P & D
Pickup and delivery.

P2P
(1) See Peer to Peer 2. See Path to Profitability

Package to Order
A production environment in which a good or service can be packaged after receipt of a customer order. The item is common across many different customers, packaging determines the end product.

Packaging
Materials used to protect a shipment when in transit or in storage at a warehouse facility. Protective packaging is often inside a carton or individual box.

Packing
Protecting individual items either by placing them in cardboard boxes or by securing them in bundles or packages with wrapping material.

Packing and Marking
The activities of packing for safe shipping and unitizing one or more items of an order, placing them into an appropriate container, and marking and labeling the container with customer shipping destination data, as well as other information that may be required.

Packing List
List showing merchandise packed and all particulars. Normally prepared by shipper but not required by carriers. Copy is sent to consignee to help verify shipment received. The physical equivalent of the electronic Advanced Ship Notice (ASN).

Pad Wrap
‘A service provided by moving companies and specific carriers that eliminates packaging material by wrapping product in padded ”blankets”. This will protect the goods during transit, usually on ”air ride” vans. See Blanket Wrap. ‘

Pallet
The platform which cartons are stacked on and then used for shipment or movement as a group. Used to support cargo and ease movement by forklifts.Pallets may be made of wood or composite materials.

Pallet Ticket
A label to track pallet-sized quantities of end items produced to identify the specific sublot with specifications determined by periodic sampling and analysis during production.

Pallet wrapping machine
A machine that wraps a pallet’s contents in stretch-wrap to ensure safe shipment.

Parcel Shipment
Small packages like those typically handled by providers such as UPS and FedEx.

Pareto
A means of sorting data for example. For example, 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 percent of a set of independent variables is responsible for 80 percent of the effect. Also see: 80/20 Rule

Part Period Balancing
In forecasting, a dynamic lot-sizing technique that uses the same logic as the least total cost method, but adds a routine called look ahead/look back. When the look ahead/look back feature is used, a lot quantity is calculated, and before it is firmed up, the next or the previous period’s demands are evaluated to determine whether it would be economical to include them in the current lot. Also see: Discrete Order Quantity, Dynamic lot sizing.

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.

Partlow Chart
A chart that indicates the temperature reading in a reefer container.

Partnership
An agreement between parties to operate a business with stipulations regarding the sharing of profits and losses.

Partnerships and Alliances
Shippers and providers who enter into agreements designed to benefit both parties.

Passenger-mile
A measure of output for passenger transportation, it 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.

Patent
A right given to an inventor to manufacture and market an invention for a specified period of time. A government patent office grants such authorizations.

Path to Profitability
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.

Payroll
Total of all fully burdened labor costs, including wage, fringe, benefits, overtime, bonus, and profit sharing.

PBIT
see Profit Before Interest and Tax

PDA
see Personal Digital Assistant

PDCA
see Plan-Do-Check-Action

Peak demand
The time period during which the quantity demanded is greater than during any other comparable time period.

Peer to Peer
A computer networking environment which allows individual computers to share resources and data without passing through an intermediate network server.

Pegged Requirement
An MRP component requirement that shows the next-level parent item (or customer order) as the source of the demand.

Pegging
A technique in which a ERP system traces demand for a product by date, quantity, and warehouse location.

Penalty
A charge against a contractor for non-compliance that if not paid within a certain period of time would result in default of contract. A clause stating this condition must be included in the contract if this action is exercised.

Per Diem
(1) The rate of payment for use by one railroad of the cars of another.(2) A daily rate of reimbursement for expenses.

Percent of Fill
Number of lines or quantity actually shipped as a percent of the original order. Synonym: Customer Service Ratio.

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 Bond
A guarantee submitted by a contractor, certifying that if the contractor is unable to fulfill the obligation the amount will be paid to the purchaser to compensate any loss.

