MATERIAL

MANAGEMENT
Introduction
Materials are the essential resources to achieve
the objectives of a health care organization.
about 40% of the funds are consumed to
provide materials. Material management is
concerned with providing drugs supplies and
equipment needed by health personnel to
deliver health services.
Meaning
Material management means bringing together
the available resources as to attain specific
Objectives

Material management is processing, planning,

organizing, coordinating and controlling the
available resources.
 Definition of material management
Material management is a Administrative activities concerned
with the ordering, storage, and movement of materials.
-INC

Material management has been defined as” the planning,

directing, co-ordinating and controlling of all those
activities concerned with the material and inventory
Requirements.
- L.J Derose
Six M’S IN MANAGEMENT
MAN
2.MONEY
3.MATERIALS
4. METHOD
5.MECHINES
6. MARKETS
Operative goal
 Optimum material acquisition
 Good vendor relationship
 Material cost control
 Effective issue and distribution
 Elimination of losses and pilferage(steal).

Totally 5 R’s
 Right price in
 Right quantities, at
 Right time, at
 Right price, from
 Right sources, at least cost.
Objective of material management
 Primary objectives.
 Right price.
 low procurement and storage cost.
 continuity of supply.
 high turnover.
 Development Of personal.
 Good relation with the suppliers.
 Sound information system.
 Secondary objectives
 Maintaining friendly relationship
 New material and product
 Buying decision.
 Product innovation.
 Departmental harmony.
 Forecasting and standardization.
Material used in hospital
 MEDICAL SIDE
 perfusion materials
 Surgical disposables
 Instruments and Equipment
 Drug, medicine
 oxygen cylinders
 Bio medical equipment
 Disinfecting items
 Food and beverage
 Anesthesia equipment
 Glass ware, dental machines
 Surgical dressing
 Furniture. Etc…
Management side
 computer, fax, telephone
 Stationary items
 Public address system
 OHP
 Audio visual exposure system.
Principles for material management
 Quantity (optimal)
 Price (moderate)
 Source (alternatives)
 Delivery (time)
 Method (ABC)
 Quality ( world class)
Elements of a material management
 Demand estimation
 Procurement
 Receipt and inspection
 Storage
 Issue and use
 Maintenance and repair
 Disposal
 Accounting and informative system
GOLDEN RULES IN THE MATERIALS
MANAGEMENT
Rule :1 successful material management build up on
an effective management system and good
supervision.

Rule :2 purchase order is often called the umbilical

cord of the purchasing process

Rule :3 centralize the purchasing system. centralized

purchasing eliminates uncontrolled purchased by
departments, secures a reduction in prices.
Rule :4 negotiation is the key to sound purchasing.
some tips for good and successful negotiations.

Never purchase at list price

Negotiate for bulk price or price for quantity the

hospital would need for the whole year and then get the
price for any quantity you want to purchase.

Always ask for a discount.

Always get a price protection form the agreed price.

Rule :5 There should be an effective receiving programme
with the responsibility, accountability and internal
control programme

Rule :6 Establish an optimum inventory control programme.

Rule :7 Establish effective requisition and distribution system

Rule :8 Establish written policies and procedure.

Rule :9 standardization and evaluation of all products and

services.
Process of material management
1. Budgeting and material planning.
2. Demand forecasting
3. procurement, Receipt, inspection & payment
4. Storage, Inventory control
5. Issue/distribution
6. Usage.
7. Maintenance.
8. Disposal/contaminations
9. Minimizing loss and pilferage.
 1.Budgeting and material planning.

Based on the data of past levels of performance and on

anticipated activity/plans, capital equipment, consumable

and supplies to be procured . the material budget which

should be prepared annually. at periodic intervals carryout a

budgetary appraisal and determine the variance between

actual and the planned budget.

2.DEMAND FORCATING
Materials in the hospital may be required based on

 For an urgent/immediate use or in anticipation of a

need.

 On a one time basis or repeatedly and continuously to

replenish the stock.

 As a single unit or as a bulk requirement.

3.Procurement, Receipt, inspection, &
payment
The term Procurement is defined as the acquisition of goods
and services and payment of an accepted price for them.
Thus in an effort to procure something a purchase may be
made.
Objective of purchasing:
 Continuous supply of materials .
 Maintaining standards of quality.
 Avoidance of duplication, waste etc…
 Maintenance inter- departmental relation
 Maintenance of proper records.
Type of purchasing

Types of purchasing

centralized
De centralized
 centralized purchasing
Advantages Disadvantages

Better administrative control Delay

Uniformity
No authority to users
Favorable items

Avoidance of duplication Conflicts

Record keeping
Unsuitability.
 Decentralized purchasing
Advantages Disadvantages

◊Close contact ◊Higher prices

◊Fixed responsibility ◊No uniformity

◊Flexibility in purchasing

◊Emergencies

◊Avoidance of
misunderstanding
Receipt ,inspection, payment.

