ERP software system concepts and terms - education and training is essential for successful ERP implementation

ERP Software Concepts and Terms Starting with: P

4ETO:
4

ETO Home Page
What is ETO?
ETO Links
Suggest a Link
Contact 4

ETO
Previous Page
ERP:
ERP Software Modules
ERP Business Processes
ERP Dictionary A-Z
ERP Dictionary by Category

Papers & Articles:
Index of Articles
Supply Chain Optimisation
S&OP and SCM
SCO Software
CIM Seminar
ERP Training
ERP Education

Understanding of the relevant ERP system terminology and concepts is important if an ERP software package is to be sucessfully implemented within a business and operated correctly such that it yields cost savings, better quality management information and the other efficiencies and benefits that you are hoping for. To aid with this understanding of ERP system terminology and concepts we are compiling a list of ERP terms and their associated definitions which is being made available to companies with an interest in ERP - if you want to add to this list of ERP concepts then please complete the form at the bottom of this page.

The table below lists the main ERP system concepts that start with letter P and their definitions - we hope you find them useful and wish you every success with your ERP software system implementation! To learn about other ERP system concepts, terminology and definitions click the relevant letter from the list below:

-A-B-C-D-E-F-G-H-I-J-K-L-M-N-O-P-Q-R-S-T-U-V-W-Y-Z-

ERP Software Concepts and Terms Starting with: P
ERP Concept	ERP Term Definition
Pareto analysis	Synonym for ABC analysis. Classifies items into different categories depending on their annual usage.
Part family	Set of parts that require similar machinery, tooling, machining operations, and jigs and fixtures.
Part master record	Record for an item containing descriptive data, control values (lead times, order quantities etc.) and other information. Synonym: Item master record.
Part number	A number which serves to uniquely identify a part.
Parts reference file	Organises parts into families and contains interchangeability and upgradeability information
Parts requisition	An authorisation that identifies the item and quantity required to carry out a task.
Pegged requirements	A requirement which shows the next level parent item (or customer order) as the source of the demand, (i.e. by using the where-used capability from the BOM).
Pegging	In MRP and MPS, the capability to identify for a given item the sources of its gross requirements and / or allocations. Pegging can be thought of as active where-used information.
Performance evaluation	Process of measuring performance for the purposes of feedback and reporting.
Period order quantity	A lot sizing technique under which the lot size is equal to the net requirements for a given number of periods.
Phantom BOM	Subassemblies which are rarely stocked. MRP drives requirements straight through the phantom item to its components (blow-through).
Phase-in -out part	Engineering changes result in old parts being substituted by new ones
Picking list	A document used to pick manufacturing or shipping orders, listing the components and quantities required.
Planned cost	The estimated cost of a particular product.
Planned orders	A suggested order quantity, release date, and due date created by the planning system's logic when it encounters net requirements in processing MRP.
Planned queue time	Is the expected time that an on-schedule order will wait in the work centre before processing
Planned receipts	An anticipated receipt against an open purchase order or open production order.
Planning	The consideration of actions to be taken in the event of some expected scenario or occurrence happening in the future.
Planning BOM	An artificial grouping of items or events in BOM format which is used to facilitate master scheduling or material planning
Planning horizon	The amount of time the master schedule extends into the future.
Planning yield	An MRP / MPS planning parameter used to adjust requirements to take account of the expected yield (See Yield).
Potential future market	An estimate of how the possible demand for a product (size, customers etc.) may develop in the medium to long term
Preventative maintenance	Activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns. The purpose is to ensure that production quality is maintained and that delivery schedules are met.
Pricing	Process of determining the sales price of a product line or a special.
Priority control	The process of communicating start and completion dates to manufacturing departments in order to execute a plan. The dispatch list is the tool normally used to provide these dates and priorities based on the current plan and status of all open orders.
Process based layout	"Conventional" style of plant layout, i.e. a facility configuration in which operations of a similar nature or function are grouped together.
Process manufacturing	Continuous, dedicated production of large amounts of bulk product, for example, paint, chemicals etc.
Process planning	Definition of production operations required to make an item from start to finish.
Process sheet	Contains part information, routing information and operation detail information.
Product costing	The activity of determining the cost associated with a particular product.
Product families	A group of products with similar characteristics, often used in production planning.
Product features / options	A distinctive characteristic of a product or service.
Product life cycles	Introduction, growth, maturity, saturation and decline are the main phases in a product's life cycle.
Product line	A group of products whose similarity in manufacturing procedures, marketing characteristics, or specifications allows them to be aggregated for planning, marketing or costing.
Product load profile	A listing of the required capacity and key resources needed to manufacture one unit of a selected item or family. The resources requirements are further defined by a lead-time offset to predict the impact of the product on the load of the key resources b
Product specification	A statement of acceptable characteristics that distinguish one product from another.
Product structure file	Containing BOM data for products.
Production activity control	System for utilising data from the shop floor to maintain status information on shop orders and work centres
Production classification	Categorisation of production approaches, i.e. job shop, intermittent, repetitive and process are example production types.
Production kanbans	Define the quantity of the specific part that the producing work centre should manufacture in order to replace those which have been removed by the downstream work centres
Production plan	Derived from the detailed sales forecast, it balances market demand with company resources (developed by operating management).
Production planning	The process of creating an overall production plan for the factory, over a specified time horizon
Production scheduling	The allocation of resources to the manufacture of the parts to be produced.
Productivity	Ratio of output to input.
Program evaluation and review technique (PERT)	A network planning technique for the analysis of a project's completion time.
Progress reporting	Reporting of the actual current state of an activity.
Project management	The use of skills and knowledge for co-ordinating the organisation, planning, scheduling, directing, controlling, monitoring and evaluating of prescribed activities to ensure that the stated objectives of a project are achieved.
Projected available balance	An inventory balance projected into the future. It is the running sum of on-hand inventory minus requirements plus scheduled receipts and planned orders.
Pseudo BOM	An artificial grouping of items that facilitates planning.
Pull	Material flow system whereby work centres are only authorised to produce when they have been signalled that there is a need for more parts in a downstream department.
Purchase order	The purchaser's authorisation used to formalise a purchase transaction with a supplier.
Purchase requisition	An authorisation to the purchasing department to purchase specified materials in specified quantities within a specified time.
Purchasing	Activity responsible for acquiring purchased materials.
Purchasing service level	Is a measure applied to assess the performance of the Purchasing function, i.e. in terms of on-time delivery, purchase-part quality, cost etc.
Push	System whereby future forecasts of demand are used to generate the requirements for lower level items and work pushed through the shop floor in the expectation that it will be completed by the required due date.

