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8/13/2019 Material Management For Hospitals
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DefinitionIt is concerned with planning, organizing and
controlling the flow of materials from their initial
purchase through internal operations to the service
point through distribution.OR
Material management is a scientific technique,
concerned with Planning, Organizing &Control of flow
of materials, from their initial purchase to destination.
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The Materials Management Procedures
enable centralised procurement and
distribution of medical, biomedical,
pharmaceutical, medical & non-medicalfurniture and general items.
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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
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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
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FUNCTIONS
The Materials management functions are asenumerated below:
Standardisation of Items
Purchase
Storage as per product requirements
Inventory Management
Distribution
Maintain Records utilisation pattern,
supplierslist, etc.
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Economy in material management
Containing the costs
Instilling efficiency in all activities
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ORGANOGRAM
Medical director
Purchase manager
Purchase and
stores
committee
Asst. manager
purchase & stores
Stores manager
Store asst.
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Four basic needs of Material
management1. 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
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Basic principles of material management1. 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
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Elements of material management
1. Demand estimation
2. Identify the needed items
3. Calculate from the trends in Consumption during last
2 years.
4. Review with resource constraints
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Functional areas of material management1. Purchasing
2. Central service supply
3. Central stores4. The print shops
5. The pharmacy
6. Dietary
& Linen services
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Standardisation of Items
All the items to be procured, stored and
utilised will be fixed by The Material
Standardisation Committee
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REDUCTION OF VARIETY AND HOSPITAL
STANDARDISATION
Item codes are designed to avoid
duplication, i.e. no item has two item codes
or no two items share the same code Yearly review of the entire inventory,
demarcating the non-moving items, slow
moving items and the fast moving items
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Contd...
Non-moving items are removed from theinventory, levels of slow moving items
inventory is reduced and adequate stock
of fast moving items is maintained
Inclusion of new items carried out through
proper authorisation. This is made
possible, if and only if, the respective
departmental head is able to justify its
utilisation on a regular basis.
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PRODUCT STANDARDISATION GUIDELINES Policy Statement: It will be the policy of the hospital
that any product or piece of equipment that isproposed for use within the hospital must firstundergo evaluation and approval by The MaterialStandardization Committee.
The Material Standardization Committee, wouldprioritise the quality of the product in relation to theprice. Products not been in the market for a periodless than 10 years and tested for its accurateperformance would not be considered for listed.
Exception to this will be only after authorisation by theMedical Director (Medical)/ Director (Administration)
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on ...Procedural Documentation:
All potential products are forwarded to the
Purchase and Stores Department by the Doctor,Departmental Head, Hospital Personnel, Sales
representativesetc.
All items are screened by the respective
department prior to forwarding to the Purchase
and Stores Department. Their recommendations
and comments about the item should accompany
all the requests.
An agenda is prepared and distributed to the
members one week prior to the next committee
meeting by the purchase/stores officer
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Committee Meetings
Arranged on a quarterly basis, or on aneed
base.
Committee actions are:
1. Evaluation of the product time period
determined
2. Non-acceptance of the Product
3. Acceptance of the Product
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Exception
All items must undergo the above procedure
with one exception. If the product is requested
on an emergency basis, it can be purchased,
and a justification would have to be providedwith in 24 hours by the Purchase Officer
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Emergency procedure
Send requisition to the stores
If the item available it is issued and if notavailable is forwarded to the purchase officer
The purchase officer or the next person in
authority would take authorisation from theManaging Director / Executive Director /
Hospital Administrator and purchase the
required item from the market. This would be
accounted for as an ad hoc purchase The item is handed over to the stores officer
who would issue the same to the
requisitioning party
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PURCHASE
The centralisation of all the purchase enables
to set up quality controls for all the items
being procured by the hospital. Items required
for all the departments are centrally monitoredat this level
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Purchases are made for
Pharmaceutical items by thepharmaceutical contractor/chief of
pharmacy
Medical Instruments - ExecutiveMaterials, along with stores and purchase
officers
Specific requirements of the Pathology
and the Imaging departments by the
respective purchase manager/officers
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Contd...
