ERP Glossary

Here you will find some of the most common words and abbreviations from the ERP community. We have also included some book-keeping words for your convenience. If you find some errors or would like to add a word / explanation, please contact us on



Abbreviation; see Third Party Logistics Provider.


Advanced Shipment Notification

This is an electronic notification of a shipment in EDI. It is commonly referred to as an 856 document. Typically, the data that is transmitted includes the products’ description and quantities, lot data, customer purchase reference information, carrier, and configuration of shipment. ASNs are frequently required by large trading partners such as Walmart, and inaccuracies in the transmitted data subject the vendor to fines and other charges.



Abbreviation; see Advanced Shipment Notification.



Batch is used in many different ways in food and nutraceuticals. Historically, the term “batch” referred to all components or products that are completed at a workstation before being moved to the next one. Mixing is a commonly understood batch determinant, as it involves the creation of a single “batch” from multiple product inputs (ingredients). Because the outputting of separate production batches presents a logical point for lot assignment, it has become increasingly common for the term “batch” to be synonymous with “lot,” implying a unique identifiable output. Depending upon the organization, the terms “batch” and “lot” may be interchangeable, mean different things depending upon context or use, or may always be defined differently.



Abbreviation; see Business Intelligence.


Bill of Materials

Bill of materials is the term used to identify the various raw materials, intermediate products, components and packaging needed to manufacture an end item (finished good). All bills of materials represent a list of components in a hierarchical manner, with the finished product at the top. Manufacturing bills of materials are commonly used in food and nutraceuticals and may be referred to as “formulas,” “recipes,” or “ingredients lists,” and each may behave differently in terms of the production planning and execution process.



Abbreviation; see Bill of Materials.


Break Bulk

The process of breaking apart a container (such as a pallet) down into the individual units (such as cases, boxes, or bags) that were stored within it. Break bulk may be performed intentionally as part of a loading or unloading process. It may also be necessary to record unintended break bulk activities.


Business Intelligence

A set of tools or software that transforms data from an ERP software into real-time, easy-to-understand business information. The information is often presented in a graphical format to facilitate fast, accurate business decision-making.


Capacity Requirements Planning

The process of calculating the production capacity that a business requires to meet planned and actual demand.


Certificate of Analysis

A document issued by a manufacturer, vendor, exporter, importer, or accredited firm or individual (such as an independent laboratory or testing organization) that certifies the quality, purity, and/or adherence to specifications of an accompanying product. It is sometimes known as a Certificate of Inspection in some organizations.



Abbreviation; see Current Good Manufacturing Practice.


Cloud Computing

A method allowing users to connect to their ERP software over the internet, as opposed to using hardware located inside the organization. Cloud computing makes it unnecessary to create and maintain a hardware infrastructure onsite, and eliminates the associated costs.


COA or CofA

Abbreviation; see Certificate of Analysis.



Abbreviation; see Customer Relationship Management.



Abbreviation; see Capacity Requirements Planning.


Containment Units

Any type of container that directly touches a food product for interim storage, processing, handling, transporting, or storage. Containment units are generally not, however, the units that are used for packaging. Examples include bins, barrels, trays, boxes, etc. As used in this document, a containment unit exists as a “touch point” for traceability purposes, but is usually not included as part of the final product.



Abbreviation; see Country of Origin Labeling.


Country of Origin

The originating country for a consumer food product. As regulated by the USDA, packers and processors that supply certain covered commodities to their retail customers must provide Country of Origin Labeling data to those retailers. This information can be supplied in a number of ways, such as including the information on invoices or other transaction documents, providing the labels to the retailer, or labeling the product directly.


Country of Origin Labeling

The labeling of consumer food products with the country of origin. Labeling can be either voluntary or mandatory, depending upon the item/commodity. See also Country of Origin for additional information.


Current Good Manufacturing Practice

This refers to the Current Good Manufacturing Practice regulations of the FDA, which require that manufacturers, processors, and packagers of various food and drug products take specific steps to ensure that their products are safe, pure, and effective. Regulations include recordkeeping, personnel qualifications, sanitation and cleanliness practices, equipment, processing, and complaint validation.



The person, organization, or entity that has the food product under their direct physical control.


Customer Relationship Management

A software or function aimed at helping an organization improve customer-facing processes by capturing, tracking, and analyzing customer interactions across the entire customer lifecycle.


