Supply Chain Management main glossary

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

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ABC classification

The ABC classification (also called the 80/20 rule or the Pareto analysis) is a method of classifying inventory according to their relative importance. The items are classified as either A, B or C as follows: A -Very important; B -Moderately important; C -Least important. This approach enables the organisation to concentrate on high value or otherwise important items, while not neglecting the other categories.


Entry link: ABC classification

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.

Entry link: Active pharmaceutical ingredient

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.

Entry link: Aircon storage

Allopathic medicine

Allopathic medicine refers to the mainstream system of medical practice in Western countries. Also called Western medicine, bio-medicine, evidence-based medicine or modern medicine.

Entry link: Allopathic medicine

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.

Entry link: Ambient storage


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.

Entry link: Audit

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.

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

Entry link: Average monthly consumption



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.

Entry link: Batch

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.

Entry link: Batch number

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.

Entry link: Batch release

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