ABC Analysis

A ranking of items in the Item Catalog based on percent of annual expense for the item. Class A items carry the largest percentage; class C items carry the smallest percentage.

ABC Classification

A classification for an item based on a percentage of the annual expense for all items. Typical percentages are:

A = 20% (the 20% of the items that carry 80% of the expense)

B = 30%

C = 100% - Class B% - Class A%

Sites can define ABC classes based on annual item expenses. Any item can then be assigned the appropriate letter class according the percentage of the expense that it carries.

ABC Cycle Counting

A physical inventory method that cycles item counts based on ABC class. This method counts "A" class items (the 20 percent of the items that constitute 80 percent of the inventory expense) more often than "B" and "C" class items.

Accept a Contract

In Sourcing and Contract Management (SCM), to mark a contract as accepted, making the contract's spend available for analysis in Sourcing and Contract Management . After contract acceptance, contract prices can be activated.

The concept of "accepting a contract" does not exist in SCA.

Account Mask

Account "masks" are a way to specify one or more account codes, or a range of account codes in "shorthand" form, without keying in every code. The "syntax", or actual shorthand, includes literal values -- integers -- and "wild cards." For example, the account mask 001-20?-10? uses the wild card character ? to cover accounts 001-200-100 to 001-209-109.

Activate Prices

For a contract, activating prices flags the prices as current, and writes the prices to the item vendor record in the site's item file, or in ERP's Item Catalog. Price activation makes contract items available for purchase at the contract price from the date that the contract price is effective.

Activated items can be deactivated. When deactivated, a contract price is no longer used in purchasing. When a contract expires, the application deactivates all the contract's prices.

Active Item

ActiveX Controls

Note: As of Release 7.11, ActiveX controls are being phased out in ERP in favor of more recent, and better technologies.

ActiveX controls are compact, reusable programs that can be combined to provide various features in Internet-delivered applications. For example, ActiveX controls can let users rearrange the order of columns in application panels and lists.
ActiveX controls (officially) work only with Microsoft Internet Explorer on the Windows operating system. ActiveX controls are downloaded to Internet Explorer from the application that uses them.  Materials Management uses a few ActiveX controls.

ADT

Aging Analysis

An analysis method that flags obsolete, overstocked, and surplus items. (Also called "Dead Stock Reporting.")

Alert

Message sent as a reminder for reviews or as a notice that a problem was encountered or a threshold reached.

Allocate Items; Allocation

In Materials Management, to reserve items that are to be issued, but that have not yet been taken out of stock. Items that are "allocated" are not available for issuing.

In General Ledger, an allocation is a formula or algorithm that establishes how dollars from one or more accounts are redistributed to other accounts.

Analysis Group, Dynamic Analysis Group

In Sourcing and Contract Management, a segment of a hospital's total spend dollars defined according to categories that the analyst selects.

Analysis groups can contain file, non-file, off-contract spend, or all spend.

ANSI

American National Standards Institute
An organization responsible for developing voluntary national standards, such as standards for computer languages, EDI, and others. Standards themselves are created by non-governmental committees and managed by ANSI.

AP Location

ASC X12

Accredited Standards Committee X12
An organization that creates generic EDI standards.

Asset Location

An asset location is an online repository for supply records and transactions. You can think of an asset location as a "virtual warehouse." An asset location contains item inventory records; purchase order and requisition records, and more.

Some hospitals associate asset locations with actual physical inventory areas containing items on shelves or in bins. In a stockless environment, asset locations provide records needed for supply purchases and issues.

Normally, a department is assigned a particular asset location (or locations) to use in requisitioning/purchasing items. A medical center can be set up so that one (larger) asset location supplies items to several other asset locations.

Async Process

Async is short for asynchronous. An async process is a routine that runs independently of a main program in an application. Async processing is sometimes called processing "in the background." The normal application features are available to users while asynchronous processes run.

Some application routines that are time consuming -- such as purging unneeded data -- process asynchronously, and can often be scheduled to run at times of the day when other use of the application is low. Both the ERP and SCM products contain a scheduling feature so that users can set up asynchronous jobs -- "batch jobs" to run in off hours. See Set Up Schedules for Batch Jobs.

Available to Issue

On-hand inventory minus allocated inventory. (Also called Available Inventory.)

Average Cost

A stock item's cost on any given day - the average cost - is subject to change, based on several factors. Details are in the topic "Calculating the Average Cost of an Item."

In general: When on-hand quantity is present for an item, average cost equals the inventory value divided by the on-hand quantity. When on-hand quantity is zero, average cost equals the lowest UOM cost for the primary supplier.

Award

To accept a manufacturer's bid and generate a contract with that manufacturer.

Backorder

A backordered item is out of stock and expected to be available at a future time. Requisitions for non-stock and non-file items have the status "backordered" until a purchase order with the item is received. If a stock item is not available, the status of the requisition is also "backordered."

