Supply Chain Management main glossary

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

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A term used to describe an objective, methodology or instrument that measures what it is supposed to measure.

Entry link: Valid

VED classification

The VED classification classifies items of an inventory in a warehouse based on their general importance for the organisation. Inventory is broadly divided into:

  • Vital. Vital category items are those items without which the productive activities such as clinical consultations or surgeries would come to a halt, or at least be drastically affected.
  • Essential. Essential items are those items whose stock-out cost is very high for the organisation.
  • Desirable. Desirable items are those items whose stock-out or shortage causes only a minor disruption for a short duration and for which the cost incurred is nominal.
Entry link: VED classification

VEN classification

The VEN classification is an inventory approach which classifies items based on their importance for the patients or clients. Inventory is divided into:

  • Vital. These are potentially life-saving or crucial products to providing basic health services with a major public health importance. They can also contain medicines with a significant withdrawal side-effect.
  • Essential. These are items which are effective against less severe but significant forms of disease.
  • Non-essential. These are items used for minor or self-limited illnesses and may or may not be formulary items or included on the national EML list. They are the least important items to be stocked.

Sometimes a country or an organisation has insufficient funds to buy all the desired medicines. The VEN analysis is a well-known method to help set up priorities for purchasing medicines and keeping stock.

Entry link: VEN classification