Essential Guide to Material Management in Healthcare

1. MATERIAL MANAGEMENT Presented By, Mrs. Ahitha, M.Sc (N) Asst. Prof Obstetrics & Gynecology Department

3. INTRODUCTION Materials 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.

4. definition 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.

5. 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.

6. AIM OF MATERIAL MANAGEMENT • To get • The Right quality • Right quantity of supplies • At the Right time • At the Right place • For the Right cost

7. Components of material management • Obtaining /acquiring • Storage • Distribution • Exercising control

8. PURPOSE 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

9. Four basic needs of Material management • To have adequate materials on hand when needed • To pay the lowest possible prices, consistent with quality and value requirement for purchases materials • To minimize the inventory investment • To operate efficiently

10. 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

11. 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

12. Materials management functions • Material planning and programming • Purchasing and outsourcing • Transportation and material handling • Storekeeping and warehousing • Codification

13. Contd… 6. Inspection and quality control 7. Standardization and evaluation of all products 8. Distribution 9. Cost reduction through value analysis 10. Inventory control 11. Disposal of surplus / obsolete material

14. ESSENTIAL REQUIRMENT OF MATERIAL MANAGEMENT Right material Right quality Right quantity Right time Right price Right supplier Right user Right cost(minimum)

15. TYPES OF PURCHASE 1.Decentralized purchase 2.Centralized purchase 3.Group purchase

16. TYPES OF MATERIAL

17. TYPES OF MATERIAL

18. 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.

19. 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

20. Procurement cycle • Review selection • Determine needed quantities • Reconcile needs & funds • Choose procurement method • Select suppliers • Specify contract terms • Monitor order status • Receipt & inspection

21. 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

22. 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

23. 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

24. 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.

25. 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.

26. PRINCIPLES OF INVENTORY MANAGEMENT There are two Determination of order quantity Determination of reorder point of record level

27. CLASSIFICATION OF AN INVENTORY • Raw Material Inventories • Finished Goods Inventory • In Process Inventory • Indirect Inventory • Transaction Inventory • Speculative Inventory

28. Functions of inventory control • To provide maximum supply service, consistent with maximum efficiency & optimum investment. • To provide cushion between forecasted & actual demand for a material

29. SELECTIVE CONTROLS IN MATERIAL MANAGMENT ABC analysis VED analysis HML analysis XYZ analysis FSN analysis SDE analysis GOLF analysis SOS analysis

30. ADVANTAGES OF INVENTORY Delivery in time Possibility of discount for bulk purchase Unforeseen circumstances can be handled to some extent Workers and machinery needn’t idle

31. DISADVANTAGES OF INVENTORY Working capital is tied up More space required Increases insurance charges Increased overhead expenses Changes of damage, pilferage replacement etc is more Increase change for obsolescence

32. T H A N K U