Logistics & Supply Chain Acronyms and Abbreviations

In the intricate world of logistics and supply chain management, acronyms and abbreviations are not just jargon; they serve as the vital shorthand that keeps the wheels of global commerce spinning. Understanding these abbreviations is crucial for professionals navigating this complex field, offering clarity in communication and efficiency in operations. Whether you’re a seasoned expert or new to the logistics arena, our comprehensive guide to acronyms and abbreviations is designed to demystify the terminology that shapes our industry.

Inventory Management

SKU – Stock Keeping Unit

An SKU (Stock Keeping Unit) is a unique alphanumeric code assigned to each item in an inventory. It helps in tracking the quantity, sales and deliveries of the product.

WIP – Work in Progress

Work in Progress (WIP) refers to products or items that are partially completed. These products are in the process of production but are not yet finished.

JIT – Just In Time

Just In Time (JIT) is an inventory management strategy that aims to reduce the time goods spend in inventory by aligning production schedules with material orders from suppliers. It is an important concept of ‘Lean’ operations.

BOM – Bill of Materials

A Bill of Materials (BOM) is a comprehensive list of raw materials, parts and assemblies needed to construct, manufacture, or repair a product or service.

VMI – Vendor Managed Inventory

Vendor Managed Inventory (VMI) is an inventory management approach where the supplier is responsible for maintaining the customer’s inventory levels, ensuring that the customer doesn’t run out of stock.

AIDC – Automatic Identification and Data Capture

Automatic Identification and Data Capture (AIDC) refers to the methods used to automatically identify and collect data from objects, images or sounds and then input it directly into computer systems without human intervention.

RFID – Radio Frequency Identification

Radio Frequency Identification (RFID) is a technology that uses radio waves to read and capture information stored on a tag attached to an object. The tag can be read from up to several feet away and does not need to be in the direct line-of-sight of the reader.

EPC – Electronic Product Code

The Electronic Product Code (EPC) is a universally unique identifier that provides a unique, serialised identity for each physical object in the supply chain. EPC is often used in conjunction with RFID technology.

WMS – Warehouse Management System

A Warehouse Management System (WMS) is a software application designed to support warehouse or distribution centre management and staff in their daily operations. It helps manage inventory levels, stock locations, picking processes and shipping orders.

DFRL – Design for Reverse Logistics

Design for Reverse Logistics (DFRL) is a design methodology that considers a product’s entire lifecycle, including its return, disassembly and recycling or disposal. It involves designing products in such a way that they are easier to recover, recycle, or dispose of responsibly at the end of their life.

EOQ – Economic Order Quantity

3PL – Third-Party Logistics Provider

A Third-Party Logistics Provider (3PL) is a firm that offers outsourced logistics services to companies for part or all of their supply chain management functions. These services can include transportation, warehousing, picking and packing, inventory forecasting, order fulfilment, returns processing and freight forwarding.

4PL – Fourth-Party Logistics Provider

A Fourth-Party Logistics Provider (4PL) is a firm that provides a broader scope of services than a 3PL by managing resources, technology, infrastructure and even manage external 3PLs to design, build and provide supply chain solutions for businesses.

BOL – Bill Of Lading

A Bill Of Lading (BOL) is a legal document issued by a carrier to a shipper. It provides details about the type, quantity and destination of the goods being carried. The BOL also serves as a receipt of shipment when the goods are delivered at the predetermined destination.

TEU – Twenty-foot Equivalent Unit

Twenty-foot Equivalent Unit (TEU) is a standard unit of measure in the shipping industry used to describe a ship’s cargo carrying capacity, or a shipping terminal’s cargo handling capacity. One TEU represents the cargo capacity of a standard shipping container 5.90 metres (20 feet) long, 2.35 metres (8 feet) wide and 2.39m (8 feet) high.

FCL – Full Container Load

Full Container Load (FCL) is a term used within the international shipping industry to refer to the transportation of goods in a container that is loaded and unloaded under the risk and account of one shipper and only one consignee. In practice, it means that the whole container is intended for one consignee.

LCL – Less-than Container Load

Less-than Container Load (LCL) refers to a shipment that is not large enough to fill a standard cargo container. With an LCL shipment, the shipper pays for their load to be shipped in a container with one or more loads from other shippers.

POE – Port of Entry

A Port of Entry (POE) is a place where one may lawfully enter a country. It typically has border security staff and facilities to check passports and visas and inspect luggage to assure that contraband is not imported.

