Glossary of Terms

for Third Party Logistics, Supply Chain Management & Fulfillment Operations

Many of the terms used in the world of third-party logistics do not appear in a standard dictionary, nor is there a dictionary of fulfillment or warehouse management definitions. We offer this glossary to help you better understand our business. If you have a term you would like defined, or have a definition that you would like to share with us, please send us an e-mail.

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Jump to terms:

- OMS (Order Management System)
- on-hand inventory
- order
- order picking
- OTIF
- outsourcing

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O

OMS (Order Management System)
a computerized system of interconnected databases for managing orders, selecting items from inventory, consolidating products for shipment, generating bills of lading, waybills, manifests, invoices, confirming and tracking shipments, and other logistics functions.

on-hand inventory
the total quantity of an item in the warehouse. Whether or not the item is available to ship depends on its status: whether it is already allocated, is damaged, is part of a pending order, etc.

order
an instruction from the purchaser of a product to ship a product or a group of products to a specific destination within a specified time frame, often accompanied by other detailed information and requests. Most retail chain stores submit their orders via EDI, while many websites orders are retrieved in database files at FTP sites.

order picking
the process of selecting and assembling inventory within a warehouse for shipment.

OTIF
On Time and In Full; the requirement that an order must be delivered with the exact products, in the exact quantities, and within the exact timeframe specified in the purchase order.

outsourcing
the process of a client hiring an outside company to do something on the client’s behalf. The theory behind outsourcing is that one should outsource non-core services in which one cannot be competitive, so that one can concentrate one’s time, talent, and financial resources where they can be used most profitably. Many companies which regarded themselves as manufacturers have even outsourced their manufacturing, often offshore. When such companies were faced with foreign competition they were forced to concentrate on their core competitive strengths of branding, marketing, and merchandising. Thus outsourcing was, and is, the way for many companies to remain competitive. For many marketers and manufacturers, outsourcing logistics and fulfillment operations to third party logistics (3PL) or third party fulfillment (3PF) companies allows the virtual “back-room” operations to be handled by a specialist. Outsourcing of warehousing, order processing, customer service, shipping, and other fulfillment operations can reduce costs, accelerate shipping times, and increase end-customer satisfaction while so that the client can focus on growing his company.