtheuseoffixedorportablecomputers,bar
codescanners,RFIDreaders,lightsignalingtechnology(picktolight),orvoicetechnology.Ormaybeitjustmeans
youranoutofpaper.
Paperrollclamp
designedspecificallyforthehandlingoflargepaperrolls,thepaperrollclampisalifttruckattachmentthatclamps
aroundtherollandalsoallowsforafull360degreerotation.
Pallet
aportableplatformdesignedtoallowaforkliftorpalletjacktolift,move,andstorevariousloads.Mostpalletsare
madefromwood,butpalletsarealsomadefromplastic,steel,andevenpaperbasedmaterials.Spec'ingawood
palletinvolvesidentifyingwoodtype(hardwoodorsoftwood),overrallpalletsize,numberandsizeandspacingof
stringers,whetherstringersaretobenotchedfor4wayuse,numberandsizeandspacingofdeckboards,numberand
sizeandspacingofbottomboards,whetherdeckboardsandbottomboardsareattachedflushwithoutsidestringersor
overhangoutsidestringers.Otheroptionsincludeusingasoliddeck(ratherthanseparatedeckboards),chamferingthe
deckboards,usingtreatedwood(forinternationalshipments).2waypalletsallowentrybyaforkliftfromthefrontor
backofthepallet,4waypalletshavethestringersnotched(oruseablockingsysteminsteadofstringers)soaforklift
canalsoenterthepalletfromeitherside.ThemostcommonsizedpalletistheGMA(GroceryManufacturer's
Association)pallet,alsocalledagrocerypallet.Itisa4waypalletthatis40incheswide,by48inchesdeep,by5
inchesinheightandhasthedeckboardsandbottomboardsmountedflushwithwiththeoutsidestringers.Alsosee
Skid.
Palletinverter
atypeofstationaryequipmentusedtotransferproductbetweendifferenttypesofpalletssuchastransferringfrom
woodtoplasticpallets,orfrompalletstoslipsheets.Aloadonapalletisplacedinthepalletinverterandtheentire
loadisrotated180degreesallowingyoutoremovetheoriginalpalletandreplaceitwithanother.
Periodorderquantity
anordermethodthatusesafixedperiodoftimetocalculateorderquantities.Periodorderquantityisgenerally
statedindaysandwillbecomparedtotheforecastattimeofreordertocalculatetheappropriateorderquantity.
Phantombillofmaterial
afictitiousbillofmaterialcreatedforcommonsubassembliesorkitsthatyoudonotwanttoproduceasseparate
items.Forexample,ifyouhaveanumberofproductsthatallusethesamehardwarekityoucancreateaphantombill
 forthehardwarekitandthenjustputthephantomitemonthebillsforallproductsthatuseit.YourMRPsystemwill
treatthephantombillcomponentsasthoughtheywerepartofthebillforthehigherlevelitem(ratherthantreatingitas
aseparateitemthatneedstobeproduced).Phantomitemsneveractuallyexist,theyarejustameansforsimplifying
themanagementofyourbillsofmaterials.
Physicalinventory
referstotheprocessofcountingallinventoryinawarehouseorplant.Operationsareusuallyshutdownduringa
physicalinventory.Seephysicalinventorypageataccuracybook.comformoreinformation,alsoreadmyarticleon
physicalinventories.
Pickandpass
seeZonePicking
Pickface
thisistheportionofourstorageareathatisimmediatelyaccessibletotheorderpicker.Thinkofitasthefront(face)
ofyourstorage.Ifyouweretomeasureapickface,yourmeasurementwouldcontainwidthandheight,butnotdepth.
Pickmodule
candescribeanythingfromalargeareaofawarehousedesignatedfororderpicking(suchasamultilevel
mezzaninepickingarea)totheindividualsectionsofflowrackorotherstoragemediathatmakeupthepickingarea.I
thinktheimplicationhereisthata"pickmodule"somehowhasalevelofsophisticationabovethatofa"warehouse
areausedfororderpicking".It'sreallyjustamarketingtermusedbyequipmentsuppliersandconsultantstotryto
impresstheirclients.
Pickpath
therouteapickerfollowsthroughthepickingareatocompletehispickingtasks.Pickpathscanbeafixedpaththat
flowsthroughtheaislesinthewarehouse,orcanbeuniquetothespecificorder(s)beingpickedatthetime.
Picktoclear
methodoftenusedinwarehousemanagementsystemsthatdirectspickingtothelocationswiththesmallest
quantitiesonhand.
Picktocarton
forparcelshippers,picktocartonlogicusesitemdimensions/weightstoselecttheshippingcartonpriortotheorder
pickingprocess.Itemsarethenpickeddirectlyintotheshippingcarton.Whenpickingiscomplete,dunnageisadded
andthecartonsealedeliminatingaformalpackingoperation.Thislogicworksbestwhenpicking/packingproductswith
similarsize/weightcharacteristics.Inoperationswithaverydiverseproductmixit'smuchmoredifficulttogetthistype
oflogictoworkeffectively.
Picktolight
picktolightsystemsconsistoflightsandLEDdisplaysforeachpicklocation.Thesystemusessoftwaretolight
thenextpickanddisplaythequantitytopick.Picktolightsystemshavetheadvantageofnotonlyincreasing
accuracy,butalsoincreasingproductivity.Sincehardwareisrequiredforeachpicklocation,picktolightsystemsare
easiertocostjustifywhereveryhighpicksperSKUoccur.Cartonflowrackandhorizontalcarouselsaregood
applicationsforpicktolight.Inbatchpicking,puttolightisalsoincorporatedintothecartorrackthatholdsthe
cartonsortotesthatyouarepickinginto.Thelightwilldesignatewhichorderyoushouldbeplacingthepickeditems
in.SeearticleonOrderPicking,alsocheckoutMybookoninventoryaccuracy.
Piecepicking
alsoknownasbrokencasepicking,piecepickingdescribesaprocesswhereindividualitemsarepickedfororders.
SeearticleonOrderPicking.
