ABCD: Technique for analyzing technical & administrative functions that are useful for process analysis and deciding how to remove or automate activities:
Activity-Based Costing: A method to plan, measure & control expenses associated with managing & monitoring the supply chain specific techniques for assigning cost in business processes to activities.
Backorders: Indicates the sufficient quantities of an ordered item are not available. A date or number of days may be provided to estimate the length of time the purchaser must wait for the item. In cases where it is known that the item(s) will not be available as per the "Due Date" on the purchase requisition, the Buyer generating the purchase order will notify the requestor.
Bar Coding: An automatic identification technology that uses parallel dark bars & spaces to represent characters. Bar coding is used to track materials in the supply chain.
Benchmarking: A search for the best practices that will lead to superior performance. Benchmarking is usually executed with those who perform a targeted activity the best, regardless of the industry. Internal benchmarking makes comparisons within an organization, such as developing best practices from several hospitals that perform similar functions.
Bin Location: The place on a storage shelf where a specific supply item is held until needed.
Case Cart: A handcart containing all the supplies needed to perform the procedures for a specific surgical case.
Cataloged Items: An item that has been completely described and identified by the manufacturer's part number, cross-indexed by UMMC's identification number, fixed pricing established and entered into the Item Table.
Chargeable Supplies: Supply items that may be charged to a patient's bill.
Consignment: An agreement whereby a vendor keeps a quantity of their supply items in stock at UMMC. UMMC is not charged for any consignment item until it is used.
Continuous Replenishment Process: A method of inventory management that matches replenishment to usage. As supplies are used they are immediately replenished.
Contract Administration Fee (CAF's): Is a fee paid by manufacturers to GPO's on behalf of the hospital members for doing business and gaining access to hospital members.
Controlled Substances Act of 1970: The DEA of Diversion Control regulates the manufacture and distribution of controlled substances. This control is designed to prevent the diversion of legitimate pharmaceutical drugs into illegal channels and to ensure that there is sufficient supply for legitimate medical uses.
Cycle Count: A scheduled, periodic count of on-hand supplies.
Data Warehouse: A repository for data organized in a format that is suitable for ad hoc query processing. The data is built from operational databases used for day-to-day business processes. The data is cleaned and transformed in such a way that is amenable to fast retrieval and efficient analysis.
Distributor: Are firms that resell products to the customer. Not to be confused with "Wholesaler" (See Wholesaler Definition).
E-Commerce: Conducting business online, which can include selling, buying, customer service, and more.
Economic Order Quantity (EOQ): A fixed-order quantity model that determines the amount of an item to be purchased at one time. The intent is to minimize the combined costs of acquiring and carrying inventory.
Electronic Data Interchange (EDI): The computer-to-computer exchange of business documents in a standard format, such as purchase orders, shipping notices, invoices between two organizations. A Buyer and a supplier are operating in a near real-time environment, which can reduce material delays by shortening procurement lead times.
Electronic Requisitioning: An automated method for submitting supply requests to the department requesting the item(s) to UMMC's supply distribution center or purchasing.
Exchange Carts: One or two supply carts on which identical supplies are kept at identical levels. During the restocking process, the carts are physically exchanged; leaving a fully stocked cart at the point-of-use while the previous cart is refilled.
Fill Rates: The percentage of purchase order line items successfully received from a vendor as compared to total purchase order line items submitted to the vendor.
Forecastable Demand: Applies to certain patterns of demand that contain enough history to provide a forecast of future demand.
Group Purchasing Organization (GPO): An organization whose primary product or service is the development of purchasing contracts with product and non-labor service vendors that its hospital membership can access.
Integrated Supply Chain: A long-term commitment between two or more hospitals for the purpose of achieving specific business objectives by maximizing the effectiveness of each participant's resources.
Inventory: Inventories make possible smooth and efficient operation of the total operation of UMMC. The basic challenge is to determine the inventory level that works effectively with the operating system or systems existing within UMMC.
Inventory Turns: The number in a given period that on-hand supplies are completely replaced. Example: If 20 items are kept on hand and 100 are ordered during a year, the number of inventory turns is 5.
Just in Time (JIT or Stockless Program): A supply procurement program designed to reduce on-hand inventory by increasing deliveries to units in low units of measure. Owens & Minor is UMMC's JIT Partner.
