Warehouse Vocabulary 101 – The Pallets of Penzance!

My apologies to Gilbert and Sullivan for the operatic parody, but…This is the very model of a modern major warehouse blog, it’s information basic and it even has an epilogue! Welcome warehouse newbies and I promise this won’t be a slog. If slotting goods makes no sense, then settle back we’ll fill your nog!

This post is a primer to an upcoming educational track, October 13, 2020, comprised of three Advanced Warehouse Management sessions. In the first session, we will review and expand on the topic of this blog. This is a FREE learning opportunity and  you can join HERE! Plus check out the remaining 7 tracks, at our Dynamics Digital Academy, running through December HERE

Advanced Warehouse management online learning

Now, on to the show! It is impossible to build an actual warehouse without a foundation and so in order to understand a warehouse we must also start with the vocabulary foundation. That means deciphering what all of warehouse gurus are babbling about when you walk up to them in mid conversation. Like for instance, what is a Warehouse? I am glad I asked. In its most simplistic form, a warehouse is a room, big or small, that has lots of items stored in it. Now that we have that out of the way, let’s get serious with some scary acronyms and mildly familiar terms:

WMS – Is a Warehouse Management System. It is the generic name bestowed upon the software part of an organization that handles inventory and order fulfillment. A WMS can partner with a TMS (Transportation Management System for shipping needs) and gives broader abilities than that of an IMS, an Inventory Management System.

  • AWS – Why have a WMS when you can have an AWMS. The Advanced Warehouse Management system adds in some of the following:
    • Mobile devices
    • License plating
    • Inventory status
    • Zones

RTW – is Release to Warehouse. This is the process in which a user or the system schedules work for the warehouse.

  • Releasing work can be done from the RTW form or Sales orders. It can be automated using configured set-up, and Load planning (Release a load).
  • D365 has a feature to enhance this process using the Release to warehouse rule. This must be enabled in the system and configured
    • It can add configuration options for each warehouse, Partial order lines, advanced cross-docking.

Slotting – Warehouse slotting is a way in D365 to consolidate demand by item and unit of measure based on sales orders and assist with location replenishment.

  • This functionality must be turned on in D365 by an administrator.

Work – This one is easy. Work is what is performed by a user such as receiving, picking, packing, etc. Work is good. Work pays the bills. Yay work!

WMA – The Warehouse Mobile App makes work easier, although sometimes it seems the opposite when we hear the user arguing with the mobile device. The WMA can be anything from a very specific device designed only for warehouse use or a simple app on a table or phone.

Locations – A warehouse is broken up into many parts during the architecture phase of design. These parts can consist of: Aisles, Racks, Shelves, and pick bins. Other terms common for locations: Reserve, overstock, closeout, or custom. They can be configured to meet the needs of each organization.

  • Locations have profiles that determine the properties for each location.
    • Will the location allow License plating, mixed inventory?

Location directives inform the user how to proceed with inventory movement in the warehouse.

  • Once set-up, the directive will directly direct the user in the right direction. Meaning, when a User starts a pick action, the system will look at the item and find the first available location based on the directive.
    • This can be set-up for pick and put. 

Zones – Zones are additional configurations in the warehouse that group locations. With zones, a company can designate areas of like products, high velocity products, or finished good components.

  • Example: If Product 123 is made up of 4 components, these four components might be best stored in a zone for efficiency.

Pallet ID  – A pallet ID is used in standard Warehouse Management to allow the company to scan and track product

  • LP – License plate is an ID number placed on a pallet, carton or other container, and used to track the contents of that container as it moves through the warehouse. It normally will have a barcode that contains the ID number for use in scanning. Scanning the LP can initiate or complete movement transactions for all items and quantities on the LP.

Waves – If someone is waving at you in the warehouse, they might be friendly, or they might just be sending you work. A Wave is a collection of order lines released to the warehouse. The term Wave process might also be used in this context.

  • A Wave is configured to help group like orders for processing as they are released to the warehouse.
  • Wave templates are setup in advance and help to assist the user with basic parameters used to gather the work when creating the wave.
    • Waves can be created automatically or manually
  • Different types of waves in D365: Shipment, Production, Kanban

Zone picking

  • When Zone are used, zone picking allows a worker to remain in one small area. Work will be assigned to a specific zone and if applicable, passed to another zone.  Bonus term: This is sometimes called the “Pick and Pass”

Cluster picking – Cluster  picking allows the user to pick items from multiple orders at the same time by organizing work in the same location into clusters. There are several parameters: Number of orders, break cluster, number of positions, etc. This is also referred to as “Cart picking.”

Cycle Count

  • A Cycle count is a physical count of an inventory location that is matched against the system on-hand.
    • There is checks and balances functionality in D365
    • Example: If a difference exists, the work line will move to Pending Review and require further action.
      • Cycle count supervisor – This is a Worker parameter that overrides the check
  • Random thought: Inception would be a Cycle count at a Harley Davidson warehouse.


  • If the business is doing well, the pick bins will get empty. That means it is time for Replenishment. There can be several approaches to replenishment: Wave demand, Min/Max, Load demand, and Immediate.
  • An organization could have custom reports, notification on mobile devices, or manual work requests.
  • Once a request is made a warehouse worker will typically move inventory from a bulk location such as reserve, to the requested pick bin.

MIN/MAX – This setting allows the user to establish a minimum and maximum inventory position.

Containers – Can be boxes, pallets, etc.

  • Containers are opened and closed
  • Mixing constraints – Allow for system to prohibit items

Shipment – A shipment is what is typically sent to a single destination (delivery address) and can be made up of many containers and sales orders.

Loads – In D365, a load is the system name for a grouping of products on sales and purchase orders.

  • Loads can be built based on supply and demand from purchase orders, transfer orders, and sales orders
  • Load planning workbench is a tool in D365 that allows a user to create loads by selecting specific orders or order lines to be grouped into a load.
  • Load templates are designed to help the user define attributes about the load. What equipment is being used, the load dimensions helps to set the parameters when creating the load. Stack load on floor, tells the system that it is ok to go wall-to-wall and ceiling to floor when loading inside the shipping container.
  • A load can be made up of a shipment or multiple shipments and can be incoming or outgoing.

Cross docking – Is not what a minister does prior to bed, it is quite the warehouse operation. A cross dock shipment is configured in a way to allow the recipient to parse the larger shipment into smaller pieces to be sent to other locations.

  • Example:
    • Vendor A (Widget Maker) produces 100 widgets packaged in 4 boxes and shipped to Customer A
    • Customer A receives the shipment at a distribution warehouse and using cross docking, splits it into the 4 boxes, each of which is subsequently going to be sent to individual retail locations.
    • Customer A can do this for multiple incoming vendor shipments to save on shipping costs to the individual retail locations and help control inventory.

Consignment – Consignment inventory is product that a company receives from a vendor without paying. The product is stored until it is used or sold, at which point payment is due.

I hope this was a helpful exercise in understanding some familiar warehouse speak. Looking back, not only did we piece together some terms to create a foundation for some warehouse knowledge, we even managed to cobble together a few walls.

Thanks for reading! You may also be interested in… 

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