Pinwheel
seePinwheeling
Pinwheeling
referstoamethodforloadingtrailerswhereyoualterthedirectionofeveryotherpallet.Basicallyyouuse
pinwheelingtoloadmorepalletsonatrailerwhenthedepthofthepalletislongerthanhalfthetrailerwidth,butthe
depthplusthewidthislessthanthetrailerwidth.Youcanalsouseitasaproductivity/spaceutilizationcompromiseor
toreduceloadshiftingwhenloadingpalletswherethedepthofthepalletislessthanhalfthetrailerwidth.Seearticle
onTrailerLoadingTechniques.
PLC
Programmablelogiccontroller.Computerizeddeviceusedtocontrolfunctionsofmachines.PLCsareusedin
automationofmanufacturingequipmentandmaterialhandlingequipmentsuchasautomatedconveyorsystems.
Plannedorder
termusedwithinMRPandDRPsystemsforsystemgeneratedplannedorderquantities.Plannedordersonlyexist
withinthecomputersystemandservemultiplefunctions.Onefunctionistonotifythematerials/plannerorbuyerto
produceorordermaterials,whichisdonebyconvertingaplannedorderintoanpurchaseorder,shoporder,ortransfer
order.AnotherfunctionisusedbytheMRPorDRPsystemtoshowdemandwhichisusedbysubsequentMRPand
DRPprogramstogenerateadditionalplannedorders.(MRP/DRPsystemssometimesrunseveralprogramsina
specificsequencetogenerateallplannedorders,oneprogrammayconvertforecastsorcustomerordersintoplanned
orderswhichcreatesthedemandthenextprogramusesthisdemandtocreateadditionalplannedorders).
Planningbill
seePlanningbillofmaterial
Planningbillofmaterial
afictitiousbillofmaterialusedtogroupoptionsofafamilyofproducts.Forexample,youmayhavealineof
notebookcomputerswherebymostofthecomponentsarethesame,butsomewillhavedifferentharddrives,
processors,memory,etc.Ratherthancreatingseparatebillsforeachpossiblecombinationandthenforecastingeach
possiblecombination,youcreateonelargeplanningbillthatcontainsallpossiblecomponentsbutusesthe"quantity
per"tomanagetheoptions.Ifyouexpecthalfofthecomputerstohave40GBdrives,25%tohave60GBdrives,and
25%tohave80GBdrives,youwouldsetupeachdriveonthebillanduse0.50,0.25,and0.25respectivelyasthe
quantityper.Youwouldthenproceedtodothesameforallotheroptions.Yourhigherlevelforecastwouldbeforthe
totaldemandforallcomputersinthisfamily.PlanningbillsaresometimesreferredtoasSuperBillsorPseudoBills.
Plugging
pluggingisusedwithelectricindustrialvehiclestoreducespeed,stop,orchangedirection,withoutusingthebrake.
Mostcommonlyusedwithvehicleswithhandthrottlessuchasmotorizedpallettrucksandorderselectors,the
operatorsimplyswitchesbetweenforwardandreversetocontrolspeed.Thoughthissoundslikesomethingyou
shouldn'tbedoing,manyelectrictrucksaredesignedtoallowforthis.
Popupsorter
sortingequipmentintegratedintoconveyortomovematerialsoffofconveyoratfixedpoints.Popupsortersare
installedinfixedpositionsandmayconsistofaseriesofwheelorsmallbeltsthatarenormallylocatedslightlybelow
theconveyorrollers.Thewheelsorbeltsaremomentarilyraised(popup)toenabledivertingmaterialsoffofthe
conveyor.
Postponement
aManufacturing/Distributionstrategywherespecificoperationsassociatedwithaproductaredelayeduntiljustprior
toshipping.Storingproductinagenericstateandthenapplyingcustomlabelsorpackagingbeforeshippingisan
exampleofpostponement.
Poweredindustrialtruck
accordingtoOSHA,a"poweredindustrialtruckisdefinedasamobile,powerdrivenvehicleusedtocarry,push,
pull,lift,stack,ortiermaterial".Prettymuchcoversanytypeoflifttruckaswellasvehiclesusedtotowmaterials.
SeeLiftTruck
Privatewarehouse
asopposedto"publicwarehouse"(seeseparatelisting),aprivatewarehousesimplymeansthewarehouseis
owned/leasedandoperatedbytheprivatecompanywhosewarehouseoperationsareconductedwithinthatbuilding.
Forexample,ifamanufacturerordistributorhastheirownwarehousethattheyoperateoutof,thatisaprivate
warehouse.AlsoseearticlePublicWarehouses,ContractWarehouses,and3PLsExplained.
Proformainvoice
basicallyafakeinvoicecreatedtoshowabuyerwhatthedetailsoftheactualinvoicewilllooklike.Youcanthinkof
itasadraftinvoice.Proformainvoicesarecommonlyusedwithinternationaltransactionstoprovidethebuyerwiththe
informationtheywillneedtopayforthegoods(prepaymentiscommonwithinternationaltransactions)andarrangefor
import.
Processmanufacturing
typeofmanufacturingwhereaproductisproducedortransformedthroughmixing,chemicalreactions,etc.
Examplesofprocessmanufacturingwouldberefiningcrudeoilintogasoline,extractingcopperfromore,combining
materialstomakepaint.Processasopposedtodiscretemanufacturing.AlsoseeDiscretemanufacturing.
Productionplan
generallyusedtodescribealongtermplanofwhatwillbeproducedatafamilylevel.
Programgenerator
programgeneratorsaresoftwareprogramsthatgenerallyprovidegraphicaluserinterfacesandtoolsthatallowauser
tocreateaprogramwithouthavingtowriteactualcomputercode.Currentlytheseprogramsaremorefrequently
referredtoas"DevelopmentTools"andareusuallydesignedtowritecodeforspecificapplicationssuchasdata
collectionprogramsforportablecomputers.Whileauserdoesnotneedtobeaprogrammertousethissoftware,the
userdoesneedtohaveahigherleveloftechnicalskillsthanthatofmoststandardsoftwareusers.a.k.a.Code
generator,Developmenttools
Proprietary
usedtodescribeequipmentortechnologiesthatdonotfollowanopenstandarddesignthatwouldallowthemto
easilyintegratewithotherequipmentortechnologies.Proprietaryequipmentandtechnologiesareusuallypatentedor
otherwiseprotectedmakingitdifficultorimpossibleforothercompaniestooffersimilarorcomplementaryproducts.
