## VED Analysis (Vital, Essential, Desirable)

VED classifies items by their criticality to production / operations (not by value or movement). It is especially used for spare parts and in service settings like hospitals.

### The three categories

Category	Meaning	Impact & action
Vital	Essential for production	Unavailability stops production. Strictly controlled with re-order levels.
Essential	Important but not critical	Shortage reduces efficiency. Reviewed periodically.
Desirable	Optional or substitutable	No impact on production. Controlled with least priority.

### Application in a hospital (illustration)

Life-saving, rare, critical drugs → Vital: unavailability affects critical services.
Common medicines with substitutes → Desirable: optional, no loss in efficiency.
Drugs nearing expiry → use the FSN system to identify and dispose of them in time.

> The hospital example shows VED and FSN being used together: VED ranks by criticality, FSN flags items not moving (e.g. near expiry).

Worked example

### Example 1

Hospital classification example:

A rare antivenom kept for emergency cases → Vital (its absence can cost a life, so it is strictly controlled with a re-order level).
A common painkiller with many substitutes → Desirable (least-priority control).
A batch of drugs approaching their expiry date → flagged by the FSN system so it can be used or disposed of before it becomes a loss.

⚠️ Common exam mistakes

Mixing up VED (criticality) with ABC (value) — a low-cost item can still be 'Vital' if its absence halts production.
Assuming 'Desirable' items need no control — they get least-priority control, not zero awareness.
Forgetting that VED and FSN can be applied together (e.g. hospital inventory).

Reference:

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