Backorder Quantity

The total quantity of an item currently on backorder to all departments within the current Asset Location.

Batch Processing, Batch Job

With batch processing, an application bundles data from files and processes several bundles at a time. Batch jobs run in asynchronous mode. With the ERP and SCM applications, you can establish a schedule for running a batch job, and the application does the processing without user intervention. See Set Up Schedules for Batch Jobs. Also see async process.

Best Packaging

A calculation performed by the system to order items in the most convenient and economical purchasing unit of measure.

The application automatically calculates and uses best packaging to ensure that a PO is created in the best purchasing UOM for the vendor.  It occurs for non-stock items and stock items that do not have Preferred Ordering information specified.

The best packaging logic takes the quantity requested in the lowest UOM and searches the item UOMs for a purchasing UOM with a conversion factor that divides evenly into the requested quantity. If one is found that is different from the UOM requested, that UOM becomes the purchasing UOM.

For example, item Gauze Packet has UOMs EA/BX(5)/CA(10)/PL(100). The purchasing UOMs are BX, CA and PL. The user requests 2 BX(5), which equals 10 in the lowest unit of measure.  The conversion factor for CA is evenly divisible into the lowest unit of measure, so the PO orders 1 CA. If CA was not a purchasing UOM, then the PO would order 2 BX. 

Blanket Purchase Order

An open purchase order, usually with no specific quantities and no ship dates. A Blanket Purchase Order may not even have any listed items. For instance, a lawn maintenance company may have a Blanket Purchase Order to mow the grass "for the season."

Browser

An application used to access and display information on the Internet. Microsoft Edge or Google Chrome is required for ERP and SCM.

Microsoft Internet Explorer is no longer supported.

Buy-From Location

A vendor location that accepts purchase orders. A vendor may have one buy-from location or several.

Capital Purchase

A purchase that is above a hospital's pre-defined ceiling on supply or services purchase amounts. Usually, capital purchases govern permanent assets, such as instruments, equipment, or facilities. The planning and budgeting process for capital purchases is typically longer than for routine purchases. The Fixed Assets application accounts for capitalized assets.

Carrying Cost

For every dollar of inventory, the cost out-of-pocket plus the lost profit opportunity.

Case Cart

A cart or other conveyance that contains the set of materials to be used for a surgical procedure. A cart can be specific to a physician, specific for a procedure (or procedures), and specific to a patient. When a procedure is scheduled, the information about the case can be passed to the hospital's materials management organization. Materials Management then produces the list of items required for that case, and supplies the items. A variation is that the OR sends the list of items needed to Materials for Materials to deliver to the OR.

Cash Commitment Schedule

A method of forecasting future working capital requirements as inventory levels change.

Catalog

In Materials Management: The catalog code is an identifier associated with each materials system when a site has several materials systems. Each materials system is assigned its own catalog code.

Since manufacturers and items may be the same across the materials systems, each manufacturer item record and item catalog/inventory record displays the code for any materials system where its record exists.

The catalog number typically appears with the manufacturer number or item number in parentheses, in light gray; for example:

Item
91330 (MM456)
Thermometer Temp Incubator

Manufacturer
SPS MEDICAL
SPSMEDIC  (MM123)

The catalog number may be the same as the vendor set, when a vendor set is used at the site:

Vendors
3M Company
1014 (MM123)

3M Company
1014 (MM456)

3M Company
1015 (MM789)

Categories

- Classifications of Services vendors for purposes of spend analysis. (examples: Insurance, Legal Services, Travel, Car Rental).

- As applied to contracts, a  descriptor tag that identifies the type of items in a supply contract: for example, Integrated Platform, (Chemistry and Immunochemistry Analyzers, Automation, Reagents, Consumables, and Service)

Channel Partner

A supplier of business services at any point in the supply chain (from production to consumption) who moves products through the chain.  

Checkpoint

In Materials Management, a snapshot of inventory activity at a point in time. When you set a checkpoint, the application creates a record containing inventory activity (for each asset location) calculated from the previous checkpoint up to the checkpoint that you just created.

Commodity Code

In Materials Management, a code entered on an item record that identifies the item as a particular type (e.g., "gas," "reagent," "prosthesis," etc.) defined by the hospital. You can set up separate requisition approval paths for commodity-coded items.

Connector

A software module in Sourcing and Contract Management that talks to an MMIS system used by a "stand alone" site; that is, a heath care center that does not also license Premier's ERP Materials Management, but uses another vendor's application.

Consignment Items

Items that a vendor keeps on site at a hospital. The vendor does not charge the hospital for the items until they are actually used. See Processing Consignment Items.

Contract

An agreement between a hospital and a manufacturer, services provider, or GPO. Supply contracts are used for purchasing supplies, and may be simple or complex, with one or many tiers, and may cover elements such as item price, minimum purchase requirements, delivery terms and guarantees, etc.   Services contracts are used for purchased services such as landscape maintenance, physician services, laundry service, etc.

