The following are some terms related to warehouses:
ABC Stratification: ABC stratification is when a warehouse organizes goods according to their activity level. This sorting method can be based on one of many factors, including how often a good is sold, how many of a good is sold, and the cost of a good. ABC stratification is designed to help warehouses organize their goods for efficient shipping and receiving, and it also helps the warehouse better manage their inventory levels.
Automated Storage and Retrieval System: An automated storage and retrieval system is a forklift, conveyor, or other equipment that can distribute goods throughout or collect goods from a warehouse without manual operation. This is accomplished using machines that run on wires, magnets, optical equipment, or other coordinating devices. Some warehouses, often called lights-out warehouses, run entirely on automated storage and retrieval systems.
Backhaul: Backhauling is gathering an additional load for delivery immediately after a different load has been delivered.
Bill of Material: A bill of material is a list of ingredients, materials, or other things that are needed to create a particular product. Some warehouses have multilevel bills of material that include additional information, like scrap that is a result of production.
Consignment Inventory: Consignment inventory is goods that are owned by a supplier but are possessed by the customer. This marketing tool gives more businesses access to particular goods. The customer – typically a business owner – does not have to worry about large upfront fees.
Cross-docking: Cross-docking is the loading of goods directly from one mode of transportation to another. This means that, theoretically, no warehouse will be needed for the goods because they will move straight from one truck to another. Cross-docking does not usually work as well in practice, though, and a staging area – temporary warehouse space – is still needed.
Direct ship: Direct shipments are completed by a supplier for a seller. A buyer orders goods from a seller, and the seller hires a warehouse or other supplier to ship the goods to the buyer. The buyer is not typically aware of the supplier’s involvement.