Performance Measurement Program
A performance measurement program goes beyond just having performance metrics in place. Many companies do not realize the full benefit of their performance metrics because they often do not have all of the necessary elements in place that support their metrics. Also see: Performance Measures, Dashboard, Scorecard, Key Performance Indicator Typical characteristics of a good performance measurement program include the following: &

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 comparisons and benchmarking. For example, a common performance measure for a distribution center is % of order fill rate. Also see: Performance Measurement Program Attributes of good performance measurement include the following: (1) Measures only what is important: The measure focuses on key aspects of process performance (2) Can be collected economically: Processes and activities are designed to easily capture the relevant information (3) Are visible: The measure and its causal effects are readily available to everyone who is measured (4) Is easy to understand: The measure conveys at a glance what it is measuring and how it is derived (5) Is process oriented: The measure makes the proper trade-offs among utilization, productivity and performance (6) Is defined and mutually understood. The measure has been defined and mutually understood by all key parties (internal and external) (7) Facilitates trust: The measure validates the participation among various parties and discourages ”game playing” (8) Are usable: The measure is used to show progress and not just data that is ”collected”. Indicated performance vs data ‘

Performance Record
A documentation of the contractors ability to comply with the requirements of a contract during the term.

Performance Specifications
This type of specification places emphasis on describing a capability or result to be accomplished with a commodity or service. A testing or inspection may be included.

Period Order Quantity
A lot-sizing technique under which the lot size is equal to the net requirements for a given number of periods, e.g., weeks into the future. The number of periods to order is variable, each order size equalizing the holding costs and the ordering costs for the interval. Also see: Discrete Order Quantity, Dynamic Lot Sizing

Periodic Review System
See Fixed Reorder Cycle Inventory Model

Perishable Commodities
Commodities that have a short shelf-life and may be expect to spoil if not placed in direct 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 Digital Assistant
A computer term for a handheld device that combines computing, telephone/fax, and networking features. PDA examples include the Palm and Pocket PC devices. A typical PDA can function as a cellular phone, fax sender, and personal organizer. Unlike portable computers, most PDAs are pen-based, using a stylus rather than a keyboard for input. This means that they also incorporate handwriting recognition features. Some PDAs can also react to voice input by using voice recognition technologies. Some PDAs and networking software allow companies to use PDAs in their warehouses to support wireless transaction processing and inquiries.

Personal discrimination
Charging different rates to shippers with similar transportation characteristics, or vice versa.

Phantom Bill of Material
A bill-of-material coding and structuring technique used primarily for transient (nonstocked) subassemblies. For the transient item, lead time is set to zero and the order quantity to lot-for-lot. A phantom bill of material represents an item that is physically built, but rarely stocked, before being used in the next step or level of manufacturing. This permits MRP logic to drive requirements straight through (blowthrough) the phantom item to its components, but the MRP system usually retains its ability to net against any occasional inventories of the item. This technique also facilitates the use of common bills of material for engineering and manufacturing. Synonym: Pseudo Bill of Material. Also see: blowthrough

Physical Distribution
All logistics activities from the production line to the final user, including traffic, packaging, materials handling, warehousing, order entry, customer service, inventory control etc.

Physical Inventory
The process of actual counting all items on-hand at a given time in a facility.

Physical supply
The movement and storage functions associated with raw materials from supply sources to the manufacturing facility.

Pick Line
An arrangement of SKUs in some orderly system to facilitate selecting or picking warehousing units to satisfy orders.

Pick List
A list of items to be picked from stock in order to fill an order.

Pick on Receipt
Product is receipted and picked in one operation (movement), therefore the product never actually touches the ground within the warehouse. It is unloaded from one vehicle and re-loaded on an outbound vehicle. Related to Cross Docking.

Pick/Pack
Picking of product from inventory and packing into shipment containers.

Pick-and-Drop
Operation that normally consists of one over-the-road van operator alternating between two trailers. He transports and delivers one trailer while another is being loaded.

Pick-by-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.

Picking
The operations involved in pulling products from storage areas to complete a customer order.

Picking by Aisle
A method where picking all needed items in an aisle regardless of the items’ ultimate destination, the items must be sorted later.

Picking by Source
A method where pickers successively pick all items going to a particular destination regardless of the aisle in which each item is located.

Pick-to-carton
Pick-to-carton logic uses item dimensions/weights to select the shipping carton prior to the order picking process. Items are then picked directly into the shipping carton.

Pick-to-clear
A method often used in warehouse management systems that directs picking to the locations with the smallest quantities on hand.