Psuedobillofmaterial
seePlanningbillofmaterial
Purchaseorder
adocumentusedtoapprove,track,andprocesspurchaseditems.Apurchaseorderisusedtocommunicatea
purchasetoasupplier.Itisalsousedasanauthorizationtopurchase.Apurchaseorderwillstatequantities,costs,
anddeliverydates.Thepurchaseorderisalsousedtoprocessandtrackreceiptsandsupplierinvoices/payments
associatedwiththepurchase..
Pushbackrack
rackingsystemthatincorporatesacarriageorotherslidingdevicetoallowyoutofeedmultiplepalletsintothesame
location"pushingback"thepreviouspallet.AlsoseeRackingPicsPage.
Pushsorter
averysimplefixedpositionsortingdeviceusedwithconveyorsystems.Apushsortermayuseaswingingarmora
simplepistontypepushingdevicetopushmaterialsacrosstheconveyor.
Puttolight
technologysimilartopicktolight,however,thelightmodulesareuseddodirectwhichtote,bin,orcarton,theitem
istobepickedinto,ratherthandirectingwhichlocationstopickfrom.AlsoseePutWallandPicktolight
Putwall
termusedtodescribeagroupofdividedshelvesusedwithputtolighttechnology.It'sbasicallyamanualsortation
systemwheresomeoneusesputtolighttechnologytotellthemwhichslottoplacetheitemin(theyoftenscanthe
itembarcodetoinitiatetheputtolight).AlsoseePuttolight
Publicwarehouse
abusinessthatprovidesshortorlongtermstoragetoavarietyofbusinesses,usuallyonamonthtomonthbasis.A
publicwarehousewillgenerallyusetheirownequipmentandstaff,however,agreementsmaybemadewheretheclient
eitherbuysorsubsidizesequipment.Publicwarehousefeesareusuallyacombinationofstoragefees(perpalletor
actualsq.footage)andtransactionfees(inboundandoutbound).Publicwarehousesaremostoftenusedto
supplementspacerequirementsofaprivatewarehouse.AlsoseeContractWarehouseand3PLandarticleonPublic
Warehousesand3PLs
Quantity
Therearevariousquantityelementsinperpetualinventorysystems.Belowaredefinitionsofthemostcommon.Be
awarethatthesedefinitionsarefairlygenericandthatspecificinventorysystemsmayusecompletelydifferent
definitionsorterminology.
Quantityonhand
alsoknownasonhandquantity,instock,storequantityQuantityonhanddescribestheactualphysicalinventoryin
thepossessionofthebusiness.Wheninventoryisreceivedorproduced,itisaddedtoquantityonhand,when
inventoryissoldorconsumed,itisremovedfromquantityonhand.
Quantityonorder
includesquantityonopenpurchaseordersormanufacturingorders.Mayormaynotincludequantitiesontransfer
ordersfromotherbranches.
Quantityintransit
inmultibranchenvironments,quantityintransitreflectsthequantitythathasbeenshippedfromonebranch/facility
toanotherbranch/facility,buthasnotyetbeenreceivedbythatbranch/facility.Inoperationsthatuseadvanced
trackingofreceipts,itmayreflectquantitiesthathavebeenshippedbyoutsidevendors,butnotyetreceived.
Inboundandoutboundquantities
inmultibranchenvironments,inboundandoutboundquantitiesreflectopenquantitiesoninterbranchtransferorders.
Quantityallocated
alsoknownascommittedquantity,commitments,orallocations.Quantityallocatedisthequantitythatisoncurrent
opensalesordersorproductionorders(ascomponents),andmayberelativetoaspecifictimeperiod.Alsosee
Allocations
Quantityavailable
istheresultofacalculationthattakesquantityonhandandreducesitbyallocations(forsalesorders,
manufacturingorders,etc).Quantityavailablemayormaynotbedatespecificandthereforetakeintoaccountfuture
receipts.Quantityavailablecalculationsaresometimesverycomplicatedandvaryfromonesoftwareproductto
another.
Queuetime
amountoftimeajobwaitsatanoperationpriortosetuporprocessing.Partofmanufacturingleadtime.
Racksupportedbuilding
warehousedesignthatusesstructuralpalletracktosupporttheroofofabuilding,eliminatingtheneedforposts.
RacksupportedbuildingsareusuallydesignedforAS/RSsystemsorturrettrucksystemswhererackingis40to100ft
inheight.
Radiofrequency
inwarehousing,referstotheportabledatacollectiondevicesthatuseradiofrequency(RF)totransmitdatatohost
system.
Radiofrequencyidentification
seeRFID
Railguided
guidancesystemusedwithverynarrowaislevehiclessuchasorderselectorsandturrettrucks.Asteelrailis
moundedoneachsideoftheaisle,androllersaremountedonthelifttrucktoguideitbetweentherails.
Randomlocationstorage
referstostoragemethodwhereaproductmaybestoredinanylocation.Randomstoragehashigherspace
utilizationandgenerallyloweraccuracythanfixedlocationstorage
Reachtruck
a.k.a.Standupreach,Straddlereach,Doubledeepreach.Thereachtruckisanarrowaisle(8'10')lifttruck
designedspecificallyforrackedpalletstorage.Itconsistsofoutriggersinfrontandtelescopingforksthatusea
hydraulicscissorstypemechanismthatallowyoutopickuptheloadandretractitovertheoutriggersreducingthe
overalltruckandloadlength,allowingyoutoturninanarroweraisle.Doubledeepreachtrucksuseanextendedreach
mechanismthatallowsyoutostorepalletstwodeepinspeciallydesigneddoubledeeprack.Reachtrucksare
designedforrackingareasonlyanddonotworkforloadingtrucksorquicklymovingloadsoverdistances.Alsosee
LiftTruckPicsandLiftTruckBasicsformoreinfo.