Bio-medical and General Maintenancebythe respective contractors
Stationery requirements of the hospital -
hospital stores and purchase officer
Furniture & Fixtures - hospital stores and
purchase officer
Capital Equipment - hospital stores and
purchase officer (under authorisation of theExecutive Director)
Kitchen equipment and suppliesby the
respective contractor
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PROCUREMENT
1. Direct from companies
2. Medical stores/hospital stores
3. Vendors/distributors of region
4. Receiving donations/grants/supplies
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Procurement cycle
Review selection
Determine needed quantities
Reconcile needs & funds
Choose procurement method
Select suppliers
Specify contract terms
Monitor order status
Receipt & inspection
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Objectives of procurement systemAcquire needed supplies as inexpensively as possible
Obtain high quality supplies
Assure prompt & dependable delivery
Distribute the procurement workload to avoid period of
idleness & overwork
Optimize inventory management through scientific
procurement procedures
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CALL FOR
OFFERS
CALL FOR
OFFERS
YESYES
DETERMINE DRUGS & DRUG
REQUIREMENTS
DETERMINE DRUGS & DRUG
REQUIREMENTS
DRUG REQUIREMENTSDRUG REQUIREMENTS
DONATION
SOURCE
DONATION
SOURCE
GOVERNMENT
PRODUCTION
GOVERNMENT
PRODUCTION
DETERMINE DRUGS & DRUG
REQUIREMENTS
DETERMINE DRUGS & DRUG
REQUIREMENTS
PURCHASE
REQUIREMENTS
PURCHASE
REQUIREMENTS
OPEN TENDEROPEN TENDER RESTRICTED
TENDER
RESTRICTED
TENDERNEGOTIATED
TENDER
NEGOTIATED
TENDERDIRECT
PURCHASE
DIRECT
PURCHASE
REQUEST OFFERS FROM
ELIGIBLE SUPPLIERS
REQUEST OFFERS FROM
ELIGIBLE SUPPLIERSLOCATE
RELIABLE
SUPPLIERS
LOCATE
RELIABLE
SUPPLIERS
CONTACTRELIABLE
SUPPLIER
CONTACTRELIABLE
SUPPLIER
EVALUATE &
SELECT SUPPLIER
EVALUATE &
SELECT SUPPLIER
EVALUATE OFFERS
& SELECTSUPPLIERS
EVALUATE OFFERS
& SELECTSUPPLIERS
NEGOTIATE PRICE &
SUPPLY CONDITIONS
NEGOTIATE PRICE &
SUPPLY CONDITIONS
ESTABLISH
PRICE
ESTABLISH
PRICE
PURCHASE ORDER
/ CONTRACT
PURCHASE ORDER
/ CONTRACTPURCHASE ORDER /
CONTRACT
PURCHASE ORDER /
CONTRACTPURCHASE
ORDER /
CONTRACT
PURCHASE
ORDER /
CONTRACT
PURCHASE
ORDER /
CONTRACT
PURCHASE
ORDER /
CONTRACT
DRUGS RECEIVED, CHECKED AGAINST PURCHASE ORDER / CONTRACT SPECIFICATIONS & CLEARED
FOR DISTRIBUTION
DRUGS RECEIVED, CHECKED AGAINST PURCHASE ORDER / CONTRACT SPECIFICATIONS & CLEARED
FOR DISTRIBUTION
ADJUST
QUANTITIES
ADJUST
QUANTITIES
ADJUST
QUANTITIES
ADJUST
QUANTITIES
YES
NO
YES
NO
NO NO NO
YES YES
FLOW OF PROCUREMENT DECISIONSFLOW OF PROCUREMENT DECISIONS
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Open tenderPublic bidding, resulting in low prices
Published in newspapers
Term - 4 weeks
Quotations must be sent in the specific forms
that are sold, before the time &date mentioned inthe tender form
In technical items, two packets or two bins
system is followed. Offers are given in two
separate packets.1. Technical bid
2. Financial bid
Cont
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First technical bid is opened & short listed
Then financial bid of selected companies are
opened & lowest is selected
Delayed tenders & late tenders are not accepted.
But if, in case of delayed tenders, if the rate quoted is
very less, then it can be accepted.
