Retail EDI Glossary

3 Way Match

When used in the retailer/buyer process, this is the process of validating the supplier invoice to the inventory receiving details as well as against the purchase order. Retailers/buyers not trading electronically are doing this process manually. For those trading electronically, the systems do this function and report any exceptions that would require additional review coordinated by the Accounts Payable personnel.

3PL (third-party logistics providers)

Are freight forwarders, courier companies other companies integrating & offering subcontracted logistics and transportation services. In the “PL” terminology, it is important to differentiate the 3PL from the 1PL, which are the shipper or the consignee and 2PL, which are actual carriers.

4PL (fourth-party logistics provider)

Originally just consulting firms specializing in logistics, transportation and supply chain management such as Rollins, Deloitte, SCMO (company) or BMT Limited. Now a new crop of companies have emerged who are actual transportation companies too. While a 4PL is sometimes described as non-asset-owning service provider, their role is to provide broader scope managing of the entire supply chain. Making way for 5PL (Fifth-party logistic model) who define themselves as broadening the scope further to e-business.

Adjacencies

Synonomous to a map of a store, where products and categories are given dedicated space and locations on that map to optimize space and store operational efficiencies.

Advance Ship Notice (ASN)

This is the EDI transaction used to communicate shipment details to the trading partner. This transaction typically contains information regarding the purchase order, dates, carrier, and product details of the physical shipment. It may contain packing information & identifiers such as the GS1-128 label or carrier tracking numbers. This should be sent immediately upon departure from the shipper.

ANSI

The American National Standards Institute (ANSI) is a private non-profit organization that oversees the development of voluntary consensus standards for products, services, processes, systems, and personnel in the United States. This body represents the US in interactions with ISO, IEC and IEF.

Applicability Statement 2 (AS2)

AS2 is a specification for transporting data securely and reliably over the Internet. AS2 is a common communication method used for EDI in the retail industry.

Back Order

Used to describe product ordered that is out of stock and typically shipped when the product becomes available.

Banners

When a parent company has different names for their stores than the title of the company.
Example: Dick’s Sporting Goods has stores named Dick’s Sporting Goods, Golf Galaxy, and Field & Stream, so they have 3 banners.

Bill of Lading

A legal document between the shipper of goods and the carrier in a Truckload (TL) or Less-Than-Truckload (LTL) carrier relationship. It contains information about the load such as weight, pallet and/or carton count, locations, harmonized tariff codes, classifications (ex. Commodity codes; hazmat indications). The BOL# may be sent in the ASN as the shipment identifier.

Big-box store

A large retail store whose physical layout resembles a large square or box when seen from above. A big-box store is characterized by a large amount of floor space (generally more than 50,000 square feet), a wide array of items available for sale, and its location in suburban areas. Big-box stores often can offer lower prices because they buy products in high volume. Also called supercenter, superstore or megacenter.

Blackout

The timeframe in which changes are not allowed. Typically refers to system or process changes not allowed during critical high traffic or selling periods (i.e. holidays).

Blanket Purchase Order

A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. Shipments do not normally occur against the blanket order but managed by release orders.

Blanket Release Order

The order authorization to ship against a blanket purchase order, agreement, forecast, or contract.

Brick-and-mortar

A traditional “street-side” business that deals with its customers face to face in an office or store that the business owns or rents. The local grocery store and the corner bank are examples of “brick and mortar” companies. Brick and mortar businesses can find it difficult to compete with web-based businesses because the latter often have lower operating costs and greater flexibility.

Business to business (B2B)

A type of commerce transaction that exists between businesses, such as those involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business refers to business that is conducted between companies, rather than between a company and individual consumers. This is in contrast to business to consumer (B2C) and business to government (B2G).

Business to consumer (B2C)

Business to consumer refers to businesses that sell primarily to individual consumers.

Business to government (B2G)

Business to government refers to businesses that sell primarily to government agencies.

Carrier

A company that transports product from point A to point B; includes truck, rail, ocean, small package, and air carriers.