Realtimelocatorsystem
realtimelocatorsystem(RTLS)usesRFIDtechnologythatprovidestheobjectstheyareattachedtotheabilityto
transmittheircurrentlocation.SystemrequiressometypeofRFIDtagtobeattachedtoeachobjectthatneedstobe
tracked,andRFtransmitters/receiverslocatedthroughoutthefacilitytodeterminethelocationandsendinformationto
computerizedtrackingsystem.Whileitsoundslikeagreatwaytoeliminate"lost"inventory,thesystemsarestilltoo
costlyformostinventorytrackingoperationsandaremorelikelytobeusedtotrackmorevaluableassets.
Reorderpoint
Theinventorylevelsettotriggerreorderofaspecificitem.Reorderpointisgenerallycalculatedastheexpected
usage(demand)duringtheleadtimeplussafetystock.Fixedreorderpointimpliesthereorderpointisastaticnumber
pluggedintothesystem.Dynamicreorderpointimpliesthereissomesystemlogiccalculatingtheorderpoint.
Generallythiswouldbecomparingcurrentinventorytotheforecasteddemandduringtheleadtimeplussafetystock.
Replenishmentcycle
seeOrderCycle
Reservestorage
referstolocationsusedtostoreadditionalinventorythatwilleventuallyreplenishforwardpicklocations.Alsocalled
overflowstorage,reservelocations,backupstorage.SeealsoForwardPickLocations.
Reverselogistics
fancytermforReturns.ReverseLogisticscoversactivitiesrelatedtoreturnedproduct,returnedpalletsand
containers,returnedmaterialsfordisposalorrecycling.
RFID
Radiofrequencyidentification.ReferstodevicesattachedtoanobjectthattransmitdatatoanRFIDreceiver.These
devicescanbelargepiecesofhardwarethesizeofasmallbook,likethoseattachedtooceancontainers,orvery
smalldevicesinsertedintoalabelonapackage.RFIDhasadvantagesoverbarcodes,suchastheabilitytoholdmore
data,theabilitytochangethestoreddataasprocessingoccurs,doesnotrequirelineofsitetotransferdataandis
veryeffectiveinharshenvironmentswherebarcodelabelswon'twork.ReadmyarticlesADCBasicsandRFID
Update,alsocheckoutMybookoninventoryaccuracyanditsrelatedRFIDUpdatesandRFIDLinks.
Rollerconveyor
typeofconveyorthatusesrollerstomovematerials.Rollerconveyormaybeautomated(liveroller)orsimplyuse
gravity(gravityroller)tomovematerials.SeeConveyorPics.
Roughcutcapacity
 usedtodetermineestimatedloadonkeypiecesofequipmentorresources.Mayuseproductionplanormaster
productionschedule.Roughcutcapacityisusetdasachecktoverifythatmanufacturingresourcesareadequateto
executetheproductionplan.
Routing
usedinconjunctionwiththebillofmaterialinmanufacturingoperations.WhiletheBOMcontainsthematerial
requirements,theroutingwillcontainthespecificstepsrequiredtoproducethefinisheditems.Eachstepintherouting
iscalledanoperation,eachoperationgenerallyconsistsofmachineandlaborrequirements.
RTLS
Realtimelocatorsystem(seeseparatelisting)
BACKTOTOPOFPAGE
Copyright.ContentonInventoryOps.comiscopyrightprotectedandisnotavailableforrepublication.

Safetystock
quantityofinventoryusedininventorymanagementsystemstoallowfordeviationsindemandorsupply.Safety
stockcalculationswilltakeintoaccounthistoricdeviationsandusearequiredservicelevelmultipliertodeterminethe
optimalsafetystocklevel.Formoreinfoonsafetystock,checkoutmybookoninventorymanagementandmyarticle
onsafetystock.
Safetyleadtime
safetyleadtimeisawaytorepresentyoursafetystockasanumberofdaysdemand.Safetyleadtimecanbe
beneficialwhenyouwanttopadyourleadtimetocompensateforsuppliervariability,transportationvariability,or
internalprocessvariability.Forexample,ifcantake2or3daystogetincomingmaterialsprocessedthroughyour
receivingprocess,youmaywanttosetyoursafetyleadtimeto2or3days.Thiswillcalculatetherequesteddatesfor
yourpurchaseorders2or3daysearlierthanactualneed.Thisismuchcleanerthanaddingthe2to3daystothe
suppliersleadtime(whichcanbeconfusingwhenthesuppliersstatedleadtimeisdifferentfromwhatisinyour
system).
Screenmapping
softwarethatprovidesthefunctionalitytochangethearrangementofdatafieldsonacomputerscreenthat
accessesamainframecomputerprogram.ScreenMappingisfrequentlyusedincombinationwithterminalemulation
softwareto"Remap"datafieldsfromastandardmainframeprogramtobeusedonthesmallerscreenofaportable
handhelddevice..a.k.a.Screenscraping
Seasonality
fluctuationsindemandthatrepeatwiththesamepatternoverequivalenttimeperiods.
Seasonalityindex
consistsofanumberforeachspecificforecastperiodthatdescribestherelationshipofeachperiodsdemandtothe
averagedemand(level)overthecompleteseasonalcycle.Aseasonalityindexisusedtoadjusttheforecastto
accountforthesecyclicalchangesindemand.Theaveragedemandisrepresentedbythenumber1.Ifseasonality
foraperiodresultsindemandgreaterthantheaveragedemand,itwillberepresentedbyanumbergreaterthan1.For
example,ifDecemberssaleswere,onaverage,30%greaterthantheaveragemonthlysalesfortheyear,youwould
haveaseasonalityindexof1.3(1plus.30)forDecember.IfJanuaryssaleswere,onaverage,20%lessthanthe
averagemonthlysalesfortheyear,youwouldhaveaseasonalityindexof0.8(1minus.20).
Selectivepalletrack
thetermselectivepalletrackimpliesstandardsingledeeppalletrackconfigurations(andrackdesigns)whereeach
palletisimmediatelyaccessiblefromanaisle.Incontrasttodoubledeeprack,driveinordrivethrurack,orpushback
rackwheresomeloadswillbestoredbehindotherloads.SeeEquipmentPics:Rackingpageforexamples.