FOB – Free on Board

Free on Board (FOB) is a term in international commercial law specifying at what point respective obligations, costs and risk involved in the delivery of goods shift from the seller to the buyer. Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on board the vessel.

CIF – Cost, Insurance, and Freight

Cost, Insurance and Freight (CIF) is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier.

DDP – Delivery Duty Paid

Delivery Duty Paid (DDP) is a shipping agreement where the seller takes full responsibility of all the logistics costs including transporting goods, paying duties and taxes and arranging for customs clearances. The seller assumes all of the risk, responsibilities and costs of the delivery.

RORO – Roll-On, Roll-Off

Roll-On, Roll-Off (RORO) is a type of cargo handling which uses vessels designed to carry wheeled cargo, such as cars, trucks, trailers, which are driven on and off the ship on their own wheels. This is in contrast to lift-on, lift-off (LOLO) vessels which use a crane to load and unload cargo.

FTL – Full Truck Load

Full Truck Load (FTL) is a type of freight shipment that fills up an entire truck, or a partial load shipment occupying an entire truck.

LTL – Less than Truck Load

Less than Truck Load (LTL) is a method of transporting a smaller amount of freight that does not require the full space of a truck. This allows multiple shippers to share space on the same truck, each paying for only the room required for their particular goods.

ROE – Rate of Exchange

Rate of Exchange (ROE) is the value of one country’s currency in relation to another’s. In the context of logistics, it is essential for businesses dealing with international transactions to account for the fluctuations in currency exchange rates as it affects the cost of goods and services.

Quality Control and Assurance

6S – Six Sigma

Six Sigma is a methodology that focuses on process improvement with an aim to reduce defects and improve quality in manufacturing, logistics and service processes. It employs statistical and quality management methods to achieve this.

QA – Quality Assurance

Quality Assurance (QA) involves systematic activities to ensure that products and services meet specified requirements and standards. In logistics, QA can encompass everything from checking packing lists against physical cargo to auditing third-party providers.

QC – Quality Control

Quality Control (QC) is the part of quality management that ensures products and services meet specific standards. QC focuses on detecting defects in the finished products, whereas QA focuses on preventing defects from occurring in the first place.

ADR – European Agreement concerning the International Carriage of Dangerous Goods by Road

ADR is a European treaty that governs the transportation of hazardous materials across international boundaries by road. It prescribes specific packaging and documentation requirements to ensure safety during transportation.

IMDG – International Maritime Dangerous Goods

The International Maritime Dangerous Goods (IMDG) Code is an international guideline to the safe transportation or shipment of dangerous goods or hazardous materials by water on vessel. It’s accepted as an international guideline to the safe transportation or shipment of dangerous goods or hazardous materials by water on vessel.

GDP – Good Distribution Practices

Good Distribution Practices (GDP) is a quality system for warehouses and distribution centres dedicated to medicines. It ensures that consistent quality management systems are in place throughout the entire supply chain, from the early stages of manufacturing to the moment the products reach the end user.

Production and Assembly

ATO – Assembled to Order

Assembled to Order (ATO) is a business production strategy where products are quickly produced, assembled and shipped once a customer order is confirmed. This strategy minimises inventory holding costs and reduces the risk of having obsolete goods.

ODM – Original Design Manufacturer

Original Design Manufacturer (ODM) refers to companies that design and manufacture a product, as specified, that is eventually rebranded by another firm for sale. They allow the brand business to obtain a wide range of products without having to manage and operate a factory.

OEM – Original Equipment Manufacturer

Original Equipment Manufacturer (OEM) traditionally refers to companies that produce parts and equipment that may be marketed by another manufacturer. However, the term has evolved to refer to companies that design and manufacture complete products that are then sold to other companies to rebrand and sell as their own.

AIAG – Automotive Industry Action Group

The Automotive Industry Action Group (AIAG) is a not-for-profit association where professionals from a diverse group of stakeholders – including retailers, suppliers of all sizes, automakers, manufacturers, service providers, academia and government – work collaboratively to streamline industry processes via global standards development & harmonised business practices. They also provide tools and resources that help streamline processes, reduce complexity and increase overall efficiency.

Product Identification and Taxation

UPC – Universal Product Code

The Universal Product Code (UPC) is a barcode symbology that is widely used in the United States, the United Kingdom, Australia and New Zealand for tracking trade items in stores. Its most common form, the UPC-A, consists of 12 numerical digits.

