Supply Chain & Logistics: A 40-Term English Vocabulary Guide

The global supply chain is the backbone of modern commerce, and its language is filled with specific, technical terms. For professionals in operations, procurement, or management, mastering this vocabulary is essential for clear communication with suppliers, partners, and internal teams. This guide covers 40 key terms in supply chain and logistics.

To truly master these terms, consistent practice is key. The BizVoc app offers specialized decks for Operations Management to help you learn efficiently.

Core Supply Chain Concepts

• Supply Chain Management (SCM)

  The management of the flow of goods and services, involving the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

  Effective Supply Chain Management is crucial for reducing costs and improving efficiency.
• Procurement

  The process of finding, agreeing to terms, and acquiring goods, services, or works from an external source, often via a competitive bidding process.

  The procurement department is responsible for negotiating contracts with our key suppliers.
• Sourcing

  The process of identifying, evaluating, and selecting suppliers to obtain goods and services.

  We are sourcing new vendors to diversify our supply base.
• Logistics

  The detailed coordination of a complex operation involving many people, facilities, or supplies. In business, it's the management of the flow of things between the point of origin and the point of consumption.

  Our logistics team ensures that products are delivered to customers on time.

Inventory Management

• Inventory

  The raw materials, work-in-process goods, and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

  We need to conduct a physical inventory count at the end of the month.
• SKU (Stock Keeping Unit)

  A unique code consisting of letters and numbers that identify characteristics of each product, such as manufacturer, brand, style, color, and size.

  Each color variation of the t-shirt has a different SKU.
• Just-In-Time (JIT)

  An inventory management strategy where goods are received from suppliers only as they are needed. The main objective is to reduce inventory holding costs.

  Implementing a JIT system requires close coordination with our suppliers.
• Lead Time

  The time elapsed between placing an order and receiving it.

  The supplier has a lead time of four weeks for this component.
• Safety Stock

  An extra quantity of a product which is stored in the warehouse to prevent an out-of-stock situation.

  We maintain two weeks of safety stock to guard against unexpected demand spikes.
• Warehouse

  A large building where raw materials or manufactured goods are stored before their export or distribution for sale.

  The new warehouse has a capacity of 50,000 square feet.
• Distribution Center (DC)

  A specialized building, often with refrigeration or air conditioning, which is stocked with products to be redistributed to retailers, wholesalers, or directly to consumers.

  Orders are shipped directly from our central distribution center.

Transportation & Freight

• Freight

  Goods transported in bulk by truck, train, ship, or aircraft.

  The cost of air freight is significantly higher than sea freight.
• Carrier

  A company that transports goods or people for any person or company and is responsible for any possible loss of the goods during transport.

  We use several different carriers for our domestic and international shipments.
• Bill of Lading (BOL)

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

  The driver must sign the Bill of Lading upon collection of the goods.
• Freight Forwarder

  A company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution.

  Our freight forwarder handles all the customs documentation for our imports.
• Third-Party Logistics (3PL)

  The outsourcing of a company's warehousing, transportation, and fulfillment services to a third-party company.

  Using a 3PL provider has allowed us to scale our e-commerce operations efficiently.
• Incoterms

  A series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law.

  The contract specifies that the shipment is under 'FOB' Incoterms.
• Customs Broker

  A professional who assists importers and exporters in meeting federal requirements governing imports and exports.

  Our customs broker ensured the shipment cleared customs without any delays.
• Tariff

  A tax imposed by a government on imported goods.

  The new tariff increased the landed cost of our imported components.
• LTL (Less-Than-Truckload)

  The transportation of relatively small freight. LTL shipments typically weigh between 151 and 20,000 lbs.

  For smaller orders, we use LTL shipping to save on costs.
• FTL (Full Truckload)

  A shipment that takes up an entire truck by itself. FTL shipping is typically faster and safer than LTL.

  The large order for our biggest customer will ship via FTL.

Processes & Documentation

• Purchase Order (PO)

  A commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

  The supplier will not process the order until they receive an official Purchase Order.
• Invoice

  A document that lists the products and services a business provides to a client and establishes an obligation on the part of the client to pay the business.

  The invoice is due within 30 days of receipt.
• Packing List

  A document that includes details about the contents of a package.

  Please check the contents of the shipment against the packing list upon arrival.
• Quality Assurance (QA)

  A way of preventing mistakes and defects in manufactured products and avoiding problems when delivering products or services to customers.

  Our QA process includes rigorous testing at every stage of production.
• Quality Control (QC)

  A process through which a business seeks to ensure that product quality is maintained or improved.

  The QC team inspects a sample of finished goods from each batch.
• Reverse Logistics

  The process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Includes returns and recycling.

  Managing customer returns efficiently is a key part of our reverse logistics strategy.
• Tracking Number

  A unique ID number assigned to each package, which allows you to monitor the shipment's movement.

  You will receive an email with the tracking number once your order has shipped.
• ETA / ETD (Estimated Time of Arrival / Departure)

  Common business acronyms used to communicate timings for shipments and projects.

  What is the ETA for the container ship from Shanghai?

Speak the Language of Logistics with BizVoc

This glossary is a starting point for navigating the complex world of supply chain management. Using these terms correctly will enhance your credibility and ensure clear communication with partners around the globe.

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