Supply Chain & Logistics in Retail: Key Terms Explained
Dive into the complexities of supply chain and logistics in retail. This glossary offers a comprehensive overview of terms that are crucial for efficient operations and customer satisfaction.
RFID (Radio-Frequency Identification): The use of radio waves to read and capture information stored on a tag attached to an object. In retail, it’s often used for inventory tracking.
Last-Mile Delivery: The final step of the delivery process from a distribution center or facility to the end-user. It has become increasingly important in e-commerce.
Just-In-Time Inventory: An inventory management strategy that aligns raw-material orders from suppliers directly with production schedules.
Third-Party Logistics (3PL): Outsourced logistics services that include anything involved in the logistics of supply chain management.
Agile Supply Chain: A supply chain management strategy that emphasizes flexibility, adaptability, and speed to market, often in response to changing customer demands or market conditions.
Cold Chain Logistics: A temperature-controlled supply chain that is necessary for the safe transport of perishable goods.
Cross-Functional Teams: Teams that cut across organizational silos and bring together employees from different departments to work on a specific project or solve a specific problem.
Demand Planning: The process of forecasting customer demand to make informed supply chain decisions.
Freight Forwarding: A service used by companies that deal in international or multi-national import and export services to transport goods from one destination to another.
Global Trade Management: The practice of streamlining the entire lifecycle of a global trade across order, logistics, and settlement activities to improve operating efficiencies and cash flow.
Inventory Accuracy: The measure of how closely physical inventory matches the inventory records in a company’s database.
Lead Time: The amount of time that passes between the commencement and the end of a process in supply chain management, typically the time from a supplier’s receipt of an order and the delivery of the goods.
Logistics Management: The part of supply chain management that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customer’s requirements.
Multi-Echelon Inventory Management: A system that optimizes inventory across multiple stages of the supply chain to improve service levels while minimizing costs.
Procurement: The action of obtaining or procuring something, especially for business purposes. It involves the process of selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts and actual purchasing of goods.
Reverse Logistics: The process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.
Supply Chain Visibility: The ability of parts, components, or products in transit to be tracked from the manufacturer to their final destination.
Third-Party Fulfillment: The use of third-party businesses to outsource elements of the company’s distribution and fulfillment services.
Vendor-Managed Inventory (VMI): A family of business models in which the buyer of a product provides certain information to a vendor (supplier) of that product and the vendor takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer’s consumption location.
Mastering supply chain and logistics is essential for retail success. This glossary serves as a valuable resource for anyone looking to deepen their understanding of these critical areas.