Carrier PRO Number

A carrier generated number representing the load number or load ID and can be used for tracking and billing purposes (the carrier’s representation of the load). This may be a shipment identifier that is included on the ASN and the freight bill.

Consumer Experience (CX)

Also called customer experience, is the perception a patron has after engaging with a company, brand, product or service.

Casepack / Masterpack

A standard packaging configuration of products that may be the shipping unit. This configuration is usually assigned a unique GTIN identifier that may also be barcoded on the outside of the pack/carton.

Categorization

A term used by retailers to break products into groups with other like products. For example, T-shirts are in the apparel category. Categorization is now broadening out to include store categories (high volume, low volume) in addition to categorizing customers.

Category Management

A practice by which a key supplier in a category (or 3rd party) leverages a retailer’s data to provide category recommendations and insights for managing the business. They are expected to be brand agnostic recommendations that benefit the entire category.

Category Review

A practice between retailers and their supplier/category managers where they review the performance of the business. Typically done prior to a seasonal plan or category transition planning.

Chargebacks (Deduction)

A penalty or cost offsets that are assessed by retailer to a supplier for not following Vendor Procedures, Compliance Manual or vendor agreements established in the contract with the retailer. Chargebacks can be associated for incorrect discounts, order fill rates, missing data, data quality, Labeling, packing, and carton marking requirements.

Check Lanes

This is the merchandising space located at the checkout aisles. Typically features highly impulsive items.

Class / Sub-class

In merchandising, this is the category and sub-category generally defined by the retailer to an item.

Commodities

These are essential household items (Ex. toilet paper, milk, laundry detergent) that are typically carried by a high % of retailers. They are extremely price sensitive items, tend to be lower margin, and sometimes also used as lost leaders (to get consumers into the store).

Consignee

In the movement of freight, the consignee is the person or company to whom goods are officially sent or delivered.

Consignment

The process where the supplier ships product to a retailer’s DC or store but does not invoice the retailer until the product has been sold by the retailer. Sharing the buying organization’s Point of Sale information is what drives the invoicing process. The EDI 852 Sales & Inventory transaction is usually a requirement for this type of relationship.

Consolidators (Freight Forwarder)

An organization that takes small shipments and combines them into larger shipments to garner better freight rates. Commonly used in import operations and may also provide customs clearance services.

Consumer

The end user, but not necessarily a purchaser, in the distribution chain of a goods or services.

Contract Carrier

A transport line that moves product under contract with a shipper or consignee.

Cost of Goods (COGS)

This is the cost of an item as charged by the supplier to the retailer. This typically includes all cost charged by the supplier to get the item to the retailer (production, packaging, freight).

Country of Origin Labeling (COOL)

A USDA labeling law the requires retailers (grocery) to notify the consumer regarding the source country of certain foods (ex. meat, fish, fruit, and nuts).

Credit Memo

A financial document issued by the seller of goods or services to the buyer, reducing the amount that the buyer owes to the seller. Some common credit memo examples are billing errors, rebates, returns, volume discounts, etc.

CRM Contact Center (Customer service, call center, etc)

A computer-based system that provides call and contact routing for high-volume telephony transactions, with specialist answering “agent” stations and a sophisticated real-time contact management system. The definition includes all contact center systems that provide inbound contact handling capabilities and automatic contact distribution, combined with a high degree of sophistication in terms of dynamic contact traffic management. There are a lot of synonyms for this important function.

Cross-dock / Cross-docking

A fulfillment model where suppliers pick, pack, and mark for final destination. Retailers traditionally allocate item inventory by store during the creation or updates of the order. Products are routed through a distribution center, staged, and routed for final delivery. A cost-effective and efficient distribution strategy. Major activities are consolidating shipments and re-distributing partial loads.

Customs

A government agency entrusted with enforcement of laws and regulations to collect and protect import-revenues and to regulate and document the flow of goods in and out of the country.

Customer Experience Management (CEM)

A business strategy that focuses and redefines the business from the customer viewpoint. CEM assumes that products and services are no longer sufficient to satisfy the customer and elevate the value proposition to the level of an experience. At the core of the CEM strategy is an organizational experience that defines the value for both employees and customers.

