3PL WMS Glossary: Plain English Meanings

This glossary defines about thirty terms a 3PL hears when it talks about its WMS, a sentence or two each. Warehouse software has its own shorthand, and 3PLs add client and billing language on top. This glossary is for owners, managers and new staff who keep hearing a term and nodding along. Terms are grouped by where they come up in the day.

The basics

WMS. Warehouse management system. Software that records what is in the building, where, and who owns it, and directs the work of receiving, storing, picking and shipping.

3PL. Third-party logistics provider: a company that stores and ships goods for other companies, its clients.

Client (or customer, or account). The company whose goods you hold. In a 3PL WMS every record carries a client.

SKU. Stock keeping unit. One distinct item as your client sells or stores it, with its own code. A blue shirt in medium and the same shirt in large are two SKUs.

Item master. The list of every SKU with its details: description, dimensions, weight, barcode, unit of measure and any special handling.

Inbound

ASN. Advance ship notice. A message from the client or supplier saying what is coming, how much, and when. The dock team checks the delivery against it. See ASN explained.

Appointment (or dock appointment). A booked time slot for a delivery, so doors and people are ready.

Receiving. Checking in goods at the dock: counting, inspecting and recording them in the system.

Discrepancy. A difference between what was expected and what arrived. Short, over, damaged and wrong item are the usual types, and this routine covers each.

Putaway. Moving received goods to a storage location and confirming it by scan.

Cross-dock. Moving goods from the receiving door to the shipping door with little or no storage in between.

Storage

Location. A specific place in the building, such as an aisle, rack, level and position. Every unit should be in one.

Pick face. The location from which items are picked, usually at an easy height. Bulk storage above or behind it refills the pick face.

Replenishment. Moving stock from bulk to the pick face so pickers do not run dry.

Cycle count. Counting a small part of the inventory on a routine, rather than the whole building at once, and correcting differences.

On hand, allocated, available. On hand is what is physically in the building. Allocated is reserved for orders not yet shipped. Available is on hand minus allocated, and is what you can promise to a new order.

Lot number. A code that groups units made or received together, used for tracing and recalls.

Serial number. A unique code for a single unit.

Expiry date and FEFO. The expiry date is the date after which a product should not be sold. FEFO, first expired first out, means shipping the earliest expiry first.

Outbound

Order line. One item and quantity on an order.

Allocation. Reserving stock for an order.

Pick, batch pick, zone pick. Pick means taking items for an order. Batch pick means collecting for several orders at once, then sorting. Zone pick means each person works one area of the building and orders pass between them.

Short pick. Reaching a location and finding less stock than the task asked for.

Pack station. The place where items are checked, boxed, labelled and weighed.

Manifest. A list of the shipments handed to a carrier at pickup.

Backorder. An order, or part of one, that waits because stock is not yet available.

Client and billing

Rate card. The list of what you charge a client for each service: receiving, storage, picks, packing, shipping and extras.

Billable event. Something the system records that you can charge for, such as one pallet received or one order packed.

Client portal. A secure website or screen where a client can view its own stock, orders and invoices.

Value-added service. Extra work beyond storing and shipping, such as kitting, labelling or inserting a flyer.

Data and control

Audit trail. A record of who changed what and when.

Integration. A connection between your WMS and another system, such as accounting or an online store, so data moves without retyping.

Pairs people mix up

Available vs on hand. A shelf can hold ten units on hand with only four available, because six are reserved. When a client asks "do you have ten?", the honest answer depends on which word they mean.

Lot vs serial. A lot groups many units. A serial identifies one. A product can have both, but tracking both means more scanning on the floor, so do it only when a client or a regulation needs it.

Receiving vs putaway. Receiving is about counting and recording. Putaway is about moving. A pallet can be received but not yet put away, and it is still not available to pick.

Cycle count vs inventory adjustment. A count is how you find a difference. An adjustment is how you fix it in the system, and it should carry a reason and a name.

Order vs shipment. An order is what the client wants. A shipment is what left the building. One order can become several shipments.

An example to hold it together

Here is a short invented story that uses several of the terms. A client sends an ASN for twenty cartons of one SKU. Eighteen arrive, so the receiver records a discrepancy. The cartons are put away in a pick face. An order line for four comes in and the system allocates four, so available drops by four. A picker takes them, packs them at the pack station, and the system records the billable events: receiving, storage, one pick, one pack and one shipment.

Most conversations about a 3PL WMS are really about those steps, and about how reliably the software records each one.

Where to go next

If you are choosing software, ask each vendor to walk through the story above on their own screens, using your terms. If you are training new staff, hand them this page on day one. And if a word you use daily is missing or means something different in your building, tell us from the Contact page.

Questions people ask

What does WMS mean for a 3PL?

Warehouse management system. It is software that records what is in the building, where it is, and who owns it, and directs the work of receiving, storing, picking and shipping.

What is the difference between on hand and available stock?

On hand is what is physically in the building. Allocated is reserved for orders not yet shipped. Available is on hand minus allocated, and it is what you can promise to a new order. A shelf can hold ten on hand with only four available.

What is the difference between a lot number and a serial number?

A lot number groups many units made or received together, used for tracing and recalls. A serial number identifies a single unit. Tracking both means more scanning, so do it only when a client or a regulation needs it.

What is a rate card in a 3PL?

It is the list of what you charge a client for each service, such as receiving, storage, picks, packing, shipping and extras.

What is a billable event in a 3PL?

Something the system records that you can charge for, such as one pallet received or one order packed.