Lexicon

Welcome to AHRMM's healthcare supply chain Lexicon. This database contains terms used throughout the healthcare supply chain field. Simply click on the link to access the entire definition.

AHRMM thanks Kate Vitasek and Supply Chain Visions for their contribution of certain terms to the Lexicon. Terms supplied by Supply Chain Visions are used with permission. Supply Chain Vision’s Glossary of Supply Chain Management Terms appears on the Council of Supply Chain Management Professionals website. AHRMM also acknowledges Michael B. Neely with Perimeter Solutions Group for his role in developing healthcare-specific terms.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 123

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  • 14 Points

    W. Edwards Deming's 14 management practices to help companies increase their quality and productivity:
  • 2013 IPPS Final Rule

    revises the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems. Some of the changes implement certain statutory provisions contained in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively known as the Affordable Care Act) and other legislation. These changes will be applicable to discharges occurring on or after October 1, 2012, unless otherwise specified in this final rule.
  • 24-hour Manifest Rule (24-hour Rule)

    U.S. Customs rule requiring carriers to submit a cargo declaration 24 hours before cargo is laden aboard a vessel at a foreign port.
  • 24/7

    Referring to operations that are conducted 24 hours a day, 7 days a week
  • 24/7/365

    Referring to operations that are conducted 24 hours a day, 7 days a week, 365 days per year, with no breaks for holidays, etc
  • 340B Drug Pricing Program

    The program originated with the enactment of Public Law 102-585, the Veterans Health Care Act of 1992, which is codified as Section 340B of the Public Health Service Act. Section 340B limits the cost of covered outpatient drugs to certain federal grantees and federally-qualified health centers. The 340B Program provides substantial discounts on pharmaceutical products to eligible entities such as health centers, disproportionate share hospitals and Indian Health Service grantees
  • 3D Loading

    3D loading is a method of space optimizing designed to help quickly and easily plan the best compact arrangement of any 3D rectangular object set (boxes) within one or more larger rectangular enclosures (containers). It's based on three dimensional, most-dense packing algorithms
  • 3PL

    See Third Party Logistics
  • 4PL

    See Forth Party Logistics
  • 5 Whys

    The five whys is a question asking method which is used to explore the cause/effect relationships underlying a particular problem or process. When an answer is given to a question continue by asking why the answer is appropriate. This allows for a drill down to determine a root cause of a defect or problem, or rationale for the process.
  • 5-Point Annual Average

    Method frequently used in PMG studies to establish a representative average for a one year period.
  • 5-S Program

    A program for organizing work areas. Sometimes referred to as elements, each of the five components of the program begins with the letter "S." They include sort, systemize, shine or sweep, standardize, and sustain. In the UK, the concept is converted to the 5-C program comprising five comparable components: clear out, configure, clean and check, conformity, and custom and practice. The 5-S program is frequently combined with precepts of the Lean Manufacturing Initiative. Even when used separately, however, the 5-S (or 5-C) program is said to yield excellent results. Implementation of the program involves introducing each of the five elements in order, which reportedly generates multiple benefits, including product diversification, higher quality, lower costs, reliable deliveries, improved safety, and higher availability rate.
  • 6-S

    An expanded definition of 5-S which includes safety
  • 7 Wastes

    One of the basic concepts of Lean management, the seven 'deadly wastes' are best remembered by the acronym TIM WOOD:
  • 80-20 Rule

    A term referring to the Pareto principle. The principle suggests that most effects come from relatively few causes; that is, 80% of the effects (or sales or costs) come from 20% of the possible causes (or items). Also see: ABC Classification, Pareto
  • 80-20 Rule

    A term referring to the Pareto principle. The principle suggests that most effects come from relatively few causes; that is, 80% of the dollars of products purchased come from 20% of the number of products used.
  • A/P

    See Accounts Payable
  • A/R

    See Accounts Receivable
  • A3 Method

    The A3 system is a means of describing a business process in a compact form. It was originally created by the Toyota Motor Corporation and was named for the paper size on which it was printed: A3 (11" x 17"). Toyota used the A3 methodology to help develop its famed Toyota Production System (TPS).
  • Abandonment

    (1) The decision of a carrier to give up or to discontinue service over a route. Railroads must seek ICC permission to abandon routes. (2) As in the phrase "call abandonment". This refers to people who, being placed on hold in an incoming call, elect to hang up ("abandon") the call. Call centers monitor closely the "abandonment rate" as a measure of their inefficiency.
  • ABB

    See Activity Based Budgeting
  • ABC

    See Activity Based Costing
  • ABC Classification

    Classification of a group of items in decreasing order of annual dollar volume or other criteria. This array is then split into three classes called A, B, and C. The A group represents the largest group from a financial movement perspective with 10 to 20% by number of items, and 50 to 70% by projected dollar volume. The next grouping, B, represents about 20% of the items and about 20% of the dollar volume. The C-class contains 60 to 70% of the items, and represents about 10 to 30% of the dollar volume.
  • ABC Classification