Data Element

A unit of data for which the definition, identification, representation, and/or permissible values are specified by means of a set of attributes/values.

Date Code

The date information assigned by the manufacturing or packing plant for tracking purposes of a product. Specifically, a means of identification of the products prepared, processed, or packaged on a certain date the use of track and trace.
Examples: Used by date, production date, sell by date

Days / Weeks of Supply (WOS)

A calculation used to determine and evaluate the optimal inventory levels. It is current inventory level divided by average sales over a given time period.

Distribution Center (DC)

A facility which warehouses inventory or flows inventory for pending distribution to the stores, other warehouse facilities, or the e-commerce consumer. Also called branch warehouse or distribution warehouse.

Debit Memo

A financial document issued from a buying organization to a seller that notifies the seller that a deduction was made to the seller’s payment. Some common debit memo examples are billing errors, rebates, returns, volume discounts, etc.

Deconsolidation

The act of separating a ‘consolidated’ (usually containerized) shipment into smaller shipments, for delivery to one or more destinations, typically a regional distribution center or store locations.

Direct Import

When product is imported directly by the retailer and not through the manufacturer’s authorized agent/distributor. This process allows the retailer to take control of inventory sooner, resulting in lower cost of goods sold and transportation costs.

Direct Store Delivery (DSD)

A method of delivering product from a supplier/distributor directly to a retail store, thereby bypassing a retailer’s distribution center. DSD products are typically, but not always, fast-turning, high velocity, and high consumer demand merchandise. Typically, the supplier is responsible for creating the order and merchandising the product on the sales floor.
Examples: Soda, chips, greeting cards, and bread suppliers

Discontinued

Used to describe an item that is currently being sold and replenished but is determined to no longer be sold or replenished. This can be determined at the supplier or retailer level.

Display Ready (Floor Ready)

Shelf-ready packaging (SRP) refers to the preparation of a product so that it is delivered to a retailer in a ready-to-sell merchandised unit. Products which come in SRP can be easily placed on the shelf without the need for unpacking or repacking. SRP covers all types of packaging designed for the retail outlet. It is not limited to packaging which goes on the shelf; it also includes sales support mechanisms in all major distribution channels.

Distributor

An entity that buys noncompeting products or product lines, warehouses them, and resells them to retailers or direct to the end users or customers. Distributors allow for smaller minimum order quantities and support multi-vendor consolidated shipments.

Domestic

When product is purchased and shipped within the same country.

Drop ship / Drop shipping

A supply chain management method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.

D-U-N-S Number

A nine-digit identification number assigned by Dun & Bradstreet to businesses and used for uniquely identifying companies. For EDI, some companies will use this information as a corporate identifier but may also assign a 4-digit suffix to indicate a specific location or business entity.

E-commerce (Electronic commerce or EC)

The buying and selling of goods and services on the Internet. In practice, this term and a newer term, e-business, are often used interchangeably. For online retail selling, the term e-tailing is sometimes used.

Electronic Data Interchange (EDI)

The system-to-system transmission of business messages in a standards-based format, developed and managed by standards governing bodies.

EDI Standard

Standards prescribe the formats, character sets, and data elements (and in some instances code values) used in the exchange of business documents. EDI standards commonly used are X12 (North American based), EDIFACT (all other countries) and Tradacoms (UK).

EDI Provider

An outsourced technology company that provides a secure and automated network for exchanging electronic data interchange (EDI) documents throughout your entire supply chain. EDI providers maintain the platform security and update EDI maps whenever a retailer changes requirements or specifications.

EDI Outsourcing

The term “outsourced EDI” refers to any type of EDI solution where a provider handles the translation, communication and technology for you. This includes software, hardware, infrastructure and ongoing changes to EDI specs or maps.

EDI Version

EDI standards are supported by updates to the standard, known as versions, that are published (typically annually) to allow for new data elements, transactions needed to support changing systems, and business requirements.

EDIFACT

United Nations/Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT or EDIFACT) is the international EDI standard developed under the United Nations.

Electronic Funds Transfer (EFT)

A hands-off, electronic system that moves money to and from bank accounts or financial institutions.