EAN – European Article Number

European Article Number (EAN), now known as International Article Number, is a barcode symbology that is widely used globally for product identification in retail. It’s a standard that includes the country of origin, manufacturer and specific product identifier. EAN-13 is the most commonly used format, consisting of 13 digits.

VAT – Value-added Tax

Value-Added Tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is the cost of the product, less any costs of materials used in the product that have already been taxed.

HTS – Harmonized Tariff Schedule

The Harmonized Tariff Schedule (HTS) is used by most countries worldwide as a basis for their customs tariffs. It allows for the uniform classification of goods traded internationally and is used to determine the duty that will be applied to a particular product.

HS Code – Harmonized System Code

Harmonized System (HS) Code is a standardised numerical method of classifying traded products. It is used by customs authorities around the world to identify products for tax reasons and is internationally agreed upon. It covers about 5,000 commodity groups and is used by more than 200 countries.

Supply Chain and Logistics

COGS – Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the goods along with the direct labour costs used to produce the goods.

DIFOT – Delivery in Full, On Time

Delivery in Full, On Time (DIFOT) is a key performance indicator (KPI) that measures the accuracy and efficiency of deliveries. It calculates the percentage of goods that arrive on the promised delivery date in the right quantity and quality, as ordered by the customer.

OTIF – On Time In Full

On Time In Full (OTIF) is similar to DIFOT. It’s a performance measure that is used in supply chain management to track delivery performance. It is typically calculated as a percentage, representing the amount of goods delivered to their destination on time and in full.

E2E – End-to-End

End-to-End (E2E) refers to the completion of a process from its starting point to its end. In supply chain management, it involves overseeing and managing the entire lifecycle of a product, from procurement and manufacturing through to delivery to the end customer.

DSD – Direct Store Delivery

Direct Store Delivery (DSD) is a retailing strategy where goods are shipped directly to retail stores bypassing distribution centres. This reduces inventory and transportation costs and can improve product freshness and availability.

CPG – Consumer Packaged Goods

Consumer Packaged Goods (CPG) are items used daily by average consumers that require routine replacement or replenishment, such as food, beverages, clothes, tobacco, makeup and household products.

FBA – Fulfilment by Amazon

Fulfilment by Amazon (FBA) is a service provided by Amazon that provides storage, packaging and shipping assistance to sellers. This takes the burden off of sellers and grants them more flexibility in their selling practices.

CSI – Container Security Initiative

The Container Security Initiative (CSI) is a programme of the United States Customs and Border Protection (CBP). It is intended to increase the safety of containerised cargo shipped to the United States by pre-screening containers that pose a risk at the port of departure.

APS – Advanced Planning and Scheduling

Advanced Planning and Scheduling (APS) systems are a step beyond traditional ERP systems, using more advanced algorithms and logic to plan production. They take into account multiple constraints and business rules to output production plans and schedules.

D2C – Direct-to-Consumer

Direct-to-Consumer (D2C) is a form of e-commerce where manufacturers or brands sell directly to consumers, bypassing third-party retailers, wholesalers, or any other intermediaries.

DC – Distribution Centre

A Distribution Centre (DC) is a facility that holds inventory, typically in the wholesale and retail distribution chain. It serves as an intermediate point between the supplier and the retailer, ensuring the correct products get where they need to go.

DSM – Demand Supply Management

Demand Supply Management (DSM) refers to the process of balancing demand with supply, optimising profit and satisfying customer requirements. It is an integrated approach to planning, sourcing and delivery of products.

PO – Purchase Order

A Purchase Order (PO) is a commercial document issued by a buyer to a seller, indicating types, quantities and agreed prices for products or services. It’s used to control the purchasing of products and services from external suppliers.

EDI – Electronic Data Interchange

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners. It replaces the mail preparation and handling associated with traditional paper documents.

MRP – Material Requirements Planning

Material Requirements Planning (MRP) is a production planning, scheduling and inventory control system used to manage manufacturing processes. It ensures that materials are available for production and products are available for delivery to customers.

MABD – Must Arrive By Date

Must Arrive By Date (MABD) refers to the final possible date by which a shipment must arrive at its designated location, as requested by the customer or agreed upon by the buyer and seller.

RTV – Return to Vendor

Return to Vendor (RTV) is a process where goods are returned to the original vendor due to various reasons like defects, wrong shipment, unsold goods, etc. It involves logistical processes of moving goods from their buyer back to their seller.

Transportation

DRP – Distribution Resource Planning

Distribution Resource Planning (DRP) is a method used in business administration for planning orders within a supply chain. It helps in managing the strategic, operational and tactical aspects of distribution, reducing carrying costs and maintaining delivery service levels.

