Glossary of Logistics Terms

"A" Channel

The primary sales channel, carrying first quality goods that have not been available elsewhere.

Advance Ship Notice (ASN)

EDI transaction that informs users what, where, how, and when product is arriving.

Asset Recovery

The classification and disposition of surplus, obsolete, scrap, waste and excess material products, and other assets, in a way that maximizes returns to the owner, while minimizing costs and liabilities associated with the dispositions.

"B" Channel

Secondary sales channel, for goods that have been through a reverse flow. Can carry first quality goods.

Barter Companies

Allow firms to get rid of unwanted inventories of first-quality and other goods, by trading for other products or for commodities such as airline tickets or advertising time.

Brokers

In reverse logistics, brokers are firms specializing in products that are at the end of their sales life. Often, willing to purchase any product, in any condition, given a low enough price. Often the customer of last resort for many returns.

Brown Goods

Electronics goods (such as computers, televisions, fax machines, and audio equipment).

Buy-out

When one manufacturer buys out a retailer's inventory of another manufacturer's product. This allows the buying manufacturer to replace its competitor's product with their own.

Cannibalization of Demand

In reverse logistics, cannibalization of demand is when secondary market sales reduce sales in the "A" channel.

Cannibalization of Parts

When parts or components are taken off of one item and used to repair or rebuild another unit of the same product.

Centralized Return Center (CRC)

A facility where a company's returns are processed.

Chargeback

A deduction from a vendor invoice for product return amount; sometimes occur without vendor permission.

Class Tariff

A tariff containing only class rates.

Close-out Liquidators

Firms specializing in buying all of a retailer's product in some particular area; it usually happens when a retailer decides to get out of a particular area of business.

Controlled Tip

A sanitary landfill where refuse is sealed in cells formed from earth or clay.

Core

A valuable and reusable part or subassembly that can be remanufactured and sold as a replacement part; often found in the automotive industry.

Core Charge

The amount charged by a supplier on a re-manufacturable product to encourage the consumer to return the defective item being replaced.

Design for Disassembly (DFD)

Designing a product so it can be more easily disassembled at end-of-life.

Design for Logistics (DFL)

Designing a product to function better logistically. Taking into consideration how the product will be handled, shipped, stored, etc.

Design For Manufacturing (DFM)

Taking manufacturing concerns into account when designing a product, to enable easy manufacturing, cost effectiveness, or a higher standard of quality.

Design For Reverse Logistics (DFRL)

Designing products so that their return flow functions better; designing reverse logistics requirements into product and packaging.

Disposition

How a product is disposed of, e.g. sold at an outlet, sold to a broker, sent to a landfill, etc.

Disposition Cycle Time

The duration of time from an item's initial return, to the item reaching its final disposition.

Duales System Deutschland (DSD)

The German organization responsible for collecting and recycling consumer packaging.

Electronic Data Interchange (EDI)

A system for business-to-business electronic communication.

Extended Producer Responsibility (EPR)

A requirement that the original producer of an item is responsible for ensuring its proper disposal.

Factory-Renewed

A product that has been refurbished by the manufacturer; typically carries a full new-product warranty.

Footprint

Building size, in square feet. A large footprint store requires a large number of square feet.

Gatekeeping

The screening of products entering the reverse logistics pipeline.

Gray Market

Products sold through unauthorized dealers or channels; generally, do not carry a factory warranty.

Green Dot

A symbol on packaging sold in Germany that indicates that the product is eligible to be recycled through the Duales System Deutschland.

Green Logistics

Attempts to measure and minimize the ecological impact of logistics activities.

Header

A header, or headload are volumes of freight destined for one service center that are loaded in the nose of a trailer. They are not touched again until they reach their final destination.

High Learning Products

Items that require education or instruction before being able to operate; a computer, for example.

Insurance Liquidators

Secondary market companies specializing in buying products damaged in shipment and declared as losses by insurance companies.

Investment Recovery

See Asset Recovery.

Irregular

Products that do not meet the standards for first quality product, perhaps for cosmetic reasons, but which generally still satisfy most of the basic performance requirements.

Job-Out Liquidators

Secondary market companies specializing in buying end-of-season products from retailers.

No terms beginning with the letter K.

Landfill

A controlled environment for burying municipal solid waste.

Leachate

Water that seeps through a landfill, picking up pollutants as it travels.

Less than Container Load (LCL)

The transportation of ocean shipments not large enough to fill a standard container (20 to 40 feet). In an LCL shipment, just as in an LTL (less than truckload) shipment, your freight may be combined with cargo from different shippers in a single container.

Liquidator

A secondary market company that buys product that has reached the end of its sales life in the "A" channel.

Lift

See Buy-out.

Logistics

The process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.

Made-For-Outlet

Products made especially to be sold at outlet stores; generally of slightly lower quality that "A" channel products.

Marketing Returns

Unsold product a supplier has agreed to take back from the retail customer; usually overstocks; can be the result of product shipped to the retailer with the understanding that sales are guaranteed.

Municipal Solid Waste (MSW)

Garbage generated by residences and small businesses.

