P
Packing
List: A document containing information
about the location of each Product ID in each package. It allows the recipient
to quickly find the item he or she is looking for without a broad search of all
packages. It also confirms the actual shipment of goods on a line item basis.
Pallet: The platform which cartons are stacked on and then used for
shipment or movement as a group. Pallets may be made of wood or composite
materials.
Pallet Wrapping Machine:
A machine that wraps a pallet's contents in stretch-wrap to ensure safe
shipment.
Parcel
Shipment: Parcels include small packages like
those typically handled by providers such as UPS and FedEx.
Pareto: A means of sorting data. For example, the number of quality
faults by frequency of occurrence. An analysis that compares cumulative
percentages of the rank ordering of costs, cost drivers, profits, or other
attributes to determine whether a minority of elements have a disproportionate
impact. Another example: identifying that 20% of a set of independent variables
is responsible for 80% of the effect. Also see: 80/20 Rule.
Part Standardization: A
program for planned elimination of superficial, accidental, and deliberate
differences between similar parts in the interest of reducing part and supplier
proliferation. A typical goal of part standardization is to reduce costs by
reducing the number of parts that the company needs to manage.
Passenger-Mile: A measure of output for passenger transportation that
reflects the number of passengers transported and the distance traveled; a
multiplication of passengers hauled and distance traveled.
Pay
on Use: Pay on use is a process where
payment is initiated by product consumption, i.e., consignment stock based on
withdrawal of product from inventory, This process is popular with many
European companies.
Payment
Collection: Obtaining money, or other agreed
upon medium, for provision of goods or services.
Payroll: Total of all fully-burdened labor costs, including wages,
fringe, benefits, overtime, bonus, and profit sharing.
Peer
to Peer (P2P): A computer-networking environment
which allows individual computers to share resources and data without passing
through an intermediate network server.
Pegging: A technique in which a DRP system traces demand for a
product by date, quantity, and warehouse location.
* Delivered complete, with all items
on the order in the quantity requested
* Delivered on time to customer's
request date, using the customer's definition of on-time delivery
* Delivered with complete and
accurate documentation supporting the order including packing slips, bills of
lading and invoices
* Delivered in perfect condition
with the correct configuration, customer ready, without damage, and faultlessly
installed (as applicable)
Performance and Event Management Systems: The systems that report on the key measurements in the
supply chain - inventory days of supply, delivery performance, order cycle
times, capacity use, etc. Using this information to identify causal
relationships to suggest actions in line with the business goals.
Performance Measures:
Indicators of the work performed and the results achieved in an activity,
process, or organizational unit. Performance measures should be both
non-financial and financial. Performance measures enable periodic comparison
and benchmarking. Also see: Performance Measurement Program.
Performance Measurement Program: A performance measurement program goes beyond just having
performance metrics in place. Typical characteristics of a good performance
measurement program include the following:
* Metrics that are aligned to
strategy, and linked to the shop floor or line-level workers.
* A process and culture that drives
performance and accountability to deliver performance against key performance
indicators.
* An incentive plan that is tied to
performance goals, objectives, and metrics.
* Tools/technology in place to
support easy data collection and use.
Perpetual Inventory: An
inventory record keeping system where each transaction in and out is recorded
and a new balance is computed.
Personal Computer (PC):
An individual unit an operator uses for creating and maintaining programs and
files; can often access the mainframe simultaneously.
Personal Discrimination:
Charging different rates to shippers with similar transportation
characteristics, or, charging similar rates to shippers with differing
transportation characteristics.
Physical Distribution:
The movement and storage of finished goods from manufacturing plants to
warehouses to customers; used synonymously with business logistics. See Distribution.
Physical
Supply: The movement and storage of raw
materials from supply sources to the manufacturing facility.
Picking: The operations involved in pulling products from storage
areas to complete a customer order.
Picking
by Aisle: A method by which pickers pick all
needed items in an aisle regardless of the items' ultimate destination; the
items must be sorted later.
Picking
by Source: A method in which pickers
successively pick all items going to a particular destination regardless of the
aisle in which each item is located.
Pick
List: A list of items to be picked from
stock in order to fill an order; the pick list generation and the picking
method can be quite sophisticated.
Pick
to Light: A laser identifies the bin for the
next item in the rack; when the picker completes the pick, the bar code is
scanned and the system then points the laser at the next bin.
Pick-Up
Order: A document indicating the authority
to pick up cargo or equipment from a specific location.
Place
Utility: A value that logistics creates in a
product by changing the product's location. Transportation creates place
utility.
Plan-Do-Check-Action (PDCA): In quality management, a four-step process for quality
improvement. In the first step (plan), a plan to affect improvement is
developed. In the second step (do), the plan is carried out, preferably on a
small scale. In the third step (check), the effects of the plan are observed.