There are many factors that are deemed to be critical to the success of an ERP software implementation. Ensuring that you have gone through an effective ERP system selection process is one essential ingredient to success and other ingreients would be issues such as data accuracy (BOMs, inventory records, routings etc.) However, the 'softer' issues associated with ERP software implementation process are often ignored by companies attempting an ERP implementation often with disastrous consequences. Soft implementation issues include: the people in the organisation, their fears, motivation (or lack of it!), resistance to change and the prevailing culture within the organisation - all have their parts to play in the ERP implementation process.

Communication and overt committment to the ERP implementation project by senior management are crucial to ERP system implementation success. Similarly, adequate and timely education and training of key personnel helps to reduce fear, increase understanding and can be used to sway a critical mass of people to being behind the ERP implementation and working to make the implementation a success. The ERP system Concepts and Terms listed and defined on this page can be used for reference to help ensure that people in companies attempting an ERP package installation and implementation are conversant with the main ERP ideas and terminology associated with ERP software systems and their use.

If you would like to add an ERP concept and definition or you want to make a general comment about this page of ERP system concepts and terms or have any questions about ERP software selection or ERP system implementation then please complete the form below and we will do our best to help.

Note that after submitting the form this page about ERP software system terminology, concepts and definintions will reload.

The 4

ETO web site is being used to fulfil three purposes, firstly, it is a vehicle to recruit engineer to order manufacturers to take part in the research project concerned with improving how ETO manufacturing companies plan production and manage their jobs / projects. Secondly, the 4

ETO web site is being used a means of disseminating the results of the research project as well as good practices employed by successful engineer-to-order manufacturers. Thirdly, the 4

ETO site will be developed into a portal site for ETO manufacturers.

Please contact Austen Jones with any questions, comments or suggestions.

Last Updated: 27-Mar-2008