Non-Defective Defectives

when customers return a product claiming it to be defective, when in fact, the problem is not with the product, but often with the customer's ability to properly operate the product.

Non-Defective Returns

A non-defective defective returned by a customer.

Outlet Sales

Products sold at an "outlet" store; typically, irregular or off-season products.

Overstock

Excess inventory; may be from ordering too much, order cancellations, or product's failure to sell.

Point of Sale (POS)

The point where ownership of the product transfers to the customer.

Partial Returns Credit

Giving a customer a partial refund for a product because not all components of the product are present.

Prebate

Providing a discounted purchase price on a product linked to the promise not sell the product to a re-manufacturer at the end of its life; paying the customer at the time of purchase for returning the product at end-of-life.

Preselling

Contracting ahead of time (during the selling season) with a job-out company to purchase all remaining product at the end of the season.

Primary Packaging

The first level of product packaging; for example, the tube that toothpaste is packed in, or a bottle that contains beer.

Producer Pays

The principle that the manufacturer should pay for ensuring the recycling and proper disposal of product at end-of-life.

No terms beginning with the letter Q.

Reclaim Materials

See Recycling.

Reclamation Centers

Centralized processing facilities for returns; term used widely in the grocery industry.

Reconditioning

When a product is cleaned and repaired to return it to a "like new" state.

Recycle

When a product is reduced to its basic elements, which are reused.

Refurbishing

Similar to reconditioning, except with perhaps more work involved in repairing the product.

Remanufacturing

Similar to refurbishing, but requiring more extensive work; often requires completely disassembling the product.

Re-Returns

When a customer tries to return for full price a product that was sold as a returned product.

Resell

When a returned product may be sold again as new.

Restocking Fee

A charge to the consumer for accepting their returned product.

Return Abuse

When a customer tries to return a product at a chain other than where they bought it, or for a price higher than what they paid for it, or after the warranty period has expired.

Returnable Tote

Transport packaging that can be used multiple times to move materials between or within facilities.

Return Authorization (RA)

Authorization to return a product to a supplier.

Return Material Allowance (RMA)

Authorization to return a product to a supplier.

Returns

Products for which a customer wants a refund because the products either fail to meet his needs or fail to perform.

Returns Allowance

The quantity of product that a customer is allowed to return; usually calculated as a percentage of total purchases.

Returns Center

Same as centralized return center.

Return to Supplier

Returning damaged products or customer returns to the vendor from whom they were purchased.

Return To Vendor (RTV)

Same as return to supplier.

Reusable Tote

Same as returnable tote.

Reuse

Using a product again for a purpose similar to the one for which it was designed.

Reverse Distribution

The process of bringing products or packaging from the retail level through the distributor back to the supplier or manufacturer.

Reverse Logistics

The process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods, and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.

Radio Frequency Identification (RFID)

A technology in which a tag is attached to each item that broadcasts a unique, low-frequency radio signal.

Return Material Authorization (RMA)

Using a closed loop of repairable products; when a customer sends in a broken product, a repaired product is sent, and the customer's product is repaired and stored to be sent to another customer.

Salvage

When a product is sold to a broker or some other low-revenue customer.

Sanitary Landfill

A landfill scientifically designed to prevent ground water contamination from leachate.

Secondary Market

A collection of companies that specialize in selling products that have reached the end of their selling season in the "A" channel.

Secondary Packaging

The second level of product packaging; for example, the box that contains a tube of toothpaste, or the carton that holds six bottles of beer.

Secure Disposal

Requiring a company to destroy the product under the supervision of a security guard to ensure the product is destroyed.

Secure Returns

A reverse logistics process designed to minimize leakage of product; secure returns processes are designed to eliminate shrinkage and unwanted product disposition.

Source Reduction

Reducing usage of resources at the point of generation or production.

Supply Chain Position

The position in the channel that the firm occupies; this position could be manufacturer, wholesaler, distributor, retailer, or combinations of these.

Take-Back

Requiring manufacturers to collect product at end-of-life to reclaim materials and dispose of properly.

Tipping Fees

The cost of disposing of one ton of garbage in a landfill.

Transport Packaging

Packaging used for transporting products from manufacturers to distributors or retailers.

Two-Dimensional Bar Coding

A bar coding technology that allows much more information to be stored in a given space instead of a single row of line; the bar code label consists of a two-dimensional grid of dots.

Trailer Interchange

Transfer of trailer with or without lading from one transportation line to another.

Transport Operator

Driver of intercity road equipment. Also known as, road drivers, etc.

Twinliner

Two semi-trailer boxes hooked in combination, drawn by a single tractor, the front unit supported by the tractor, the rear one by a dolly.

No terms beginning with the letter U.

Volume Rate

A rate applicable in connection with a specified volume (weight) of freight.

White Goods

Household appliances such as washers, dryers, refrigerators.

No terms beginning with the letter X.

No terms beginning with the letter Y.

Zero Returns

Manufacturer never takes possession of returns. Destroyed in the field by retailer or third party.