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.

A process of encompassing acquisition, shipping, receiving, evaluation, warehousing and distribution of goods, supplies and equipment.

To get The Right quality

Right quantity of supplies

At the Right time

At the Right place

For the Right cost

To gain economy in purchasing To satisfy the demand during period of replenishment 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

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

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

1. Material planning and programming 2. Purchasing and outsourcing

3. Transportation and material handling

4. Storekeeping and warehousing

5. Codification

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

Demand estimation Procurement Receipt and inspection Storage Issue and use Maintenance and repair Disposal Accounting and information system.

A large number of items are used in the

hospital. The advisory committee for development of

surgical instruments, equipment and appliances (1963) identified 3200 items of instruments,

equipments and applications being used in the hospital. This should always be done keeping in view

the trends and changing emphasis on various

programmes and activities in the health field.

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.

 Acquire needed supplies as inexpensively as possible Obtain high quality supplies Assure prompt and dependable delivery Distribute the procurement workload to avoid period of idleness and overwork 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

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

 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

The stores ordered are received in the sore. A

reasonable sound policy and methodology of inspection of

incoming stores is an essential element of MP and MS. The inspection policy should enuciate the sampling procedure for

inspection and this procedure must be followed. Basic facilities

for such examination be created in the organization itself depending upon the size of stores turnover, governmental and

commercial chemical laboratories should also be made use of

for analysis of chemical composition of drugs etc.

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

 Can be centralized or decentralized Centralized: The head office will have only one material department under the rigid control of all the material. Decentralized: Along with head office material management division will be their in many locations with minimum amount of autonomy

o Maintenance & repairs

o Preventive maintenance

o Master maintenance plan

o Repair of equipment

Purchase with warranty & spares. Safeguard the electronic equipments with, o Voltage stabilizer, UPS. o Automatic switch over generator. Requirement of electricity, water, space, Atmospheric conditions, etc. Must be taken into consideration. Well equipped maintenance cell must be available. All equipment must be operated as per instructions with trained staff. Monitoring Annual Maintenance Contracts (AMC). Communications between maintenance cell & suppliers of the equipment. Follow-up of maintenance & repair services. Outside Agencies. In-house Facility.

Repair of an Equipment

Criteria for condemnation: The equipment has become 1. Non-functional & beyond economical repair 2. Non-functional & obsolete 3. Functional, but obsolete

4. Functional, but hazardous

5. Functional, but no longer required

 Circulate to other units, where it is needed

Return to the vendor, if willing to accept

Sell to agencies, scrap dealers, etc Auction Local destruction

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.

 To

provide

maximum

supply

service, &

consistent

with

maximum

efficiency

optimum investment. To provide cushion between forecasted & actual demand for a material

There are two 1. Determination of order quantity 2. Determination of reorder point of record level

1. 2. 3. 4. 5. 6. 7. 8.

ABC analysis VED analysis HML analysis XYZ analysis FSN analysis SDE analysis GOLF analysis SOS analysis

 To reduce financial investment in inventors To facilitate smooth production operation If an offer of discount comes for a bulk purchase, to decide whether to go bulk purchaser not.

Raw Material Inventories Finished Goods Inventory In Process Inventory Indirect Inventory
Transaction Inventory Speculative 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 neednt idle

1. 2. 3. 4. 5.

Working capital is tied up More space required Increases insurance charges Increased overhead expenses Changes of damage, pilferage replacement etc is more 6. Increase change for obsolescence

(ABC = Always Better Control). This is based on cost criteria. It helps to exercise selective control when confronted with large number of items it rationalizes the number of orders, number of items & reduce the inventory. About 10 % of materials consume 70 % of resources About 20 % of materials consume 20 % of resources

About 70 % of materials consume 10 % of

resources

Small in number, but consume large amount of resources Must have Tight control Rigid estimate of requirements Strict & closer watch Low safety stocks Managed by top management

Intermediate Must have Moderate control Purchase based on rigid requirements Reasonably strict watch & control Moderate safety stocks Managed by middle level management

Larger in number, but consume lesser amount of resources Must have: Ordinary control measures Purchase based on usage estimates High safety stocks ABC analysis does not stress on items those are less costly but may be vital

VED ANALYSIS

Based on critical value & shortage cost of an item o It is a subjective analysis. Items are classified into Vital Shortage cannot be tolerated. Essential Shortage can be tolerated for a short period. Desirable Shortage will not adversely affect, but may be using more resources. These must be strictly Scrutinized

V A B AV BV

E AE BE

D AD BD CATEGORY 1 CATEGORY 2

ITEM COST 10 20 70% 20%

CV

CE

CD

CATEGORY 3

70

10%

CATEGORY 1 CATEGORY 2 CATEGORY 3

- NEEDS CLOSE MONITORING & CONTROL - MODERATE CONTROL. - NO NEED FOR CONTROL

1. 2. 3.

Ensuring regular and adequate flow of supply Monitoring quality & safety of the materials Indenting, receiving, storing, checking for all necessary equipment and supply

4. 5. 6.

Maintaining of emergency stocks Arranging and assisting in audit Participation in policy making for material management

7.

Evaluating the efficacy of the material management system

followed in particular nursing unit

Material management is an important management tool which will be very useful in getting the right quality & right quantity of supplies at right time, having good inventory control & adopting sound methods of condemnation & disposal will improve the efficiency of the organization & also make the working atmosphere healthy any type of organization, whether it is Private, Government ,Small organization, Big organization and Household. Even a common man must know the basics of material management so that he can get the best of the available resources and make it a habit to adopt the principles of material management in all our daily activities