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Warehouse Management Fundamentals

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SKU (Stock Keeping Unit)

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A unique code that identifies each distinct product and service that can be purchased.

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Pallet Racking

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A storage system designed to store materials on pallets allowing efficient use of vertical space.

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Cross-docking

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A practice in logistics of unloading materials from an incoming carrier and loading these directly onto outbound carriers with little or no storage in between.

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Cycle Counting

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An inventory auditing procedure where a small subset of inventory is counted on any given day.

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WMS (Warehouse Management System)

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Software designed to support and optimize warehouse functionality and distribution center management.

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RFID (Radio-frequency Identification)

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Use of radio waves to capture information stored on a tag attached to an object, part of automated identification and data capture (AIDC).

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LIFO (Last In, First Out)

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A method used in managing inventory and financial matters which the last items placed in inventory are the first to be used or sold.

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FIFO (First In, First Out)

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An inventory management method where the first items placed in inventory are the first to be used or sold.

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Pick and Pack

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A type of order fulfillment process where items are picked from inventory and then directly packed into shipping boxes.

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Putaway

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The process of moving goods from the receiving dock and placing them into their most appropriate storage space.

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Receiving

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The process of accepting and storing incoming goods to a warehouse before they are placed into storage.

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Zone Picking

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An order picking method where a warehouse is divided into several pick zones, and order pickers are assigned to only one zone.

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Wave Picking

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A warehouse process where orders are grouped into small batches or waves and picked at the most efficient time.

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Just-in-Time (JIT)

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An inventory strategy to increase efficiency and reduce waste by receiving goods only as needed for the production process, which reduces inventory costs.

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ABC Analysis

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An inventory categorization method where items are categorized into three categories (A, B, and C) based on their importance.

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Bulk Storage

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The process of storing products that are not palletized in larger quantities, commonly in areas without racks.

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Economic Order Quantity (EOQ)

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A formula used to determine the optimal order quantity that minimizes total inventory holding costs and ordering costs.

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Safety Stock

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A quantity of inventory kept in storage to protect against stockouts caused by variability in demand or supply.

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Value-Added Services

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Additional services provided to customers such as product customization, labeling, and packaging which enhance the value of the product.

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Reverse Logistics

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A process by which companies collect and handle returned, damaged, or outdated products and recycle, repair, or dispose of them.

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Continuous Improvement

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A method of constantly improving warehouse operations through incremental changes or major innovations, aiming for long-term sustainability.

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Lean Warehousing

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Warehouse management principles that focus on reducing waste, improving flow, and increasing efficiency.

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Throughput

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The rate at which goods are received, processed, and shipped out of a warehouse.

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Six Sigma

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A set of techniques and tools for process improvement aimed at reducing errors and improving quality in manufacturing and business processes.

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Kanban

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A visual scheduling system that tells you what to produce, when to produce it, and how much to produce.

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Slotting

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The activity of determining the most appropriate storage location for each item in a warehouse.

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Cross-Training

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Training employees to perform multiple jobs within the warehouse so they can switch roles when necessary.

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Carton Clamping

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A forklift attachment that allows the handling of goods without pallets by clamping the load.

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Yard Management

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The process of overseeing the movement of trucks and trailers in the yard of a warehouse or distribution center.

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Dock Leveler

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A height-adjusting device used to ensure a smooth transition between a warehouse dock and the trailer during loading or unloading.

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