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Thursday, December 29, 2016

Glossary of Supply Chain Terms "P"



P

P & D: Pickup and delivery.


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.

Particular Average: See Marine Cargo Insurance.

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.

Password: A private code required to gain access to a computer, an application program, or service.

Path to Profitability (P2P): The step-by-step model to generate earnings.

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: The transfer of money, or other agreed upon medium, for provision of goods or services.

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.

PBIT: See Profit Before Interest and Tax.


Peak Demand: The time period during which customers demand the greatest quantity.

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.

Per Diem: A payment rate one railroad makes to use another's cars.

Perfect Order: The definition of a perfect order is one which meets all of the following criteria:
* 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.

Permit: A grant of authority to operate as a contract carrier.

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.

Pick/Pack: Picking and packing immediately into shipment containers.

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.

Piggyback: Terminology used to describe a truck trailer being transported on a railroad flatcar.

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.

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.

Plant Finished Goods: Finished goods inventory held at the end manufacturing location.

PM: Particulate matter



Point of Sale Information (POS): Price and quantity data from the retail location as sales transactions occur.

Point of Use Delivery: Delivery right to the production floor of an item.

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: A harbor where ships will anchor.

Port Authority: A state or local government that owns, operates, or otherwise provides wharf, dock, and other terminal investments at ports.

Port of Discharge: Port where vessel is off loaded.

Port of Entry: A port at which foreign goods are admitted into the receiving country.

Port of Loading : Port where cargo is loaded aboard the vessel.

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.

POS: Point of Shipment, or Point of Sale

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.

Present Value: Today's value of future cash flows, discounted at an appropriate rate.


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 Warehouse: A company-owned warehouse.

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: A series of time-based activities linked to complete a specific output.

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 Description: The user's description of the product.

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.


Profit Ratio: The percentage of profit to sales--that is, profit divided by sales.

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 Signal: A signal from a using operation that triggers the issue of raw material.

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.

Purchasing: The functions associated with buying the goods and services the firm requires.

Pure Raw Material: A raw material that does not lose weight in processing.

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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