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Like any industry, the FMCG industry has a multitude of terms that are frequently used. When it comes to FMCG logistics, it’s the same game. There are again several industry-specific terms that if you don’t know being in the FMCG logistics segment, understanding its basic operations might seem very difficult to you.
On the contrary, knowing these terms can make your task a lot easier. This is why we have come up with this complication of the most frequently used terms in FMCG logistics. So, let’s break it all.
FMCG are goods that move faster from a retail outlet.
It is a service through which date information is applied on products, packaging, and labels by using an inkjet date coding machine.
It is a service by which the label of the goods is translated into the language of the country of destination. For instance, many logistics companies in Dubai provide Arabic translation services.
It is the service through which labels are printed and stickered.
The number of outlets at which a company’s products are available is called numeric distribution. It is also calculated as the percentage of outlets where a company’s product is present. Remember, only those outlets are considered here that have at least one SKU of a product.
The percentage of the total sales volume coming from the served outlet is called weighted distribution.
Note: While you get an idea of the reach of distribution through numeric distribution whilst weighted distribution bestows you with an idea of the quality of distribution.
A Stock Keeping Unit or SKU is a number that is assigned to a product so that inventory management and record-keeping become easy.
It is the document issued to the shipper that contains details about the contents, method as well as destination of a shipment. It acts as a receipt for the cargo and the proof of authority or ownership to pick up and deliver.
The INCO or Incoterms are the international commercial terms published by the International Chamber of Commerce defining the rights and responsibilities of each party to a sales contract. They provide clarification on the legal ownership of goods transfers from buyer to seller.
3PL or 3rd Party Logistics are the companies that provide outsourced services such as warehousing, distribution, and fulfillment. These companies are becoming increasingly common in the logistics industry as they provide more efficient product handling.
These are the software applications that help in automating and optimizing warehouse, distribution, and fulfillment logistics.
It is the final bill for charges that are due on a shipment of goods. It is used for clearing Customs as it provides the total cost on which duties are assessed.
It is the statement that certifies the origin of goods i.e., where the goods were manufactured.
Quite different from logistics, overhead, or marketing costs, COGS are the direct costs of manufacturing a product.
These were just a few most frequently used terms in FMCG logistics. There are plenty more such as MPF, VAT, etc. Knowing these terms will help you comprehend the FMCG logistics operations more easily and perform them more efficiently. CJ Cherryh has very rightly said “Trade isn’t about goods. Trade is about information. Goods sit in the warehouse until information moves them.”
Yes, folks! Information is the key in every business operation and logistics is no different. In fact, it is even more dependent on information as it requires you to not only support customers but also make important business decisions. Hopefully, the list of logistics terminologies will help you perform your job better. If you know any FMCG logistics terms that you think people should know, you can share them in the comments section below.
14 March 2022