Quotations are opened in presence of indenting
department, accounts & authorized persons of party
Validity of tendersgenerally 90 days
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Earnest money
2 % of the tender amount or as decided has to be paid
along with all quotations. In case of default 1/5 is withheld
Restricted or limited tender
From limited suppliers (about 10)
Lead-time is reduced
Better quality
Negotiated procurementBuyer approaches selected potential Suppliers & bargain
directly
Used in long time supply contracts
Direct procurementPurchased from single supplier, at his quoted price
Prices may be high
Reserved for proprietary materials, or low priced, small
quantity & emergency purchases
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Rate contractFirms are asked to supply stores at specified Rates
during the period covered by the Contract
Spot purchaseIt is done by a committee, which includes an officerfrom stores, accounts & purchasing departments
Risk purchaseIf supplier fails, the item is purchased from otheragencies & the difference in cost is recovered from
the first supplier
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Points to remember while purchasingPROPER SPECIFICATION
INVITE QUOTATIONS FROM REPUTED FIRMS
COMPARISON OF OFFERS BASED ON BASIC PRICE, FREIGHT &
INSURANCE, TAXES AND LEVIES
QUANTITY & PAYMENT DISCOUNTS; PAYMENT TERMS
DELIVERY PERIOD, GUARANTEE
VENDOR REPUTATION (RELIABILITY, TECHNICAL CAPABILITIES,
CONVENIENCE, AVAILABILITY, AFTER-SALES SERVICE, SALES
ASSISTANCE)
SHORT LISTING FOR BETTER NEGOTIATION TERMS
SEEK ORDER ACKNOWLEDGEMENT
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STORAGE
STORE MUST BE OF ADEQUATE SPACE
MATERIALS MUST BE STORED IN AN APPROPRIATE
PLACE IN A CORRECT WAY
GROUP WISE & ALPHABETICAL ARRANGEMENT
HELPS IN IDENTIFICATION & RETRIEVAL
FIRST-IN, FIRST-OUT PRINCIPLE TO BE FOLLOWED
MONITOR EXPIRY DATE
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FOLLOW TWO BIN OR DOUBLE SHELFSYSTEM, TO AVOID STOCK OUTS
RESERVE BIN SHOULD CONTAIN STOCK THAT
WILL COVER LEAD TIME AND A SMALLSAFETY STOCK
Issue & use
CAN BE CENTRALIZED OR DECENTRALIZED
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METHODS OF PURCHASEAll purchases are usually based on Yearly tender
system. The Standardisation of ProductsCommittee will decide the various suppliers for all
the items, by March of the preceding year for the
next financial year April to March. The call for
tenders will be publicised by the month ofDecember
All tenders are reviewed with utmost
confidentiality
The results declared and all the formalities
complete by the first week of march ensuring that
the products are received by the 1stof April
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The Purchase Function
Requisition for Purchase
As per Reorder levels (ROL)
Urgent requirement of stores / department
1. Purchase Order
2. Receiving Process
3. Transfer to Stores
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The requisition for purchase is generated
Either when the product stock levels reach the
ROL, which is explicit in a well maintained and
upgraded stock register. The Quantity is decided
as per Economic Order Quantity (EOQ), EOQ is calculated on consideration of the shelf
life, utilisation pattern, and procurement time.
Or as an emergency requirement, this product
might or might not be on the Standard Product
list.
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PURCHASE ORDER
PO is Generated when the requisition is
rechecked with the existing stock, and the
requirement is genuine. The PO is prepared
in duplicate to ensure that the productsreceived are as per the specifications laid
down in the purchase order.
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STORES
Centralised stores ensures reduced
inventory costs, more organised supply
and improved utilisation of space and
manpower. Stores control is necessary to
curtail the pilferage to a large extent.
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System of stores Establishes the initial inventories, sets up
quantities and supplies of all the items, up-grades the same
Specific day/s are fixed for the requisitioning of
various items Emergencies are attended through a recheck
with respective departmental head
All departments send their requisitions withappropriate authorisation to the stores
Stores department promptly delivers therequisitioned items to the respective department
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When the requisitioned items are not in stock
EITHER the items are delayed in thepurchasing process whereby store
communicates with the respective
department of the delay and provides the
items as and when procured,
OR the items are not stocked in the
stores, in such a case the stores
department is to return the requisitionwith same/similar items after confirming
the acceptance of the same from the user
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Receiving Process
Specifications are as per the request placed
by the respective department and/or
consultant
Items substituted without prior approval of the
purchasing department Shelf life of the items
Damaged and/or defective items
Excess / Shortage in quantity Supplies for which purchase orders have not
been placed (all the above should be verified
by reviewing the purchase orders)
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Contd...All the items when they arrive at hospital
will have a Goods Received Note (GRN),which is a counter check to the itemsordered to the items received. The GRN
would be verified during the physicalverification process
The Physical verification of the Items iscarried out by the Stores Officer along
with the respective departmental head /representative of the department toensure that the item received is the onerequisitioned item.
