Logistics & Supply Chain Glossary
41+ terms explained in plain English — from warehouse basics to green logistics.
Supply Chain Strategy
Supply Chain Management (SCM)
The end-to-end coordination of sourcing, production, inventory, transportation, and delivery activities required to move a product from raw material to end customer.
Bullwhip Effect
The phenomenon where small fluctuations in consumer demand cause progressively larger swings in orders as they move upstream through distributors, manufacturers, and suppliers.
Demand Forecasting
The process of predicting future customer demand using historical sales data, market trends, and statistical models, used to plan inventory, production, and logistics capacity.
Lead Time
The total time that elapses between placing an order and receiving the goods, encompassing processing, production, and transit time.
Just-in-Time (JIT)
An inventory strategy that aligns raw-material orders with production schedules to minimize inventory holding costs, receiving goods only as they are needed.
Vendor-Managed Inventory (VMI)
An arrangement in which the supplier, rather than the buyer, monitors and replenishes the buyer's inventory levels based on agreed stock targets.
Supply Chain Resilience
An organization's ability to anticipate, absorb, and recover from disruptions such as supplier failures, natural disasters, or demand shocks while maintaining service levels.
Reverse Logistics
The process of moving goods from their final destination back to the seller or manufacturer for returns, repairs, recycling, or disposal.
Total Landed Cost
The complete cost of a product delivered to its destination, including unit price, freight, insurance, customs duties, taxes, and handling fees.
Warehouse & Inventory
Warehouse Management System (WMS)
Software that controls and optimizes warehouse operations including receiving, put-away, picking, packing, and shipping, often integrated with inventory and order systems.
Cross-Docking
A logistics practice where incoming goods are transferred directly from inbound to outbound transportation with little or no warehouse storage in between.
SKU (Stock Keeping Unit)
A unique alphanumeric code assigned to a specific product variant, used to track inventory levels, sales, and stock movement.
FIFO / LIFO
Inventory valuation and rotation methods — First-In-First-Out (oldest stock sold or used first) and Last-In-First-Out (newest stock sold or used first).
Safety Stock
Extra inventory held above expected demand to buffer against supply delays or demand spikes, reducing the risk of stockouts.
Economic Order Quantity (EOQ)
The optimal order quantity that minimizes total inventory costs, balancing ordering costs against holding (carrying) costs.
Pick-and-Pack
The warehouse fulfillment process of selecting items from storage (picking) and preparing them for shipment (packing) against a customer order.
3PL (Third-Party Logistics)
An outsourced provider that handles warehousing, transportation, and fulfillment on behalf of a business, without owning the goods being moved.
4PL (Fourth-Party Logistics)
A provider that manages and coordinates an entire supply chain on a client's behalf, often overseeing multiple 3PLs and other logistics resources.
Inventory Turnover Ratio
A metric showing how many times inventory is sold and replaced over a period, calculated as cost of goods sold divided by average inventory value.
Transportation & Distribution
Last-Mile Delivery
The final leg of the delivery process, moving goods from a distribution hub to the end customer's doorstep — typically the most expensive and complex part of the supply chain.
Freight Forwarder
An agent who arranges the shipment of goods on behalf of shippers, coordinating carriers, customs documentation, and multimodal transport.
Less-Than-Truckload (LTL)
A shipping method for freight that doesn't require a full truckload, where multiple shippers' goods share space on the same vehicle to reduce cost.
Full Truckload (FTL)
A shipping method in which an entire truck is dedicated to a single shipper's freight, typically used for large volumes moving directly between two points.
Intermodal Transportation
The movement of freight using two or more transport modes (e.g., rail, ship, truck) without handling the cargo itself when changing modes, usually via standardized containers.
Route Optimization
The process of determining the most efficient delivery routes and sequences, factoring in distance, traffic, delivery windows, and vehicle capacity.
Bill of Lading (BOL)
A legal document issued by a carrier to a shipper, detailing the type, quantity, and destination of goods being shipped, and serving as a receipt and contract of carriage.
Incoterms
A set of internationally recognized trade terms published by the ICC that define the responsibilities of buyers and sellers for the delivery of goods under sales contracts.
Fleet Telematics
Technology that combines GPS tracking and onboard diagnostics to monitor vehicle location, driver behavior, and fuel usage in real time.
Procurement & Trade
Procurement
The business process of sourcing, negotiating with, and purchasing goods or services from suppliers to meet an organization's operational needs.
Request for Quotation (RFQ)
A formal document sent to suppliers requesting price quotes for specific goods or services, used to compare offers before purchasing.
Customs Clearance
The process of preparing and submitting documentation to authorize the import or export of goods across a country's border, including duty and tax payment.
Harmonized System (HS) Code
An internationally standardized numerical code used to classify traded products for customs, tariffs, and trade statistics purposes.
Free Trade Agreement (FTA)
A pact between two or more countries that reduces or eliminates tariffs and trade barriers on goods moving between them.
Vendor Compliance
The degree to which a supplier adheres to a buyer's requirements for packaging, labeling, delivery windows, and documentation.
Technology & Green Logistics
Green Logistics
Logistics practices aimed at minimizing environmental impact — through route optimization, low-emission vehicles, sustainable packaging, and carbon tracking.
Carbon Footprint (Logistics)
The total greenhouse gas emissions generated by transportation, warehousing, and packaging activities across a supply chain, typically measured in CO2-equivalent.
Scope 3 Emissions
Indirect greenhouse gas emissions that occur in a company's value chain, including those from logistics and transportation providers, outside its direct operations.
Electronic Data Interchange (EDI)
A standardized digital format for exchanging business documents such as purchase orders and invoices directly between supply chain trading partners' systems.
Internet of Things (IoT) in Logistics
The use of connected sensors and devices to track shipment location, temperature, and condition in real time throughout the supply chain.
Digital Twin (Supply Chain)
A virtual, data-driven replica of a physical supply chain or warehouse used to simulate scenarios and optimize operations before applying changes in the real world.
Predictive Analytics (Logistics)
The use of historical data, machine learning, and statistical algorithms to forecast future logistics outcomes such as demand, delays, or equipment failure.
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