Electronic Trading

The electronic exchange of business message between parties. Electronic trading can be any format as long as both parties are in agreement with structure, content, and code/values.

Endcaps

The space at the end of the aisle for merchandise facing the main aisles. Higher traffic areas that drive sales lift for items located in that space. The space typically gets changed out for seasonal or promotional relevancy.

Enterprise App Stores

Applications are being developed with the features and functionality of Amazon, Google, Facebook and the Apple App Store in mind to improve consumer experience.

E-retailer

A company whose primary business is the sale of goods and services through the Internet. Electronic retailing, or e-tailing, can include business-to-business and business-to-consumer sales. E-tailing revenue can come from the sale of products and services, through subscriptions to website content, or through advertising. It is a play on the words “retail” and “e-commerce.”

European Article Number (EAN)

A defined numbering mechanism used in Europe to uniquely identify every retail product and packaging option. The EAN is similar in concept and design to the UPC code and is usually what the barcode represents on goods. This value is also identified as a GTIN.

Every Day Low Pricing (EDLP)

A pricing strategy that signals to the consumer that an item is rarely on promotion but just is offered at a low price at all times. In direct contradiction to a high/low strategy where an item is purposely sold by the retailer at a high price on non-promotional weeks so they can go low on promotion (like 50%) off and therefore see majority of the volume when on promotion. EDLP usually matches closely to what the high/low price is when item is sold on promotion.

Factor

A factor is a financial intermediary that purchases receivables from a company. A factor is essentially a funding source that agrees to pay the company the value of the invoice less a discount for commission and fees. The factor advances most of the invoiced amount to the company immediately and the balance upon receipt of funds from the invoiced party.

Fill Rate

The percentage of items on an order or the quantity of an item shipped against the original or changed order.

First In First Out (FIFO)

In the supply chain, this is the monitoring of inventory and shipping of the oldest products first, where shelf life is a concern.
In accounting, this is a method of valuing the cost of inventory using oldest item price paid for product.

Flow-through

An order management model where suppliers pick and pack for the original Ship-To. The retailer determines the item inventory allocation by store prior to when the products arrive at the DC and commonly uses the ASN to determine Post-Distribution. Products are routed through a distribution center, staged, and routed for final delivery.

Forecast

A number associated with an expected outcome. Typically used as part of business planning internally but also a number that is shared between retailers and suppliers so they have more insight into what to expect from the other party.

Freight

For a carrier, the products being moved by a carrier between two points. For a buyer/seller, the cost of shipping products between two points.

Freight Bill

The carrier invoice for the movement of products and services that includes some shipment/product details and may include accessorial charges.

Freight Carrier

The companies that haul freight, also called “for-hire” carriers. Methods of transportation include trucking, railroads, airlines, and ocean shipping.

Freight Charge

The rate and other charges determined by the carrier associated with cost of moving goods between two points.

Freight Collect

The freight and charges to be paid by the consignee (the retailer is responsible of the transportation costs).

Freight on Board (FOB)

Freight on board (FOB) is a trade term that indicates whether the seller or the buyer has ownership and/ or liability for goods during shipment between the two parties.

Freight Prepaid

The freight and charges to be paid by the shipper (the supplier is responsible of the transportation costs).

Fulfillment

Sequence of steps involved in processing an order to the satisfaction of the customer and making the necessary changes in the inventory records. It may also include processing of returns and adjustment of the records. Also called order processing.
Examples: Direct to Store, Direct Ship, Drop Ship, Cross-dock

Global Data Synchronisation (GDS)

The messaging used within the GDSN that supports the exchange of standardized item data with their trading partners based on GS1 message standards.

Global Data Synchronisation Network (GDSN)

An internet-based, interconnected network of interoperable data pools and a global registry known as the GS1 Global Registry, that enables companies around the globe to exchange standardized and synchronized supply chain data with their trading partners using a standardized Global Product Classification.