Pick-to-light
Pick-to light systems consist of lights and LED displays for each pick location. The system uses software to light the next pick and display the quantity to pick.

Pick-to-trailer
Order-picking method where the order picker transports the materials directly from the pick location to the trailer without any interim checking or staging steps.

Pick-Up Order
A document authorizing a service provider the authority to pick up cargo or equipment from a specific location.

Pier
A structure built away from land and extending some distance over water, often used for docking boats. Also known as a wharf.

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

Pilferage
Cargo stolen from the container, warehouse or terminal.

Pin lock
A hard piece of iron, formed to fit on a trailer’s pin, that locks in place with a key to prevent an unauthorized person from moving the trailer.

Place utility
A value created in a product by changing its location. Transportation creates place utility.

Plaintext
Data before it has been encrypted or after it has been decrypted, e.g., an ASCII text file.

Plan Deliver
The development and establishment of courses of action over specified time periods that represent a projected appropriation of supply resources to meet delivery requirements.

Plan Make
The development and establishment of courses of action over specified time periods that represent a projected appropriation of production resources to meet production requirements.

Plan Source
The development and establishment of courses of action over specified time periods that represent a projected appropriation of material resources to meet supply chain requirements.

Plan Stability
The difference between planned production and actual production, as a percentage of planned production. Calculation: [(Sum of Monthly Production Plans) + (Sum of the absolute value of the difference between planned and actual)]/[Sum of Monthly Production Plans] Note: Base Production Plan is the three month removed plan

Plan-Do-Check-Action
In quality management, a four-step process for quality improvement. In the first step , a plan to effect improvement is developed. In the second step , the plan is carried out, preferably on a small scale. In the third step , the effects of the plan are observed. In the last step , 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 and as the Deming circle . Synonyms: Shewhart Cycle. Also see: Deming Circle

Planned Date
The date an operation such as a pickup or delivery of an order is planned to occur.

Planned Order
A suggested order quantity, release date, and due date created by the planning system’s logic when it encounters net requirements in processing MRP. In some cases, it can also be created by a master scheduling module. Planned orders are created by the computer, exist only within the computer, and may be changed or deleted by the computer during subsequent processing if conditions change. Planned orders at one level will be exploded into gross requirements for components at the next level. Planned orders, along with released orders, serve as input to capacity requirements planning to show the total capacity requirements by work center in future time periods. Also see: Planning Time Fence, Firm Planned Order

Planned Receipt
An anticipated receipt against an open purchase order or open production order.

Planning Bill
See Planning Bill of Material

Planning Bill of Material
An artificial grouping of items or events in bill-of-material format used to facilitate master scheduling and material planning. It may include the historical average of demand expressed as a percentage of total demand for all options within a feature or for a specific end item within a product family and is used as the quantity per in the planning bill of material. Synonym: Planning Bill. Also see: Hedge Inventory, Production Forecast, Pseudo Bill of Material

Planning Calendar
See Manufacturing Calendar

Planning Fence
See Planning Time Fence

Planning Horizon
The amount of time a plan extends into the future. For a master schedule, this is normally set to cover a minimum of cumulative lead time plus time for lot sizing low-level components and for capacity changes of primary work centers or of key suppliers. For longer term plans the planning horizon must be long enough to permit any needed additions to capacity. Also see: Cumulative Lead Time, Planning Time Fence

Planning Time Fence
A point in time denoted in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may adversely affect component schedules, capacity plans, customer deliveries, and cost. Outside the planning time fence, customer orders may be booked and changes to the master schedule can be made within the constraints of the production plan. Changes inside the planning time fence must be made manually by the master scheduler. Synonym: Planning Fence. Also see: Cumulative Lead Time, Demand Time Fence, Firm Planned Order, Planned Order, Planning Horizon, Time Fence.

Planogram
The end result of analyzing the sales data of an item or group of items to determine the best arrangement of products on a store shelf. The process determines which shelf your top-selling product should be displayed on, the number of facings it gets, and what best to surround it with. It results in graphical picture or map of the allotted shelf space along with a specification of the facing and deep.

Planography
A scale drawing of a storage area showing the approved layout of the area, location of bulk bin, rack and box pallet areas, aisles, assembly areas, walls, doorways, directions of storage, office space, washrooms, and other support and operational areas.

