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Supply Chain and Logistics Terms and Glossary
Labor Management System (LMS): A software solution which provides a means of defining / documenting the most appropriate means of performing a process or task, provides an engineered methodology for calculating standard which show how long a task should take to complete and includes tools which can be used for planning activities and reporting performance against standards.
Lading: The cargo carried in a transportation vehicle.
Laid-down cost: The sum of the product and transportation costs. The laid-down cost is useful in comparing the total cost of a product shipped from different supply sources to a customer’s point of use.
LAN: See Local Area Network
Land bridge: The movement of containers by ship-rail-sip on Japan-to-Europe moves; ships move containers to the U.S. Pacific Coast, rails move containers to an East Coast port, and ships deliver containers to Europe.
Land grants: Grants of land given to railroads during their developmental stage to build tracks.
Landed Cost: Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc. Also called Total Landed Cost or Net Landed Costs
Lane: A major origin-destination pair, i.e., traffic lane , an origin-destination pairing. A manufacturer in Chicago ships to a destination in New York, producing the Chicago to New York traffic lane.
Lash barges: Covered barges that are loaded on board oceangoing ships for movement to foreign destinations.
Last In, First Out (LIFO): Accounting method of valuing inventory that assumes latest goods purchased are first goods used during accounting period.
LCC: See Life Cycle Costs
LCL: See Less-Than-Carload or Less-Than-Container load
LDI: See Logistics data interchange
Lead Logistics Partner (LLP): An organization that organizes other 3rd party logistics partners for outsourcing of logistics functions. An LLP serves as the client's primary supply chain management provider, defining processes and managing the provision and integration of logistics services through its own organization and those of its subcontractors. Also see: Fourth Party Logistics
Lead Time: The total time that elapses between an order's placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.
Lead Time from Complete Manufacture to Customer Receipt: Includes time from when an order is ready for shipment to customer receipt of order. Time from complete manufacture to customer receipt including the following elements: pick/pack time, prepare for shipment, total transit time (all components to consolidation point), consolidation, queue time, and additional transit time to customer receipt.
Lead Time from Order Receipt to Complete Manufacture: Includes times from order receipt to order entry complete, from order entry complete to start to build, and from start to build to ready for shipment. Time from order receipt to order entry complete includes the following elements: order revalidation, configuration check, credit check, and scheduling. Time from order entry complete to start to build includes the following elements: customer wait time and engineering and design time. Time from start to build to ready for shipment includes the following elements: release to manufacturing or distribution, order configuration verification, production scheduling, and build or configure time.
Least Total Cost: A dynamic lot-sizing technique that calculates the order quantity by comparing the setup (or ordering) costs and the carrying cost for various lot sizes and selects the lot size where these costs are most nearly equal. Also see: Discrete Order Quantity, Dynamic Lot Sizing
Least Unit Cost: A dynamic lot-sizing technique that adds ordering cost and inventory carrying cost for each trial lot size and divides by the number of units in the lot size, picking the lot size with the lowest unit cost. Also see: Discrete Order Quantity, Dynamic Lot Sizing
Leg: A portion of a complete trip which has an origin, destination, and carrier and is composed of all consecutive segments of a route booked through the same carrier. Also called Bookable Leg.
Less-Than-Carload (LCL): Shipment that is less than a complete rail car load (lot shipment).
Less-Than-Truckload (LTL) Carriers: Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.
Lessee: A person or firm to whom a lease is granted.
Lessor: A person or firm that grants a lease.
Letter of credit (LOC): An international business document that assures the seller that payment will be made by the bank issuing the letter of credit upon fulfillment of the sales agreement.
Leverage: Taking something small and exploding it. Can be financial or technological.
License Plate: A pallet tag; refers to a uniquely numbered bar code sticker placed on a pallet of product. Typically contains information about product on the pallet.
Life Cycle Cost (LCC): In cost accounting, a product’s life cycle is the period that starts with the initial product conceptualization and ends with the withdrawal of the product from the marketplace and final disposition. A product life cycle is characterized by certain defined stages, including research, development, introduction, maturity, decline, and abandonment. Life cycle cost is the accumulated costs incurred by a product during these stages.
Lighter: A flat-bottomed boat designed for cross-harbor or inland waterway freight transfer. While the terms barge and lighter are used interchangeably, a barge usually refers to a vessel used for a long haul, while a lighter is used for a short haul.
LIFO: See Last In, First Out
Lift-On Lift-Off: Vessel of which the loading and discharging operations are carried out by cranes and derricks.
Lift truck: Vehicles used to lift, move, stack, rack, or otherwise manipulate loads. Material handling people use a lot of terms to describe lift trucks, some terms describe specific types of vehicles, others are slang terms or trade names that people often mistakenly use to describe trucks. Terms include industrial truck, forklift, reach truck, motorized pallet trucks, turret trucks, counterbalanced forklift, walkie, rider, walkie rider, walkie stacker, straddle lift, side loader, order pickers, high lift, cherry picker, Jeep, Towmotor, Yale, Crown, Hyster, Raymond, Clark, Drexel.
