Glossary of Global Sourcing Terms

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Glossary of Global Sourcing Terms

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Discover the leading definitions in the Sourcing, Procurement & Supply profession.

3rd Party Logistics (3PL)

A 3PL (Third-Party Logistics) partner or service assists e-commerce merchants with supply chain management. Warehouse and inventory management, order fulfillment, shipping coordination, retail distribution, swaps, and refunds are all common 3PL services.

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Activity based costing (ABC)

Activity based costing (ABC) is a more accurate way of allocating manufacturing overhead costs because it first assesses the activities that are truly causing an expense, rather than simply allocate them on basis machine hours..

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Bill of Lading

A bill of lading (BL or BoL) is a legal document that shows the type, amount, and destination of the goods being shipped. It is given by the carrier to the shipper. When the carrier delivers the goods to a predetermined location, the bill of lading also serves as a shipment receipt. No matter how the goods are shipped, this document must go with them. It must be signed by an authorized representative from the carrier, the shipper, and the receiver.

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Cross Docking

Methods and technologies that can streamline and minimize costs in the supply chain are continually being updated and modified for particular businesses in the logistics industry. Among them is cross-docking.

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Customs Bond

A Customs Bond is a financial commitment between three parties: the surety, the principal, and CBP (Customs and Border Protection), allowing CBP to lodge a claim against the bond if the Principal fails to pay the correct amount of money for duties and taxes based on the import transaction.

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eProcurement Systems

Procurement, alternatively referred to as electronic procurement or supplier exchange, is the process of purchasing and selling supplies, equipment, works, and services using a web interface or other networked system.

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Full-Container-Load (FCL)

FCL stands for full-container-load. You pay a flat rate to hire a container for your exclusive use and for its transportation. You don’t have to fill the container, but if you don’t you’ll effectively be paying to transport thin air.

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International Freight Forwarders

Over the years, freight forwarding has become a popular and practical approach to international transport. Whether it’s personal or commercial use, freight forwarding firms coordinate the shipment from one location to another.

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Less than Container Load (LCL)

Unlike Full Container Load (FCL), which usually has a flat rate per container, LCL is charged based on the volume, set in cubic meters. LCL shipping is a cost-effective solution for smaller shipments as you only need to pay for the volume space used. At the same time it almost always cheaper than air freight.

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Nearshoring

Nearshoring is the practice of outsourcing to a country that is physically close to your own and has a time zone that is expected to be within 1-3 hours of your own. In the context of western European organizations, this term is frequently used to refer to Eastern Europe and Turkey (possibly also North Africa for some countries).

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Procurement Profiling

Procurement profiling is the process of identifying vendors who meet certain criteria. This includes looking at past performance, pricing, and other relevant data.

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Production Part Approval Process (PPAP)

Production Part Approval Process (PPAP) is used in the automotive supply chain for establishing confidence in suppliers and their production processes. Actual measurements are taken from the parts produced and are used to complete the various test sheets of PPAP.

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Scan Data

The process of 3D scanning an object is simple, however, taking the actual process of taking that 3D scan data and creating an actual CAD model is somewhat different. At Mechanical Power we use cutting-edge hardware and software to create the CAD models to eliminated errors and improve product development timeline.

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Sourcing Agent

A sourcing agent is primarily responsible for locating suppliers and manufacturers who can meet your requirements. Depending on your needs and whether they can find a solution to your problem, you can choose an independent sourcing agent or an agent from a sourcing agency.

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