Supply Chain 101

Unioncrate's Glossary of CPG and Supply Chain Terms [Updated]

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June 9, 2020
by Jonathan Zalman
3 minutes

A

Active / Inactive (product status): Active products are items that are currently being transacted in your supply chain. Inactive products are items that are no longer current in your supply chain. Typically we recommend making items inactive only when the back history (inclusive of sales, inventory, etc.) are not needed anymore.

Amazon Seller Central: Online e-commerce platform owned and operated by Amazon in which third-party merchants sell new and used products directly to Amazon's customers, alongside Amazon's own offerings. Amazon Seller Central cannot accept EDI orders, although multiple API connections are possible. Merchants have more control of their listings through Amazon Seller Central than they do on Amazon Vendor Central, and they're typically paid more quickly.

Amazon Vendor Central: Online e-commerce platform owned and operated by Amazon. Unlike, Amazon Seller Central, however, Amazon Vendor Central is EDI focused. Amazon's retail team buys and sells items from a first-part seller, usually in bulk/large quantities, essentially acting as a supplier to Amazon. taking on more risk but gaining more control over the sales process (such as payment terms and price) in the process.

Amazon FBA: When orders are placed through Amazon's marketplace, they are fulfilled directly from a physical Amazon warehouse for a fee. This could includes warehousing, packing, and shipping as well as providing customer service support to address any issues that may arise in the process. Otherwise, merchants can handle all aspects of the fulfillment process out of their own facilities or 3PLs, etc. This option is called Amazon FBM (Fulfilled by Merchant).

ASIN (Amazon Standard Identification Number): An ASIN is a standard by which a product is identified. Unlike a UPC and EAN, an ASIN is alphanumerical, made up of 10 letters and/or numbers. Each ASIN is assigned by Amazon.com and its partners, and no two products have the same ASIN number.

B

Base Price: The foundational cost of a product, not including any additional fees (such as taxes, shipping costs, e.g.).

Base UOM (Unit of Measurement): A system that converts the quantities of all products entered in other units of measure to a common (or base) unit of measure.

Batching (Orders): One way to manually route/transmit the orders you receive from customers directly to your 3PL. Rather than sending them one by one, batching enables you to send purchase orders in chunks, called batches. Sending batched orders to your 3PL is basically equivalent to issuing a purchase order.

Bill of Lading (BOL): A document created and exchanged by a freight carrier during the shipment of goods that serves the following purposes:

-- Lists the details of all items in the shipment (quantity, type, weight, e.g.), serving as a contract between shipper and carrier, and proof of the receipt of goods;

-- Serves as a shipment receipt, exchanged between  the freight carrier to the consigner of the goods (customer) at a predetermined destination and within a predetermined time frame.

Bill of Materials (BOM): Also known as an assembly, a Bill of Materials (BOM) is a detailed list of all items—components, raw materials, assemblies, subassemblies, parts, you name it—plus the necessary amounts of each—that are needed to manufacture a physical product.

Brand: The name of a product (packaged, finished good) that's manufactured by a particular company and sold to consumers.

Bundling / Kitting: Interchangeable terms, Bundling/Kitting refers to the process of combining/packaging multiple individual products together, and selling that bundle/kit as one unit. Bundling/Kitting merchandise can raise average order values, help in depleting inventory and the avoidance of dead stock, lower warehouse holding costs, help introduce new products, and more.

C

Co-packer: Short for Contract Packager, Co-packers manufacture, package, and label products for clients, sometimes under their client's name.

COGS (Cost of Goods Sold): COGS are any costs that can be directly attributed with the production of a finished good, such as raw materials and production labor, but excludes marketing and shipping, for example. COGS are included as part of your P&L once a finished good has been sold.

Component: Material (part, ingredient, or subassembly) that contributes to the manufacture of a finished consumer product/good. Some components may be companion parts to other components.

CPG (Consumer Packaged Goods): In terms of industry, CPG encompasses to all manufacturers, distributors, warehouses, shippers, fulfillment centers, sellers, and marketers related to physical goods that are sold through retailers to end-users (customers).

CSV (comma-separated values): A CSV file is a common type of file used to exchange often large pieces of information between parties. CSV files are commonly opened as Microsoft Excel sheets, listing, for example, relevant information of a sales order.