In the last step (action), the results are studied to determine what was
learned and what can be predicted. The plan-do-check-act cycle is sometimes
referred to as the Shewhart cycle (Walter A. Shewhart discussed the concept in
his book Statistical Method from the Viewpoint of Quality Control) and as the
Deming circle (W. Edwards Deming introduced the concept in Japan; the Japanese
subsequently called it the Deming circle). Synonym: Shewhart Cycle.
Also see: Deming Circle.
Also see: Deming Circle.
Planned
Date: The date an operation such as a
receipt, shipment, or delivery of an order is planned to occur.
Planned
Order: In DRP and MRP systems, a future
order the system plans in response to forecasted demand.
Point of Sale Information (POS): Price and quantity data from the retail location as sales
transactions occur.
Poka Yoke (mistake proof):
The application of simple techniques that prevent process quality failure. A
mechanism that either prevents a mistake from being made or makes the mistake
obvious at a glance.
Police
Powers: The United States' constitutionally
granted right for the states to establish regulations to protect their citizens'
health and welfare; truck weight; speed, length, and height laws are examples.
Pooling: A shipping term for the practice of combining shipment from
multiple shippers into a truckload in order to reduce shipping charges.
Port
Authority: A state or local government that
owns, operates, or otherwise provides wharf, dock, and other terminal
investments at ports.
Portal: A web site that serves as a starting point to other
destinations or activities on the Internet. Initially thought of as a home
base-type of web page, portals attempt to provide all Internet needs in one
location. Portals commonly provide services such as e-mail, online chat forums,
shopping, searching, content, and news feeds.
Possession
Utility: The value created by marketing's
effort to increase the desire to possess a good or benefit from a service.
Postponement: The delay of final activities (i.e., assembly, production,
packaging, etc.) until the latest possible time. A strategy used to eliminate
excess inventory in the form of finished goods which may be packaged in a
variety of configurations.
Pre-Expediting: The function of following up on open orders before the
scheduled delivery date to ensure the timely delivery of materials in the
specified quantity.
Prepaid: A freight term which indicates that charges are to be paid
by the shipper. Prepaid shipping charges may be added to the customer invoice,
or the cost may be bundled into the pricing for the product.
Prepaid
Freight: Freight paid by the shipper to the
carrier when merchandise is tendered for shipment that is not refundable if the
merchandise does not arrive at the intended destination.
Price
Erosion: What causes old-line executives to
break out in a cold sweat? No question about it; traditional business models
are threatened by the market efficiencies of B2B. When prices begin to plummet,
the margin structures of older industries are also threatened.
Primary-Business Test:
A test the ICC uses to determine if a trucking operation is bona fide private
transportation; the private trucking operation must be incidental to and in the
futherance of the firm's primary business.
Primary Manufacturing Strategy: Your company's dominant manufacturing strategy. The primary
manufacturing strategy generally accounts for 80-plus % of a company's product
volume. According to a study by Pittiglio Rabin Todd & McGrath (PRTM),
approximately 73% of all companies use a make-to-stock strategy.
Private
Carrier: A carrier that provides
transportation service to the firm that owns or leases the vehicles and does
not charge a fee. Private motor carriers may haul at a fee for wholly owned
subsidiaries.
Private
Label: Products that are designed,
produced, controlled by, and which carry the name of the store or a name owned
by the store; also known as a store brand or dealer brand. An example would be
Wal-Mart's "Sam's Choice" products.
Private Trucking Fleets:
Private fleets serve the needs of their owners, and do not ordinarily offer
commercial trucking services to other customers. Private fleets typically
perform distribution or service functions.
Private Warehousing:
The storage of goods in a warehouse owned by the company that has title to the
goods.
Proactive: The strategy of understanding issues before they become
apparent and presenting the solution as a benefit to the customer, etc.
Process Benchmarking:
Benchmarking a process (such as the pick, pack, and ship process) against
organizations know to be the best in class in this process. Process
benchmarking is usually conducted on firms outside of the organization's
industry. Also see: Benchmarking, Best in Class, Competitive Benchmarking.
Process Improvement: A
design or activity which improves quality or reduces costs, often through the
elimination of waste on non-value-added tasks.
Process Manufacturing:
Production that adds value by mixing, separating, forming, and/or performing
chemical reactions. It may be done in a batch, continuous, or mixed
batch/continuous mode.
Process
Yield: The resulting output from a
process. An example would be a quantity of finished product output from
manufacturing processes.
Procurement: The business functions of procurement planning, purchasing,
inventory control, traffic, receiving, incoming inspection, and salvage
operations. Synonym: Purchasing
Product: Something that has been or is being produced.
Product Characteristics:
All of the elements that define a product's character, such as size, shape,
weight, etc.