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Contd... Physical verification for general items require
verification of items in a random fashion, in
case of high value items verification is a
detailed verification of all the features
After physical verification the bills areforwarded to the Finance Department, where
the payment is made within the stipulated
number of days mentioned in the contract.
All the items are then transferred to the Storesalong with the item specifications and their
quantities after physical verification
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The Pharmacy Services
Definition:-Premises licensed for the retail sale or
supply to the Hospital Out Patient
department and/or In Patient area of drugs
which have qualified licensed person(s)and indulge in compounding of drugs.
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Functions of Pharmacy Services
1. Demand estimation
2. Compounding and manufacturing of sterile and nonsterile products.
3. Quality control of drugs purchased.
4. Supply of Drugs to In patient, Wards, I.C.U., O.Ts,Emergency etc.
5. Dispensing for Out Patients.6. Maintenance of formulary system.
7. Furnishing Drug information to Physicians and otherprofessional staff.
8. In-Service training, teaching and research and clinicaltrials.
9. Patient Education
10. Drug use review
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Types of Pharmacies
1. Pharmacy for O.P.D.
2. Pharmacy for In Patients Services
3. A combination of both.
4. A retail sale counter in the Hospital
5. A combination of above all type.
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Managerial Issues in
Pharmacy Services
1. Control of Drug costs.
2. Effective Staff utilization.
3. Human Relation.
4. Consumer Satisfaction.
5. Non availability of Drug.
6. Supply of Sub Standard Drugs.
7. Drug pilferage.
8. Drug distribution system.
D b i i i h
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Documents to be maintain in the
Pharmacy Service
1. Non expendable stores ledger.
2. Expendable stores ledger.
3. Indent file.
4. Formula file for manufacturingmedicaments.
5. Costing returns.
6. Report file.7. Stock verification returns file.
8. Hospital formulary.
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INVENTORY CONTROL
Ensures maximum efficiency in utilisation of
the items and enables to bridge the gap
between the forecasted and the actual
demand of the materials. Inventory control does not mean minimum or
lowest inventory levels
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FUNCTIONS OF INVENTORY
CONTROL
TO PROVIDE MAXIMUM SUPPLY SERVICE,
CONSISTENT WITH MAXIMUM EFFICIENCY& OPTIMUM INVESTMENT.
TO PROVIDE CUSHION BETWEEN
FORECASTED & ACTUAL DEMAND FOR AMATERIAL
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Guidelines for an effective Inventory Control Policy
Review past records, and analyse theutilisation of the all the items
Assign responsibilities with respect tovarious to various functions of inventory
management Co-ordinate the procedures of inventory
management with the internal auditors
and computer systems Clear instructions describing the
procedure of inventory procurement,issue, records maintenance and stock
audit
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Contd...All items should be identified with a distinct
code which are to be followed either in anautomated or manual system, the code is to
be clearly visible (specific colour can be
provided)
The Bin Cards and Stock Register should also
contain the specifications of the respective
item
Classify the inventory, and segregate physicalareas for the various items as per their
similarities in function and/or specifications
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Contd...All the items are arranged in the following
manner The items are segregated with respect to
medical, surgical, linen, spare parts(Electrical, Plumbing, air-conditioning,
ventilation etc.), equipment (all thedepartments), Radiology, Sonography,Laboratory, Pharmacy etc
Further the items can be arranged
alphabetically for easy access and retrieval ofitems
Sign boards are placed identifying the zoneswith similar items
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REPLENISHMENT SYSTEMS
Fixed Order Quantity
Economic Order Quantity (EOQ)
Quantity to be ordered is fixed for each and
every product
As the order is fixed, the orders are placed at
irregular intervals and reduces the ordering
cost and inventory carrying cost
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Contd...
The Re-Order Levels ( ROL ) for ordering
is reached when the item reaches the
quantity reaches the buffer stock plus
consumption required for the period ofprocurement
These two methods for quantity required
along with the time at which to orderwould maintain adequate stock and
reduce stock out situations to a large
extent
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Economic order of quantityEOQ= Average Monthly Consumption X Lead Time [in
months] + Buffer StockStock on hand
CARRYING
COSTPURCHASING
COST
ECONOMIC ORDER OF
QUANTITY(EOQ)
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Economic Order Quantity (EOQ)
Q =
Where,
Q = Economic Order Quantity or optimum number
of units per order to minimise the total cost C = Cost of one unit of item
I = Inventory Carrying cost, expressed as apercentage of the value of the average inventory
R = Total annual quantity requirement or total
demand
S = Ordering cost per order All the factors involved in placing an order are included in
determining the EOQ; hence it would reduce pilferage to a
large extent.