Contract line: single item as priced in the contract agreement.

Conversion Factor

The factor used to convert one unit of measure to another. For example, if 1 box = 10 each; the conversion factor is 10.

Contract Price Exception

An instance where an updated contract price is outside the tolerance (acceptable amount of change) for a price increase (or decrease).

Control Group Cycle Counting

A method of counting in which a group of items is set aside as a "control group." The control group is counted repeatedly over a short time period. Cyclic group cycle counting is typically used to analyze or test the design of an inventory process, rather than to monitor inventory record accuracy. 

Customer Service

See Service Level.

Cycle Counting

A method of performing physical inventory that involves regular counts of inventory items. Items are counted systematically according to a cycle paradigm. The cycle paradigm describes the frequency of the count (daily, weekly, etc) and defines a selection method for items (e.g., by aisle and bin, alphabetically by description, by class, etc.) The objective is to keep accurate records by finding any differences between records and the actual quantity of items on hand and determining the reasons for the difference.

Dashboard

A panel that contains one or more gauges (tables and/or graphs) that track key statistics of interest to the user. In Sourcing and Contract Management, users can create multiple dashboards and populate them from a list of available gauges of their choice. See Using Dashboards.

In ERP, users can view several gauges with various types of data on the Welcome Page.

Data Profile

Specifies the region, organization, department, and asset location data that a user may access. Many application features contain restrictions based on the users' data profiles.

Demand Filter

A statistical method of filtering out unusual peaks and valleys in sales patterns.

Department

An organizational unit of a medical facility. This could be a floor, a medical/surgical service, a nursing station, the gift shop, food services, the OR suite, the ER, physical plant/facilities, etc.

Direct Ship

A process whereby the vendor delivers supplies directly to the staff using the items on a hospital floor, bypassing the receiving dock. 

Distributor

An entity that warehouses, markets, and/or sells merchandise in a given area.

Drop Ship

Shipping to a location other than the ordering location. A hospital that owns physician practices and other entities may purchase centrally, but drop ship directly to each location.  

EDI

Electronic Data Interchange
The generation, sending, and receipt of information electronically between the hospital and vendors. EDI documents of various types have been defined by the standards organization. The Materials Management applications use several of these document types such as purchase orders, invoices, vendor catalogs, and others. Specifically, ERP supports these EDI documents:

EDI 850 - purchase orders
EDI 855 - purchase order confirmations
EDI 810 - invoices
EDI 832 - vendor catalogs
EDI 820 - payments
EDI 856- advance replenishment notice

End Customer

One of the healthcare providers or consumers who use products in caring for a patient or for themselves.

Entity

For Materials Management ERP and SCM:
A business that provides a hospital with supplies or services. An entity may be a vendor, distributor, or manufacturer.

An Entity is a business that has been defined in the Product Index Layer. An entity would be a corporate name or parent corporation for a manufacturer or vendor. For example, Novartis A.G. would be a parent entity for vendors such as Alcon Inc. and Gerber Products Company. A large health care organization may have several vendor locations for Alcon (in different geographic areas), and all would be associated with the entity Novartis A.G.

The Product Index Layer uses manufacturer and vendor entities to identify items by MIN (manufacturer item numbers) and VIN (vendor item numbers) in a standard way. Associating a vendor or manufacturer location with the overall corporate name -- entity -- registers the vendor or manufacturer. Once registered, a vendor's or manufacturer's supply or services spend is available for display and analysis.

A Local Entity is a business that has been defined in your site's database and only applies to your site.

Note: Other  applications available to members (e.g., SCA) use the word "entity" for other purposes, such as to designate a subset of organizations/departments ("facilities") in a health care center. This term is application-dependent. Contracts in SCM that are "parent-managed," in other words, synced with SCA, may also have SCA-style entities assigned to them.

The Dictionary of Terms for the beta Catalog has an additional set of definitions specifically related to contracts.

EOQ

Economic Order Quantity
The number of items to purchase that will allow for the smallest price per item.

Escheat

Escheat refers to the power of a U.S. state to acquire title to property for which there is no owner. Typically a hospital has accounts payable checks that have not been cashed for many months. The hospital attempts several times to locate the payee; if unable to do so, the hospital is required to send the money to the appropriate state for the payee.

The escheat process lets you select uncleared checks based on a check date within a range of dates, a bank account, an organization, and a state. You can review the selections, and unselect any that are not relevant. You can then create escheats payments from the selected uncleared checks.

Exception/ Vendor Exception on a Contract

An imported contract may contain items that do not match a hospital's item file records in every respect, or that have prices above/below limits set by the hospital. These are "exception" items.

