MATERIAL MANAGEMENT

INTRODUCTIONMaterials are an essential resource to achieve the

objectives of a health care organization. While about 60 per

cent of the funds of health sector are consumed to provide

manpower health care being a labour intensive activity almost

40 %of the funds are used up for providing materials. In the

absence of materials required for health care activities, the

manpower deployed is rendered non-functional. Therefore, it

is of great importance that materials of right quality are

supplied to the consumers in high quality at right quantity at

right time and at right place of use.

1. Material management can be regarded as the

function responsible for the coordination of planning,

sourcing, purchasing, moving, storing and controlling

materials in an optimum manner so as to provide service to

the consumer at a minimum cost.

DEFINITION

2.Material management is the

integrated functioning of purchasing and

allied activities so as to achieve the

maximum coordination and optimum

expenditure in the area of materials.

DEFINITION

To get

The Right quality

Right quantity of supplies

At the Right time

At the Right place

For the Right cost

AIM OF MATERIAL MANAGEMENT

Obtaining /acquiring

Storage

Distribution

Exercising control

COMPONENTS OF MATERIAL MANAGEMENT

• To gain economy in purchasing

• To carry reserve stock to avoid stock out

• To stabilize fluctuations in consumption

• To provide reasonable level of client services

• Increase efficiency of health care systems

• Develop knowledge and skills of health care

• Provide materials in required quantity and quality as and

when required

PURPOSE OF MATERIAL MANAGEMENT

1. To have adequate materials on hand when needed

2. To pay the lowest possible prices, consistent with

quality and value requirement for purchases materials

3. To minimize the inventory investment

4. To operate efficiently

FOUR BASIC NEEDS OF MATERIAL MANAGEMENT

1. Effective management & supervision. It depends on managerial functions of

• Planning

• Organizing

• Staffing

• Directing

• Controlling

• Reporting

• Budgeting

2. Sound purchasing methods

3. Skillful & hard poised negotiations

4. Effective purchase system

5. Should be simple

6. Must not increase other costs

7. Simple inventory control programme

BASIC PRINCIPLES OF MATERIAL MANAGEMENT

1. Effective management & supervision. It depends on managerial functions of

• Planning

• Organizing

• Staffing

• Directing

• Controlling

• Reporting

• Budgeting

2. Sound purchasing methods

3. Skillful & hard poised negotiations

4. Effective purchase system

5. Should be simple

6. Must not increase other costs

7. Simple inventory control programme

BASIC PRINCIPLES OF MATERIAL MANAGEMENT

MATERIALS MANAGEMENT FUNCTIONS

1. Material planning and programming

2. Purchasing and outsourcing

3. Transportation and material handling

4. Storekeeping and warehousing

5. Codification

CONTD…

6. Inspection and quality control7. Standardization and evaluation of all

products8. Distribution9. Cost reduction through value analysis10. Inventory control11. Disposal of surplus / obsolete material

ESSENTIAL REQUIRMENT OF MATERIAL MANAGEMENT

Right material Right quality Right quantity Right time Right price Right supplier Right user Right cost(minimum)

TYPES OF PURCHASE

1.Decentralized purchase2.Centralized purchase

3.Group purchase

TYPES OF MATERIALS.No Content Description

1 Drug and medicines Used of prevention and treatment of various types of ailments, including anaesthetic agents, vaccines and drugs required for specific purposes

2 Supplies Materials required in the hospital for diagnosing and treating of ailments, such as cotton, bandages, gauze or other dressing materials , syringes, needles, forceps, splints, plasters, trays, bottles, linens, utensils, that are related directly or indirectly to the treatment. Supplies may also include items of linen like draw sheet, bed cover, mattresses, pillows, masks, etc. A comprehensive list of supplies of hospital requirements has to be prepared and will need updating and modification from time to time depending upon the type of expertise, personnel of levels of technology available in the hospital