2RS
CI
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RE-ORDER LEVEL: STOCK LEVEL AT
WHICH FRESH ORDER IS PLACED
AVERAGE CONSUMPTION PER DAY X LEAD
TIME + BUFFER STOCK
LEAD TIME: DURATION TIME BETWEEN
PLACING AN ORDER & RECEIPT OF
MATERIAL; IDEAL2 TO 6 WEEKS.
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Re Order Level (ROL)
ROL = B + Lc + Rc/2 where
ROL = Re-Order Level
B = Buffer Stock
Lc = Lead Time Consumption Rc = Review Period Consumption
The ROL looks into all the aspects like
lead-time, buffer stock and theconsumption patterns, hence this wouldensure to reduce the stock possibilities toa large extent.
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ABC ANALYSIS(ABC = Always Better Control)
THIS IS BASED ON COST CRITERIA.
IT HELPS TO EXERCISE SELECTIVE CONTROL WHENCONFRONTED WITH LARGE NUMBER OF ITEMS IT
RATIONALIZES THE NUMBER OF ORDERS, NUMBER OF ITEMS &
REDUCE THE INVENTORY.
ABOUT 10 % OF MATERIALS CONSUME 70 % OF RESOURCESABOUT 20 % OF MATERIALS CONSUME 20 % OF RESOURCES
ABOUT 70 % OF MATERIALS CONSUME 10 % OF RESOURCES
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A ITEMS
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
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B ITEM
INTERMEDIATEMUST HAVE:
MODERATE CONTROL
PURCHASE BASED ON RIGID REQUIREMENTS
REASONABLY STRICT WATCH & CONTROL
MODERATE SAFETY STOCKS
MANAGED BY MIDDLE LEVEL MANAGEMENT
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C ITEMSLARGER 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
CUMMULATIVECUMMULATIVEANNUAL COSTANNUAL COST COS %
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19950050019
19900050018
19850050017
19800050016
19750050015
19700050014
19650050013
196000150012
194500150011
193000175010
19125027509
18850040008
18450045007
18000050006
17500075005
16750075004
160000200003
140000500002
90000900001
CUMMULATIVECUMMULATIVE
COSTCOST [Rs.]ANNUAL COSTANNUAL COST
[Rs.]ITEMITEM COST %COST %ITEM %ITEM %
70 %70 %
20 %20 %
10 %10 %
10 %10 %
20 %20 %
70 %70 %
ABC
A
N
A
L
Y
S
I
S
WORK
SHEET
VED ANALYSIS
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VED ANALYSIS BASED ON CRITICAL VALUE & SHORTAGE COST OF AN ITEM
IT IS A SUBJECTIVE ANALYSIS.
Items are classified into:
VITAL:Shortage cannotbe 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 ScrutinizedV E D ITEM COST
A AV AE AD CATEGORY 1 10 70%
B BV BE BD CATEGORY 2 20 20%
C CV CE CD CATEGORY 3 70 10%
CATEGORY 1 - NEEDS CLOSE MONITORING & CONTROL
CATEGORY 2 - MODERATE CONTROL.
CATEGORY 3 - NO NEED FOR CONTROL
SDE ANALYSIS
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SDE ANALYSIS
Based on availability
ScarceManaged by top level management
Maintain big safety stocks
Difficult
Maintain sufficient safety stocks
Easily availableMinimum safety stocks
FSN ANALYSIS Based on utilization.
Fast moving.Slow moving.
Non-moving.
Non-moving items must be periodically
reviewed to prevent expiry & obsolescence
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HML ANALYSIS
Based on cost per unit
HighestMedium
Low
This is used to keep control over consumptionat departmental level for deciding the frequency of
physical verification.