In Sourcing and Contract Management, exceptions include:

• UOM errors: items whose unit of measure in the contract does not exist as a purchasing unit of measure in the item file record.
• Price exceptions: unactivated items whose prices on a new contract are outside of a tolerance that you have set.
• Contract exceptions: items that have been imported on a contract, but that are already activated on a different contract.

Exception Invoice

An invoice with one or more lines that do not agree with the receipt's lines in terms of quantity, price, or both (i.e., the price or received quantity on the invoice was higher/lower than on the receipt). Other types of exceptions are also possible: missing lines, unreceived items, etc. See "Handling Invoice Exceptions."

Extended Price

An item's unit price times the quantity; appears on a purchase order line and invoice line for an item.

Export

To recreate in another format and make available for saving outside of the application. (For example, generating an Excel worksheet from a list panel, users can save the Excel document on a local network, or on their local computers.)

Facility

An organization at a medical center. The term facilities is another way of referencing the organizations, hospitals, or large units, that make up a medical center's structure.

Facilities may contain each other. Typically, the Top Parent facility is the highest in the hierarchy.

This term is mostly relevant to contracts that are managed from SCA (i.e., "parent managed contracts."

Fee
See Incentive)

Sourcing and Contract Management incentives are reimbursements from suppliers for purchases on contracts. Incentives may be compensation for services; for example, a manufacturer distribution incentive if the hospital distributes the manufacturer's items to multiple locations. Incentives can be rebates and sharebacks, loyalty incentives, and others. In Sourcing and Contract Management, users can define, set up, and apply different incentives based on the manufacturers terms.

An incentive may be a fixed dollar amount, or may be based on the hospital's percent of spend on a contract.

Font

A typeface family such as Helvetica, Courier, Arial, Verdana, etc.

File Item

An item listed in the supply catalog. It is an item regularly used and purchased by the site. File items include stock items, which are may be kept on site, and non-stock items which always must be ordered when needed by a department. Compare to non-file item.

Fill-Kill

A flag indicating a partial fill of an order, by design. If a vendor buy-from location can only partially fill a purchase order, it will do so, and kill any remaining quantity.  Individual receipt lines for a fill-kill vendor buy-from location cannot be canceled. Canceling one receipt line results in cancellation of all lines.

Forecasting

The estimation of future demand or need.  

Gateway

A gateway is a portal for uploading and downloading files between the applications and an external network. The Premier Pulse applicance handles gateway imports and exports.

Gauge

On a dashboard, a graphic depiction of a statistical value, status, quantity, dollar amount, or other data.
In ERP and SCM, you can set a gauge profile for a user that governs the gauges that he/she is allowed to see, including those on the Welcome page. The Adminstration section lets you create gauge profiles and then assign them to user profiles.

GLN

Global Location Number
A globally unique identification number that is used to identify a location to the supply chain. It may be used to identify both physical locations and legal entities.

GPI

Generic Product Identifier
A proprietary code from Medi-Span® that identifies drugs using a 14-character hierarchy. The hierarchy of code values includes (top to bottom): drug group, class, subclass, name, name extension, dosage form, and strength.

GPO

Group Purchasing Organization
An organization owned by member hospitals or a hospital association that negotiates purchase agreements for supplies, drugs, food, services, capital equipment, and software. GPOs usually achieve superior pricing by combining the purchasing volume of several hundred medical centers and either requiring or encouraging compliance. (The GPO does not actually place orders, inventory supplies, receive orders, or invoice members for goods received. Those are the functions of individual hospitals.) 

GS1

An international not-for-profit association that develops global standards for supply and demand chains; its supply chain standards system is the most widely used in the world. (See GTIN.)

GTIN

Global Trade Item Number
A value assigned to any item (product or service) that may be priced, ordered, or invoiced at any point in any supply chain. The GTIN is used to to retrieve pre-defined information about the item. See Work with GTIN Item Identifiers.

The GTIN (and SSCC) codes are registered with the GS1, a non-profit organization dedicated to the design and implementation of global trade standards for the purpose of improving efficiency in the supply chain.

HEDIC

Healthcare EDI Coalition

HIBCC

Health Industry Business Communications Council

HIDA

Health Industry Distributors Association

HIN

Health Industry Number
A global identifier which uniquely enumerates the locations of services and activities in the healthcare industry. The HIN also identifies individual prescribers by location, provider establishments, including internal locations where services are performed, and all other entities in the health industry supply chain.

HIPAA

The Healthcare Insurance Portability and Accountability Act. This is a statute passed by Congress in 1996 that does the following:

"- Provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs.
- Reduces health care fraud and abuse.
- Mandates industry-wide standards for health care information on electronic billing and other processes; and
- Requires the protection and confidential handling of protected health information."

(Above is quoted from the CA.gov California Department of Health Care Services website.)

IDN

Integrated Delivery Network; a large health care organization such as Ascension Health Care or Duke Health Care that may own different medical facilities and related institutions (e.g., assisted living centers, urgent care centers, ambulatory care centers, etc. ) in different parts of a state or country.

