Supply Chain Management main glossary


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

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S

Safety stock

The safety stock is the amount of stock that is always kept in reserve in case a product is unavailable from the supplier or a sudden increase in demand occurs. This amount may be determined as a number of months multiplied by the average monthly consumption, or calculated as a percentage of the annual quantity required.

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Standard Operating Procedure

Standard operating procedures (SOP) are a set of written instructions established or prescribed to be followed routinely when carrying out a given operation in a given situation. SOPs guarantee that the practice is done in accordance with agreed upon specifications and aimed at obtaining a desired outcome. The development and use of SOPs are an integral part of a successful quality system as it provides staff with the information needed to perform a job properly.

Entry link: Standard Operating Procedure

Stock keeping unit

A stock keeping unit (SKU) is a number given to a product in retail or warehousing. This number gives easy access to the price, the attributes, and the manufacturer of the product.

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Stock on hand

The stock on hand is the quantity of usable stock available at a particular facility or level, or at all levels of a system at a given point in time.

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Stock on order

The stock on order is the quantity of stock in the pipeline, ordered or confirmed as ordered with the suppliers but not yet delivered.

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Stock-out

A stock-out is a situation where the demand for a product cannot be fulfilled. In other words, the stock on hand of the product is nil. This situation has to be avoided at all costs in the supply chain management of medicines, as it creates acute risks for the health of the population and jeopardises their trust in the health system. 

Entry link: Stock-out

Stringent Regulatory Authorities

Stringent Regulatory Authorities (SRA) are national regulatory authorities who apply the same standards for quality, safety, and efficacy of medicines as those of the WHO. To qualify as a SRA, a country must either be a member, or an observer of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use. or have a mutual, legally binding recognition agreement with a member.

Entry link: Stringent Regulatory Authorities

Substandard medicines

Substandard medicines are medicines that do not not meet the quality specifications set for that product. They are usually produced by genuine manufacturers, but the products became substandard as a result of negligence, human error, or poor storage conditions. The public health impact of substandard medicines is huge.

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Supply chain management

Supply chain management (SCM) refers to the management of the chain of activities involved in bringing a product or a service to an end user. Normally, this is done through the cumulative effort of various people and organisations.The aim of good SCM is to maximise customer value, achieve a sustainable competitive advantage, and develop supply chains in the most effective and efficient way.

Entry link: Supply chain management

T

Total health expenditure

The WHO defines total health expenditure as the sum of all public and private health expenditures in a country as a ratio of the total population of that country. Total health expenditure covers the provision of health services (preventive and curative), family planning activities, nutrition activities, and emergency aid designated for health. It does not include the provision of water and sanitation.

Entry link: Total health expenditure


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