Product
Family: A group of products with similar
characteristics often used in production planning (or sales and operations
planning).
Product
ID: A method of identifying a product
without using a full description. These can be different for each document type
and must, therefore, be captured and related to the document in which they were
used. They must then be related to each other in context (also known as SKU,
Item Code or Number, or other such name).
Production Capacity:
Measure of how much production volume may be experienced over a set period of
time.
Production
Line: A series of pieces of equipment
dedicated to the manufacture of a specific number of products or families.
Production Planning and Scheduling: The systems that enable creation of detailed, optimized
plans and schedules, taking into account the resource, material, and dependency
constraints to
meet the deadlines.
Production-Related Material: Production-related material is an item classified as a
material purchase and included in cost-of-goods sold as a raw material
purchase.
Productivity: A measure of resource utilization efficiency defined as the
sum of the outputs divided by the sum of the inputs.
Profitability Analysis:
The analysis of profit derived from cost objects with the view to improve or
optimize profitability. Multiple views may be analyzed, such as market segment,
customer, distribution channel, product families, products, technologies,
platforms, regions, manufacturing capacity, etc.
Profitable to Promise:
This is effectively a promise to deliver a certain order on agreed upon terms,
including price and delivery. Profitable to Promise (PTP) is the logical
evolution of Available to Promise (AtP) and Capable to Promise (CTP). While the
first two are necessary for profitability, they aren't sufficient. For
enterprises to survive in a competitive environment, profit optimization is a
vital technology.
Profit Before Interest and Tax (PBIT): The financial profit generated prior to the deduction of
taxes and interest due on loans. Also called operating profit.
Pro-forma: A type of quotation or offer that may be used when first
negotiating the sales of goods or services. If the pro-forma is accepted, then
the terms and conditions of the pro-forma may become the request.
Pro
Forma Invoice: An invoice, forwarded by the seller
of goods prior to shipment, that advises the buyer of the particulars and value
of the goods. Usually required by the buyer in order to obtain an import permit
or letter of credit.
Promotion: The act of selling a product at a reduced price, or a buy
one/get one free offer, for the purpose of increasing sales.
Pro
Number: Any progressive or serialized
number applied for identification of freight bills, bills of lading, etc.
Proof of Delivery (POD):
Information supplied by the carrier containing the name of the person who
signed for the shipment, the time and date of delivery and other shipment
delivery-related information. POD is also sometimes used to refer to the
process of printing materials just prior to shipment (Print on Demand).
Proportional
Rate: A rate lower than the regular rate
for shipments that have prior or subsequent moves; used to overcome combination
rates' competitive disadvantages.
Protocol: Communication standards that determine message content and
format, enabling uniformity of transmissions.
Public
Warehouse: The warehouse space that is rented
or leased by an independent business providing a variety of services for a fee
or on a contract basis.
Public
Warehousing: The storage of goods by a firm that
offers storage service for a fee to the public.
Public Warehouse receipt:
The basic document a public warehouse manager issues as a receipt for the goods
a company gives to the warehouse manager. The receipt can be either negotiable
or nonnegotiable.
Pull or Pull-Through Distribution: Supply chain action initiated by the customer.
Traditionally, the supply chain was pushed; manufacturers produced goods and
pushed them through the supply chain and the customer had no control. In a pull
environment, a customer's purchase sends replenishment information back through
the supply chain from retailer to distributor to manufacturer so goods are
pulled through the supply chain.
Pull Ordering System: A
system in which each warehouse controls its own shipping requirements by
placing individual orders for inventory with the central distribution center. A
replenishment system where inventory is "pulled" into the supply
chain (or "demand chain" by POS systems, or ECR programs). Associated
with "build to order" systems.
Purchase Order (PO):
The purchaser's authorization used to formalize a purchase transaction with a
supplier. The physical form or electronic transaction a buyer uses when placing
an order for merchandise.
Purchase Price Discount:
A pricing structure in which the seller offers a lower price if the buyer
purchases a larger quantity.
Push
Distribution: The process of building product and
pushing it into the distribution channel without receiving any information
regarding requirements. Also see: Pull or Pull-Through Distribution.
Push Ordering System: A
situation in which a firm makes inventory deployment decisions at the central
distribution center and ships to its individual warehouses accordingly.
Push
Technology: Web casting (push technology) is
the prearranged updating of news, weather, or other selected information on a
computer user's desktop interface through periodic and generally unobtrusive
transmission over the World Wide Web (including the use of the web protocol on
intranet). Web casting uses so-called push technology in which the web server
ostensibly pushes information to the user rather than waiting until the user
specifically requests it.
Put
Away: Removing the material from the dock
(or other location of receipt), transporting the material to a storage area,
placing that material in a staging area, and then moving it to a specific
location and recording the movement and identification of the location where the
material has been place.
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