Servicefactor
factorusedasamultiplierwiththeStandardDeviationtocalculateaspecificquantitytomeetthespecifiedservice
level.Seearticleonsafetystockformoreinformationonservicefactor
Shippingmanifestsystem
softwareusedtoassociateshipmentswithcarrier,service,rate,etc.Shippingmanifestsystemswillproducea
report(physicalorelectronic)thatissenttothecarriertobeusedforbillingpurposes.Shippingsystemswillusually
produceshippingdocumentssuchascomplianceshippinglabels,billofladings,Exportdocuments,andHazmat
documentation.Theymayalsohavefunctionalityrelatedtorateshopping,freightpolicyexecution,freightcost
management.AlsoseeTransportationManagementSystem.
Sideshift
averycommonlifttruckattachment,thesideshiftdeviceallowstheforkcarriagetoslideleftandrighttoallowmore
accurateplacementoftheload.Sideshiftswillincreaseproductivityandsafetyaswellasreduceproductdamageby
allowingtheoperatormoreflexibilityinloadplacement.
Skatewheelconveyor
typeofconveyorthatusessmallwheels(usuallymadeofsteel)tomovematerials.SeeConveyorPics.
Skid
aportableplatformdesignedtoallowaforklift,palletjack,orothermaterialhandlingequipmentlift,move,andstore
variousloads.Askidissimilartoapalletbutdoesnothavebottomdeckboards.Askidispreferredoverapalletwhen
usedwithequipmentthatwouldhaveproblemswiththebottomdeckboards.Thedownsideisthataskidusually
needsbeefiermaterials(moreexpensiveandheavier)inordertomeetthestrengthrequirementsofacomparable
pallet.Thoughnottechnicallycorrect,thetermsSkidandPalletareoftenusedinterchangeably.AlsoseePallet
SKU,Stockkeepingunit
referringtoaspecificiteminaspecificunitofmeasure.Forxample,ifyoudistributedthirtyweightmotoroilinboth
quartsandgallonsyouwouldmaintaintheinventoryastwoSKUseventhoughtheyareboththirtyweightmotoroil.
Alsoreferstotheidentification#assignedtoeachSKU.
Slapandship
termusedtodescribeanapproachtocomplyingwithcustomerrequirementsforphysicalidentificationofshipped
goods.Mostrecently,slapanshiphasbeenusedtodescribecomplyingwithRFIDrequirements(suchasthosefrom
WalMart),however,itisalsoapplicabletoanycompliancelabelingrequirement(suchascompliancebarcodelabels).
Slapandshipimpliesyouaremeetingthecustomer'srequirementbyapplyingthebarcodelabelsorRFIDtags,but
arenotutilizingthetechnologyinternally.
Slideshoesorter
 typeofconveyorsortingequipmentthatusesaseriesofslidingshoestomovematerialsoffoftheconnveyor.The
slidingshoesarepartoftheconveyorandtravelwiththematerials,whenthesortingpointisreached,aseveralshoes
willslideaccrosstheconveyor,pushingthematerialsontoanotherconveyorordownachute.
Slipsheetattachment
lifttruckattachmentusedwhereslipsheets(asheetofcardboard,paperboard,orplastic)areusedratherthan
pallets.Theslipsheetattachmenthasapush/pullmechanismthatclampsontotheslipsheetandpullstheloadontoa
thinplatformandthenpushestheloadoffoftheplatformwhenthetruckreachesthedestination.
Slot
thephysicalspacewhereanitemisstored.Examplesofslotswouldincludeapartsbinonashelf,apalletlocation
inpalletrack,orastoragelanewheremultiplepalletsofanitemarestackedonthefloor.
Slotting
theactivitiesassociatedwithoptimizingproductplacementinpicklocationsinawarehouse.Therearesoftware
packagesdesignedjustforslotting,andmanyWMSpackageswillalsohaveslottingfunctionality.Slottingdecisions
willgenerallyuseitemvelocity(timespicked),cubeusage(cubicvelocity),andminimumpickfacedimensionsto
determinebestlocation,buttherearenumerousotherfactorsthatmayneedtobeconsideredinagivenenvironment.
SeearticleonSlotting
Speechbasedtechnology
alsoknownasvoicetechnologyisactuallycomposedoftwotechnologies:Voicedirected,whichconvertscomputer
dataintoaudiblecommands,andSpeechrecognition,whichallowsuservoiceinputtobeconvertedintodata.Portable
voicesystemsconsistofaheadsetwithamicrophoneandawearablecomputer.SeearticleonADCformoreinfo,
alsocheckoutMybookoninventoryaccuracywhichprovidesgreaterdetailonspeechbasedsystems.
SSCC
SerialShippingContainerCode(alsocalledSerializedShippingContainerCode).AnSSCCisauniquenumber
(code)assignedtoashippingcontainer.Theshippingcontainercouldbeasinglecarton,apalletizedload,orevena
fullshippingcontainer.TypicallyusedwithAdvancedShipmentNotificationsandEDI,theSSCCisthekeytothat
shippingcontainerandtheinformationthatdescribestheshippingcontaineranditscontents.SSCCsareusually
printedonacomplianceshippinglabelasabarcodeallowingthedestinationtoscanthebarcodetoautomatically
receiveinformationabouttheshipment(oftentimesscanningthebarcodewillautomaticallyreceivethecontentsof
theshipmentintoinventory).TheSSCCcouldalsobeincorporatedintoandRFIDtagoranyothermeansofapplyinga
readable(machineorhuman)codeontheshipment.
Stamping
generallydescribesanunfinisheditemmadeofmetalthatisproducedthroughaprocessthatusespressuretoform
discreteunitsfromlargerrawmaterials.Alsodescribestheprocessusedtoproducestampings.Insomecases,
stampingsmayalsobereferredtoas"blanks".
Standardcost
inventorycostingmethodusedinmanufacturingenvironmentsthatusesthematerialscostsinthebillofmaterials
combinedwiththelaborcosts(basedonstandardlaborhoursandratesperoperation)andmachinecostsintherouting
tocalculatethecostofthefinishedorsemifinisheditem.
Standarddeviation
usedtodescribethespreadofthedistributionofnumbers.Standarddeviationiscalculatedbythefollowingsteps:

1.determinethemean(average)ofasetofnumbers.
2.determinethedifferenceofeachnumberandthemean
3.squareeachdifference
4.calculatetheaverageofthesquares
5.calculatethesquarerootoftheaverage.