Import a Contract

For Sourcing and Contract Management, the process of uploading a contract and bringing it into SCM for work.

Incentive

Sourcing and Contract Management incentives are reimbursements from suppliers for purchases on contracts. Incentives may be compensation for services; for example, a manufacturer distribution incentive if the hospital distributes the manufacturer's items to multiple locations. Incentives can be rebates and sharebacks, loyalty incentives, and others. In Sourcing and Contract Management, users can define, set up, and apply different incentives based on the manufacturers' terms.

An incentive may be a fixed dollar amount, or may be based on the hospital's percent of spend on a contract.

Incentive Type

Incentive type describes the reason why an incentive is offered by a supplier. For example, incentive types include rebates, administration charges, sharebacks, distribution charges, loyalty or utilization incentives, etc.

Inventory

A list of supplies normally kept in stock, complete with on-hand quantities, amounts on order, etc. File items are inventoried; non-file items are not. An item inventory in the application may refer to a real storage location (a physical location) or a virtual one (for items that are normally available through "just in time" vendor deliveries).

Inventory Record

Any document, account, or information pertaining to an item that contains data such as quantity, asset location, vendor, manufacturer, item number, etc.

Inventory Process

All operations involved with an item from the moment it is received.

Invoice

A "bill" from a vendor for supplies or services.

IP Address

An Internet Protocol address. The address is a number that identifies each device belonging to a network that uses the IP Protocol. Typically, on the World Wide Web, IP addresses are binary numbers that take the readable form: nnn.nn.nnn.n; e.g., "172.68.234.1". These are called "octets."

Item Catalog/ Item File

A list of supplies that can be ordered from approved vendors. The item file is created and maintained by medical center staff.

Item Class

A broad category of items, such as gloves.

Item Subclass

A narrower, specific type within a class, such as surgical gloves.

Journal Entry

Journal Voucher

Just-in-time (JIT)

A strategy that seeks to reduce the carrying cost of supply inventory by acquiring supplies at the point when they are needed, rather than keeping supplies in stock. The ERP and SCM applications support this approach.

KPI

Key Performance Indicator
A measure of performance that indicates success or failure of a particular activity. For example, the activity may have defined goals, and the KPI may measure goal achievement. For example, a site that wishes to reduce the time that a requisition spends in the approval process may have a KPI such as "Average number of hours needed to approve requisitions."

Lead Time

The total time elapsed between recognizing that an item needs to be ordered and receiving the ordered item, including updating stock status records.

Landed Price

The cost of an item, including any vendor markup.

Local Entity

Lot Number

A lot number identifies a group of items manufactured, bundled, or packaged together. For example, an inventory may have two lots of Item 334455 -- Latex Gloves: lot number 011 and lot number 022. Lot number tracking can be associated with items in inventory by itself, or in combination with serial number tracking and/or expiration date tracking.

Manufacturer

A person, group, or enterprise that makes goods manually or by automation.

Markup Value

A dollar amount added to an item's manufacturer price by a vendor. Markup can be specified as a fixed amount on some basis, such as per item UOM (e.g., $0.50 per case), or as a percent.

Markup set is an editable field in Sourcing and Contract Management (SCM).

Matched Item

An item that has been matched from a contract to a record in the site's item catalog.

There is a definitive discussion of this topic in the Spend, Savings, and Contract Definitions.

supply chain

The process involving all activities and functions related to the cycle of acquisition and use of materials. This cycle may include production, packaging, purchasing, shipping, expediting, handling, receiving, warehousing, inventory control, internal ordering (requisitions), distribution, invoicing, payment, and journal entries in a General Ledger.

Maximum Stock Quantity

The maximum quantity of an item that can be ordered at any one time. (Useful when storage facilities are limited.)

Mean Absolute Deviation (MAD)

A statistical measure of forecast and/or sales variability about an expected value.

Minimum Stock Quantity

A calculated value equal to Days Between Delivery * Average Daily Usage if  Days Between Delivery is greater than zero. Otherwise, it equals Pipeline Days * Average Daily Usage. See the topic  "Using the Suggested Order List - Response Formula Description."

MIN

Manufacturer Item Number
An identifying number given to an item by the manufacturer.

Missing Vendors

MMIS

Materials Management Information System
A system for acquiring, inventorying, and distributing supplies. See Materials Management for detail.

Moving Average

The average value (for some defined statistic, such as item count) and period that is continually moved forward. Thus, a "two-week moving average" is made of counts from the latest two-week period. A moving average biases the average of historical information to the more recent periods.

MRP

Material Requirements Planning
The calculation of requirements for materials using information such as bills of materials, inventory data, etc., in order to replenish orders and reschedule open orders to meet changing needs.