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

Plimsoll Mark
Depth to which a vessel may safely load. Identified by a circle on the vessel’s side with a vertical line through and a number of small horizontal lines showing the max depth for summer and winter.

PM
see Preventative Maintenance

PO
see Purchase Order

POD
Abbreviation for:(1) Port of Discharge, (2) Port of Destination, (3) Proof of Delivery:

Point Of Sale
The time and place at which a sale occurs, such as a cash register in a retail operation, or the order confirmation screen in an on-line session. Supply chain partners are interested in capturing data at the POS, because it is a true record of the sale rather than being derived from other information such as inventory movement. Also a national network of merchant terminals, at which customers can use client cards and personal security codes to make purchases. Transactions are directed against client deposit accounts. POS terminals are sophisticated cryptographic devices, with complex key management processes. POS standards draw on ABM network experiences and possess extremely stringent security requirements.

Point of Sale Information
Price and quantity data from retail locations as sales transactions occur.

Point-of-Purchase
A retail sales term referring to the area where a sale occurs, such as the checkout counter. POP is also used to refer to the displays and other sales promotion tools located at a checkout counter.

Point-of-use inventory
Material used in production processes that is physically stored where it is consumed.

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 or the states to establish regulations to protect the health and welfare of its citizens, truck weight, speed, length, and height laws are examples.

Political Subdivision
Cities, counties, towns or any division of government within a state which is below the state level, but with delegated authority to function as a local government.

Pooling
A shipping term for the practice of combining shipment from multiple shippers into a truckload in order to reduce shipping charges.

POP
see Point-of-Purchase

Port & Terminal Service Charge
South Europe Conference [SEAC] charge incurred when the shipper is not able to deliver cargo directly alongside the vessel. The carrier may assess its expenses in moving cargo from the shipper’s point of delivery to the vessel.

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

Portal
‘Websites that serve as starting points 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
see Point Of Sale

Positioning
The moving of empty equipment from surplus areas to deficit areas.

Possession utility
The value created by marketing’s effort to increase the desire to possess a good or benefit from a service.

Post-Consumer Materials
Any goods that have been expended by the consumer and directed to a recycling process rather than to a landfill or solid waste depository.

Post-Deduct Inventory Transaction Processing
A method of inventory bookkeeping where the book (computer) inventory of components is reduced after issue. When compared to a real-time process, this approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Consumption can be based on recorded actual use, or calculated using finished quantity received times the standard BOM quantity (backflush). Also see: Backflush

POSTNET
The POSTNET barcode is used on envelopes and postcards that are sent through the U.S. Postal Service. This barcode is placed in the lower right-hand corner of the envelope.

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.

PPB
see Part Period Balancing

Pre-Bid Conference
A meeting to clarify an invitation to bid that has been issued.

Pre-Deduct Inventory Transaction Processing
A method of inventory bookkeeping where the book (computer) inventory of components is reduced before issue, at the time a scheduled receipt for their parents or assemblies is created via a bill-of-material explosion. When compared to a real-time process, this approach has the disadvantage of a built-in differential between the book record and what is physically in stock.

Predictive maintenance
Practices that seek to prevent unscheduled machinery downtime by collecting and analyzing data on equipment conditions. The analysis is then used to predict time-to-failure, plan maintenance, and restore machinery to good operating condition. Predictive maintenance systems typically measure parameters on machine operations, such as vibration, heat, pressure, noise, and lubricant condition. In conjunction with computerized maintenance management systems (CMMS), predictive maintenance enables repair-work orders to be released automatically, repair-parts inventories checked, or routine maintenance scheduled.

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.

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

Pre-Solicitation Conference
A meeting with prospective bidders to obtain information for bidding and invite recommendations.

Preventative Maintenance
Regularly scheduled maintenance activities performed in order to reduce or eliminate unscheduled equipment failures and downtime.

Price Agreement
A price decided upon between the purchaser and the vendor(s).

Price Competition
A contract that is awarded solely upon price consideration.

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. Price Look-Up (PLU)

Price Fixing
A collusion among vendors to market a commodity or certain goods at the same price, thereby restricting competition.