D

Delivery Terms: Conditions for the transportation of goods that are agreed upon by a buyer and seller, thereby dividing costs and risk. Contractual logistics typically include various data such as carrier, routing, freight charges, place of delivery, and time of delivery.

Distributor: A distributor is an intermediary entity between a the producer of a product and another entity in the distribution channel or supply chain, such as a retailer.

E

EAN (European Article Number): Also known as an International Article Number, an EAN is a standard 13-digit code (EAN-13), typically represented as a barcode on a product label, that uniquely identifies a retail product (type), its manufacturer, and other descriptive details, such as its specific packaging configuration.

EDI (Electronic Data Interchange): The standardized system through which various businesses in supply chain communicate safely and electronically. EDI orders are assigned specific numbers depending on the transaction and business unit involved, including transportation/logistics management, order cycle, vendor/supplier collaboration, warehouse fulfillment, and manufacturing/material handling.

F

Finished Good: The packaged, paid-for product that ends up in a consumer's hands.

FOB: FOB, which stands for "Free on Board" or "Freight on Board," is a terms that dictate who pays for shipping when the ownership of a good is transferred between parties.

I

Inner pack: The type/level of packaging (see image below), typically located inside of an outer pack (master case) made up of individual items.

Inventory: Non-capitalized assets or goods intended for future sale that are stocked and stored in various locations, from manufacturer warehouses to big-box retailers.

M

MOQ (Minimum order quantity): The MOQ is a standard set by a supplier that represents the lowest amount of stock they are willing to sell. If a buyer is not able to purchase the MOQ of a specific product, be it a component or raw material, the supplier will not sell it since the order for that standard amount of stock has not been reached.

O

OTB (Open-to-Buy): Essentially a budget, the Open-to-Buy is the planned money a retailer has allocated to purchasing inventory for a define period of time, typically a quarter.

Out-of-stock (OOS): Synonymous with stockout, an out-of-stock is a situation in which inventory (or a particular product) has been exhausted, i.e. demand cannot be met.

Outer pack: The type/level of packaging (see "Inner pack" image above) made up of inner packs. Outer packs are typically placed on a pallet (with other outer packs) to be processed for shipping.

P

Pick List: Also referred to as a Picking List, Pick Ticket, Pick Sheet, and Pack List, a Pick List is a document containing a list of product needed to fulfill an order. A Pick List is intended for the hands of a fulfiller; someone in a warehouse who uses the document to locate and pick all items included in a particular order (or set of orders).

Pipeline Inventory/Stock: Products that are in transit (i.e. still "in the pipeline") and therefore between locations. For example, pipeline stock could be a finished good that's en route from a 3PL to a retailer; it is neither with a supplier or a retailer.

Promotions: Promotions (or "promos") are additional efforts/avenues employed by marketers, product developers, and salespersons in order to drive sales. This includes signage; fixed price, percent, and volume discounts; loyalty programs; and more.

Purchase Order (PO): Official documentation sent to a vendor for the purchase of goods in exchange for money. POs contain specific information, including the item wanted, how much of it (quantity), variables like size or color size, plus when it should ship and where it should ship to.

Q

QuickBooks Online: Online accounting software integrations with the Union Crate platform that's used for various aspects of the sales order management process.

R

Raw Materials: The most unrefined, unprocessed form of a future finished product.

S

Sales Order (SO): Official documentation that initiates the sale of a finished good to a customer.

Safety Stock: Also known as buffer stock, safety stock is an extra level of inventory (stock) that's carried to prevent a stockout/out-of-stock (OOS).

ShipStation: Online e-commerce order fulfillment tool that integrates with the Union Crate platform.

Shopify: Online e-commerce sales tool that integrates with the Union Crate platform.

SKU (Stock keeping unit): The number a company internally assigns to a product for stock-keeping and operational purposes.

Stockout: Synonymous with an out-of-stock (OOS), a stockout is a situation in which inventory (or a particular product) has been exhausted, i.e. demand cannot be met.

Supply: Also known as stock, supply is a term for goods available for purchase and various prices. These goods are supplied by various suppliers along your supply chain, from manufacturers to distributors.

Supply Chain: Roughly put, a supply chain is the networked, sequenced process necessary for a company to produce and distribute a specific commodity/product, and get it into the hands of a consumer/final buyer.

U

UPC (Universal Product Code): A 12-digit bar code standard used for retail packaging in the United States that uniquely identifies a product. See below for explanatory image.

W

Warehouse: Commercial property used to store merchandise.

