Essential English for Supply Chain & Logistics Vocabulary

Backorder
To put it simply, a backorder is when a retailer orders something that’s currently
out of stock. The client trusts the company long enough to wait for the order to be
shipped at a later date.
Jack has finally dealt with all the pending backorders for our customers, and our
inventory is up-to-date.
Bilateral Contract
This is a reciprocal arrangement between two parties, where you promise to do
something in exchange for something in return. Both of you are bound to keep
your ends of the bargain (deal or agreement).
If you agree to provide a service for a company and they agree to pay you for it,
you’re entering into a basic bilateral contract.
Blanket Purchase Order
Also referred to as a blanket order or a standing order, this is a type of purchase
order where a client receives regular, ongoing deliveries for large quantities of
goods, thereby taking advantage of discount pricing.
Jane uses a blanket purchase order to get her products. This keeps her business
steady and she gets what she needs at cheaper rates.
Business-to-Business (B2B)
This is an approach where a business targets other businesses to access and sell
their products and services. In short, the commercial transaction occurs not with
the customer but with another business.
For her new jewelry start-up, Maya recently bought a huge set of charms and beads
directly from a wholesale supplier that specializes in B2B.
Business-to-Consumer (B2C)
This is the opposite of B2B and the one we’re more familiar with, where the
transaction takes place between the business and a customer. The strategies used
here differ significantly from those used in B2B marketing.
Typically, B2C strategies focus on emotionally engaging the customer to buy a
product, whereas a B2B approach focuses more on value and utility.
Consignor and Consignee
The consignor is the person (or firm) that sells or ships the goods to the recipient,
or “consignee.” The consignor is usually the “seller” and retains ownership of the
goods until the consignee pays for them.
As per the transportation document, Aditya is the consignor and you must make the
necessary payments to him when he delivers the goods.
Customs Officer
The customs officer is the law enforcement official who acts on behalf of the
government and ensures that people and goods enter or exit a country legally.
The customs officer at the docks caught him trying to smuggle some banned
substances and promptly confiscated them.
Distribution Network
This term refers to the interconnected group of storage facilities and
transportation systems that ensure goods are smoothly delivered from the
manufacturer to the customer. The distribution network is part of the supply
chain (see definition below).
Creating and managing a strong distribution network is one of the key skills
required to succeed in logistics.
Freight
This refers to the goods that are carried in bulk by land, sea or air. It can also mean
the fees paid for the transportation of these goods.
Joe worked for a few months as a truck driver carrying freight across the highway
from one city to another at night.
Inbound Logistics and Outbound Logistics
Inbound logistics refers to the activities involved in receiving, storing and
distributing goods and materials coming into a company’s premises. Outbound
logistics, on the other hand, involves the processes of storing, handling and
transporting goods and materials from a company to its customers.
Amrita is the head of the inbound logistics team, so address all queries regarding
the manufacturer to her and she’ll deal with them.
Inventory
This refers to all the goods, raw materials or finished products that a business
holds for the purpose of production, sale or distribution.
Keeping the company’s inventory list up-to-date is very important so that it’s easy
to see if any goods have gone missing or been stolen.
Lading
This term typically refers to the loading of cargo or goods onto a transportation
vehicle. However, it also sometimes refers to the cargo itself.
The lading process was long and strenuous, but we did it carefully and now the
ship’s set sail with the cargo.
Logistics Service Provider (LSP)
As the term suggests, LSPs are third parties that provide companies and clients
with logistics services.
We advised Michael to research an LSP’s credentials and track record, before
approaching one to distribute his goods and take care of the transportation for his
business.
Order Picking
Order picking is the process of assembling the goods before they’re shipped off to
the customer. It’s one of the basic warehousing processes.
Sayan recently got a job collecting articles before shipment and the company is so
pleased with his efficient order picking he may soon get a promotion.
Order Processing
This refers to all the different activities related to the filling of a customer’s orders
until they’re completed. It usually includes the picking, sorting, packing and
delivery of goods to the shipping carrier.
Swift order processing is the hallmark of any wholesale retail company.
Original Equipment Manufacturer (OEM)
An OEM is usually a company that manufactures goods that are then used as
components in another company’s goods. However, the term has evolved over the
years and now sometimes refers to the second company (i.e. the one receiving and
using the goods).
I decided to purchase the car part from the OEM to ensure compatibility and quality.
Owner’s Risk
When something is transported at the owner’s risk, it means that the owner is
responsible for insuring it against any potential loss or damage that may occur
during the transportation process. The owner bears the financial burden and
should take necessary precautions to protect the item during transit by obtaining
appropriate insurance coverage.
When shipping goods internationally, the company opted for ‘owner’s risk‘ terms so
that they wouldn’t be responsible for any potential losses or damages during transit.
Packaging
Packaging involves all the processes and materials that are used to contain,
transport and protect a product until it’s delivered. It also can refer to the design
and production of packages.
Sarita works as a packaging engineer for a small business and she’s responsible for
the optimum use of paper and cardboard resources.
Pareto Principle
Also called the 80/20 rule, this principle says that 80% of profits come from 20% of
your work or effort. In order to improve productivity, you identify the “20%” areas
and capitalize on those.
The Pareto principle is applicable in all walks of life, so know your “20%” well and
spend more time and resources on improving it.
Pooling
This is a common term in shipping lingo, where multiple shipments from different
carriers are combined in one truckload to reduce shipping charges.
Pooling your delivery goods is an efficient way to make the most of your company
budget and is also more environmentally friendly.
Preferential Rate
This is a term related to customs payments. It’s a special, reduced rate for products
from certain “preferred” countries.
Luckily for you, you can pay per your country’s preferential rate for exporting these
items.
Route Optimization
The process of determining the most efficient route or sequence for transportation
to minimize time, cost or distance.
The logistics team implemented route optimization software to minimize
transportation costs and reduce delivery times for our products.
Supply Chain
The entire interconnected network of organizations, people, activities and
resources that are responsible for the movement of the product from the supplier
to the customer.
Efficient supply chain management is one of the chief aims of any logistics
operation, so every detail must be overseen by the person who leads the operation.
Transportation
This is a key aspect of any logistics operation and refers to the movement of goods
via land/sea/air, as well as the procedures involved to make it go smoothly and
efficiently.
I was in charge of transportation, which meant I had to coordinate with truck
drivers for the delivery of our goods to the warehouse.
Warehousing
The act of storing goods that are to be distributed and sold at a later date. The
commercial building where goods are stored is called a warehouse.
Tanya scaled down her plans for the start-up because the warehousing costs were
too expensive.