Posted in Operations and Supply Chain Terms, Total Reads: 3116
Ullage in literary term means loss of liquid due to seepage from a container. This term also has a wide application in warehousing and logistics. The reasons for under delivery of orders are
Errors in stock keeping
Non receipt of order items due to unavailability
Damage of shipments
Inaccuracy in the inventory management system
Monitoring of loading and unloading procedures .
Unsystematic line up of the inventory items in the warehouse
Ambiguity in manufacturing serial numbers
However as per contracts ullage allowances are provided by the supplier . The supplier does not have to replace the items which have been damaged after providing the required compensation as per agreement.
The accepted levels of ullage are below 1 % but some contracts provide compensation upto 10% ullage.