Glossary
Forty stocktaking and warehouse inventory terms, defined.
Forty terms used across stocktaking, cycle counting and warehouse inventory management, in plain language. They are grouped by subject rather than listed alphabetically, because a term is usually easier to find by what it is about.
How a count is run
- Stocktake
- A count of stock carried out to check or correct the records in a warehouse management system. It can cover the whole building at once, known as wall to wall, or run continuously as cycle counts. See how to run a warehouse stocktake.
- Wall to wall count
- A single count that covers every pallet position in a building in one exercise, as opposed to a rolling cycle count. It is the traditional annual stocktake, and the one most likely to need a shutdown when done by hand. See wall to wall stocktaking.
- Cycle count
- A count of a subset of stock on a rolling schedule, rather than counting everything at once. Frequent cycle counts hold accuracy steady across the year instead of restoring it once. See continuous cycle counting.
- Blind count
- A stock count carried out without the counter seeing the quantity the system expects to find. It is used to stop expectation biasing what gets written down.
- Perpetual inventory
- A stock system that is updated continuously as items move, rather than corrected only at a periodic count. Cycle counting is what keeps a perpetual inventory system honest between full counts.
- Reconciliation
- Comparing a physical count against the stock records in a system and identifying where they disagree. The output of reconciliation is a list of discrepancies, not a single accuracy number.
- ABC analysis
- A way of ranking stock by importance, usually by value or how often it moves, into groups labelled A, B and C. A items get tighter control and more frequent counting than C items.
Accuracy and what goes wrong
- Inventory accuracy
- The share of stock records that match what is physically on the racking, for both quantity and location. It is usually stated location by location rather than as a single average. See how accuracy is measured.
- Stock discrepancy
- Any case where the physical stock on the racking does not match what the system holds, whether in quantity, location or both. Sentispec Inventory reports four specific types of discrepancy behind every count.
- Shrinkage
- The loss of stock between it being recorded in the system and it being available to sell or use, from causes such as damage, theft, administrative error or expiry. It is usually expressed as a value or a percentage of stock held.
- Write off
- Removing stock from the system's records because it has been confirmed lost, damaged, expired or otherwise unusable. A write off is the final step after a discrepancy has been investigated, not the discrepancy itself.
- Dead stock
- Stock that has stopped moving and is unlikely to sell or be used again. It ties up racking space and working capital until it is written off or cleared.
- Obsolete stock
- Stock that can no longer be sold or used, typically because the product has been superseded or has expired. It differs from dead stock in that obsolete stock usually cannot be sold at any price.
- Quarantine stock
- Stock held separately and excluded from normal picking, usually pending a quality check, a hold instruction or an investigation. It should still appear in a stock count, flagged as unavailable rather than missing.
Where stock sits
- Bay
- A single vertical section of racking, made up of the shelf levels stacked above one floor position. A run of bays along an aisle forms a rack row.
- Bin location
- A specific, addressable storage spot within a warehouse, identified by a code so a system can point to exactly where an item sits. Also called a location code or a slot.
- Pallet position
- A single, specific location in racking or on the floor sized to hold one pallet. A wall to wall count checks every pallet position in a building, occupied or empty.
- Pick face
- The specific location a picker takes an item from during normal order fulfilment, usually the ground or first level position closest to the aisle. Reserve stock above or behind it replenishes the pick face as it empties.
- Selective racking
- The most common racking type, where every pallet position is directly accessible from the aisle without moving another pallet first. It trades some storage density for full, immediate access to every position.
- Double deep racking
- A racking layout where pallets are stored two positions deep instead of one, reached with a special forklift attachment. It increases density but means the front pallet has to move before the back one can be reached.
- High bay racking
- Racking built taller than standard to maximise storage density on a fixed floor area, reached with a reach truck or a specialist high level truck. Counting the top levels by hand typically needs a person lifted up to read the label.
- Narrow aisle
- An aisle width, often abbreviated VNA for very narrow aisle, built tight enough to need a purpose built forklift that cannot turn within the aisle. It increases storage density at the cost of general forklift access.
- Block stack
- Pallets stacked directly on top of each other on the floor, without racking. Common for high volume, low variety stock where racking would be wasted capacity.
- Staging area
- A floor area set aside for stock that is between two stages of handling, such as goods waiting to be put away or orders waiting to be loaded. Stock in a staging area is easy to miss in a manual count because it has no fixed racking position.
How stock moves
- Goods receipt
- The point at which incoming stock is checked in and recorded in the warehouse management system. Errors made at goods receipt are a common cause of discrepancies found much later in a stocktake.
- Put away
- Moving received stock from goods receipt to its storage location and recording where it ended up. A put away error, where the system location does not match the physical one, is one of the most common causes of a discrepancy.
- Order picking
- The process of retrieving specific items from storage to fulfil an order. It is usually the single largest labour cost in a warehouse, which is why picking accuracy and stock accuracy are closely linked.
- Replenishment
- Moving stock from reserve or bulk storage to a pick face to keep it available for order fulfilment. Replenishment timing and stock accuracy affect each other: a wrong location record sends replenishment to the wrong place.
- Slotting
- Deciding which stock goes in which location, usually to put fast moving items closer to the aisle or the pick face and slower moving items further away. Good slotting reduces travel time and picking labour.
- Cross docking
- Moving goods from an inbound delivery straight to an outbound one, with little or no time in storage between. It reduces handling and storage cost for fast moving stock.
- Kitting
- Assembling several individual items into a single pre-packed set before it is stored or shipped as one unit. The individual items and the finished kit are usually tracked as separate stock records.
Identity and sequence
- SKU
- Stock keeping unit: the smallest distinct item a business tracks separately in inventory, down to variations in size, colour or pack size. Each SKU has its own stock record, separate from the handling units it is stored in.
- LPN
- Licence plate number: a unique identifier assigned to a handling unit, most often a pallet, so a warehouse system can track it as one object regardless of what it contains. LPN translation, mapping the identifiers a warehouse uses to the ones a system expects, is validated during deployment.
- Handling unit
- Any single load moved and stored as one object, most often a pallet, but also a cage, a tote or a carton. Stocktaking counts and reconciles handling units, not individual items inside them.
- Lot number
- An identifier given to a batch of stock produced or received together, used to trace that batch through the warehouse and, if needed, recall it. Common in food, pharma and manufacturing.
- FIFO
- First in, first out: a stock rotation rule where the item that arrived first is picked or shipped first. It is the default rotation method where product does not have a fixed expiry.
- FEFO
- First expired, first out: a stock rotation rule where the item closest to its expiry date is picked or shipped first, regardless of when it arrived. Common in food, pharma and other perishable stock.
Planning numbers
- Safety stock
- Extra stock held above expected demand to absorb variability in usage or in supplier lead time. It is a buffer against running out, not working stock for normal turnover.
- Lead time
- The time between placing an order for stock and having it available to use or sell. Longer lead times generally mean more safety stock is needed to avoid running out.
- Inventory turnover
- How many times stock is sold or used and replaced over a given period, usually a year. A low turnover figure for a given item is often the first sign it is drifting towards dead stock.
These terms are used throughout the guides and the FAQ. For sector specific language, see industries.
Next step
See these terms applied to a real discrepancy list.
A 30 minute call working through a live discrepancy report, using your own racking and label format.