Price Maintenance
The regulation of a base price that may not be undersold by supplier or manufacturer.

Price Protection
An agreement between the buyer and the seller to furnish goods at a predetermined price without increase for the term of the contract. An agreed upon index of periodical increases may be included in such contracts.

Price Schedule
A negotiated or predetermined listing of commodities for a certain price.

Primage
A charge paid by shippers to ship agents for services provided by the agent in Turkish and Greek ports, generally for loading activities conducted by port stevedores. It is not an actual contractual term so the obligation to pay does not depend on its inclusion in the bill of lading. Turkey: 3% on Total Ocean Freight including all surcharges and intermodal charges. Greece: 3% Piraeus, 5% Salonika (except on cargo originating in Bulgaria).

Primary highways
Highways that connect lesser populated cities with major cities.

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.

Primary-business test
A test used by the ICC to determine if a trucking operation is bona fide private transportation, the private trucking operation must be incidental to and in the furtherance of the primary business of the firm.

PRIME QR
Product Replenishment and Inventory Management Edge for Quick Response.

Principal
One who designates another to action her or his behalf. The designee would be controlled by the principal.

Private carrier
A carrier that provides transportation service to the firm and 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 Warehouse
A company-owned warehouse.

Privatization
The redirection by a government of a program or government function to be carried on by a private organization.

Pro Number
Any progressive or serialized number applied for identification of freight bills, bills of lading, etc.

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 that are linked to complete a specific output.

Process Benchmarking
Benchmarking a process (such as the pick, pack, and ship process) against organizations known 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 capability
Refers to the ability of the process to produce parts that conform to (engineering) specifications. Process capability relates to the inherent variability of a process that is in a state of statistical control. See also CP or CPK.

Process Improvement
Designs or activities, which improve quality or reduce costs, often through the elimination of waste or 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. Products in this manufacturing group include: foods, petrochemicals, bottling, chemicals, etc. Process manufacturing frequently generates co-products and by-products as an outcome in addition to the primary product being manufactured. An example would be the manufacture of petroleum products, where multiple grades of lubricants and fuels are produced from a single run as well as non-usable by-products such as sludge.

Process technology
The technology used by a particular business or manufacturing process, using the Internet for communication purposes rather than mail, telephones, EDI, or faxes for example.

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.

Procurement Cycle
The entire cycle of purchasing functions and duties which occur during acquisition of commodities.

Procurement Officer
A person who is authorized to enact and administer contracts and issue determinations in that regard.

Procurement Services Provider
A services firm that integrates procurement technologies with product, sourcing, and supply management expertise, to provide outsourced procurement solutions. A PSP serves as an extension of an organization’s existing procurement infrastructure, managing the processes and spending categories and procurement processes that the organization feels it has opportunities for improvement but lacks the internal expertise to manage effectively.

Product
An item 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 Configurator
A system, generally rule-based, to be used in design-to-order, engineer-to-order, or make-to-order environments where numerous product variations exist. Product configurators perform intelligent modeling of the part or product attributes and often create solid models, drawings, bills of material, and cost estimates that can be integrated into CAD/CAM and MRP II systems as well as sales order entry systems.

Product Description
The user’s detailed description of the product.

Product Family
A group of products with similar characteristics, often used in production planning (or sales and operations planning).

Product line segmentation
Separating a product line into items having similar characteristics, purposes, or manufacturing requirements.

Product modularity
An approach used to design products that can be assembled from a family of modules. Using the modular approach, many configurations of a product can be assembled from one set of modules.

Product serviceability
The ease with which a product can be serviced for maintenance or repair purposes.

Product technology
The technology used in the development of a product, analogue technology versus digital technological in the case of telephones for example.

Production Calendar
See Manufacturing Calendar

Production Capacity
Measure of how much production volume may be experienced over a set period of time.

Production Forecast
A projected level of customer demand for a feature (option, accessory, etc.) of a make-to-order or an assemble-to-order product. Used in two-level master scheduling, it is calculated by netting customer backlog against an overall family or product line master production schedule and then factoring this product’s available-to-promise by the option percentage in a planning bill of material. Also see: Assemble-to-Order, Planning Bill of Material, Two-Level Master Schedule

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 materials are those items classified as material purchases and included in Cost of Goods Sold as raw material purchases.

