The Ultimate Supply Chain Glossary: Key Terms Every Professional Should Know

The supply chain industry is filled with complex terminology that can be overwhelming, even for experienced professionals. Understanding key supply chain terms is essential, whether you’re a logistics expert, procurement specialist, or someone new to the field. This glossary breaks down 100 important terms in simple, easy-to-understand language, making it a go-to resource for anyone involved in the industry.

A

ABC Analysis – A method for categorizing inventory based on importance, with A items being the most valuable.

ABC Costing (Activity-Based Costing) – A method of assigning costs to specific activities within a supply chain to determine profitability.

Advanced Shipping Notice (ASN) – A digital or paper document sent by a supplier that provides detailed shipment information, including contents, estimated arrival time, and tracking details.

Agile Supply Chain – A flexible supply chain strategy that can quickly adapt to changes in demand or market conditions.

Air Freight – The transportation of goods via aircraft, typically for high-value or time-sensitive shipments.

Asset Tracking – The process of monitoring the location and status of physical assets in the supply chain.

Automated Guided Vehicle (AGV) – A mobile robot used in warehouses and factories to transport goods autonomously.

Automated Storage and Retrieval System (AS/RS) – A technology used in warehouses to store and retrieve goods efficiently.

B

Backorder – An order for an item that is currently out of stock but will be shipped when available.

Batch Picking – A method where multiple orders are picked simultaneously to improve efficiency.

Bill of Lading (BOL) – A document that serves as a receipt for shipped goods and outlines the shipping details.

Blank Sailing – A situation where a scheduled ocean freight shipment is canceled by the carrier.

Blockchain in Supply Chain – A decentralized digital ledger that records supply chain transactions securely and transparently, reducing fraud and improving traceability.

Bonded Warehouse – A storage facility where imported goods can be stored without paying duties until they are moved.

Bottleneck – A stage in the supply chain where operations slow due to capacity constraints.

Bulk Shipping – The transportation of large quantities of goods, often in unpackaged form.

Buyer’s Consolidation – The practice of combining multiple shipments from different suppliers into one to reduce shipping costs.

C

Capacity Planning – The process of determining the production capacity needed to meet demand.

Capacity Utilization – A measure of how efficiently a business is using its production capacity.

Carbon Footprint – The total amount of greenhouse gases produced by supply chain activities.

Carrier – A company that transports goods from one location to another.

Cold Chain – A temperature-controlled supply chain used for perishable goods like food and pharmaceuticals.

Consignment Inventory – A supply chain strategy where suppliers retain ownership of inventory until it is sold.

Continuous Replenishment – A system where inventory is replenished continuously to prevent stockouts.

Cross-Docking – A logistics strategy where incoming shipments are directly transferred to outbound vehicles without long-term storage.

D

Deadstock – Inventory that has not been sold or used for a long time.

Demand Forecasting – The process of predicting future demand for a product based on historical data and trends.

Demand Planning – The process of forecasting customer demand to ensure supply chain efficiency.

Direct Store Delivery (DSD) – A distribution method where manufacturers ship goods directly to retail stores instead of distribution centers.

Distribution Center (DC) – A facility used to store and distribute goods to retailers or directly to consumers.

Dropshipping – A fulfillment method where a retailer does not hold inventory but instead transfers orders to a supplier who ships directly to customers.

Duty-Free Zone – A location where imported goods can be stored without paying customs duties.

Dynamic Routing – The real-time optimization of delivery routes based on traffic, weather, and other variables.

E

E-commerce Logistics – The management of supply chain activities for onli…

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