MATERIALS MANAGEMEN

T &HSCM

Materials Management- basic introductionMaterials Management- importanceMaterials Management- various functionsMaterials Management- hospital operationsMaterials Management & SCMMaterials Management & ITRole of Physician in Materials ManagementSupply chain managersInventory Management & SCM

OBJECTIVES

IntroductionMaterials Management is a basic part of any organization.

Life blood of any manufacturing or service organization.

In India known as an Integrated Activity.

Plays a vital role in developing our economy.

Requires time-to-time controlling.

Lions share in the total cost of a product.

EvolutionIn olden days, materials are taken for granted.

By the end of 1950s, the concept of materials function became important.

Recognized as separate department from past 40 to 45 years.

Indian industry realized its importance from 1970s.

Hospitals Materials are defined as the equipment, apparatus and supplies procured, stocked and utilized by an organization.

Management means bringing together the available resources so as to achieve a specific objective.

Hospitals Materials Management is the art and science of planning, organizing and controlling the flow of materials from their initial purchase, internal operations to the distribution at the service points.

Definition

According to IFPMM, Materials Management is defined as a total concept of any organizational structure whose core responsibility is to maintain systematic flow and control of materials from identification of the needs through customer delivery.

Scope Starts with planning and purchasing.

Ends with social responsibility of customers.

Effects ROI & profitability.

Differences• Importance• Cost• Classification• Customer• Quality• Quality Control• Purchase• Import• Conversion

Materials Management -Healthcare

Timing of the materials

Patient Safety

Materials Cost

OrganizationCMD

Share Holders

BOD

CEO

PersonnelManager

FinancialManager

MaterialsManager

Production Manager

Marketing Manager

Functions

Broad Classification

PRIMARY FUNCTIONS

SECONDARY FUNCTIONS

Primary Functions

1Material Planning & Control

Purchasing

Storing & Stock Keeping

Inventory

Material Planning & Control

Basic interrelated managerial functions.

Known as Siamese twins.

Planning is pre-operational activity.

Control is post-operational activity.

P&C is based on sales forecast and production plans.

Definition

Materials Planning and Control is a scientific technique of determining in advance the various requirements of materials, spares, equipments, etc as directed by the production programme.

Purchasing

Purchasing is defined as the act or process of buying or exchange of goods and services.

Stores & Stock Management

The stores and stock management comprises of all activities of carrying inventories of all goods handled by any organization ensuring optimal supply and customer service.

Inventory Control

Inventory is defined as those goods which are procured, stored and used for the day-to-day functioning of any organization.

Secondary Functions

Quality of materials. Delivery and storage. Transportation and handling of materials. Control of wastage. Disposal of surplus, obsolete and scrap

material.

MATERIALS MANAGEMENT & HOSPITALS OBJECTIVES

Survival & Growth.

Maximum service to customers.

Advancement to employees.

Technological lead over the competitors.

Integrated Concept

• What do you know about materials management?

• What is Rheochrematics?

• What is integration and interrelation?

• What is the main reason?

Advantages of Concept

Better Accountability.

Better Coordination.

Better Performance.

Adaptability to Programming.

Materials Manager’s Decisions

Reduce lead time.Informing suppliers.Contract with suppliers.Maintaining multiple suppliers.Control access to storage areas.

Dispose of inactive stock.

HOSPITAL MATERIALS

CLASSIFICATION

Expendables

Un-Expendables

Drugs

Consumables

Kitchen Stores

Linen Stores

Expendables

Un-Expendables-Operational

Un-Expendables-Support service

Un-Expendables

Diagnostic Equipment

Therapeutic Equipment

Bed side Equipment

Operational

Engineering

Productive Equipment

Ambulatory Equipment

Office Equipment

Service

Support Service

Hospital Operations

Clinical Operations

Non-clinical Operations

Inventory

Inventory is defined as the materials and supplies that a business or institution carries either for sale or to provide inputs or supplies to the production process.

(OR)Inventories are known as the stock of materials of any kind stored for future use, mainly in the production process.

To facilitate production operations.

To help during the lead time.

To act as a precautionary measure.

To meet various contingencies.

Purpose

Inventory Management

Inventory Management is defined as the planning and designing of procedures to maintain an optimum level of the idle sources for a predetermined service level.

OBJECTIVESMaximum customer service.

To reduce the financial investment.

Operating Efficiency.

Minimum Inventory Investment.

General Classification

Based on functions

Based on usage

Function Based

Lot size inventory

Fluctuation inventory

Anticipation inventory

Transportation inventory

Usage BasedRaw materials

Work-in-progress

Finished goods

Consumables

Packaging materials

Spare parts

Impact on Profitability

Profit = Revenue - Expenditure

R.O.I = Profit / Assets

INVENTORY FACTORS

Number of patientsThe types of services provided

Location in relation to suppliers

Inventory obsolesceneRelevant costs

Inventory Costs

• Ordering cost

• Carrying cost

• Over stocking cost

• Under stocking cost