Essential Jargons in Inventory that's required

Here’s a list of common jargons used in Inventory Management, Inventory Auditing, Warehouse Management, Warehouse Auditing, E-commerce and Distribution along with their meanings:

Inventory Management Jargons

1. ABC Analysis: A method of categorizing inventory into three groups (A, B, and C) based on value and importance where A items are the most valuable and C items the least.
2. SKU (Stock Keeping Unit): A unique identifier for each distinct item in inventory, used to track stock levels and sales.
3. Lead Time: The time taken from placing an order to receiving the inventory.
4. Safety Stock: Extra inventory kept to avoid stockouts in case of unexpected demand or supply delays.
5. Just-In-Time (JIT): An inventory strategy where materials are ordered and received only when needed, reducing holding costs.
6. Cycle Count: A periodic count of a subset of inventory, instead of a full physical inventory, to ensure accurate records.
7. EOQ (Economic Order Quantity): The ideal order quantity that minimizes both holding and ordering costs.
8. Dead Stock: Inventory that hasn’t been sold or used for a long period.
9. Inventory Turnover: A ratio that shows how often inventory is sold and replaced over a period, indicating how efficiently inventory is managed.
10. Order-to-Cash (O2C): The process from receiving customer orders to the collection of payments.

Inventory Auditing Jargons

1. Physical Inventory Count: The process of physically counting all items in stock to ensure the accuracy of inventory records.
2. Shrinkage: The loss of inventory due to theft, damage or error discovered through audits or physical counts.
3. Reconciliation: Comparing actual stock counts with recorded inventory data to identify discrepancies.
4. Discrepancy: Any mismatch between the recorded inventory and the physical count.
5. Audit Trail: A step-by-step record of transactions that auditors use to verify the accuracy of inventory movements.
6. Perpetual Inventory System: A system that continuously updates inventory records in real-time as sales and purchases are made.
7. Variance: The difference between the expected amount of inventory and the actual amount found during an audit.
8. LIFO/FIFO: Last In, First Out (LIFO) and First In, First Out (FIFO) are inventory valuation methods that determine the cost of goods sold.

Warehouse Management Jargons

1. WMS (Warehouse Management System): A software solution that helps control and manage warehouse operations from the time goods enter a warehouse until they move out.
2. Picking and Packing: The process of selecting items from inventory and preparing them for shipment.
3. Cross-Docking: A practice where products from a supplier or manufacturing plant are distributed directly to a customer with little to no handling or storage.
4. Receiving: The process of taking stock into the warehouse, verifying it, and entering it into the system.
5. Putaway: The process of moving goods from the receiving dock to their designated storage area.
6. Lot Control: Tracking items in inventory based on the batch or production lot they came from, often used for quality control.
7. Backorder: An order that cannot be fulfilled when requested due to lack of stock, to be delivered when inventory is replenished.
8. Bin Location: A system used in warehouses to assign locations to each item for easier tracking and retrieval.
9. Kitting: The process of combining different items into a single package or unit for sale.

Warehouse Auditing Jargons

1. Compliance Audit: A check to ensure that warehouse operations adhere to regulatory standards and internal policies.
2. Operational Audit: An audit to assess the efficiency and effectiveness of warehouse operations, including space utilization, picking accuracy, and handling practices.
3. Cycle Time: The time taken to complete one cycle of warehouse operations, such as picking, packing, and shipping.
4. Audit Scope: The defined extent and boundaries of the audit, including the areas of the warehouse to be checked.
5. Throughput: The rate at which goods are processed in and out of a warehouse, an important metric for auditing performance.
6. Root Cause Analysis: A method of identifying the underlying reasons for inventory or warehouse discrepancies during audits.
7. Non-Conformance: Any deviation from expected or defined processes, identified during an audit.
8. Risk Assessment: An evaluation of the potential risks in warehouse operations, often a key part of an audit process.

