UNIT V : MATERIAL MANAGEMENT

1. UNIT V: MATERIAL MANAGEMENT Mrs.Indumathi Lecturer YNC

2. INTRODUCTION Materials are essential resources to achieve the objectives of the health care organization. It constitutes a major cost component to an organization.60% of the funds are used up for providing materials in an organization

3. Definition Material management is concerned with providing the drugs, supplies and equipment needed by the health personnel to deliver health services. - B.T.Basavanthappa

5. PURPOSE OF MATERIAL MANAGEMENT • 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

6. AIM OF MATERIAL MANAGEMENT To get 1. The Right quality 2. Right quantity of supplies 3. At the Right time 4. At the Right place 5. For the Right cost

7. FUNCTIONS OF MM ORGANISATION Purchase functions Stores functions

8. Objective of material management • Secondary • Forecasting • Inter-departmental harmony • Product improvement • Standardization • Make or buy decision • New materials & products • Favorable reciprocal relationships • Primary • Right price • High turnover • Low procurement • & storage cost • Continuity of supply • Consistency in quality • Good supplier relations • Development of personnel • Good information system

9. Basic principles of material management • Effective management & supervision • It depends on managerial functions(POSDCORB) 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

10. Material planning • Demand estimation • Accounting and information system • Procurement and purchasing • Minimising losses and pilferage ELEMENTS • Receipt and inspection • Disposal and condemnation • Storage • Maintenance and repair • Inventory control • Issue / distribution and use

11. 1. MATERIAL PLANNING Material planning is the scientific way of determining the requirements that goes into meeting production needs within the economic investment policies”. - Gopalakrishnan and Sunderasan

12. 2. DEMAND ESTIMATION Development of long term material plan includes translating the workload statistics into materials requirement and projecting other data necessary to determine the capital funds.. Identifying the needed items include- • Need for variety reduction • Lying down proper specification of materials • Standardization

13. Demand estimation based on • Trends in consumption pattern over last 2-3 years • Objectives of the organization • Availability of funds • Changing clientele(customers) • Changing emphasis on various programmes and activities in health field • A sound database • Use of advanced projection techniques

14. 3. PROCUREMENTAND PURCHASING • Most organizations have a detailed set of rules and regulations regarding the procedure for ordering for materials.

15. Objectives • Acquire supplies inexpensively at right time • Obtain high quality supplies in appropriate quantities • Assure prompt and dependable delivery • Distribute the procurement workload • Optimize inventory management

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

17. Points to be remembered before procurement action • Plan the purchases , based on correct forecasts to avoid stock- outs • Avoid emergency purchases • Negotiate for quantity discounts • Draw up product specifications to avoid rejections

18. Purchasing • ` It acquires materials as required to meet quality and time schedules

19. The fundamental activities • Selection of acceptable vendors and negotiation of terms • Placing purchase orders • Considering economic levels • Expediting deliveries to meet inventory requirements.

20. Types of purchasing • Centralised purchasing (single purchase dept) • Decentralised purchasing(purchasing materials by all departments and branches, seperately and individually.)

21. before purchase of an equipment: • Latest technology • Offer discounts • Availability of maintenance and repair facility • Post warranty repair at reasonable cost • Reputed manufacturer • Availability of consumables • Low operating costs

22. 4. RECEIPT AND INSPECTION

23. Guidelines to be followed- • Receive the materials at specified receiving area. • At the point of delivery, • count against suppliers invoice or packing challan. • Check physical condition

24. Notify transporter and vendor immediately , if damage is detected & leave the load intact for their review. • Carry out a check against the purchase order. Notify purchase section of any discrepancies immediately.

25. Immediate basic documentation • Wide receiving corridor • Sending bills to the accounts department for payment .

26. 5. STORAGE • Restricted area with adequate security facilities. • Adequate space and sufficient size. • Located in the ground floor. • Accommodation for vehicles delivering the materials should be separate from normal patient and ambulance routes.

27. Maintain proper atmospheric condition. • Proper lighting facilities. • Adjustable, fixed location racking system with shelves. • Store in an appropriate place in a correct way. • Group wise and alphabetical arrangement

28. First-in, first-out principle • Monitor expiry date. • Stock verification should be done physically. • There should be a bin card for every item in the inventory. • 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

29. 6. INVENTORY CONTROL

30. FUNCTIONS • To carry adequate stock to avoid stock out. • To order sufficient quantity per order to reduce order cost. • To stock just sufficient quantity. • To maintain an optimum level of the idle resource at least possible cost.

31. INENTORY CONTROL METHODS • Intuitive method-.Here the items are recorded in the want book when the number of units in the stock reaches close to zero.

32. Perpetual inventory method- • the best, accurate and effective method of inventory if the record keeping can be kept up-to-date. In a ward situation, the nurse in charge of dispensing at the end of the each day, summarises all drugs issued to the patients and make the proper posting in perpetual inventory file. It comprises of bin cards, stores ledger, continuous stock taking.

33. ABC method- This method is based on the fact that some stock items have a much higher annual usage value than others. This after doing a cost analysis, stock items are separated into three classes as A, B, C.

34. ABC Method • Class               Number               Rupee value of item • A                     10% of total items                                             70% • B                      20% of total items                                             20% • C                     70% of total items                                             10%

35. VED method- In this method, each stock item is classified on vital, essential or desirable based on how critical the item is for providing health services.

36. Vital: items whose absence or shortage even for a short period can seriously hamper the work of the hospital. These items are stocked in abundance. • Essential: Those items whose non availability can be tolerated for 2-3 days, because similar or alternative items are available. These items are stocked in medium amounts. • Desirable: Those items whose non-availability can be tolerated for a long period.

37. 7. ISSUE / DISTRIBUTION AND USE • Should be issued only with an authorised requisition on a periodical (say weekly or fortnightly) basis or as and when necessary. • Different categories of stores can be issued on specified days or dates.

38. There should be adequate control by the stores officers over issues and distribution

39. 8. DISPOSAL AND CONDEMNATION • Non-consumable articles - return the excess stock to the stores as soon as it is detected • Reviewed by a condemnation board or committee in case of consumable articles. • Sold as scrap • Destroyed • Cannibalisation of parts(products decrease in sales volume after a new product has been introduced by the same company.)

40. 9. MINIMISING LOSS AND PILFERAGES • Limit access • Locking and unlocking of stores and handling of keys should be strictly controlled. • Intense vigilance by all materials personnel • Internal audits

41. NURSES ROLE IN MATERIAL MANAGEMENT

42. Ensuring regular and adequate flow of supply of necessary equipments, supplies,drugs and solution. • Monitoring and sustaining quality and safety of the material used including drugs and solutions. • Indenting, receiving, storing, checking and timely replenishing of all necessary equipment, supplies, drugs and solutions. • Maintaining emergency stocks.

43. Arranging for preventive maintenance whether necessary. • Maintaining inventory and stock of all items and supplies • Arranging and assisting in audit of materials. • Participation in tender/procurement sub-committees. • Orienting nursing personnel on material management policies from time to time. • Evaluating the efficacy of the material management system followed in particular nursing unit.