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Unioncrate's Glossary of CPG and Supply Chain Terms [Updated]

What we provided

The Client

Category

Location

A

Active / Inactive (product status): Active products are items that are currently being transacted in your supply chain. Inactive products are items that are no longer current in your supply chain. Typically we recommend making items inactive only when the back history (inclusive of sales, inventory, etc.) are not needed anymore.

Amazon Seller Central: Online e-commerce platform owned and operated by Amazon in which third-party merchants sell new and used products directly to Amazon's customers, alongside Amazon's own offerings. Amazon Seller Central cannot accept EDI orders, although multiple API connections are possible. Merchants have more control of their listings through Amazon Seller Central than they do on Amazon Vendor Central, and they're typically paid more quickly.

Amazon Vendor Central: Online e-commerce platform owned and operated by Amazon. Unlike, Amazon Seller Central, however, Amazon Vendor Central is EDI focused. Amazon's retail team buys and sells items from a first-part seller, usually in bulk/large quantities, essentially acting as a supplier to Amazon. taking on more risk but gaining more control over the sales process (such as payment terms and price) in the process.

Amazon FBA: When orders are placed through Amazon's marketplace, they are fulfilled directly from a physical Amazon warehouse for a fee. This could includes warehousing, packing, and shipping as well as providing customer service support to address any issues that may arise in the process. Otherwise, merchants can handle all aspects of the fulfillment process out of their own facilities or 3PLs, etc. This option is called Amazon FBM (Fulfilled by Merchant).

ASIN (Amazon Standard Identification Number): An ASIN is a standard by which a product is identified. Unlike a UPC and EAN, an ASIN is alphanumerical, made up of 10 letters and/or numbers. Each ASIN is assigned by Amazon.com and its partners, and no two products have the same ASIN number.

B

Base Price: The foundational cost of a product, not including any additional fees (such as taxes, shipping costs, e.g.).

Base UOM (Unit of Measurement): A system that converts the quantities of all products entered in other units of measure to a common (or base) unit of measure.

Batching (Orders): One way to manually route/transmit the orders you receive from customers directly to your 3PL. Rather than sending them one by one, batching enables you to send purchase orders in chunks, called batches. Sending batched orders to your 3PL is basically equivalent to issuing a purchase order.

Bill of Lading (BOL): A document created and exchanged by a freight carrier during the shipment of goods that serves the following purposes:

-- Lists the details of all items in the shipment (quantity, type, weight, e.g.), serving as a contract between shipper and carrier, and proof of the receipt of goods;

-- Serves as a shipment receipt, exchanged between  the freight carrier to the consigner of the goods (customer) at a predetermined destination and within a predetermined time frame.

Bill of Materials (BOM): Also known as an assembly, a Bill of Materials (BOM) is a detailed list of all items—components, raw materials, assemblies, subassemblies, parts, you name it—plus the necessary amounts of each—that are needed to manufacture a physical product.

Brand: The name of a product (packaged, finished good) that's manufactured by a particular company and sold to consumers.

Bundling / Kitting: Interchangeable terms, Bundling/Kitting refers to the process of combining/packaging multiple individual products together, and selling that bundle/kit as one unit. Bundling/Kitting merchandise can raise average order values, help in depleting inventory and the avoidance of dead stock, lower warehouse holding costs, help introduce new products, and more.

C

Co-packer: Short for Contract Packager, Co-packers manufacture, package, and label products for clients, sometimes under their client's name.

COGS (Cost of Goods Sold): COGS are any costs that can be directly attributed with the production of a finished good, such as raw materials and production labor, but excludes marketing and shipping, for example. COGS are included as part of your P&L once a finished good has been sold.

Component: Material (part, ingredient, or subassembly) that contributes to the manufacture of a finished consumer product/good. Some components may be companion parts to other components.

CPG (Consumer Packaged Goods): In terms of industry, CPG encompasses to all manufacturers, distributors, warehouses, shippers, fulfillment centers, sellers, and marketers related to physical goods that are sold through retailers to end-users (customers).

CSV (comma-separated values): A CSV file is a common type of file used to exchange often large pieces of information between parties. CSV files are commonly opened as Microsoft Excel sheets, listing, for example, relevant information of a sales order.

D

Delivery Terms: Conditions for the transportation of goods that are agreed upon by a buyer and seller, thereby dividing costs and risk. Contractual logistics typically include various data such as carrier, routing, freight charges, place of delivery, and time of delivery.