Line: 1) A specific physical space for the manufacture of a product that in a flow shop layout is represented by a straight line. In actuality, this may be a series of pieces of equipment connected by piping or conveyor systems. 2) A type of manufacturing process used to produce a narrow range of standard items with identical or highly similar designs. Production volumes are high, production and material handling equipment is specialized, and all products typically pass through the same sequence of operations. Also see: Assembly Line
Line functions: The decision-making areas associated with daily operations. Logistics line functions include traffic management, inventory control, order processing, warehousing, and packaging.
Line-haul shipment: A shipment that moves between cities and distances over 100 to 150 miles.
Line Scrap: Value of raw materials and work-in-process inventory scrapped as a result of improper processing or assembly, as a percentage of total value of production at standard cost.
Liner service: International water carriers that ply fixed routes on published schedules.
Link: The transportation method used to connect the nodes (plants, warehouses) in a logistics system.
Linked Distributed Systems: Independent computer systems, owned by independent organizations, linked in a manner to allow direct updates to be made to one system by another. For example, a customer's computer system is linked to a supplier's system, and the customer can create orders or releases directly in the supplier's system.
Little Inch: A federally built pipeline constructed during World War II that connected Corpus Christi and Houston, Texas.
Live: A situation in which the equipment operator stays with the trailer or boxcar while it is being loaded or unloaded.
LLP: See Lead Logistics Partner
LMS: See Labor Management Systems
Load factor: A measure of operating efficiency used by air carriers to determine the percentage of a plane’s capacity that is utilized, or the number of passengers divided by the total number of seats.
Load Tender (Pick-Up Request): An offer of cargo for transport by a shipper. Load tender terminology is primarily used in the motor industry.
Load Tendering: The practice of providing a carrier with detailed information and negotiated pricing (the tender) prior to scheduling pickup. This practice can help assure contract compliance and facilitate automated payments (self billing).
Loading allowance: A reduced rate offered to shippers and/or consignees who load and/or unload LTL or AQ shipments.
Loading Port: The port where the cargo is loaded onto the exporting vessel. This port must be reported on the Shipper's Export Declaration, Schedule D and is used by U.S. companies to determine which tariff is used to freight rate the cargo for carriers with more than one tariff.
LOC: See Letter of Credit
Local Area Network (LAN): A data communications network spanning a limited geographical area, usually a few miles at most, providing communications between computers and peripheral devices.
Local rate: A rate published between two points served by one carrier.
Local service carriers: An air carrier classification of carriers that operate between areas of lesser and major population centers. These carriers feed passengers into the major cities for less populous areas.
Location Tag: A bar coded sign that hangs above or on a warehouse location. The location number can be read from the tag or scanned with an RF gun.
Locational determinant: The factors that determine the location of a facility. For industrial facilities, the determinants include logistics.
Locator System: Locator systems are inventory-tracking systems that allow you to assign specific physical locations to your inventory to facilitate greater tracking and the ability to store product randomly. Location functionality in software can range from a simple text field attached to an item that notes a single location, to systems that allow multiple locations per item and track inventory quantities by location. Warehouse management systems (WMS) take locator systems to the next level by adding functionality to direct the movement between locations.
Lockbox: A method for receiving payments where customers make their remittance directly to a bank or other financial institution rather than to the invoicing company. The bank then applies the funds received directly to the company’s account, and provides the company with a listing (printed or electronic) of all the payments received.
Logbook: A daily record of the hours an interstate driver spends driving, off, duty, sleeping in the berth, or on duty but not driving.
Logistics: The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements.
Logistics Channel: The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.
Logistics Chain Manager: Plans appropriation of logistics chain resources to meet logistics chain requirements.
Logistics Data Interchange (LDI): A computerized system to electronically transmit logistics information.
Logistics Management: As defined by the Council of Supply Chain Management Professionals (CSCMP): Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements. Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution—strategic, operational, and tactical. Logistics management is an integrating function which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions, including marketing, sales, manufacturing, finance, and information technology.
Logistics Service Provider (LSP): Any business which provides logistics services. Includes those businesses typically referred to as 3PL, 4PL, LLP, etc. Services may include provisioning, transport, warehousing, packaging, etc.
LO-LO: See Lift On / Lift Off
Long ton: Equals 2,240 pounds.
Lot Control: A set of procedures (e.g., assigning unique batch numbers and tracking each batch) used to maintain lot integrity from raw materials, from the supplier through manufacturing to consumers.
Lot-for-Lot: A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period. Also see: Discrete Order Quantity
Lot Number: See Batch Number
Lot size: The set quantity of goods to be purchased or produced at one time in anticipation of use or sale in the future.
Lot Sized System: See Fixed Reorder Quantity Inventory Model
LTL: See Less-than-truckload Carriers
LSP: See Logistics Service Provider
Lumping: A term applied to a person who assists a motor carrier owner-operator in the loading and unloading of property: quite commonly used in the food industry
Lumpy demand: See Discontinuous Demand
Download the entire glossary in pdf format (1.2MB).
Definitions compiled by Supply Chain Visions, Bellevue, WA, www.scvisions.com. Updated May 2009.
Please note: The Center for Value Chain Research (CVCR) does not take responsibility for the content of these definitions, nor does the CVCR endorse these as official definitions except as noted.