TMS – Transport Management System

A Transport Management System (TMS) is a part of supply chain management, focusing on transportation logistics. It provides tools for planning, optimising and executing the transportation of goods, improving efficiency and reducing costs.

ELD – Electronic Logging Device

An Electronic Logging Device (ELD) is a hardware device installed in a commercial motor vehicle (CMV). It automatically records driving hours and provides secure, accurate and tamper-resistant logs. It’s used to monitor compliance with regulations on the length of time drivers can be on the road.

ETA – Estimated Time of Arrival

Estimated Time of Arrival (ETA) is a calculation of when a ship, vehicle, aircraft, cargo, or emergency service is expected to arrive at a specific place. It’s based on the speed of the vehicle and the distance it has to travel.

ETD – Estimated Time of Departure

Similar to ETA, Estimated Time of Departure (ETD) refers to the date and time at which a shipment is expected to depart from a particular city or country.

AGVS – Automated Guided Vehicle System

An Automated Guided Vehicle System (AGVS) is a material handling system that uses independently operated, self-propelled vehicles guided along defined pathways. AGVS are commonly used in industrial applications to move materials around manufacturing facilities and warehouses.

AMR – Autonomous Mobile Robot

Autonomous Mobile Robots (AMRs) are robots that can navigate and operate within an environment in a self-directed and autonomous way. They’re used in warehouses, distribution and fulfilment centres and manufacturing facilities for a variety of tasks including transportation, inspection and delivery.

ULD – Unit Load Device

A Unit Load Device (ULD) is a pallet or container used to load luggage, freight and mail onto wide-body aircraft and specific narrow-body aircraft. It allows large quantities of cargo to be bundled into a single unit.

FTE – Full-time Equivalent

Full-time Equivalent (FTE) is a unit that indicates the workload of an employed person. It’s used to measure the number of full-time employees or to sum up the work of part-time employees. One FTE is equivalent to one employee working full-time.

HAWB – House Air Waybill

A House Air Waybill (HAWB) is a receipt issued by an International Air Transport Association (IATA) approved freight forwarder. It serves as a contract between the shipper and the transportation service for the shipment of goods, providing detailed information about the shipped goods and the shipper.

Procurement and Sourcing

SLA – Service Level Agreement

A Service Level Agreement (SLA) is a contract between a service provider and its customers that documents what services the provider will furnish and defines the performance standards the provider is obligated to meet.

DPO – Days Payable Outstanding

Days Payable Outstanding (DPO) is an efficiency ratio that measures the average number of days a company takes to pay its suppliers. A high DPO means the company is taking longer to pay its suppliers, which may free up cash flow.

KPI – Key Performance Indicator

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. KPIs are used at multiple levels to evaluate the success at reaching targets.

ROI – Return on Investment

Return on Investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of different investments. It is expressed as a percentage and is typically used for personal financial decisions.

CAGR – Compound Annual Growth Rate

Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios and anything that can rise or fall in value over time.

CMMS – Computerised Maintenance Management System

A Computerized Maintenance Management System (CMMS) is a software package that maintains a computer database of information about an organisation’s maintenance operations. It helps maintenance teams keep a record of all assets they are responsible for, schedule and track maintenance tasks and keep a historical record of work they perform.

SOP – Standard Operating Procedure

A Standard Operating Procedure (SOP) is a set of step-by-step instructions compiled by an organisation to help workers carry out complex routine operations. SOPs aim to achieve efficiency, quality output and uniformity of performance while reducing miscommunication and failure to comply with industry regulations.

Information Technology & Automation

CRM – Customer Relationship Management

Customer Relationship Management (CRM) is a strategy for managing an organisation’s relationships and interactions with customers and potential customers. A CRM system helps companies stay connected to customers, streamline processes and improve profitability.

ERP – Enterprise Resource Planning

Enterprise Resource Planning (ERP) is a type of software that organisations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance and supply chain operations.

ASN – Advanced Shipment Notice

An Advanced Shipment Notice (ASN) is a notification of pending deliveries, similar to a packing list. It is usually sent in an electronic format and is a key part of supply chain management systems.

AES – Automated Export System

The Automated Export System (AES) is the system used by U.S. exporters to electronically declare their international exports, known as Electronic Export Information (EEI), to the census bureau.

IoT – Internet of Things

The Internet of Things (IoT) refers to the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators and connectivity which enables these things to connect, collect and exchange data.