Lost Charges: The recoverable costs of patient-chargeable items that have been used but not allocated to patients.
Mark up: An amount added to the cost of an item to determine its price to the customer.
Medical Device Manufacturers: Develop, produce, market, and sell equipment, supplies, and services for the detection, diagnosis, treatment, and prevention of disease. Standards & Poor's concludes that the following manufacturers are MDF's:
Minimum/Maximum Reorder Theory (Min/Max): A reorder theory where replenishment to the optimum level occurs when on hand supplies reach a predetermined minimum level, triggering replenishment to the optimum level.
Non-Cataloged Items: Items ordered that have not been recorded in the Item Table with fixed pricing.
Non-Chargeable Items: A supply item that is not charged to the patient.
Non-File Items: A supply item that is not listed in the purchasing system's file of supplies available for ordering. Non-file items are products that UMMC does not have protected pricing or best price.
Non-Stock: A supply item that is not kept on hand that is ordered from the vendor when requested. Non-stock items may also have contracted pricing in the Item Table.
Original Equipment Manufacturer (OEM): A company that manufactures their products.
On-Hand Inventory: Supplies currently in stock on the premises.
Out-of-Stock: Supplies that are temporarily not on hand.
Par Stock: The processing of distributing supplies from a central location to a point from which they will be used.
Partnering: A management approach used by two or more organizations to achieve mutual business objectives by maximizing the effectiveness of each partner's resources.
Patient Charge Label: A bar-coded supply item label that is transferred from the item to the patient's charge card when the item is used.
Perpetual Inventory: An inventory management technique that constantly monitors and maintains on-hand quantities at optimal levels.
Private Label: Programs offered by GPO's and Distributors whereby vendors and/or distributors can market their products using either a GPO label cutting out a third party such as a manufacturer.
Product Standardization: An agreement to use a specific product from a specific manufacturer rather than an assortment of the same type of product from a number of manufacturers.
Recommended Reorder Quantity: Amount of stocked supply item that needs to be ordered to maintain an optimal on-hand supply.
Reorder Point: The level at which on-hand supplies must be replenished.
Requisitioning: The process by which departments within UMMC submit requests for supplies.
Safety Stock: A short-term supply of medical and surgical items kept on hand for emergencies.
Service Fee: The amount charged by a vendor for services in addition to the cost of the supply items. Delivery charges not quoted by the vendor to the department may be a service fee. If the purchase order is created before the item is received and a service fee was not entered on the purchase order, then UMMC is not obligated to pay that fee.
Sponsor: An executive champion for a supply chain improvement effort. The level of the individual will depend on the level of the project.
Stock Items: A supply item kept on-hand inventory.
Stock Out: Temporarily not having a supply item on hand.
Strategic Sourcing: The use of the overall acquisition function as a tool for strategic improvement rather than one focused on transactions only. Involves both cost reduction from better purchasing and effective partnership across the supply chain.
Supply Chain: The life-cycle processes, or route, items travel from manufacturer to point of use and payment is usually made comprising physical, information, financial, and knowledge flows whose purpose is to satisfy end-user requirements with products and service from multiple, linked suppliers.
Third-Party Logistics (3PL): Companies that specialize in performing, logistics-related services for its customers. Examples include warehouse, transportation, and product assembly.
UNITED Nations Standard Products & Services Code (UNSPSC): Using consistent description codes for products and services that are entered into our Item Master using uniquely assigned numbers to each item at all levels of packaging (shipping cases; shelf packs; and unit of use packages, or "eaches"). The UNSPSC number includes a code for the manufacturer, the item number, and the level of packaging. This type of coding is used in all sectors of industry.
Unofficial Inventory: Supplies that have been expensed but not used so that they are not included in regular inventory counts.
Value Analysis: A standardization committee comprised of knowledgeable department managers from each functional area within UMMC that addresses the need for product standardization.
Voice of the Customer: A component of Quality Function Deployment (QFD) that enables a company to take account of the customers' requirements in the design of the supply process.
Walk-up Order: Everyday departmental supply requests that are hand delivered to the supply location
Wholesaler: Are firms that resell to another company (intermediary) who then resells to a third party. Example: Pharmaceutical Wholesalers.
World Class: Being the best in your industry on enough competitive factors to achieve profit goals and be considered one of the best in satisfying customers.