Posted in Operations and Supply Chain Terms, Total Reads: 3930

Definition: Ullage

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
  • Counting Errors
  • Inaccuracy in the inventory management  system
  • Pilferage
  • 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.

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