Operations Terms & Definitions

A supply chain integrator that manages and coordinates an organization’s entire logistics ecosystem—including multiple 3PLs, carriers, and technology platforms—acting as a single point of accountability.

A Bill of Materials (BOM) is a structured list of all raw materials, components, and quantities required to manufacture, assemble, or bundle a finished product.

BOPIS is a fulfillment model that lets customers purchase products online and collect them at a nearby physical store location.

The process of identifying constraints in your operational workflow that limit overall throughput and cause delays in order processing and fulfillment.

The process of determining the operational resources (staff, space, equipment) needed to meet current and future order volumes.

A business model in which brands sell products directly to end consumers through their own channels, bypassing traditional retailers, wholesalers, and marketplace intermediaries.

A retail-format facility that is closed to the public and used exclusively for fulfilling online orders, combining the layout advantages of a store with the operational focus of a warehouse.

Demand forecasting uses historical data, market trends, and statistical models to predict future customer demand, enabling better inventory planning and purchasing.

A system that intelligently routes customer orders across a distributed network of fulfillment locations—including warehouses, stores, and 3PLs—to optimize for speed, cost, and inventory availability.

A fulfillment model where the retailer does not hold inventory; instead, customer orders are forwarded to a supplier or manufacturer who ships directly to the end customer.

An integrated software suite that manages core business processes including finance, procurement, manufacturing, inventory, and human resources in a unified system.

The process of identifying, triaging, and resolving operational anomalies that deviate from standard workflows, such as stockouts, address errors, or payment failures.

A measurable value that indicates how effectively an operation is achieving its critical business objectives.

Lead time is the total elapsed time from placing an order with a supplier to receiving the goods, including production, processing, and transit time.

The total time between placing an order with a supplier and receiving the goods in your warehouse, including production time, processing time, and transit time.

The smallest number of units a supplier requires a buyer to purchase in a single order, set by the manufacturer or wholesaler to ensure production and fulfillment remain economically viable.

Multichannel selling is the practice of listing and selling products across multiple sales channels simultaneously, such as your website, marketplaces, and retail stores.

A unified commerce strategy that provides customers with a seamless, consistent experience across all sales and interaction channels, whether online, in-store, or on mobile.

The system—hardware and software—where retail transactions are completed, processing payments and recording sales data at the moment a customer makes a purchase.

The process of moving goods from the customer back to the seller or manufacturer for returns, repairs, recycling, or disposal—the opposite direction of the traditional supply chain.

A contractual commitment defining specific performance standards for order processing, shipping speed, or service quality that a business agrees to meet.

The strategic assignment of products to specific storage locations within a warehouse, optimized to minimize travel time, improve picking efficiency, and maximize space utilization.

A documented set of step-by-step instructions for completing routine operational tasks consistently and correctly across all team members.

The rate at which a system processes and completes work, typically measured as the number of orders, units, or shipments handled per unit of time.

A warehouse picking method that groups multiple orders into scheduled waves based on shared attributes like carrier cutoff times, shipping priority, or destination region to optimize batch processing.

Software that controls and optimizes day-to-day warehouse operations, including receiving, putaway, picking, packing, and shipping inventory.

A warehouse picking strategy that divides the facility into distinct zones, with each picker assigned to retrieve items only from their designated zone to improve efficiency and reduce congestion.