Inventory Management Terminology Guide

Warehouse

Warehouse is a container for stored goods. Its purpose is to protect products, ensure uninterrupted production and business operations, and record the status of goods by category. Warehouse management provides clear charts and consolidated views showing quantity and quality status, geographic location, Dept. ownership, related orders, and distribution of stored goods.

Inventory

Inventory refers to the products physically stored in a Warehouse. Controlling appropriate Inventory levels means maintaining adequate stock with minimal investment and management cost to meet demand and reduce stockout losses.

Shipping Order

A Shipping Order documents the dispatch of products from the company to a specified recipient or organization. It serves as the shipment, delivery, transportation, and acceptance record, and is an important basis for recognizing sales.

Return Order

A Return Order is used when customers return purchased goods to the company due to errors or quality issues.

Inbound Order

An Inbound Order confirms the quantity of physical goods received into a Warehouse and provides oversight of purchasing staff and Supplier performance. Without Inbound Order control, companies risk collusion between purchasers and Suppliers, false reporting of purchase quantities, and shortages. It is an important internal control document.

Outbound Order

An Outbound Order confirms the quantity of physical goods leaving a Warehouse and monitors outbound Inventory operations. Without Outbound Order control, goods may be lost or become short without traceability, causing unnecessary financial loss. It is an important internal control for Inventory Management. Outbound Orders relate to Warehouse, Inventory, batches, serial numbers, and other objects.

Transfer Order

A Transfer Order records the movement of goods between different Warehouses within the same company. It decreases Inventory in the originating Warehouse and increases Inventory in the receiving Warehouse. Transfer Orders help balance Inventory supply and consumption.

Inventory Check Sheet

An Inventory Check Sheet documents periodic or ad-hoc physical counts of a Warehouse and records differences between ledger quantities and actual counted quantities.

Purchase Order

A Purchase Order is a practical procurement plan created based on factors such as Sales Order quantities, Inventory levels, and in-transit quantities.

Purchase Return Order

After a Distributor purchases from a brand, a Purchase Return Order handles returns for reasons such as expiration, damage, or poor sales. It updates the related Purchase Order records and adjusts Inventory accordingly.

Serial Number

For large equipment, a Serial Number (also called a machine code) is used for anti-counterfeiting. Each device has a unique Serial Number, similar to an identification number.

Batch

In fast-moving consumer goods and medical industries (drugs, reagents), Batch is a common concept. Due to manufacturing processes or materials, products from different Batches may differ in attributes. For purposes such as Shelf Life management and quality traceability, Batch management enables clear distinction and control.