Productivity
A measure of efficiency of resource utilization, defined as the sum of the outputs divided by the sum of the inputs.

Profit
(1) Gross profit - earning from an ongoing business after direct costs of goods sold have been deducted from sales revenue for a given period.(2) Operating profit - earnings or income after all expenses (selling, administrative, depreciation) have been deducted from gross profit.(3) Net profit - earnings or income after adjusting for miscellaneous income and expenses (patent royalties, interest, capital gains) and tax from operating profit. Synonym: Income.

Profit Before Interest and Tax
The financial profit generated prior to the deduction of taxes and interest due on loans. Also called operating profit.

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 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 are not sufficient. For enterprises to survive in a competitive environment, profit optimization is a vital technology.

Prohibited Items
Items the carrier will not handle, such as explosives, flammables and other hazardous materials.

Project
A specific scope of business that includes detailed locations and required pick-up and delivery instructions. Coordination with the services may require a pre-arranged outside installation crew.

Project Management
A disciplined process in which an individual or team of individuals provides all planning, management, design and coordination for a large customer project. See Supportive Project Management.

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.

Proof of Delivery
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 .

Proportional rate
A rate lower than the regular rate for shipments that have prior or subsequent moves, used to overcome competitive disadvantages of combination rates.

Proposal Evaluating Criteria
Facts and information such as: Management capabilities, performance plans and technical proficiencies. These factors may be weighted or given a numerical value.

Proprietary Commodity
A commodity for which the manufacturer and/or supplier has been granted an exclusive right to market.

Protest
A registered complaint, made by a bidder or interested party, with regard to a bid decision made by the purchaser for which a remedy or resolution is expected.

Protocol
Communication standards that determine message content and format, enabling uniformity of transmissions.

Pseudo Bill of Materials
See Phantom Bill of Materials

PSP
see Procurement Services Provider

PTI
Pre-Trip Inspection. (Typically the shipping line’s inspection of reefer containers prior to release to the shipper for stuffing/loading).

PTSC
see Port & Terminal Service Charge

Public warehouse
A business that provides short or long-term storage to a variety of businesses usually on a month-to-month basis. A public warehouse will generally use their own equipment and staff however agreements may be made where the client either buys or subsidizes equipment. Public warehouse fees are usually a combination of storage fees (per pallet or actual square footage) and transaction fees (inbound and outbound). Public warehouses are most often used to supplement space requirements of a private warehouse. See also Contract warehouse and 3PL.

Public warehouse receipt
The basic document issued by a public warehouse manager that is the receipt for the goods given to the warehouse manager. The receipt can be either negotiable or nonnegotiable.

Publication Commodity
Public printing added to storeroom stock and not yet charged to a cost center.

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

Punitive Action
An action taken against a contractor, according to contract stipulation, for non-compliance of commodities supplied or performance rendered.

Purchase Order
The purchaser’s authorization used to formalize a purchase transaction with a supplier. The physical form or electronic transaction a buyer uses when placing order for merchandise. 2. Common grouping of orders for goods/services. Several SKU categories may be listed on one purchase order. Most customers group their orders in a particular way to facilitate distribution at the other end. For example, one purchase order for an apparel importer might encompass 2 dozen green sweaters and 2 dozen red sweaters. If those P.O.s originated from the same store, it is simple for the store to put all items under that P.O. onto the right truck.

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 required by the firm.

Pure raw material
A raw material that does not lose weight in processing

Push back rack
Utilizing wheels in the rack structure, this rack system allows palletized goods and materials to be stored by being pushed up a gently graded ramp. Stored materials are allowed to flow down the ramp to the aisle. This rack configuration allows for deep storage on each rack level.

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 Technology
‘Webcasting (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). Webcasting 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 placed.

Put-to-light
A method that uses lights to direct the placement of materials. Most often used in batch picking to designate the tote to place picked item into.

Postponement
Traditionally, manufacturers moved finished goods out of the prodution and stored them in the supply chain until needed. When there are many variations on a basic product, this gives high stocks of similar products. Postponement moves almost finished products into the chain, and delays completion, final adjustment or customization until the last possible moment.