GS1-128 Label

A standardized shipping label using GS1 standards that is used to indicate information about the origin, destination, and content of the shipment. It includes UCC-128 barcode technology representing the shipper assigned Serial Shipping Container Code (SSCC) and can represent the logistical/shippable unit (i.e. Container, pallets, or cartons).

Global Trade Item Number (GTIN)

A globally unique 14-digit number used to identify trade items, products, or services. GTIN is also an umbrella term that refers to the entire family of UCC.EAN data structures. The entire family of data structures within the GTIN is: UPC and EAN-13, and GTIN-8, ISBN.

Hardlines

A category of goods for retailers that includes the categories of Toys, Sporting Goods, Electronics, or Entertainment (think soft goods apparel/linen vs. hard goods plastic/electric). Sometimes used in replacement of the term “hard goods”.

Import

A good or service brought into one country from another.

Impulse Buys

Used to describe items that the consumer was not intending to buy but added to their basket once they saw the item. Retailers utilize endcaps, check lanes, and other high traffic areas to entice customers.

Item Management System / Item Management Services (IMS)

A system used by companies (retailers, distributors, suppliers) to store item details. Commonly referred to as the item master.

In-stock

Used to describe an item that is available for immediate purchase.

In-transit

Used to describe product that is in the process of moving from one point to another in the supply chain.

Invoice

The transaction used in retail where supplier requests payment for products or services rendered.

Landed Cost

The total price of a product once it has arrived at a buyer’s door. The landed cost includes the original price of the product, all transportation fees (both inland and ocean), customs, duties, taxes, insurance, currency conversion, crating, handling, and payment fees.

Leadtime

The total time that elapses between an order’s placement and its receipt. It includes the time required for order transmission, order processing, order preparation, and transit.

Less-Than-Truckload (LTL)

LTL stands for less than truckload, meaning that the shipment will not take up an entire truck. These types of shipments typically weigh between 100 and 10,000 pounds. LTL freight shipments will often take longer to reach their destinations, due to the multiple shipments on board creating frequent stops due to consolidation at Hub carrier locations/terminals.

Load

A single movement defined as the service provided by a carrier that includes a series of picks and drops from the time the product is loaded to the final delivery.

Load Tender

The transaction used by shipper or consignee requesting a shipment to be picked up and routed. Used for single stop routes, LTL (Less-Than-Truckload or TL (Truckload).

Localization

A retailing approach used to make sure their strategy is consistent with the needs of the consumer in that specific market.

Logistics

The part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers’ requirements.

Loss Leaders

A pricing strategy where a product is sold at a price below its market cost or normal margin to stimulate other sales of more profitable goods or services.

Lot Number

An identification number assigned to a particular production run or batch from a single manufacturer. Lot numbers can typically be found on the outside of packaging.

Manufacturer-direct

The term manufacturer-direct, also known as factory-direct, refers to a business model in which the manufacturer sells its goods directly to the end user of the product. Thanks to Internet and the e-commerce capabilities, the number of manufacturers that decide to go online and sell direct to their customers without intermediaries is increasing quickly. There are 4 types of manufacturers who sell direct to consumers online:

1. No retail stores, sell only through retail partners (e.g. Bose)
2. Retail stores and retail partners (e.g. Sony Store)
3. Retail stores, no retail partners (e.g. American Apparel)
4. No retail stores or retail partners, only available online/phone (like Dell used to)

Margin

A metric that looks at the difference between the cost of an item and the selling price.

Mark-downs

A reduction taken to the retail price by the retailer or to the product cost by the supplier.

Mark-ups

The difference between the cost of an item and the selling price.

Master Bill of Lading

A master bill of lading is used by shipping company “carriers” to summarize the different quantities of freight that are being sent in a particular shipment, by either vessel or other means of transport. This document is typically used in less-than-truckload (LTL) to represent the consolidation of multiple shipments.

Master Data Management (MDM)

A comprehensive method and/or system of enabling an enterprise to link all of its critical data to a master file, providing a common point of reference. This could include items, locations, or any other master data related to the owner.

Mobile Commerce

The use of wireless handheld devices such as smart phones and laptops to conduct commercial transactions online. Mobile commerce transactions continue to grow, and the term includes the purchase and sale of a wide range of goods and services, online banking, bill payment, information delivery and so on. Also known as m-commerce and mobile engagement.