E-commerce Jargons

1. Dropshipping: A retail fulfilment method where the seller doesn't keep products in stock but instead transfers orders and shipment details to a third-party supplier who ships the product directly to the customer.
2. Shopping Cart Abandonment: When a customer adds items to their online shopping cart but leaves the website without completing the purchase.
3. Conversion Rate: The percentage of website visitors who complete a desired action, such as making a purchase.
4. Fulfilment: The entire process of receiving, processing, and delivering an order to the customer.
5. Omnichannel: A sales strategy that integrates various channels (online, physical stores, social media) to provide a seamless customer experience.
6. Last-Mile Delivery: The final step of the delivery process, where goods are transported from a transportation hub to their final destination, typically the customer’s address.
7. Inventory Holding Cost: The total cost associated with storing unsold goods, including warehousing, insurance, and depreciation costs.
8. B2B (Business to Business): Transactions between businesses, such as wholesalers selling to retailers.
9. B2C (Business to Consumer): Transactions where businesses sell directly to individual customers via an e-commerce platform.
10. Customer Lifetime Value (CLV): A prediction of the net profit attributed to the entire future relationship with a customer.
11. Personalization: Tailoring marketing and product recommendations based on a customer’s browsing behaviour, purchase history, and preferences.
12. A/B Testing: A technique where two versions of a webpage, email, or advertisement are compared to see which performs better in terms of conversions.

E-commerce Auditing Jargons

1. Clickstream Analysis: The process of collecting and analysing data about the sequence of clicks a user makes while browsing an e-commerce site, often used for auditing website performance and user behaviour.
2. Cart Abandonment Rate: A metric used to measure how often users abandon their shopping cart without completing a purchase. High rates can trigger an audit to uncover underlying issues.
3. Conversion Funnel Audit: A systematic review of each step in the conversion process (from awareness to purchase) to identify drop-offs or inefficiencies.
4. Payment Gateway Audit: An assessment of the payment systems to ensure they are secure, efficient and compliant with financial regulations.
5. Fraud Detection Audit: The process of examining transactions to identify patterns of fraud, chargebacks or suspicious activity in e-commerce.
6. SEO Audit: An evaluation of the website’s search engine optimization practices to ensure the site ranks well on search engines and adheres to SEO guidelines.
7. UX/UI Audit: A review of the User Experience (UX) and User Interface (UI) design to ensure it’s customer-friendly, optimized for mobile devices, and effectively converting visitors into customers.
8. Data Privacy Audit: A review to ensure that the e-commerce business complies with data protection regulations like GDPR or CCPA, especially in the handling of customer information.
9. Inventory Reconciliation: Matching physical inventory counts with e-commerce sales records to ensure accuracy, often triggered if there are discrepancies between recorded and actual inventory     levels.
10. Shipping and Fulfilment Audit: A detailed check of the shipping and fulfilment process to ensure timely deliveries, minimize returns, and reduce shipping errors.
11. Affiliate Marketing Audit: An evaluation of the performance and authenticity of affiliate partners, ensuring they comply with agreed-upon terms and aren’t inflating traffic or sales numbers.
12. Channel Auditing: Reviewing the performance and compliance of various sales channels (marketplaces, social media, websites) to ensure consistency and accuracy in orders, fulfilment and data reporting.
13. Financial Reconciliation: The process of matching sales and revenue from various payment gateways and sales platforms with recorded financial data to ensure accurate financial statements.
14. Product Listing Audit: A thorough check of product pages to ensure they have correct pricing, descriptions, stock levels, and up-to-date information.
15. Return and Refund Audit: Analysing return and refund policies and their implementation to ensure they comply with legal requirements and offer a seamless customer experience.
16. Revenue Leakage Audit: Identifying areas where revenue is lost due to errors like mispricing, unrecorded sales or incorrect tax rates.
17. Customer Support Audit: A review of the customer service processes, such as how queries, complaints, or issues with orders are handled, to ensure efficiency and customer satisfaction.
18. Compliance Audit: Ensuring that the e-commerce site complies with industry regulations, such as PCI-DSS (Payment Card Industry Data Security Standard) for secure handling of card information.
19. Coupon and Discount Audit: A review of promotions, coupon codes, and discount offers to ensure they’re applied correctly, without errors or fraud, and don’t negatively impact profit margins.
20. Third-Party Vendor Audit: Evaluating the performance and compliance of third-party vendors or suppliers, particularly in drop shipping or marketplace models, to ensure they meet the business’s     quality and fulfilment standards.