YoucanalsouseExcelfunctionSTDDEVPAorSTDEVPtocalculatestandarddeviation.Theabovecalculation
reflectscalculatingthestandarddeviationofapopulation.Inmanycasesweuseasamplingofdata(ratherthanthe
entirepopulation).Whencalculatingthestandarddeviationofasample,ratherthancalculatingthetrueaverageofthe
setofnumbers,wewilldividethesumofthesetofnumbersbythetotalcountofnumbersminusone(1).Thisallows
ustoartificiallyinflateourstandarddeviationtoaccountforthefactwerearenotusingtheentirepopulation.Excel
functionSTDEVcalculatesthestandarddeviationofasample.Insafetystockcalculationstheforecastquantityis
oftenusedinsteadofthemeanindeterminingstandarddeviation.
Straddletrucks
lifttrucksthatincorporateoutriggerssetwideenoughtoallowapallettofitbetweenthem.Commonexampleswould
includestraddlereachtrucksandstraddlestackers.
Straighttruck
deliverytrucksthatdonothaveaseparatetractorandtrailer.Straighttrucks(alsocalledboxvans,orboxtrucks)
usuallyonlyhave2axlesandgenerallyhaveboxlengthsofbetween12and30feet(asopposedtotractortrailersthat
have5axlesandtrailerlengthsof45to53feet)..
Structuralpalletrack
rackingsystemthatusesboltsorothermechanicalfasteners(asopposedtoBoltlessPalletrack).StructuralPallet
Rackissometimesusedtosupporttheroofofthestructure(Racksupportedbuildings),eliminatingtheneedforposts.
Superbillofmaterial
typeofplanningbillofmaterialthatiscreatedataveryhighleveltyingtogetheralargerandmorecomplexfamilyof
productsthanatypicalplanningbill.seePlanningbillofmaterial
Tandems
Referstothereartandemaxles(theback8wheelsonan18wheeler)onatrailerthatcanbeadjustedforwardor
backwardonthetrailertoevenoutloadweightsormakeformorestableloading(tandemsallthewayback).
TareWeight
Tareweightistheweightofthecontainerorpackaging(basicallytheweightofeverythingonthescalethatisnot
actuallytheproductbeingweighed).Mostindustrialscalesallowyoutoinputtareweight(eitherthroughactually
weighingthepackagingorcontainer,orbymanuallyinputtingtheweight)sotheweightdisplayedonthescaleisthe
weightoftheproduct(totalweightminustareweight).Forexample,ifyouareusingacountingscaletocountsmall
parts,youmayhaveasmalltuborcontainerthatyoudumpthepartsinto.Firstyouwouldplacetheemptytubonthe
scaleandpressthe"tare"button.Thiswillzerooutthescaleattheweightofthetub.Thenyoumoveontoputting
yourcountedsampleintothetub.
Taskinterleaving
termusedindescribingfunctionalityofWarehouseManagementSystemstomixtaskstoreducetraveltime.
Sendingaforkliftdrivertoputawayapalletonhiswaytohisnextpickisanexampleoftaskinterleaving.
Terminalemulation
softwareusedondesktopandportablecomputersthatallowsthecomputertoactlikeaterminalconnectedtoa
mainframesystem.IfyouhaveanetworkeddesktopPCandareaccessingmainframeprograms(a.k.a.greenscreen
programs)youareusingterminalemulation.Terminalemulationisalsoacommonmethodusedtoconnectportable
computers(asinwarehousebarcodedatacollectionsystems)tomainframesoftware.AlsoseeScreenMapping
Thirdpartylogistics
(abbreviated3PL)describesbusinessesthatprovideoneormanyofavarietyoflogisticsrelatedservices.Typesof
serviceswouldincludepublicwarehousing,contractwarehousing,transportationmanagement,distribution
management,freightconsolidation.A3PLprovidermaytakeoverallreceiving,storage,valueadded,shipping,and
transportationresponsibilitiesforaclientandconducttheminthe3PL'swarehouseusingthe3PL'sequipmentand
employees,ormaymanageoneorallofthesefunctionsintheclient'sfacilityusingtheclient'sequipment,orany
combinationoftheabove.Anotherterm,4PLissometimesusedtodescribebusinessesthatmanageavarietyof
logisticsrelatedservicesforclientsbyusing3PLs.AlsoseearticleonPublicWarehousesand3PLsorvisit
InternationalWarehouseLogisticsAssociation(IWLA)site.
Tilttraysorter
conveyorsortingsystemthatusesaseriesoftiltingdevices(carriers)tosortmaterials.Eachtiltingcarrierhasa
trayandismountedonaconveyor,asthecarrierpassesthedropoffpoint,itwilltiltallowingthematerialstofallonto
anotherconveyor,downachute,orintosometypeofcontainer..a.k.a.Tilttrayconveyor
Timebuckets
termsometimesusedtodescribeforecastperiods.
Timefence
periodoftimepriortothescheduledproductiondatebeyondwhichchangescanbemadewithoutsignificantadverse
effects.
TMS
Transportationmanagementsystem(seeseparatelisting).
TowlineConveyor
materialhandlingsystemthatusesatowline(usuallyachain)recessedbeneaththefloortopullwheeledcartsalong
afixedpath.Towlineconveyorshavebeenusedformorethan50yearsinmanufacturingfacilities.
Trailer
a.k.a.SemiTrailer,TractorTrailer.Generallydescribesenclosedtrailersusedtotransportmaterialsbetween
locations.Standardlengthsfortrailersare45',48',and53,withstandardinternalwidthof98"to99"andinternalheight
of105"to110".Refrigeratedtrailers,alsoknownas"reefers,"havesmallerinternalwidthsofbetween90"and96"and
heightsof96"to100".Othertypesoftrailersincludeflatbeds,lowboys,andcontainerchassis.AlsoseeContainer
Trailercreep
no,thisisn'treferringtothestrangedudethatlivesinthetrailerparkortheguythathangsaroundtruckstops.
