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Logistic Glossary – Letter PP & DPickup and delivery.P2PPath to Profitability (P2P).Packing ListA 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 Wrapping MachineA machine that wraps a pallet's contents in stretch-wrap to ensure safe shipment.PalletThe 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.Parcel ShipmentParcels include small packages like those typically handled by providers such as UPS and FedEx.ParetoA 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 StandardizationA 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.Path to Profitability (P2P)The step-by-step model to generate earnings.Pay on UsePay 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 CollectionObtaining money, or other agreed upon medium, for provision of goods or services.PayrollTotal of all fully-burdened labor costs, including wages, fringe, benefits, overtime, bonus, and profit sharing.PBITProfit Before Interest and Tax.PDCAPlan-Do-Check-Action (PDCA).Peak DemandThe time period during which customers demand the greatest quantity.PeggingA technique in which a DRP system traces demand for a product by date, quantity, and warehouse location.Performance MeasuresIndicators 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.PermitA grant of authority to operate as a contract carrier.Perpetual InventoryAn inventory record keeping system where each transaction in and out is recorded and a new balance is computed.Physical DistributionThe movement and storage of finished goods from manufacturing plants to warehouses to customers; used synonymously with business logistics. See Distribution.Physical SupplyThe movement and storage of raw materials from supply sources to the manufacturing facility.Pick ListA 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 LightA 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/PackPicking and packing immediately into shipment containers.Picking by AisleA 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 SourceA method in which pickers successively pick all items going to a particular destination regardless of the aisle in which each item is located.PickingThe operations involved in pulling products from storage areas to complete a customer order.Pick-Up OrderA document indicating the authority to pick up cargo or equipment from a specific location.PiggybackTerminology used to describe a truck trailer being transported on a railroad flatcar.Place UtilityA 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.Planned DateThe date an operation such as a receipt, shipment, or delivery of an order is planned to occur.Planned OrderIn DRP and MRP systems, a future order the system plans in response to forecasted demand.Plant Finished GoodsFinished goods inventory held at the end manufacturing location.PMParticulate matterPOPurchase Order (PO).PODProof of Delivery (POD).Point of Sale Information (POS)Price and quantity data from the retail location as sales transactions occur.Point of Use DeliveryDelivery right to the production floor of an item.PoolingA shipping term for the practice of combining shipment from multiple shippers into a truckload in order to reduce shipping charges.Port AuthorityA state or local government that owns, operates, or otherwise provides wharf, dock, and other terminal investments at ports.Port of DischargePort where vessel is off loaded.Port of EntryA port at which foreign goods are admitted into the receiving country.Port of LoadingPort where cargo is loaded aboard the vessel.PortA harbor where ships will anchor.POSPoint of Shipment, or Point of SalePossession UtilityThe value created by marketing's effort to increase the desire to possess a good or benefit from a service.PostponementThe 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-ExpeditingThe function of following up on open orders before the scheduled delivery date to ensure the timely delivery of materials in the specified quantity.Prepaid FreightFreight 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 ValueToday's value of future cash flows, discounted at an appropriate rate.Primary Manufacturing StrategyYour 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 TestA 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.Private Trucking FleetsPrivate 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 WarehouseA company-owned warehouse.Private WarehousingThe storage of goods in a warehouse owned by the company that has title to the goods.Pro Forma InvoiceAn 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.Pro NumberAny progressive or serialized number applied for identification of freight bills, bills of lading, etc.ProactiveThe strategy of understanding issues before they become apparent and presenting the solution as a benefit to the customer, etc.Process BenchmarkingBenchmarking 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 ImprovementA design or activity which improves quality or reduces costs, often through the elimination of waste on non-value-added tasks.Process ManufacturingProduction 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 YieldThe resulting output from a process. An example would be a quantity of finished product output from manufacturing processes.ProcurementThe business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations. Synonym Purchasing. See alsoProduction Planning and SchedulingThe 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 MaterialProduction-related material is an item classified as a material purchase and included in cost-of-goods sold as a raw material purchase.ProductivityA measure of resource utilization efficiency defined as the sum of the outputs divided by the sum of the inputs.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.Profit RatioThe percentage of profit to sales--that is, profit divided by sales. Project CargoSee also Project CargoProfitability 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 PromiseThis 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.Pro-formaA 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.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 RateA rate lower than the regular rate for shipments that have prior or subsequent moves; used to overcome combination rates' competitive disadvantages.Public Warehouse receiptThe 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.Public WarehouseThe 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 WarehousingThe storage of goods by a firm that offers storage service for a fee to the public.Pull or Pull-Through DistributionSupply 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 SystemA 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.Pull SignalA signal from a using operation that triggers the issue of raw material.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 DiscountA pricing structure in which the seller offers a lower price if the buyer purchases a larger quantity.PurchasingThe functions associated with buying the goods and services the firm requires.Pure Raw MaterialA raw material that does not lose weight in processing.Push DistributionThe process of building product and pushing it into the distribution channel without receiving any information regarding requirements. Also see Pull or Pull-Through Distribution. |
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