Distribution Jargons

1. Distribution Centre (DC): A warehouse or storage facility where products are stored, processed, and distributed to retailers, wholesalers, or customers.
2. Third-Party Logistics (3PL): Outsourcing logistics and distribution services to an external provider who handles warehousing, fulfilment, and transportation.
3. Supply Chain: The complete process of producing and delivering goods, from sourcing raw materials to distributing finished products to consumers.
4. Demand Forecasting: Predicting future customer demand using historical sales data, market trends, and other factors to optimize stock levels.
5. Load Balancing: The practice of distributing tasks, deliveries, or shipments across multiple locations or delivery routes to optimize efficiency.
6. Freight Forwarder: A company or individual that organizes shipments for corporations or individuals to get goods from the manufacturer to a market, customer, or final distribution point.
7. EDI (Electronic Data Interchange): The electronic transfer of documents (such as orders, invoices, and shipping information) between companies within the supply chain.
8. Reverse Logistics: The process of moving products back from the customer to the seller or manufacturer, often for returns, repairs, or recycling.
9. Cross-Docking: A distribution practice where products from suppliers or manufacturers are unloaded from incoming trucks and directly loaded onto outbound trucks with minimal or no storage     in between.
10. Palletization: The process of placing goods onto pallets for easy transport and storage in warehouses or distribution centres.
11. Lead Logistics Provider (LLP): A single company that coordinates and manages all logistics functions (warehousing, transportation, etc.) for a client’s supply chain.
12. Route Optimization: The process of finding the most efficient delivery routes for shipments to reduce time and costs.
13. Hub and Spoke Model: A distribution model where goods are shipped to a central hub, from which they are then distributed to smaller locations (spokes).
14. Backhauling: Utilizing empty trucks returning from a delivery to transport goods on the return trip, increasing logistics efficiency.
15. Order Fulfilment Rate: A key metric in distribution that measures the percentage of customer orders completed successfully without delays or errors.

Distribution Auditing Jargons

1. Inventory Accuracy Audit: A review of inventory records in a distribution centre, ensuring that actual stock levels match recorded quantities in the warehouse management system.
2. Carrier Compliance Audit: An assessment of third-party carriers or logistics partners to ensure they meet contractual obligations, such as delivery times, shipping rates, and service levels.
3. Freight Audit: A thorough examination of freight invoices to identify overcharges, duplicate charges or discrepancies between agreed shipping rates and what is billed.
4. Route Optimization Audit: A review of delivery routes to assess their efficiency, ensuring the distribution network minimizes costs and maximizes delivery speed.
5. Supply Chain Risk Audit: A review of potential risks within the supply chain, including disruptions from suppliers transportation delays, and potential bottlenecks.
6. Reverse Logistics Audit: An evaluation of the processes involved in handling returned goods, ensuring the system is cost-effective, efficient, and accurately managed.
7. Cross-Docking Audit: A review of cross-docking operations, ensuring that goods are moved from incoming to outgoing shipments efficiently, minimizing storage time and handling costs.
8. Order Fulfilment Audit: A check of the order picking, packing, and shipping processes to verify that customer orders are accurately fulfilled in a timely manner.
9. Distribution Centre Efficiency Audit: An assessment of the distribution centre's operations, including space utilization, picking accuracy, labour productivity, and overall process flow.
10. Cycle Time Audit: A review of the time it takes to complete distribution processes, such as receiving, put away, picking, and shipping, to identify areas for time reduction.
11. Warehouse Capacity Audit: A review of the storage capacity in a distribution centre, ensuring that space is being utilized effectively and suggesting improvements for storage optimization.
12. Cold Chain Compliance Audit: In the case of temperature-sensitive products, this audit ensures that the cold chain (temperature-controlled supply chain) is maintained throughout the distribution process.
13. Order Accuracy Audit: An assessment of how often orders are fulfilled accurately, ensuring the right products are delivered to customers and reducing returns due to errors.
14. Third-Party Logistics (3PL) Audit: A detailed review of the performance and compliance of third-party logistics providers, ensuring they meet contractual agreements on delivery speed, cost and quality of service.
15. Inventory Turnover Audit: An evaluation of how often inventory is sold and replaced over a period, identifying potential issues with slow-moving or excess stock.
16. Kitting and Assembly Audit: For companies that offer kits or bundles of products, this audit checks the accuracy of assembling and distributing pre-packaged kits.
17. Packaging Audit: A review of the packaging process, ensuring that items are packaged properly to avoid damage during transit and that packaging costs are optimized.
18. Risk of Loss Audit: An assessment that identifies potential points of loss or damage in the distribution process such as inadequate handling, poor packaging, or high-risk transport routes.
19. Inbound Freight Audit: A review of incoming shipments from suppliers to ensure accuracy in the quantity received, shipping costs and compliance with purchase orders.

     20. Dock-to-Stock Time Audit: A measurement of how quickly products move from the receiving dock to their final storage location, assessing how efficiently inventory is handled.