Direct Store Delivery

A form of distribution where the distributor/supplier or manufacturer sells and distributes goods directly to the retailer’s Point of Sale (PoS), skipping the retailer’s distribution center.


Drop Ship

Items which are purchased by an organization and are shipped directly to one of that organization’s customers or vendors.



Abbreviation; see Direct Store Delivery.



Abbreviation; see Electronic Data Interchange.


Electronic Data Interchange

The structured transmission of data between organizations by electronic means. Generally used to transmit specific electronic documents, such as a purchase order or invoice, between one trading partner and another. The goal of EDI is to eliminate the use of physical documents and the resultant need for re-entry of data or other data manipulation. As such, it requires a structured set of data in order for multiple systems to understand the information; in North America, the ANSI X.12 standard is used, while the UN/EDIFACT is the international standard.


Enterprise Resource Planning

A system that helps an organization manage its processes more efficiently and effectively through the integration of crucial business areas, including finance, inventory, procurement, sales, warehousing, and manufacturing.



Abbreviation; see Enterprise Resource Planning.



Abbreviation; see First Expired, First Out.


First Expired, First Out

A picking methodology in which product with an earlier expiration date is picked for inclusion on a shipment, as part of a production activity, or any other sort of usage ahead of identical products that expire at a later time. FEFO picking is common in environments that deal primarily with perishable products, such as food, as it ensures that items are used before they expire.


Fixed Assets

Assets that are necessary for production or distribution, but that do not directly generate cash. Examples of fixed assets include equipment, vehicles, and facilities.



A formula is a bill of materials that defines the relationship of each ingredient as a percentage of the BOM as a whole. Because key attributes of a given ingredient may vary on a lot-by-lot basis, a formula-based BOM system must have the ability to dynamically change an ingredient’s percentage based on user-defined rules.



Abbreviation; see Hazard Analysis & Critical Control Point.


Hazard Analysis & Critical Control Point

A process established by the FDA/USDA for pharmaceutical and food processing in order to prevent foodborne illnesses. HACCP is used in the food industry to identify potential food safety hazards so that key actions, known as Critical Control Points (CCPs), can be taken to reduce or eliminate the risk of the hazard realization.



Any type of action that prevents a product or product lot from moving from one processing stage to the next. Common reasons for placing a product on hold include inspection, testing, re-processing, or quality failure.


Integrated System

An enterprise-wide information structure that includes all of the functional processes within the context of a single system. This may include multiple programs, but is characterized by the sharing of common data, no re-entry of information from one application to another, and consistent data in all modules of the application.


Key Performance Indicator

An approach to helping a business achieve its goals through the development of agreed-upon critical performance targets and the measurement of progress towards those targets. Key performance indicators can be defined and applied at every level of the business.



Abbreviation; see Key Performance Indicator.



A lot is a set of product units that have been produced, processed, or packaged under similar circumstances. A lot may be measured as a single unit of product, but is oftentimes comprised of multiple units. The identification of a lot is established beforehand by organizations using a consistent and documented method of determining the lot numbering or coding system. A lot code refers to a unique series of letters, numbers, or a combination of both, by which any food or drug can be traced in manufacturing and identified in distribution.


Machine Center

Machine centers are the lowest level of a facility in the production hierarchy and represent a machine, a group of machines with identical characteristics, a person, or a group of people. The extent to which machine centers need to be defined can be determined by the user, but usually only those resources that need to be monitored, or tend to be bottlenecks, are designated as machine centers. When a production order is scheduled to a machine center, it consumes that machine center’s capacity, reducing availability. A machine center is measured only in terms of its own capacity, since there are no facilities beneath it in the production hierarchy. Multiple machine centers can comprise a work center (see Work Center). Overhead and other production-related costs can be applied through the machine center. Additionally, as used in bcFood, a machine center allows for the definition and recording of capacity, queues, setup, wait and move times, scrap amounts, min/max process times, and more advanced scheduling functions. A machine center is often a data collection point for traceability or HACCP purposes.


Master Production Schedule

A manufacturing and planning schedule used to plan the quantity of items needed within a specific timeframe by taking into account forecasts, demand, potential bottlenecks, and raw material requirements.