NDC

Non-Contractible Item

An item that is never purchased on a contract. The  Materials Management ERP item record contains a flag identifying the item as non-contractable. Blood is a typical non-contractual item.

Non-File Item

An item that is not in the item catalog (i.e., not "on file"), such as a capital purchase, an implant used in a clinical procedure -- customized for a particular case -- or any special item that is not frequently purchased. Compare to file item.

Non-Stock Items

Items used in a hospital but not kept on hand in the hospital. They are ordered when needed.   Non-stock items are file items. Compare to stock item.

Off-Contract Spend

Dollars spent on items purchased outside of the sites supplier contracts.

There is a definitive discussion of this item in Spend, Savings, and Contract Definitions

On-Hand Quantity

The quantity of an item currently in stock, including any allocated quantity.

On-Order Quantity

The total quantity of an item currently on order from a vendor but not yet received.

Opportunity Cost

Lost profit due to lack of working capital.

Order Cycle Time

The time from the receipt of a customer order to the delivery of the merchandise to the customer.

Order Guide

"Shopping lists" of items that a department uses on a regular basis. Each order guide is customized to meet the needs of a department. The list can include stock, non-stock, and consignment items. Department staff use an order guide to requisition items.

Typically, departments have several order guides for different purposes; e.g., "Office Supplies," "Patient Care Items," "IV Supplies," etc.

Order Point

The level of inventory used as a signal for possible item reorder. See the topic  "Using the Suggested Order List - Response Formula Description."

Order Point Inventory System

A materials management system that uses an Order Point to generate reorders, in order to keep inventory at a specified Level.

Order Quantity (OQ)

The number of items requested on a purchase order.

Order Up-To System

An inventory system in which orders are placed on a fixed time schedule. Orders are placed so that the inventory will be brought "up-to" a specified level.

Organization

For  Materials Management ERP and SCM:
A top-level service division within a medical center. An organization can be an entire hospital, in a large medical center, or a large hospital unit. An organization is bigger than a department but smaller than a region.

Note: Other applications available to members use the word "facility, " which is roughly equivalent to "organization." SCA uses "entity" as well to mean a defined group of organizations/departments that can access a particular contract.

Par

Periodic Automatic Replenishment.

Par Cart

See Par Location.

Par Count

Each par location contains often-used items and each item has a par quantity. This quantity is the level at which the item is kept stocked at the location.

Periodically, hospital supply distribution staff go to par locations on hospital floors and count the number of unused items. This count is either entered into a mobile device and downloaded to the application. Or, the count is recorded on paper and then entered into an ERP panel. The system subtracts the on-hand quantity (the amount counted) from the par level (the amount that should be stocked at the location) and calculates the number of items to replenish. The system creates the item issue documents, and generates the replenishment transactions.

Parent-Managed

A field on the SCM Contract Info panel that indicates the contract is managed in the  SCA application (also called "-Managed Contracts"). These are  contracts where tier activation is handled in SCA. This field only appears for users logged in as Premier internal users.

Sites may also have "local" contracts, which are non-Premier contracts, and are not parent managed. Contracts from other GPOs (e.g., Vizient) are considered as "local."

Parent-managed contracts are synced between SCM and SCA.

Par Level /Quantity

A unit quantity for each item kept in a par location that is sufficient for the interval period for re-supply. This quantity is the level at which the item should be kept stocked at the par location. Materials Management inventories each item and brings the quantity on hand up to the par level. Example: par is 10, quantity is 4, replenish 6.

Par Location

A place in a hospital department (or floor) where frequently-used items are kept. The location can be a closet or a set of shelves, for example.

Item quantities in the location are "topped up" to their defined par quantities through the hospital's par replenishment process. This process can be established in ERP Materials Management.

The general term "par cart" refers to a par location, shelf, or other storage.

Pareto Principle

The assumption that when there were many contributors to a result, only a few of the contributors were vital to the result. (Also known as the 80/20 rule.)

Percentage Inventory Records Accuracy

The number of correct records divided by the total number of records.

Perpetual Inventory Record

A systematic bookkeeping procedure for measuring inventory balances on hand or available for future orders.

Physical Inventory

A survey or count of items onhand to confirm or contradict existing inventory records.

Pick

The gathering of items from storage to fulfill the requests for supplies.

Pick List

A form or document providing necessary information such as item numbers, descriptions etc. used to pick items. 

Point of Use Systems

Systems that capture the usage of items—and, usually, patient information—at the time the item is used on the patient.

Price Change

For contracts in Sourcing and Contract Management: either a GPO price change or a user-initiated price change.

Price changes -- which are different from price exceptions -- occur when...

- a user changes the price of an activated contract item in the item vendor record. This type of price change is user-initiated.

- an updated GPO contract changes the price of an activated item, and the new price is outside of a tolerance that you set.

Process Control Cycle Counting

A different and effective type of cycle counting that directs attention towards areas of cycle counting that have historically been undependable.  

