Understanding supply chains involves understanding the terminology that comes with them. There are a number of niche acronyms used within logistics that can be worth knowing about when starting a logistics business or improving your supply chain. Below are 7 examples. 

EDI

Electronic Data Interchange. This is a method of automating the exchanging of documents used within a supply chain such as invoices, purchase orders and shipping forms. This helps to speed up the paperwork process. There are various software solutions that you can use to carry out EDI fulfillment. These can be linked up to various other software including payment processors and WMS software.

FIFO

First In, First Out. This is a method of organising the movement of goods in a warehouse or stockroom. A FIFO system ensures that the first supplies to be received are also the first supplies to be sold or used. This ensures that the oldest supplies are being used up before newer supplies are being used. 

JIT

Just-In-Time.This is when businesses order materials to be used just in time for when they need them, rather than ordering them in advance. A JIT inventory management system can reduce the need for as much storage space, because materials aren’t being stored in bulk for long periods. It can also prevent materials expiring during storage, as well as preventing problems like weather damage or freezer burn. Of course, JIT does have its risks, such as supplies arriving late if there are delays, or shortages if there is a sudden rise in demand. 

LTL

Less-Than-Truckload. This is a shipping method used by many businesses. Instead of filling up an entire truck with goods for one customer, LTL shipping involves filling up a track with multiple smaller shipments for different customers. This allows a single vehicle to be used for multiple deliveries, but does require a single driver to carry out more journeys. 

POD

Proof of Delivery. This is a document that proves that a shipment has been delivered to its recipient. It could include a signature or a photograph of the shipment at the address. POD is essential to protecting shipping companies against fraud – providing evidence that shipments have reached their destination in good condition and in a timely manner. 

RFID

Radio Frequency Identification. This is one of the most popular and efficient ways to track shipments and inventory. It involves using RFID tags on items that are able to be tracked by an RFID reader. It is an improved alternative to barcode scanning – the RFID reader does not have to be lined up exactly with the RFID tag, but instead simply needs to be held near it, allowing multiple items to be scanned quickly. 

WMS

Warehouse Management System. WMS software is used to track inventory in a warehouse. Each item in the warehouse is typically scanned as it enters and as it leaves using a RFID reader, and this information is then stored on the WMS system. WMS software may also be able to provide information such as where the item is stored in the warehouse, who delivered it, its value and its expiry date.