Trailercreep(alsoknownastrailerwalk,dockwalk)occurswhenthelateralandverticalforcesexertedeachtimealift
truckentersandexitsthetrailercausethetrailertoslowlymoveawayfromthedockresultinginseparationfromthe
dockleveler.Factorsthataffecttrailercreeparetheweightandspeedofthelifttruckandload,thegradeofthedrive
thetrailerisparkedon,thesoftnessofthesuspension,thetypeoftransition(docklevelers,dockboards)beingused,
andwhetherthetrailerhasbeendroppedoff(spotted)orifitisstillconnectedtothetractor.ReadmyarticleonDock
Safety.
Transportationmanagementsystem
Categoryofoperationssoftwarethatmayincludeproductsforshipmentmanifesting,rateshopping,routing,fleet
management,yardmanagement,carriermanagement,freightcostmanagement.AlsoseeShippingManifestSystem.
Transversefluespace
termusedbyfirecodestodescribethespacetoeithersideofpalletinrackedstorage.Fluespacesallowthewater
fromanoverheadsprinklersystemtoreachlowerlevelsoftherack.Normallyatransversefluespaceofatleast3
inchesisrequired(6inchesmayberequiredundersomecircumstances).AlsoseeLongitudinalFlueSpace.See
articleWarehouseFireSafety,
Turrettruck
turrettrucksareamanuplifttrucksimilartoanorderselectorwiththeexceptionthatratherthanfixedforksthe
forksaremountedonanadditionalmastandcarriagethatoperatesasaturret,turning90degreesineitherdirection
facilitatingpickingandstockingoneithersideoftheaisle.Themanupdesignmakesiteasertohandleloadsinvery
tallracking.Verynarrowaisletrucksaregenerallyrecommendedtobeusedinconjunctionwithaguidancesystem
(wire,rails,optical)withintheaislestoincreasesafetyandreducepropertydamage.AlsoTurretTrucksrequirethatthe
floorbeperfectlyflatandleveltooperatecorrectly.AlsoseeLiftTruckPics,LiftTruckBasics,andTheAisleWidth
Decisionformoreinfo.
Tugger
anindustrialvehicleusedtotowcartsthroughawarehouseofproductionfacility.Tuggersaretypicallyusedwhen
materialsneedtobemovedoverlongdistances,andwilltypicallytowmultiplecarts(connectedsimilarlytorailcars)
atatime.Tuggersmayalsobecalled"TowVehicles","TowTractors",etc.
Unitload
materialhandlingtermthatdescribesanyconfigurationofmaterialsthatallowittobemovedbymaterialhandling
equipmentasasingleunit.Whilesmallermanuallyhandledconfigurationscouldbeconsideredunitloads,theterm
generallydefineslargerconfigurationsthatwouldbemovedbyalifttrucksuchaspalletizedloads,crates,bales,etc.
a.k.a.unitizedload
Unitofmeasure
(abbreviatedU/M)describeshowthequantityofanitemistrackedinyourinventorysystem.Themostcommonunit
ofmeasureis"eaches"(EA),whichsimplymeansthateachindividualitemisconsideredoneunit.Anitemthatuses
"cases"(CAorCS)astheunitofmeasurewouldbetrackedbythenumberofcasesratherthanbytheactualpiece
quantity.Otherexamplesofunitsofmeasurewouldincludepallets(PL),pounds(LB),ounces(OZ),linearfeet(LF),
squarefeet(SF),cubicfeet(CF),gallons,thousands,hundreds,pairs,dozens.AlsoseeUnitofmeasureConversion.
Unitofmeasureconversions
 aunitofmeasureconversionisneededwheneveryouworkwithmultipleunitsofmeasure.Forexample,ifyou
purchasedanitemincases(meaningthatyourpurchaseorderstatedanumberofcasesratherthananumberof
pieces)andthenstockedtheitemineaches,youwouldrequireaconversiontoallowyoursystemtocalculatehow
manyeachesarerepresentedbyaquantityofcases.Thisway,whenyoureceivedthecases,yoursystemwould
automaticallyconvertthecasequantityintoaneachquantity.
Variableleadtime
aleadtimethatchanges(notfixed).Whendescribingsupplierleadtime,variableleadtimemeansthattheleadtime
fromthesupplierchangesbasedonhiscurrentworkloadandcapacity.WithinthecontextofmanufacturingandMRP,
variableleadtimemeansthesystemcalculatesleadtimebasedontherunquantityandtimes(setuptime,runtime,
queuetime)setupintherouting.AlsoseeLeadtime,FixedLeadtime.
Vehiclerestraintsystems
devicesthatpreventtrailersfrommovingawayfromtheloadingdock.OneofthemostpopularistheICCbartype
restraintsystem.ThesesystemsincorporatedadevicethatengagestheICCbar(rearimpactguard)ontherearofthe
trailerpreventingitfrommovingawayfromthedock.Thesedevicesmaybemechanicallyorhydraulicallyoperated
andmayvaryindesignandfunctionalityfromonemanufacturertoanother.Therearealsoothertypesofrestraints
suchasthosethatautomaticallyengagetherearwheelsofthetrailer.AswiththeICCbarrestraints,thewheel
engagementrestraintsalsovarysignificantlyfromonemanufacturertoanother.Thereisnotaonesystemfitsall
solutionforvehiclerestraints,ICCbarsystemsmaynotworkwithdamagedICCbars,liftgates,andlowboytrailers.
Wheelengagementsystemsaremoreexpensiveandmayhaveproblemsinnorthernclimatesduetosnoworice.See
articleonDockSafetyandDockEquipmentPicsformoreinfo.
Verynarrowaisle
Lifttrucksthatoperateinaisleslessthansixfeetandoftenuseguidancesystems(wire,rail,oroptical)totravel
withintheaisles.TypesofVNAtrucksincludeorderselectors,swingmast,pivot,mast,andturrettrucks.Seealso
articleTheAisleWidthDecision
Vendormanagedinventory(VMI)
phraseusedtodescribetheprocessofasuppliermanagingtheinventorylevelsandpurchasesofthematerialshe
supplies.Thisprocesscanbeverylowtech,suchasanofficesuppliessupplierormaintenancesuppliessupplier
comingintoyourfacilityonceperweektovisuallycheckstocklevelsandplacearesupplyorder,orhightech,such
asanelectroniccomponentsupplierhavingremoteaccesstoyourinventorymanagementandMRPsystemand
producingandautomaticallyshippingtomeetyourproductionschedule.Vendormanagedinventoryreducesinternal
costsassociatedwithplanningandprocuringmaterialsandenablesthevendortobettermanagehisinventorythrough
highervisibilitytothesupplychain.Vendormanagedinventorymaybeownedbythevendor(consignmentinventory)
orthecustomer.