Product Index Layer (PIL)

A cross-referenced index of item records by manufacturer, MIN, vendor, and VIN that allows contract and hospital items to be matched without intensive data cleansing.

Project

SCM: A set of activities in Sourcing and Contract Management that allows a hospital to improve prices on items it purchases. The activities are: identifying item spend to study, soliciting competitive bids for the items, comparing prices among returned bids, comparing prices to benchmarks, awarding a contract to a bid, and maintaining relevant documents and correspondence. A project with an awarded contract calculates and displays savings from purchases on the contract.

Projects go through phases which can be tracked, for example:

• spend study
• RFP sent
• bid returned
• price analysis
• contract awarded.

Following the award, contract activation, and subsequent purchase of items, SCM tracks savings derived from orders on the contract.

In ERP, a project can be any work process, such as refurbishing a lounge, to which purchase orders, invoices, and payments can be attached. Projects may have specific general ledger accounts associated with them.

Proposal

A bid in response to an RFP (request for proposal).

Punch-Out

Purchase Order (PO)

A formal direction or document to a vendor authorizing an acquisition of supplies, or provision of services. 

Queue

An ordered list of purchase orders, invoices, requisitions, or other transactions awaiting approval or authorization. Materials Management and General Ledger include a queue for any user who is an approver, and a second queue for all approvers who handle invoices, journal vouchers, requisitions, or check requests awaiting approval.

Random Sample Cycle Counting

A type of cycle counting that randomly selects items to be counted. The chance percentage that an item will be counted is equal among all items.

Receipt

A document created by the hospital's receiving department ("loading dock") stating that ordered items were received, the date, quantity, unit of measure, and the cost. For non-file items, the receipt may also list the department that the items were ordered for.

In ERP, receipts are available to match with purchase order invoices.

Record

A table row that stores a single element of information (e.g., vendor record, item record).

Recurring Invoice

Templates for invoice information used to create "real" invoices over and over again. In ERP, when you set up a recurring invoice, you use it to generate a manual invoice. (A manual invoice is not associated with a materials purchase order.)

Rent paid monthly is a typical use of a recurring invoice.

Region

A geographic, conceptual, or other type of organizational unit (e.g., Midwest, Southeast, <100 beds, 100-300 beds, >300 beds). Usually, large IDNs structure their services regionally.

Registration

Requisition

Response Formula

The response formula is a mathematical calculation that determines the appropriate minimum stock quantity (MSQ) for stock items in the warehouse, while at the same time suggesting order quantities for purchases. Taking usage of an item over a period of time and forecasting future usage, the application determines the minimum quantity at which an item should be stocked to meet future demand, while simultaneously suggesting order quantities for inventory replenishment.

The application executes the response formula when the on-hand quantity of an item drops to the safety stock quantity. The response formula uses quantities stated in the lowest unit of measure in all calculations. The process rounds calculated quantities up to the whole unit.

For example: an item is issued as either each (EA) or box (BX), but must be ordered from the vendor by the box. The response formula calculates that 131 each need to be ordered. The system then determines that 11 boxes of 12 each must be ordered in order to receive at least 131 each.

See the topic  "Using the Suggested Order List - Response Formula Description."

Requisitions

Requests from a hospital unit for supplies or services.

RFP/RFB

Requests for proposals/requests for bids. The SCM Projects feature lets users identify and analyze item spend, select items to send out for manufacturer bids, send requests for bids to manufacturers, upload returned bids, compare current prices with prices among bids, and award a contract to a bid.

ROA- Return on Assets

The percent return on a dollar invested in a product.

ROI

Return on investment. The following is the Investopedia definition:

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different options. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Role

A user's function within the organization (e.g., buyer, department manager, district clerk), which governs their access to system features and their level of access.

Safety Stock Quantity

The minimum acceptable stock quantity for an item. The Safety Stock Quantity is a value that a materials manager specifies for an item.
Manually changing this value resets the Maintain Date (used in building item exports) to the current date. The item export build process can then pick up the item.

See the topic  "Using the Suggested Order List - Response Formula Description."

Savings

Can be any one of the following types:

• Contract Savings - savings on contract purchases.
  

• Project Savings - savings for projects with awarded contracts

• Savings Opportunities - overpayments and recoverable savings. The application shows you where you have overpaid, and provides tools to help recover overpayments.

There is a definitive discussion of these concepts in Spend, Savings, and Contract Definitions.

Scheduled Job

Serial Number

Identifies one unique piece of inventory for a given item number and description. In ERP, item serial numbers can be tracked alone or in combination with lot numbers and/or expiration dates.

Service Level

1. The percent dollar demand satisfied within a fixed time period.
2. The percent of line items satisfied within a fixed time period.
3. The percent of invoices satisfied within a fixed time period.
4. The probability of a stockout within a reorder cycle.

