Supply Chain Management main glossary


This is a glossary of key terms used throughout the site.

Browse the glossary using this index

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A

Active pharmaceutical ingredient

An Active Pharmaceutical Ingredient (API) is any substance used in the manufacture of a pharmaceutical dosage form or finished pharmaceutical product. The API is the key ingredient in the formulation which provides pharmacological activity or therapeutic effect in the diagnosis, treatment or prevention of disease.

Aircon storage

Aircon storage refers to facilities or containers where medicines or health products are stored below a certain temperature with the help of airconditioning. The temperature range is normally under 23° C. Aircon storage contrasts with cold storage where temperature stays between 2 - 8 ° C or with ambient storage where products are stored at room temperature.

Ambient storage

Ambient storage refers to facilities or containers where medicines or health products are stored at room temperature. Ambient storage contrasts with cold storage where temperature stays between 2 - 8 ° C or with aircon storage where products are stored under 23° C.

Audit

An audit is an independent, objective inspection of an organisation's accounts and statutes or performance, designed to add value and improve an organization’s operations, effectiveness of risk management, control and governance processes.

A regulatory audit will obtain independent verification of financial and other information reported to regulators. A performance audit is concerned with relevance, economy, efficiency and effectiveness. Internal auditing provides an assessment of internal controls undertaken by a unit reporting to management while external auditing is conducted by an independent organization.

Average monthly consumption

The average monthly consumption (AMC), also known as average monthly use is a measure of how much a consumable product, such as a medicine, has been used on average per month. It is calculated by dividing the total annual consumption of a medicine by the number of months in stock.

$$AMC = \frac{total\ annual\ consumption}{N^{o}\ of\ months\ in\ stock}$$

B

Batch

Batch (lot) is a defined quantity of starting material and packaging which goes through a single production and is expected to be homogeneous. The size of the batch depends on fixed quantity or amount produced in a fixed time interval.

Batch number

Batch number (lot number) is a unique combination of numbers and/or letters given to a batch and corresponding labels, certificate of analysis and other documentation.

Batch release

Batch release (lot release) is a procedure by which different batches are tested to assess if it meets all the required product specifications as defined by the relevant pharmacoopoeial standards.

Bid security

Bid security is a form of financial guarantee where the bidder is required to make a deposit at the time of submission of a bid or tender. Bid security is a safeguard against withdrawal of bids before the end of the bid validity period or a refusal to sign the contract (see also performance guarantee).

Buffer stock

Buffer stock is a synonym of safety stock, the stock that is kept in reserve in case an item is unavailable from the supplier or a sudden increase occurs in demand. This may be determined at 3-6 months, or calculated as a % of the annual quantity required, depending on the country and system.


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