Items ordered from the supplier should be

received at a common receiving area. Receiving
clerk should detect mistakes, if any, of the
vendor ,the supplier and or the purchasing
department .
 Material receipt register

Date Sr. Supplier’ P. O. Challan Qty Qty Qty sig

No s Name Ref. & No. Dt. Receiv Reject Accept
. Date ed ed ed
4.STORGE AND INVENTORY
CONTROL
STORAGE:
Proper storage ensures that fill the issue for
usage ,the suppliers are adequately preserved to
prevent loss or damage.
INVENTORY CONTROL:
Inventory systems

1.Cyclic system:
This is a periodic inventory system
where the physical stock position is reviewed
at periodic/fixed intervals and orders are
placed depending on the stock on hand and
rate of consumption.
2.ABC (Always Better Control) analysis:
This analysis separates inventories into ABC
items on cost criteria
A Items- Represent high cost items
B Items- Intermediate cost items
C Items- Low cost items

ABC analysis is concerned the following guidelines

will help in keeping the system optimum.
A Items:
Tight control
Rigid estimates
Strict and close watch
safety locks should be low
management of items should be done at top
level
B Items:
Moderate control
Purchase based on the rigid requirement
Strict watch and control
safety locks should be moderate
management of items should be done at
middle level
C Items
Ordinary control measures
purchase based on the usage estimate
safety locks should be high
management of items should be done at
lower level
Advantages of ABC analysis
 There is a great economy in stock carrying
costs.

 close and strict control

 helps in maintenance of high stock turn over

 2.VED analysis
V- Vital- Absence of which even for very short
duration will cause major effect (eg. Life saving
drugs)

E- Essential- Absence of which cannot be tolerated

for more than a day or so (eg. Antibiotics,
solution)

D-Desirable- Definitely needed with their absence the

work can continue (eg. Computer, gloves etc)
 3.FSN Analysis
Fast moving:-items are used at the rabid rate(eg
cotton, syringe, saline)

Slow moving:- items are used consistently, but

at the slow rate (eg. Medicines)

Non moving:- material retain in stock for

several months without being issued.(Eg
catheters)
4. Turnover of inventory:

Inventory turnover is qualitative

measurements of the number of items that
the total inventory value is issued and
replaced.
total annual rupee value of
turnover rate= issued suppliers
rupee value of closing stock.
5. Physical inventory
This involves a physical verification of the actual
stock units on hand versus the number
documented in the records .physical inventory
carried out at least once a year
5.ISSUE/DISTRIBUTION

Items in inventory by the stores

may be issued through indents
to user departments on a periodical basis or
when necessary. The letter is preferable for
expensive drugs and consumables, especially if
the costs are to be debited to the particular
patient.
 Systems of stock distributed to
wards/departments are of the following types

 Requisition or drug basket system: at definite

intervals or as and when departmental stock
level gets low, a requisition is prepared for
replenishing the stock and sent to the stores.
the stores then issues items in compliance
with the requisition. in this system each
department keeps track of its own inventory
levels
Par level or Topping up system:

The maximum stock level for each

ward/department is predetermined on the basis
of usage rate and frequency of replenishment. This
departmental, stock is stored in an assigned
location. At periodic intervals ,stores personnel visit
the ward/department to carry out a physical
inventory of what is available and arrange to replace
the stock to the predetermined maximum level.
Exchange card system
This system is similar to the par- level system the
departmental stock however is stored in a card
and a duplicate of each card in the user area is
maintained by the stores. At predetermined
intervals. The full card for the stores is taken to
the user area and exchanged for the depleted
card.
 6.Usage.

effort must be put at all levels in the organization

to utilize supplies in the most conscientious
manner avoiding any form of wastage.
 7.Maintentance
Proper maintenance of equipment, furniture and
fixtures not only ensures their almost
continuous availability for use but also an
extended life and productivity for the items ,thus
Resulting in lower material costs.
8.DISPOSAL/CONDAMINATION

Indents are often improperly scrutinized and

unofficial inventory builds up in
wards/departments
9.MININMISING LOSS AND PILFERAGE.
Theft of material is also uncommon, items may
be pilfered by the transporter, receiver, store
personal and/or the user.
IMPORTANCE OF MATERIAL
MANAGEMENT
 Saving Lobour
 Time Reduction In Inventories
 Reduction In Storage Space
 Reduction In Damage To Material
 Smooth Flow Of Production.
 Reduce Employee workload.
NURSES ROLE IN MATERIAL
MANAGEMENT
 Ensuring regular and adequate flow of supply of
necessary equipments, supplies, drugs and
solutions.
 Monitoring and sustaining the quality and safety
 Indenting , receiving, storing, checking and
timely replenishing of all necessary equipments,
supplies, drugs and solutions
 Maintaining of emergency and buffer stocks.
 Arranging for preventive medicine wherever
necessary
 Maintaining inventory and stock of all items and
supplies.
 Arranging for condemnation of articles in
accordance with the laid down policies of the
organizations and maintaining of dead stock
register.
 Arranging and assisting in audit of materials.
 Participation in policy making for material
management.
 Participation in tender/procurement sub-
committee.
 Orienting nursing personnel on material
management policies from time to time
 Evaluating the efficacy of the material
management system followed in particular
nursing unit