Supply Chain Management main glossary

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

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VED classification

The VED classification classifies inventory items in a warehouse in categories based on their general importance for the organisation. The categories are: Vital - Essential - Desirable. Vital items are those without which the productive activities such as clinical consultations or surgeries would come to a halt, or at least be drastically affected. Essential items are those whose stock-out cost is very high for the organisation. Desirable items are those whose stock-out or shortage causes only a minor disruption for a short duration and for which the cost incurred is nominal.


The VEN concept or analysis is an inventory control technique by which items are classified into the categories vital (V), essential (E) and non-essential (N), thus setting priorities for selection, procurement, distribution and use. It is used by procurement agencies and countries to categorize medicines.


VEN classification

The VEN classification classifies inventory items in categories based on their importance for the patients or clients. These categories are: Vital - Essential - Non-essential. Vital items are potentially life-saving or crucial products with a major public health importance. They also contain medicines with a significant withdrawal side-effect. Essential items are those which are effective against less severe but significant forms of disease. Non-essential items are those used for minor or self-limited illnesses. 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.


Virus d’Immunodéficience Humaine


VPP is the acronym for Voluntary Pooled Procurement, a strategic initiative established by the Global Fund aimed at ensuring a cost effective and efficient procurement of core health commodities. Through this mechanism, Global Fund grant recipient countries can procure core ehakth products through the VPP prequalified procurement services agents. More recently, it has been renamed as Pooled Procurement Mechanism (PPM).