Spend

Actual invoiced dollars from the previous number of months as specified by the user (default = 12 months). Spend is a "rolling" measure: as a month is completed, the spend values change.

A definitive discussion of this concept can be found in Spend, Savings, and Contract Definitions.

Spend Type

Standing Orders

Purchase orders that have predetermined quantities and prices allowing the items to be delivered at regular intervals. For example, a standing order can be issued to a paper vendor for 10,000 reams of copy paper every 2 weeks.

"Stand Alone"

A configuration in which a hospital has Sourcing and Contract Management without the other Premier ERP products. "Stand alone" sites may have a materials management system such as Lawson, McKesson, or PeopleSoft. Sourcing and Contract Management has connectors that exchange data with a hospital's MMIS system.

Statistical account

A general ledger account that tracks statistical, non-monetary information. Examples include: labor hours or occupancy. Statistical accounts are supported in distribution lines for invoices (except recurring invoices) and in check requests.

Stock Item

An item that is normally kept in inventory. Stock item records are in asset locations. Compare to non-stock item.

Systematic Physical Inventory

A method of establishing inventory record balances that combines features of  physical inventory and cycle counting.

Tier

A price bracket on a contract. Typically, the higher the tier, the lower item prices. The ability to purchase at a particular contract tier is usually determined by the site's past purchases of the item(s) based on quantity, dollar amount, or both.

Tolerance

The amount by which an item price on a contract, an invoice total, or other value may exceed a particular limit without generating an exception. Tolerance is set as a percentage, as a dollar cap, or as both.

Sourcing and Contract Management supports setting GPO price change tolerances and vendor price change tolerances that signal price exceptions on imported contracts. See the online documentation topic "Set and use price change tolerances."

Transaction

Materials transactions are records of item activity. For example, issuing an item to a hospital department creates a record in Materials Management. The record is an issue transaction. Receiving an item on the loading dock is a receiving transaction. 

General Ledger transactions are entries to the General Ledger that result from materials transactions such as receipts, issues, invoices, payments, etc.

Occasionally, the online user assistance refers to "EDI transactions." The meaning here is simply "exchange of purchasing information electronically using EDI documents."

Turnover

The rate at which items are used and inventory replaced.

UNSPSC, UNSPSC Code

The United Nations Standard Products and Services Code® (UNSPSC®) is a hierarchical set of codes "used to classify all products and services." An UNSPSC code provides multiple, layered categories for identifying goods and services. Each code has four levels of classification: segment, family, class, and commodity. Two digits are available for each level. (The UNSPSC web site http://www.unspsc.org provides more information about the codeset.)

Item records in ERP may contain the relevant UNSPSC code for each item, if the site uses these codes. ERP keeps an updated table of UNSPSC codes for assignment to item records.

Unit Price

The price of an item per unit. (See UOM, below.)

UOM

Unit of Measure
e.g. box (BX), case (CS), each (EA).
Item vendor records contain three types of UOMs:

• The lowest unit of measure for the item, for example EA (each). This field is required for the item to be active.
  Note: if an item has multiple vendors, the same lowest UOM must be assigned for all the vendors.
• The unit of measure in which the item is issued. An item record must have a default issue unit of measure, and may have other units of measure in which an item can be issued.
• The unit of measure in which the item is purchased. This unit of measure must be consistent with any unit of measure specified in contracts for the item. An item record must have a default purchase unit of measure, and may have other units of measure in which an item can be purchased.

UPC

Universal Product Code
A common identification number for use on traded goods administered by the Uniform Code Council.

UPN

Universal Product Number
The standard base bar coding of health care products at all levels of packaging using either UCC/EAN or HIBCC standards.

URL

Universal Resource Locator

The "address" of a web page, such as www.premierinc.com.

This text value translates to a IP address as a numeric octet.

User-Defined Field

A field on a display panel in an application that is defined by the application user.

User ID

The user's ID, up to 20 characters.

User Profile

Specifies the user's authorities and permissions within the  ERP applications. For example, a user's profile may allow him/her to approve invoices, create and maintain MM/AP vendors, or adjust security settings.

VAN

Value Added Network
A third party that acts as a "middleman" between trading partners for the electronic exchange of documents.

Vendor/Locs

Vendor Set

Also, see Catalog.

The source of vendor record information, if the data comes from an MMIS other than Premier ERP Materials Management, such as Lawson or McKesson. This designation appears in parenthesis after the vendor number in search results (Supply Search > Vendors).

Vendors
3M Company
1014 (MM123)

3M Company
1014 (MM456)

3M Company
1015 (MM789)

VIN

Vendor Item Number
Identifying number given to an item by the vendor. Different vendors will have different numbers for the same item.

Vendor item numbers (VINs) are usually different from the MIN (manufacturer item number) assigned by the manufacturer.

WWW

World Wide Web, also known as "the Internet."

No entries for X.

No entries for Y.