Distributor: A distributor is an intermediary entity between a the producer of a product and another entity in the distribution channel or supply chain, such as a retailer.

E

EAN (European Article Number): Also known as an International Article Number, an EAN is a standard 13-digit code (EAN-13), typically represented as a barcode on a product label, that uniquely identifies a retail product (type), its manufacturer, and other descriptive details, such as its specific packaging configuration.

EDI (Electronic Data Interchange): The standardized system through which various businesses in supply chain communicate safely and electronically. EDI orders are assigned specific numbers depending on the transaction and business unit involved, including transportation/logistics management, order cycle, vendor/supplier collaboration, warehouse fulfillment, and manufacturing/material handling.

F

Finished Good: The packaged, paid-for product that ends up in a consumer's hands.

FOB: FOB, which stands for "Free on Board" or "Freight on Board," is a terms that dictate who pays for shipping when the ownership of a good is transferred between parties.

I

Inner pack: The type/level of packaging (see image below), typically located inside of an outer pack (master case) made up of individual items.

Inventory: Non-capitalized assets or goods intended for future sale that are stocked and stored in various locations, from manufacturer warehouses to big-box retailers.

M

MOQ (Minimum order quantity): The MOQ is a standard set by a supplier that represents the lowest amount of stock they are willing to sell. If a buyer is not able to purchase the MOQ of a specific product, be it a component or raw material, the supplier will not sell it since the order for that standard amount of stock has not been reached.

O

OTB (Open-to-Buy): Essentially a budget, the Open-to-Buy is the planned money a retailer has allocated to purchasing inventory for a define period of time, typically a quarter.

Out-of-stock (OOS): Synonymous with stockout, an out-of-stock is a situation in which inventory (or a particular product) has been exhausted, i.e. demand cannot be met.

Outer pack: The type/level of packaging (see "Inner pack" image above) made up of inner packs. Outer packs are typically placed on a pallet (with other outer packs) to be processed for shipping.

P

Pick List: Also referred to as a Picking List, Pick Ticket, Pick Sheet, and Pack List, a Pick List is a document containing a list of product needed to fulfill an order. A Pick List is intended for the hands of a fulfiller; someone in a warehouse who uses the document to locate and pick all items included in a particular order (or set of orders).

Pipeline Inventory/Stock: Products that are in transit (i.e. still "in the pipeline") and therefore between locations. For example, pipeline stock could be a finished good that's en route from a 3PL to a retailer; it is neither with a supplier or a retailer.

Promotions: Promotions (or "promos") are additional efforts/avenues employed by marketers, product developers, and salespersons in order to drive sales. This includes signage; fixed price, percent, and volume discounts; loyalty programs; and more.

Purchase Order (PO): Official documentation sent to a vendor for the purchase of goods in exchange for money. POs contain specific information, including the item wanted, how much of it (quantity), variables like size or color size, plus when it should ship and where it should ship to.

Q

QuickBooks Online: Online accounting software integrations with the Union Crate platform that's used for various aspects of the sales order management process.

R

Raw Materials: The most unrefined, unprocessed form of a future finished product.

S

Sales Order (SO): Official documentation that initiates the sale of a finished good to a customer.

Safety Stock: Also known as buffer stock, safety stock is an extra level of inventory (stock) that's carried to prevent a stockout/out-of-stock (OOS).

ShipStation: Online e-commerce order fulfillment tool that integrates with the Union Crate platform.

Shopify: Online e-commerce sales tool that integrates with the Union Crate platform.

SKU (Stock keeping unit): The number a company internally assigns to a product for stock-keeping and operational purposes.

Stockout: Synonymous with an out-of-stock (OOS), a stockout is a situation in which inventory (or a particular product) has been exhausted, i.e. demand cannot be met.

Supply: Also known as stock, supply is a term for goods available for purchase and various prices. These goods are supplied by various suppliers along your supply chain, from manufacturers to distributors.

Supply Chain: Roughly put, a supply chain is the networked, sequenced process necessary for a company to produce and distribute a specific commodity/product, and get it into the hands of a consumer/final buyer.

U

UPC (Universal Product Code): A 12-digit bar code standard used for retail packaging in the United States that uniquely identifies a product. See below for explanatory image.

W

Warehouse: Commercial property used to store merchandise.

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