Mobile Internet Devices (MID)

A small Internet communications unit designed to provide entertainment, information and location-based services for the consumer market (rather than the enterprise). The MID is a larger form factor than a handheld device but smaller than the Ultra Mobile PC (UMPC). As such, the device has been described as filling a consumer niche between cellular telephones and tablet PCs.

Multichannel

Interacting with customers using more than one channel (ex: physical store, e-commerce website, etc.).

Musical Size Runs

A method of ordering that consists of one style, one color, and multiple sizes to a case or assortment.

Omnichannel

A multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a brick and mortar store.

Omnichannel Fulfillment

This type of fulfillment seeks to prioritize order delivery based on individual customer needs or preferences. The goal is to fulfill every SKU from every channel for every demand source.

On Order

The total number of stock-keeping units (SKUs) that have been ordered from a supplier. These units are not counted as part of the quantity on hand until they actually arrive.

Open to Buy

A metric used to manage the amount of inventory a certain category can own at any point. Open to Buy is the difference between the inventory goal amount and the amount of inventory anticipated to be owned at any given point. Calculation tends to be: Planned Inventory – (Current inventory + incoming receipts for an order leadtime – expected sales during order lead time).

Out of Stock

Used to describe products that are currently not available for purchase because no inventory is available.

Packing Slip

An itemized list of items included for each shipment/order. Some common details are quantity, description, and weight of the contents. This document is prepared by the shipper and included with the shipment/order.

Peer-to-Peer (P2P)

A type of transient Internet network that allows a group of computer users with the same networking program to connect with each other and directly access files from one another’s hard drives. Napster and Gnutella are examples of this kind of peer-to-peer software. Major producers of content, including record companies, have shown their concern about what they consider illegal sharing of copyrighted content by suing some P2P users.

Plan – Merchandising

A financial road map which sets goals at the category level and is created seasonally or annually.

Planogram

A visual representation, diagram, or model that illustrates the placement of products within a store to maximize visual impact and productivity.

Point of Sale (POS) System

A combination of hardware (cash register) and software (payment and inventory) that allows retailers to process transactions while updating operations. A more complex POS system provides information to measure sale history, pricing metrics, customer records, inventory levels and more.

Product Information Management (PIM)

The item information required to market and sell products through distribution channels. A central set of product data can be used to feed information to media such as websites, print catalogs, ERP systems, and electronic data feeds to trading partners.

Product Turns

A calculation used to measure productivity of an item or category that represents the number of times inventory is sold during a specific timeframe. Measured as the sales or cost of goods sold during specific time period divided by the average inventory level.

Purchase Order (PO)

The transaction used in retail for order products to be shipped to a DC/store or end consumer. Can contain a single ship to or a single order with multiple ship to and provided marked for/cross dock packing details.

Purchase Order Acknowledgement (POA)

The transaction used in retail as an acknowledgement of the purchase order. Also used by retail and grocery as a suggested PO from the supplier to the buyer for VMI (Vendor-Managed Inventory).

Purchase Order Change (POC)

The transaction used by in retail by the buyer to communicate order changes to the supplier.

Racetrack

The term used for the aisles in the store that sees the highest amount of traffic flow through the store.

Radio frequency identification (RFID)

A data collection technology that uses electronic tags for storing data. The tag, also known as an “electronic label,” “transponder” or “code plate,” is made up of an RFID chip attached to an antenna. Transmitting in the kilohertz, megahertz and gigahertz ranges, tags may be battery-powered or derive their power from the RF waves coming from the reader. Like bar codes, RFID tags identify items. However, unlike bar codes, which must be in close proximity and line of sight to the scanner for reading, RFID tags do not require line of sight and can be embedded within packages. Depending on the type of tag and application, they can be read at a varying range of distances. In addition, RFID-tagged cartons rolling on a conveyer belt can be read many times faster than bar-coded boxes.

Regional Distribution Center (RDC)

The warehouses that are commonly located geographically to support the customer (suppliers, distributors, retail stores or end consumers).

