CPG glossary
CPG operations, in plain English.
The terms retailers, 3PLs and co-packers assume you already know.
- MABD · Must-arrive-by date
- Must-arrive-by date: the date a retailer requires a shipment to arrive at its DC. Missing it usually means a late-delivery fine.
- OTIF · On-time, in-full
- On-time, in-full: the share of orders delivered on the required date with every unit ordered. Many retailers fine suppliers who fall below target.
- ASN · Advance ship notice
- Advance ship notice: an electronic notice (often EDI 856) telling the retailer what is on a shipment before it arrives. Late or inaccurate ASNs are a common chargeback.
- Routing · Retailer-booked freight
- For many retailers, the retailer books the carrier. The supplier requests routing by a deadline before the ship date.
- Chargeback · A fine off your invoice
- A fee a retailer deducts from a payment, usually for compliance issues like late delivery, labeling or ASN errors.
- Deduction · Money taken off a payment
- Any amount a retailer subtracts from what it pays: chargebacks, shortages, pricing differences, promotions or returns. Many are disputable.
- Claim window · Time left to dispute
- The period in which a supplier can dispute a deduction. After it closes, the money is usually gone.
- Multi-DC PO · One PO, several DCs
- A single purchase order split across several retailer distribution centers, each with its own quantities and ship-to.
- DC · Distribution center
- A retailer’s distribution center, where suppliers deliver before goods go out to stores.
- Case pack · Units per case
- How many sellable units come in one case. Mismatches between systems cause order and inventory errors.
- TI × HI · Pallet configuration
- Cases per layer (TI) × layers per pallet (HI). It determines pallet counts on the BOL.
- BOL · Bill of lading
- The freight shipping document that travels with a shipment and serves as proof of what was handed to the carrier.
- GS1-128 · Compliant case label
- The barcode label standard many retailers require on cases and pallets.
- Lot · A batch with an expiry
- A production batch with its own lot number, expiration date and cost. The unit you trace in a recall.
- FEFO · First-expired, first-out
- Allocating the lot that expires soonest first, while meeting each retailer’s minimum shelf life at ship.
- FIFO · First-in, first-out
- Allocating the oldest lot first.
- 3PL · Third-party logistics
- An outside warehouse that stores and ships your product, usually with its own portal and inventory counts.
- Co-packer · Contract manufacturer
- A company that manufactures and packages your product for you, typically on its own schedule with your materials.
- BOM · Bill of materials
- The materials needed to make one unit of a SKU. It drives material planning and COGS.
- COGS · Cost of goods sold
- What it cost to make the product you sold: materials, labor and production costs.
- Landed margin · Margin you actually keep
- Margin after freight, fulfillment, trade spend and deductions, not just price minus COGS.
- Weeks on hand · How long stock lasts
- Current inventory divided by the weekly sell rate. Low WOH means stockout risk; high means cash tied up.
- TPR · Temporary price reduction
- A short-term retail price promotion, usually funded by the brand through off-invoice or billback.
- Month-end close · Closing the books
- Finalizing a month’s inventory, COGS, receivables, payables and accruals so the numbers can be reported.
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