An external service provider that manages one or more aspects of a company's logistics — such as transportation, warehousing, or fulfillment — allowing the company to focus on its core business while outsourcing logistics operations.

An integrator that manages an entire supply chain on behalf of a client, coordinating multiple 3PLs and other providers while owning few physical assets itself.

A classification method that ranks inventory into A, B, and C groups by value or importance, so that management effort is concentrated on the high-value items that matter most.

An order for a product that is temporarily out of stock and will be fulfilled once inventory is replenished, rather than being cancelled.

A legal document issued by a carrier to a shipper that details the type, quantity, and destination of goods being carried. It serves as a receipt, a contract of carriage, and a document of title.

The amplification of demand variability as orders move upstream in a supply chain, so small fluctuations in customer demand become much larger swings at the manufacturer and supplier levels.

The total greenhouse gas emissions generated by supply chain activities such as transport, warehousing, and production, usually expressed in CO2-equivalent.

The total cost of holding inventory over a period — including capital, storage, insurance, obsolescence, and handling — usually expressed as a percentage of inventory value per year.

Carrying Cost = Average Inventory × Holding Cost Rate

A supply chain designed to keep materials and products in use through reuse, repair, remanufacturing, and recycling, minimizing waste and virgin resource use.

A warehousing strategy where incoming goods are unloaded from an inbound truck and directly loaded onto outbound trucks with little or no storage in between, minimizing handling and inventory holding.

The portion of inventory that is consumed and replenished in normal operations between successive order deliveries, as distinct from safety stock held against uncertainty.

Cycle Stock = Order Quantity / 2

The total weight a ship can safely carry, including cargo, fuel, stores, and crew — a key measure of a vessel's carrying capacity in maritime shipping.

The process of predicting future customer demand using historical data, statistical models, and market intelligence, so that inventory and capacity can be planned in advance.

Forecast Accuracy = 1 − MAPE
MAPE = mean(|Actual − Forecast| / Actual)

A fulfillment model where the retailer does not keep goods in stock but transfers customer orders to a supplier or manufacturer who ships directly to the customer.

The order quantity that minimizes the total of ordering and holding costs. It balances the cost of placing orders against the cost of carrying inventory.

EOQ = √(2DS / H)
D = annual demand · S = cost per order · H = holding cost per unit/year

Combining several smaller shipments into one larger load to improve vehicle utilization and reduce per-unit transport cost and emissions.

An intermediary that arranges the transport of goods on behalf of a shipper, consolidating shipments, handling documentation, and booking space across carriers and modes.

A set of standardized international trade terms published by the ICC that define the responsibilities of buyers and sellers for delivery, risk, and costs in global shipments.

The movement of goods using more than one mode of transport — typically road, rail, and sea — within standardized containers, without handling the cargo itself when changing modes.

An inventory strategy that aligns material arrivals closely with production needs, minimizing inventory by receiving goods only as they are needed in the process.

The process of grouping separate but related items into a single ready-to-ship or ready-to-assemble package, simplifying picking and downstream assembly.

The final leg of the delivery journey from a distribution hub to the end customer — typically the most expensive and least efficient part of the supply chain.

The total time between placing an order and receiving the goods, including order processing, production, and transit. It is a key driver of inventory and planning decisions.

Reorder Point = (Average Demand × Lead Time) + Safety Stock

A small, often automated warehouse placed close to end customers in urban areas to speed up order fulfillment and shorten the last mile.

A key performance metric measuring the percentage of orders delivered both on the promised date and with the complete quantity ordered, reflecting service reliability.

The movement of goods from the customer back toward the producer — handling returns, repairs, recycling, and disposal — often to recover value or reduce waste.

A unique identifier for each distinct product and variant in inventory, enabling tracking, counting, and management at the item level.

Extra inventory held above expected demand to protect against variability in demand or supply lead time, reducing the risk of stockouts.

SS = z × σd × √L
z = service-level factor · σd = demand std. dev · L = lead time

A structured procurement approach that analyzes spend and supply markets to select suppliers on total value and total cost of ownership, not unit price alone.

The standard unit of measure for container capacity, based on a 20-foot container. A 40-foot container equals 2 TEU.

1 × 40 ft container = 2 TEU

The full cost of acquiring, using, and disposing of a product or service — including purchase price, operating, maintenance, and end-of-life costs — not just the unit price.

An arrangement where the supplier monitors and replenishes the buyer's inventory, sharing demand data so the supplier decides when and how much to ship.

Software that controls and optimizes warehouse operations — including receiving, put-away, storage, picking, packing, and shipping — to improve accuracy and labor efficiency.