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

by Unioncrate

4 minutes

Call us biased, but we think the CPG Industry is an incredibly exciting landscape—from consumer behavior and ecommerce platforms to supply chain and demand planning technologies that provide a competitive edge. Here are the key terms and phrases you need to know to keep up with a rapidly evolving industry.

Click on a letter to jump to its section:



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 Inactive products are items that are no longer current in your supply chain.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 logo

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 Seller Central compared to Vendor Central [Unioncrate]

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).

Artificial Intelligence: A branch of technology that incorporates smart machines that are able to perform tasks and “think” in ways that rival human intelligence, often leading to a more accurate and inclusive end product.

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.

Implementing a More Holistic Supply Chain Management Strategy [Unioncrate]

Augmented Forecast: A functionality that allows users to combine machine learning-based forecasting with human insights in a collaborative manner.

Automation: A way to modify processes that allows them to be done with less hands-on work. Machine learning technology can help automate your processes so that everything effecting your supply chain is accounted for, leading to an easier and more accurate prediction.



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.

[Read More: How AI Can Transform Your Demand Planning Process]

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.



CAC (Customer Acquisition Cost): Any costs that are incurred to take on a new client. These costs often include any marketing or advertising expenses as well as the costs of salespeople and marketers on your team. The overall CAC can be calculated by taking all of these costs together and dividing that number by the total number of customers acquired. This metric is important in creating long term growth strategies that are the most cost effective and sustainable for your business.

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. Higher COGS, lower margins.

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.



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.

Demand Forecasting: In the context of supply chain management, the process of predicting demand and sales; a step in the demand planning process.

Demand Planning: The process of forecasting demand for a product (or service) and executing an operational strategy across supply chain in order to meet it.

DIOH (Days of Inventory on Hand): Calculation that measures how quickly a business uses up its inventory levels on average, which—when accurate—helps to minimize stockouts. The equation for DIOH is the average inventory for the year divided by the costs of goods sold, the dividend of which is multiplied by 365.

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.

DNVB (Digitally Native Vertical Brand): This is a brand that originates online, and is in direct contact with their customers as well as in control of their own distribution and the entire customer experience. All DNVBs are DTC companies, and many but not all DTC brands are DNVB.

Uniting AI + Human Intelligence for Truly Agile Planning [Unioncrate]

DTC (Direct to Consumer): A way of selling products to consumers where all third party retailers or wholesalers are bypassed. The product goes directly from the company selling it to the consumer buying it. While many DTC brands operate solely online, there are DTC brands that operate through brick and mortar as well.

DOS (Days of Supply): A measurement of how many days, on average, a company holds its inventory in stock before selling through all stock.



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.

EAN (European Article Number) example

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.



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.



GMROI (Gross Margin Return on Investment): A profitability metric for inventory. It uses the gross profit earned for each dollar of your investment in inventory. As a general rule, retail stores with a GMROI higher than 1 indicates a company is selling its inventory at a higher value than it paid for the inventory. The goal is to have a GMROI of 3.2 or greater.



IBP (Integrated Business Planning): A framework that stems from the premise that finances and operations are aligned toward a singular outcome, which involves extending the S&OP process across the business to influence sales, marketing, and other departments. IBP combines long-term profit goals and short-term planning efforts for a unified business trajectory that maximizes profit and minimizes risk.

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

A SKU in the form of an item, inner pack, case, and pallet [Unioncrate]

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.

ISR (In-Stock Rate): Calculates the percentage of expected demand that you have in-stock and available for sale. If a shop has 100 articles in its assortment and only 70 are actually in stock, for example, its in-stock rate would be 70%. In-stock rates are generally based on a sales forecast, and as such, are subject to forecast error.



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.

MRO Inventory (Maintenance, Repair and Operating): The inventory of supplies used in the manufacturing process, but not a part of the finished goods produced, like cleaning supplies, repair tools, technology, or safety equipment.



OpEx (Operating Expenses): Basic expenses a company incurs to keep the business operating, like office supplies or staff wages. These expenses do not include COGS or SG&A.

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.

The Next Evolution of Supply Chain Planning [Unioncrate]

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.



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.

Point-of-Sale (POS): When and where a product is purchased; key data that drives sales forecasting.

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.



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



RAD (Requested Arrival Date): The moment the customer puts in a requested delivery date, the software you’re using calculates a date when the product could hypothetically be delivered. This calculation is based on factors like whether the product is in inventory, how long it takes to make the product if it isn’t in inventory, and whether the raw materials needed to make the product are available. Failing to meet your RDDs is not good for business-customer relationships, so if this is an issue, switching to an EDD (estimated delivery date) model may be an option.

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



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).

SG&A (Selling, General and Administrative Expenses): The sum of all direct and indirect selling expenses, as well as all general and administrative expenses (G&A) of a company. SG&A is significant in determining a company's financial well-being. While generally synonymous with Operating Expenses, the two can be listed separately on the corporate income statement.

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.

S&OP (Sales & Operations): Business practices that center on maintaining supply and meeting demand. Centers on adjusting your capability to meet the demand accordingly through top-down alignment across the business.

ST (Sell Through): A calculation, commonly represented as a percentage, comparing the amount of inventory a retailer receives from a manufacturer/supplier against the amount of inventory that gets sold to the customer. Can be useful when comparing the sale of one product or style against another. The period examined is usually a month long.

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.


TTAM (Total Addressable Market): The amount of demand that exists in your market for the product or service you are selling, or the overall revenue opportunity available if your product or service dominates your market.

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TURN (Inventory Turnover Rate): A ratio showing how many times a company has sold, and replaced, inventory during a given period. The equation for TURN is COGS divided by average inventory of the period. Calculating inventory turnover can help businesses make better decisions on pricing, manufacturing, marketing and purchasing new inventory.



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.

UPC (Universal Product Code) [Unioncrate]



Warehouse: Commercial property used to store merchandise.

Weeks of Supply (WOS): A metric showing how long the current inventory will last based on the current demand.

About Unioncrate

Unioncrate is an AI-powered Supply Chain Planning Platform that gives CPG brands the technology they need to compete and win in a rapidly changing consumer landscape. Our automated demand and supply forecasts deliver unmatched accuracy, collaborative visibility, and actionable intelligence, simplifying a manual-heavy process and slashing hours from your week.

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