Warehouse glossary
The terms used in stock management, in plain language
This glossary explains the terms that come up in warehouse and stock management: SKU, product ID, storage location, cycle count, FIFO, safety stock and the rest. Each entry is a short definition in plain language, and terms that have a page of their own link to it.
- Warehouse management system (WMS)
- Software that records what is in a warehouse, where each item is stored, and every movement in and out of it. It answers two questions continuously: what do we have, and where is it. Read more
- SKU (stock keeping unit)
- One distinct, countable product variant: a specific size, colour and packaging. Two boxes of the same item are one SKU with a quantity of two; the same shirt in two sizes is two SKUs.
- Product ID
- The code that identifies one product in a stock system. Usually the barcode printed on the packaging, but any code works as long as it is unique within the company, because every transaction refers to it. Read more
- Storage location
- Any physical place stock can sit: a rack, a shelf, a bin, a pallet position, a service van. Recording stock against a location is what turns we have forty into we have forty, in aisle 3, bay 12. Read more
- Location code
- A short, unique label for one storage position, so a person or a system can say exactly where something is. A good code is readable by someone who has never been in the building and matches the label physically on the rack. Read more
- Barcode
- A machine-readable printed code holding a product number. Scanning one is faster and far less error-prone than typing, which is why nearly every warehouse process starts with a scan.
- Inbound
- Registering goods arriving into the warehouse: which product, how many, and into which storage location. It is the moment stock starts existing in the system. Read more
- Outbound
- Registering goods leaving the warehouse, whether shipped to a customer, issued to production or scrapped. It is the moment stock stops existing in the system. Read more
- Move
- Relocating stock from one storage location to another without changing the total quantity. Only the position changes, which is what keeps the system matching the building after a reorganisation. Read more
- Transaction
- One recorded stock movement. In this app every transaction stores the product, the storage location, the quantity, the moment and the device, which together form the history a spreadsheet cannot produce.
- Stock accuracy
- How well the recorded stock matches what is physically present, usually expressed as the percentage of counted locations that turned out to be correct. It is the single number that says whether the system can be trusted.
- Cycle count
- Checking a small part of the stock at a time, continuously through the year, instead of counting everything in one annual exercise. It keeps accuracy high without ever closing the warehouse for a day. Read more
- Safety stock
- The buffer quantity kept on top of expected demand to absorb late deliveries and unexpected orders. Too little causes stockouts; too much ties up money in the racks.
- Replenishment
- Refilling a picking location from bulk storage before it runs empty. Done well, a picker never walks to an empty shelf.
- Picking
- Collecting the items for an order from their storage locations. It is the most repeated task in most warehouses, so the layout and the location codes decide how much walking it costs.
- FIFO and FEFO
- First in, first out: the oldest stock leaves first. For products with an expiry date the variant is FEFO, first expired first out, which orders by shelf life rather than by arrival.
- Batch
- A quantity of a product produced or received together, sharing an identifier and often an expiry date. Registering batches is what makes a targeted recall possible instead of a total one.
- Dead stock
- Stock that has not moved for a long period. It occupies space and capital while contributing nothing, so most warehouses review it periodically to sell it off, use it up or write it down.
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