Material Handling Unit

In bcFood, a material handling unit represents product(s) aggregated in such a way as to facilitate physical handling and tracking. A typical aggregation is the palletizing of product, in which products are grouped together on a pallet. The contents of the pallet must be tracked within the four walls of the organization, but the pallet and its contents do not constitute a selling, production, or costing unit of measure. As a result, it necessary to utilize a material handling unit for the purpose of recording physical movements. Every material handling unit must be uniquely identified, as the contents of the unit may have individual product/lot identities. The material handling unit represents a convenient way to accurately track product without having to take extra steps.


Material Requirements Planning

A system used to plan production, scheduling, and inventory. An MRP system ensures that enough materials are available for production, enough finished products are available for customer deliveries, and that the lowest amount of materials and products needed are on hand. MRP also plans manufacturing and purchasing activities, as well as delivery schedules.



Abbreviation; see Material Handling Unit.



Abbreviation; see Master Production Schedule.



Abbreviation; see Material Requirements Planning.



Abbreviation; see Programmable Logic Controller.



Abbreviation; see Proof of Delivery.



Abbreviation; see Point of Sale.


Point of Sale

The time and place that a sales transaction takes place. In ERP applications, Point of Sales typically refers to the ability or process of handling retail or counter sales.


Programmable Logic Controller

A form of computer used to automate electromechanical processes on machines in production environments. These typically connect to sensors or actuators which can provide electronic data to the production software, such as bcFood, for tracking values such as input, output, temperature, flow, and machine cycles. PLC vendors typically provide the software needed to interface their equipment with enterprise software. Third party vendors also provide interface software that can interact with multiple PLC devices.


Proof of Delivery

A document required from the carrier or driver for proper payment. POD includes the time of delivery, full delivery address, and the name and signature of the person who accepted the shipment.



Abbreviation; see Quality Assurance.


Quality Assurance

Quality assurance is a systematic process designed to ensure that manufactured products meet or exceed customer and regulatory requirements. Depending upon the product(s), quality assurance may include testing, inspection, and statistical control. In an automated environment, quality assurance can be defined as a number of checkpoints in the production process that represent “pass/fail” points, based upon the inputted results of testing and inspection.



A recipe is a bill of materials that is similar to a formula in how it is used in food processing. The formula concepts may or may not apply to a recipe. The typical difference between a formula-based and a recipe-based production process is that a formula lists the necessary ingredients and their quantities, while a recipe provides this ingredient information along with a set of preparation and processing instructions.



A routing specifies the sequence of operations needed to manufacture a product. Each operation can be performed at a work center or at a machine center (also referred to as capacities or facilities). Manufacturing companies use routings to manage the production process. Routings should always include any procedures performed by outside parties in which the custody of the product changes hands (such as sterilization or packaging), as these represent traceability control points, and the related data must be available for required documentation.



Scheduling is the process of planning and arranging orders to maximize productivity, minimize cost, and optimize delivery times.


Third Party Logistics Provider

An organization that provides outsourced supply chain services of various types. Typical services in the food and nutraceutical industries include warehousing, order fulfillment, and transportation.


Value-Added Reseller

A reseller that adds value to an existing software product through the addition of features or services.



Abbreviation; see Value Added Reseller.



Traceability is the recording of product movements at every step of the production and distribution process, along with any data related to instances where an issue of contamination arises and a recall may be required. Good traceability capabilities make it possible to identify, by precise date and location, which goods must be recalled, and which are safe, potentially saving millions of dollars in the recall process. Traceability within the food processing industry is also utilized to identify key high production and quality areas of a business versus those of low return, as well as which points in the production process may be improved. Traceability both up and down the supply chain is required by law and regulation. The bcFood application provides users with an instantaneous 360° view of all levels of product.


Warehouse Management System

A module or system that is dedicated to warehousing and distribution center processes, transactions, and activities. WMS addresses picking strategies, unit handling management, bin storage, load control, and more. A mobile WMS integrates handheld units and barcode readers with these activities.



Abbreviation; see Warehouse Management System.


Work Center

Work centers are specific locations in which work can be performed. Work centers might be set up for machines, groups of machines, or groups of people. Work centers are used in production routing and capacity planning. Production orders are scheduled to work centers through routings (described above). Work centers may also include machine centers on a discrete basis, or roll up the machine centers when determining availability. Typically, the machines or people within a work center perform similar tasks. A work center is often a data collection point for traceability and HAACP purposes. As used in bcFood, a work center can also be used to apply overhead, define capacity, apply a work calendar, and establish queue times.

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