TYPES OF MATERIALS.No Content Description

3 Equipment and instruments

These include various types of furniture and other instruments and equipment required are sterilizers, X-ray machines, other diagnostic equipment like auto analysers, cell counter, Eliza readers and arterial blood gas analysers. Oxygen and nitrous oxide gas cylinders, cooking LPG cylinders, mechanical laundry, washing machines and incinerators for bio-waste management may also be used as tools. Ambulances and vehicles are also a part of supplies

4 Facilities Normally, these are nonmovable materials or fixed assets, used for a long term compared to equipment. That have limited life span. These include buildings, toilets, lifts, water tanks and pumps, wells, kitchen and cooking facilities, and telephones and public address systems

PROCUREMENT

Procurement is the acquisition of goods

and/or services at the best possible total cost of

ownership, in the right quality and quantity, at

the right time, in the right place and from the

right source for the direct benefit or use of

corporations, individuals, or even governments.

OBJECTIVES OF PROCUREMENT SYSTEM

Acquire needed supplies as inexpensively as possible

Obtain high quality supplies Assure prompt and dependable delivery Optimize inventory management through

scientific procurement procedures

• Review selection

• Determine needed quantities

• Reconcile needs & funds

• Choose procurement method

• Select suppliers

• Specify contract terms

• Monitor order status

• Receipt & inspection

PROCUREMENT CYCLE

METHODS IN PROCUREMENT PROCESS AND NEGOTIATION STRATEGIES

Open tender Restricted or limited tender Negotiated procurement Direct procurement Rate contract Spot purchase Risk purchase Many suppliers strategy For Govt. Institutions

Fixed Quantity Contract Running Contract Rate Contract

POINTS TO REMEMBER BEFORE PURCHASE OF AN EQUIPMENT

• Latest Technology• Availability of maintenance and repair facility,

with minimum down time• Post warranty repair at reasonable cost• Upgradeability• Reputed manufacturer• Availability of consumables• Low operating costs• Installation• Proper installation as per guidelines

STORAGE OF AN EQUIPMENT• Stores must be of adequate space & size to accommodate all the drugs,

instruments and appliances

• Sufficient number of steel racks with shelves to be provided

• Medical store should be situated near to other stores

• It should be easily accessible to the suppliers as well as indentors

• Materials must be stored in an appropriate place in a correct way

• Refrigeration should be provided for storage of thermo labile items, A graded temperature zone concept is essential in medical stores

• Group wise and alphabetical arrangement helps in identification and retrieval

• First-in, first-out principle to be followed

• Monitor expiry date

• Follow two bin or double shelf system, to avoid

• Stock outs

• Reserve bin should contain stock that will cover lead time and a small safety stock

INVENTORY CONTROL

:

It means stocking adequate number and

kind of stores, so that the materials are available

whenever required and wherever required.

Scientific inventory control results in optimal

balance.

OBJECTIVES OF INVENTORY

• To reduce financial investment in inventor’s

• To facilitate smooth production operation

• If an offer of discount comes for a bulk purchase, to decide whether to go bulk purchaser not.

PRINCIPLES OF INVENTORY MANAGEMENT

There are two1. Determination of order quantity2. Determination of reorder point of

record level

CLASSIFICATION OF AN INVENTORY

• Raw Material Inventories• Finished Goods Inventory• In Process Inventory• Indirect Inventory

• Transaction Inventory• Speculative Inventory

• To provide maximum supply service,

consistent with maximum efficiency &

optimum investment.

• To provide cushion between forecasted &

actual demand for a material

FUNCTIONS OF INVENTORY CONTROL

SELECTIVE CONTROLS IN MATERIAL MANAGMENT1. ABC analysis2. VED analysis3. HML analysis4. XYZ analysis5. FSN analysis6. SDE analysis7. GOLF analysis8. SOS analysis

ADVANTAGES OF INVENTORY

1. Delivery in time

2. Possibility of discount for bulk purchase

3. Unforeseen circumstances can be handled to

some extent

4. Workers and machinery needn’t idle

DISADVANTAGES OF INVENTORY

1. Working capital is tied up2. More space required3. Increases insurance charges4. Increased overhead expenses5. Changes of damage, pilferage

replacement etc is more6. Increase change for obsolescence

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