Replenishment

The ordering and movement of inventory from upstream, or reserve product storage locations, to downstream or primary storage, picking, and shipment locations. The purpose of replenishment is to keep inventory flowing through the supply chain by maintaining efficient order and line item fill rate.

Response to Load Tender

The transaction used to indicate acceptance of a load tender.

Retailer

A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who normally sell their goods to another business.

Returns (Sales)

The merchandise sent back by a consumer to a retailer to the supplier, usually for one of the following reasons:

• Excess quantity shipped
• Excess quantity ordered
• Defective goods
• Goods shipped too late
• Product specifications are incorrect
• Items shipped

The return process is typically documented in the trading partner agreement.

Safety Stock

A level of inventory carried above and beyond basic levels to ensure the item is in stock when the customer needs it. This typically accounts for issues with item sales fluctuations, inconsistent inventory supply, long supply lead times, and variability or store stocking concerns.

Scan-Based Trading (SBT)

A method of using Point of Sale data from scanners and retail checkout to initiate invoicing between a manufacturer and retailer (pay on use).

Seasonal Items

A term used for items that only sell during a specific time of the year.

Segmentation

A method used to break down a category to a lower level of classification based on certain consumers’ shopping habits, store pattern, regional pattern, or seasonal pattern.

Sell-through

The % of purchased inventory that has been sold. Typically used in conjunction with seasonally committed businesses.

Shelf Life

The recommended length of time that a commodity may be stored without becoming unfit for use, consumption, or sale.

Shipper

The consignor, exporter, or seller (who may be the same or different parties) named in the shipping documents as the party responsible for initiating a shipment, and who may also bear the freight cost.

Showrooming

Consumers using a physical retail establishment and resources to research a purchase later made on a website or through a mobile device.

Stock Keeping Unit (SKU)

A unique code consisting of letters and numbers that identify characteristics about each product, such as manufacturer, brand, style, color, and size. It is used and assigned by retailers to identify and track its inventory, or stock.

Social media

Interaction among people in which they create, share and/or exchange ideas and information in virtual communities and networks. Examples include Twitter, LinkedIn, Facebook, Instagram and many others.

Software-as-a-Service (SaaS)

A software application delivery model wherein the provider hosts and operates the application for use by its customers over the Internet. It is typically thought of as a low-cost way for businesses to obtain the same benefits of commercially licensed, internally operated software without the associated complexity and high initial cost.

Sourcing Company

A company whose function is procuring products or services for another business partner using predefined criteria (pricing, supply chain capabilities, quality, etc).

Standard Carrier Alpha Code (SCAC)

A unique two-to-four-letter code used in the United States to identify transportation companies that are assigned by the NMFTA (National Motor Freight Traffic Association).

Statement of Work (SOW)

A document routinely employed in the field of project management. It defines specific activities, deliverables and timelines for a vendor providing services to the client.

Storage Lockers for Deliveries

Amazon has begun to use “delivery lockers” in various markets. They have quietly installed large metal cabinets—or Amazon Lockers—in grocery, convenience and drugstore outlets that function like virtual doormen, accepting packages for customers for a later pickup. Customers gets a code to open the locker.

Store Clusters

The groupings of stores with like selling patterns or consumers.

Storefront

The entrance to the store which is typically viewed as a prized space because all customer traffic passes this location and often includes customer returns, check lanes, information board/directory, etc.

Store location rationalization

A reorganization of a company in order to increase efficiency. This reorganization may lead to an expansion or reduction in company size, a change of policy or an alteration of strategy pertaining to particular products.

Suppliers

Someone whose business is to supply a particular service or commodity. Sometimes called vendors.

Supply Chain

A supply chain is the process of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer.

Taxonomy

A system for naming and organizing things.

Tender

To offer (tender) a shipment to a motor carrier including detailed scheduling, equipment requirements, commodities, and shipping instructions pertinent to a load tender.

Terminal

A building that handles and stores freight temporarily as it is transferred between trucks. Also referred to as a HUB.