Voicedirected
seeSpeechbasedtechnology
VNA
Verynarrowaisle(seeseparatelisting)
WalkieorWalkierider
seeMotorizedPalletTruck
Wavepicking
variationonzonepickingwhereratherthanordersmovingfromonezonetothenextforpicking,allzonesarepicked
atthesametimeandtheitemsarelatersortedandconsolidatedintoindividualorders/shipments.Wavepickingisthe
quickestmethodforpickingmultiitemordershoweverthesortingandconsolidationprocesscanbetricky.Picking
wavesareoftendesignedtoisolateshipmentstospecificcarriers,routes,etc.Seealsobatchpicking,zonepickingA
moregeneraldefinitionofwavepickingwouldsimplybeamethodwhereagroupofordersisreleasedtothewarehouse
forpickingandthenextgroup(wave)isnotreleaseduntilthefirstwavehasprocessedthroughthepickarea.See
articleonOrderPicking.
WarehouseControlSystem
softwareusedtocontrolautomatedsystemssuchassortationsystems,AS/RS,AGV's,andcarousellsinthe
warehouse.AWCSmayalsohavefunctionalitysimilartoaWMSjustassomeWMS'shaveWCSfunctionality.
Warehousemanagementsystem
computersoftwaredesignedspecificallyformanagingthemovementandstorageofmaterialsthroughoutthe
warehouse.WMSfunctionalityisgenerallybrokendownintothefollowingthreeoperations:Putaway,Replenishment,
andPicking.Thekeytothesesystemsisthelogictodirecttheseoperationstospecificlocationsbasedonuser
definedcriteria.WMSsareoftensetuptointegratewithdatacollectionsystems.ReadmyarticleonWarehouse
ManagementSystems.
Smoothingfactor
alsocalledasmoothingconstant,asmoothingfactorisanumberbetweenzeroandone(0.01,0.02,...0.99)thatis
usedtoweightthemostrecentperiodsdemandagainsttheforecastforthatperiodtoproducethenextperiods
forecastinanexponentialsmoothingcalculation.SeearticleonExponentialsmoothing.
WCS
Warehousecontrolsystem(seeseparatelisting)
Weightedmovingaverage
forecastingmethodsimilartoamovingaverage,howeverdifferentweightscanbeappliedtothehistoricalperiods
(theweightsmustaddupto1).Eachpreviousperiodsdemandismultipliedbytherespectiveweight,thentheresults
areaddeduptogetyourforecast.Sowhereafourperiodmovingaverageusedthesameweightforallperiods(0.25+
0.25+0.25+0.25=1),aweightedmovingaverageallowsavarietyofweightstobeused,providedtheytotal1.For
example,0.15forthefirstperiod,0.20thesecond,0.30thethird,and0.35thefourth(0.15+0.20+0.30+0.35=1).
Weightedout
Describesaconditionwheretheweightcapacityofatrailerorcontainerhasbeenmet.Theterm"weightedout"is
mostlikelyusedwhenyouhavemettheweightcapacityofthetrailerorcontainerbutstillhavephysicalspaceleftin
thetrailerorcontainer.AlsoseeCubedout.
Wireguided
termusedtodescribevehiclesthatuseawireembeddedinthefloortoguidethevehicles.Wireguidancesystems
arefrequentlyusedwithorderselectorsandturrettrucksinverynarrowaisleapplications.Theyarealsousedwith
automatedguidedvehicles.
WMS
 Warehousemanagementsystem(seeseparatelisting)
Workinprocess(WIP)
generallydescribesinventorythatiscurrentlybeingprocessedinanoperation,orinventorythathasbeenprocessed
throughoneoperationandareawaitinganotheroperation.WIPisactuallyaninventoryaccountthatrepresentsthe
valueofmaterials,labor,andoverheadthathasbeenissuedtomanufacturingbuthasnotyetproducedastockable
item.Dependingonhowyouraccountingandinventorysystemsaresetup,itmayalsoincludecomponentspickedfor
productionusageorfinishedproductsawaitingfinalinspection.SeearticlesonWorkInProcess(WIP)andReconciling
WIP.
Zonepicking
orderpickingmethodwhereawarehouseisdividedintoseveralpickzones,orderpickersareassignedtoaspecific
zoneandonlypicktheitemsinthatzone,ordersaremovedfromonezonetothenext(usuallyonconveyorsystems)
astheyarepicked(alsoknownas"pickandpass").Seealsobatchpicking,wavepickingSeearticleonOrder
Picking.
Zoneskipping
alsocalledzonejumping,zoneskippingisamethodofshippingparcels(primarily)orLTLshipments(notas
common),whereratherthandeliveringtheshipmentsdirectlytothecarrier,youconsolidateshipmentsgoingtoa
regionandshipthemtogetherasasinglelargershipment(typicallytruckloadorLTLforparcels)togetthemcloserto
thedeliverypointbeforehandingthemofftothedeliverycarrier.Forexample,ifIhaveadistributioncenterinNew
York,Imayconsolidateallmywestcoastparcelshipmentsandputthemonatrucktogetthemacrossthecountry,
thenhandthemofftoaparcelcarrier(USPS,Fedex,UPS)forfinaldelivery.Myratewiththeparcelcarrierwillbe
basedonthepointwhereIhandthemofftothem,thereforeI'llpayalowerzoneratetothem.

Copyright.ContentonInventoryOps.comiscopyrightprotectedandisnotavailableforrepublication.

DavePiasecki,isowner/operatorofInventoryOperationsConsultingLLC,aconsultingfirmprovidingservicesrelatedto
inventorymanagement,materialhandling,andwarehouseoperations.Hehasover25yearsexperienceinoperations
managementandcanbereachedthroughhiswebsite(http://www.inventoryops.com),wherehemaintainsadditionalrelevant
information.

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