    A method of Classifying inventory items relative to their impact on total control. ABC typically uses movement and cost data to calculate the value of stock usage over the prior period, and uses the result as an element in ranking items under an 80/20 Pareto rule for cycle counting purposes. The group is divided into class┐es called A, B, and C (and sometimes D) with The A group represents the highest value with 10 to 20% by number of items. The B, C and D (if used) groups are each lower values but typically higher populations. Items with higher usage value are (the 20%) are counted more frequently. Specific bars to be used in setting ABC levels will vary by organization as they will impact the financial control applied to inventory and the level of effort spent counting. See: Cycle Count
  • ABC Costing

    See Activity Based Costing
  • ABC Inventory Control

    An inventory control approach based on the ABC volume classification of Products, (A items are highest volume or cost, B items are less volume or cost, C items are lowest volume or cost). In this approach the A items are counted most frequently, the B items are counted less frequently than the A but more often than the C items which are counted less frequently. This approach is often used in an effective inventory cycle counting process and results in a higher level of inventory accuracy. The items which have the largest degree of movement are monitored more closely as those items tend to be have more variance between the physical inventory counts and fiscal records maintained in accounting.
  • ABC Inventory Control

    A method of inventory control which divides items into categories based on value of usage, something like a Pareto division where the items which constitute the highest dollar value are tracked more closely than those with lower value movement. In this method an item with high volumes of movement, but low cost, such as a small cheap fastener, would likely be counted less frequently than a slower mover which has a very high cost. Items are typically divided by a company defined set of values into "A", "B" and "C" groups, and sometimes even a "D" group. Then count frequencies are applied to the groups, for example "A" class items may be counted weekly, "B" monthly, "C" quarterly, etc. as a part of a cycle counting program.
  • ABC Model

    In cost management, a representation of resource costs during a time period that are consumed through activities and traced to products, services, and customers or to any other object that creates a demand for the activity to be performed.
  • ABC System

    In cost management, a system that maintains financial and operating data on an organization's resources, activities, drivers, objects and measures. ABC models are created and maintained within this system.
  • ABM

    See Activity Based Management
  • Abnormal Demand

    Demand in any period that is outside the limits experienced during a normal demand cycle. This demand may come from a new physician or from existing clinicians whose own demand is increasing or decreasing based on patient levels. It is important to evaluate the nature of the demand in order to prevent future stock outs or over stocking.
  • Abnormal Demand

    Demand for a product which is either greater or lower than expected by a given percentage which is determined by the organization. When observed, it should be determined whether it may be a one-time spike, or if the effect is part of a trend which should be considered during future forecasts.
  • ABP

    See Activity Based Planning
  • Absorption Costing

    A cost accounting approach which captures overhead and other indirect costs as separate from unit costs for a given period, and then applies (absorbs) those costs into unit costs at the period end based on various factors such as movement and COGS elements.
  • Acceptable Quality Level (AQL)

    In quality assessment, acceptable quality level, also known as assured quality level, describes the maximum number of defects acceptable during the random sampling of an inspection..
  • Acceptable Sampling Plan

    A quality management procedure which defines the sample sizes and acceptable defect levels for validating quality of products.
  • Acceptance Number

    See Acceptable Quality Level
  • Acceptance Sampling

    A statistical quality control method which tests samples of products at defined points as opposed to testing each product.
  • Accessibility

    The ability of a carrier to provide service between an origin and a destination.
  • Accessorial charges

    A carrier's charge for accessorial services such as loading, unloading, pickup, and delivery. See also: Upcharges.
  • Accessory

    A choice or feature that is optional to the good or service offered to the customer. An accessory enhances the capabilities of the product but is not necessary for the basic function of the product. In many cases, an accessory means that the item will increase in cost without corresponding increase in value.
  • Accessory

    A feature which can optionally be added to a finished good at the discretion of the customer. An example would be the addition of a special trim feature to an automobile.
  • Accountability

    The act of making a group or individual responsible for certain activities or outcomes. For example, managers and executives are accountable for business performance even though they may not actually perform the work.
  • Accountability:

    Being answerable for, but not necessarily personally charged with, doing specific work. Accountability cannot be delegated, but it can be shared. For example, the Distribution Manager is accountable for inventory management as well as the VP Supply Chain is accountable for the performance of the inventory numbers even though he may not actually perform the work
  • Accountable Care Organization

    Prompted by concerns that the U.S. health care system suffers from serious gaps in quality and widespread waste, many reform efforts have focused on holding individual providers accountable through performance-measurement and pay-for-performance programs. By focusing on individual clinicians, however, such efforts may overlook quality problems attributed to poorly coordinated care.
  • Accounts Payable (A/P)

    The value of goods and services acquired for which payment has not yet been made to the supplier.
  • Accounts Payable (A/P)

    The Department responsible for making payments for products and services acquired from vendors or suppliers. Typically there is a high level of interaction between this department and Purchasing concerning the processing and verification of invoice payments
  • Accounts receivable (A/R)

    The Department responsible for receiving funds or payments for service or treatment rendered to a patient.
  • Accounts receivable (A/R)

    On a company's balance sheet, accounts receivable is the amount that customers owe to that company. Sometimes called trade receivables, they are classified as current assets assuming that they are due within one year.
  • Accreditation

    Certification by a recognized entity or adherence to a predetermined standard. For example, the JCAHO accredits those healthcare organizations that meet it's guidelines. An individual hospital or IDN may also have a process in place to accredit its suppliers or salespersons.