Terms (Payment)

The conditions under which a seller will make a sale. Typically, these terms specify the period allowed to a buyer to pay off the amount due, and may demand cash in advance, cash on delivery, deferred payment period of 30 days or more, etc.

Truck-Load (TL)

TL stands for full truckload, meaning that the shipment will take up an entire truck by itself. TL shipments stay on the same truck the entire time and are not transferred during transport. This method of transportation is also much quicker than LTL, since there is not a need to transfer the load or deconsolidate the freight through a HUB/Terminal network.

Tracking Number

The number assigned to a shipment or packages when they are shipped to identify and trace it as it travels to its destination.

Trading Partner

One of the two or more participants in an ongoing business relationship.

Trading Partner Agreement

An agreement between retailer and supplier on how they will conduct business together. Also known as vendor agreement.

Transfers

A change in ownership of an asset, or a movement of assets from one location to another. This term is generally used by retailers/distributors or suppliers to define moving inventory between inventory/storage facilities.

Transportation Management System (TMS)

An application used by 4PLs/3PL/shipper (anyone who’s shipping anything, despite their role in the supply chain) to optimize management of building and transporting loads. Used to manage costs such as freight spend and carrier rates.

Trip

Traditionally used by transportation or logistics companies to define the continuous movement representing two or more consecutive loads/trailers handled by one carrier.

Uniform Communication Standard (UCS)

An EDI standard designed for and used by trading partners within the grocery industry and is a subset of the X12 national standard.

Universal Product Code (UPC)

A type of code printed on retail product packaging to aid in identifying a particular item. It consists of two parts – the machine-readable barcode, which is a series of unique black bars, and the unique 12-digit number beneath it.

Value-added Network (VAN)

A service providing a secure system for exchanging electronic data interchange (EDI) documents. Other services include private messaging system (email privacy) and workflow reporting.

Vendor Compliance

The documented rules by which trading partners will conduct business with one another as define by the retailer/buyer. Vendor compliance rules are created by companies to facilitate the importance of streamlining and standardizing their internal procedures around supply chain management, resulting in trading partners adjusting their operations to react to their customer’s requests.

Vendor Income

A fee paid from the supplier to the retailer, usually for inclusion in a coveted resource of the retailers (like weekly circular, endcap space, marketing programs) but at times also used to cover clearance or promotional markdowns.

Vendor-managed inventory (VMI)

This is a term used when a supplier (vendor) takes full responsibility for the inventory of their product(s) on behalf of the retail partner. Retailers give access to both the EDI 850 purchase order and EDI 852 product activity data documents; then it is the supplier’s job to review, maintain and suggest inventory levels across all retailers platform.

Vendor Master Agreement

A contract reached between parties, in which the parties agree to terms of doing business that will govern future initiatives, transactions, or future agreements. A master agreement permits the parties to quickly negotiate future transactions or agreements, because they can rely on the terms of the master agreement, so that the same terms need not be repetitively negotiated, and to negotiate only the deal-specific terms. Those that use the Master Agreement commonly apply or attach amendments for new initiatives.

Voluntary Inter-industry Communication Standard (VICS)

An EDI standard designed for and used by trading partners within the retail industry and is a subset of the X12 national standard.

Warehouse

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

Warehouse Management System (WMS)

The system used to effectively manage warehouse business processes and direct warehouse activities, including receiving, put-away, picking, shipping, and inventory cycle counts. Also includes support of radio-frequency communications, allowing real-time data transfer between the system and warehouse personnel. A WMS also:

• Maximizes space and minimize material handling by automating put-away processes
• Tracks inventory levels where tracking includes receiving, movement, adjustments (ex. For damage)
• Manages storage locations of product

Wholesaler

A buying organization that purchases quantities of goods from various producers or suppliers, warehouses them, and resells to retailers. Wholesalers may also be referred to as distributors.

Warehouse Information Network Standards (WINS)

An EDI standard designed for and used by trading partners within the public warehouse industry and is a subset of the X12 national standard.

X12

The most commonly used cross-industry B2B standard supported and adopted in North America. The standard incorporates many industry-related standards such as VICS, WINS, and UCS.