OMS – Order Management System

An Order Management System (OMS) is a tool that tracks sales, orders, inventory and fulfilment as well as enables the people, processes and partnerships necessary for products to find their way to the customers who bought them.

UOM – Unit of Measure

A Unit of Measure (UOM) refers to the standard of measurement that is used to quantify the amount, volume, or size of a particular commodity or item. Examples of common units of measure include pieces, pounds, ounces, kilograms, litres and cubic metres.

POD – Proof of Delivery

Proof of Delivery (POD) is a method to establish the fact that the recipient received the contents sent by the sender. It is often a document that is used when a shipment is delivered, which includes details such as the time, date and place where the delivery took place and who received it.

IFS – Integrated Fulfilment System

Integrated Fulfilment System (IFS) is a system that integrates various activities involved in the fulfilment of a customer order such as order receipt, inventory management, order picking and packing and delivery to the customer. The purpose of an IFS is to improve operational efficiency and customer satisfaction.

Trade and Compliance

B2B – Business-to-Business

Business-to-Business (B2B) refers to transactions or activities that occur between two businesses rather than between a business and an individual consumer. It involves the exchange of goods, services, or information between companies.

B2C – Business-to-Consumer

Business-to-Consumer (B2C) refers to transactions or activities that occur between a business and individual consumers. It involves the sale of goods, services, or information directly to consumers.

CSA – Compliance, Safety, Accountability

Compliance, Safety, Accountability (CSA) is a safety and compliance program initiated by the Federal Motor Carrier Safety Administration (FMCSA) in the United States. It aims to improve the safety of commercial motor vehicles and reduce crashes, injuries and fatalities through enhanced compliance and enforcement efforts.

GTM – Global Trade Management

Global Trade Management (GTM) refers to the coordination and management of all activities involved in the global trade process, including import and export compliance, logistics, customs documentation, trade finance and regulatory compliance.

BPM – Business Process Management

Business Process Management (BPM) is an approach that focuses on aligning an organization’s business processes with the desired goals and objectives of the company. It involves analysing, modelling, automating, monitoring and continuously improving business processes to enhance efficiency, effectiveness and agility.

CBM – Cubic Metre

Cubic Meter (CBM) is a unit of volume measurement commonly used in logistics and freight transportation to calculate the capacity or volume of cargo. It represents the amount of space occupied by one cubic meter.

DES – Delivery Ex Ship

Delivery Ex Ship (DES) is an international trade term that signifies that the seller is responsible for delivering the goods to the buyer at the named port of destination. The seller is responsible for all costs and risks associated with delivering the goods to that port, but not for unloading them.

CSP – Container Service Provider

A Container Service Provider (CSP) is a company that offers various services related to the handling, storage and transportation of shipping containers. CSPs provide container leasing, maintenance, repairs and logistics services to shipping companies, freight forwarders and other customers.

CTM – Container Terminal Management

Container Terminal Management (CTM) refers to the management and operation of a facility specifically designed for handling and storing shipping containers. It involves overseeing various activities such as vessel berthing, container handling, storage and coordination with other stakeholders in the supply chain.

CTO – Container Terminal Operator

A Container Terminal Operator (CTO) is a company or entity that operates and manages a container terminal. CTOs are responsible for the efficient handling, storage and movement of shipping containers within the terminal, as well as coordinating with shipping lines, trucking companies and other logistics partners.

DDU – Delivered Duty Unpaid

Delivered Duty Unpaid (DDU) is an international trade term indicating that the seller is responsible for delivering the goods to the buyer at the named destination. However, the buyer is responsible for clearing the goods through customs, paying import duties and taxes and any other costs associated with customs clearance.

FEU – Forty-foot Equivalent Unit

Forty-foot Equivalent Unit (FEU) is a standard unit of measurement in the shipping industry to quantify the capacity or volume of a shipping container. It represents the equivalent of one forty-foot-long container. It can also be referred to as 2 TEU (Twenty-foot Equivalent Unit (TEU).

ICD – Inland Container Depot

An Inland Container Depot (ICD) is a facility located away from seaports that provides services for the handling, temporary storage and distribution of shipping containers. ICDs are typically connected to seaports through rail or road networks and serve as important hubs in the inland transportation of containers.

MAPE – Mean Absolute Percentage Error

Mean Absolute Percentage Error (MAPE) is a commonly used metric in forecasting and demand planning to measure the accuracy of a forecasting model. It calculates the average percentage difference between the forecasted values and the actual values, providing an indication of the forecast’s accuracy.