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Stores Systems Bin cards - product identification code,
product specifications, and stock ofproducts (procured, issued (to whichdept), and the balance stock as per date
Stock Registers - the stock received,issued, balance, their respective ROL andEOQ
Requisition/s issued file
Requisition/s pending file
Requisition for purchase file
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SALE OF SCRAP Sale of all the scrap and by-products
handled by the stores department i.e. co-ordinate procurement storage & sale
Authority to deem items as scrap lies withstore officer
Bio-medical items and Linen decided byMaterial Standardization Committee
Vendors for purchase of the scrap andby-products decided on an annual basisthrough tenders
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Stores Officer, Manager Finance and the
Hospital Administrator review the tenders,then decision is taken; and the contracts
are usually valid for one year, under the
approval of the competent authority like
executive director
After this scrap sold at rates fixed in the
contract
\Stores Officer, Manager Finance decide
about fresh tenders
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The by-products include (some of the itemsare):
a). Silver [Radiology Department]
b). Paper waste c). Plastics and glass ware
d). Furniture and fixtures
(Market survey is carried out to get the bestprice)
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Guidelines of MATERIAL
STANDARDIZATION COMMITTEE
STORESRequisition for items from the stores:
Stock of respective item reaches ROL
Fast moving, high cost and irregular/
consignment items
ACCOUNTS & BILLING
Maintain Accounts for the payment
against bills raised
Product Identification and requisition
for purchase
Procurement Process
Prepare and Release Purchase OrdersReceipt and Physical verification of
items and hand-over to Stores
department
(Forward the bills to the accounts for
payment)
PROCUREMENT PROCESS ACTIVITY FLOW
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RECEIPT OF ITEMS
Physical verification of items along with the
respective departmental representative
Ensure that the Goods received note is for theitems physically received
Transfer of items to stores
STORES MANAGEMENT
Uupdate the stock records
Pphysically place the item/s in the respective place
Eensure that the required environmentAC/ Moisture
free etc. is appropriate
Iinventory ManagementEOQ, ROL etc.
REQUISITION FROM USER
DEPARTMENTS
STORES AND INVENTORY MANAGEMENT
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PERIODICAL REPORTS:Monthly reports
Statement of revenue and expenditure
Manpower Planning
Cost Escalation and Inflation
Usage of surgical and medical items
Standardisation of new product/items
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Quarterly Reports
Linen Inventory and Usage Report
Pharmaceutical services
Stock outs
Electrical / Air-conditioning / plumbing
supplies utilisation
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Half Yearly Reports
Outstanding Purchase Orders
Physical Inventory
User review User review
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Annual Reports
Inventory levels
New requisitions by medical and other staff
for the next year
Requests for equipment / instruments for thenext year
j f i f
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1. To procure right thing at the right time from the right
place at the right price.2. To finalize contract for the continuous supply
3. To identify indigenous/import substitutes.
4. Preparation of Yellow page book of Vendors.
5. To finalize AMCs6. To identify procedures leading to reduction in Lead-time.
7. To maintain Economic Order Quantities & Minimum
Inventory Level.
8. To ensure that the activities of all user departments are insmooth flow.
9. To release Purchase order.
Major functions of purchase department
Receiving Indent From Stores
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Locate Vendor From Vendors Master Book
Find Out Import Substitutes If AvailableLocally.
Invite Quotations
Decide terms, Conditions & Issue P.O
Follow Up With Vendors & Action To Inform
To Concerned Dept:
Material To Be Laid Down In Store
FUNCTIONS OF SUPPLY & STORE DEPARTMENT
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1. To maintain minimum inventory level2. To maintain continuous & stable supply system
3. To ensure proper storage conditions as per the nature of the
items.
4. To take adequate measures to prevent pilferage.
5. To formulate Bin Card system6. To undertake ABC analysis.
7. To implement FIFO system, GRR system.
8. To prepare formats of various stores related documents.
9. To ensure that there is proper co-ordination with all the user
departments.
FLOWCHART OF THE STORES ACTIVITIES
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Receive requisitionfrom users.
Check in the stores
for availability
Issue to user if
available in the
store & record
If unavailable indent
sent to purchase
department
FLOWCHART OF THE STORES ACTIVITIES
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ON LUSION1. Material management is an important management tool which will
be very useful in getting the right quality & right quantity ofsupplies at right time, having good inventory control
2. Adopting sound methods of condemnation & disposal will improve
the efficiency of the organization & also make the working
atmosphere healthy in any type of organization, whether it isPrivate, Government, Small organization, Big organization and
Household.
3. Even a common man must know the basics of material
management so that he can get the best of the available resourcesand make it a habit to adopt the principles of material management
in all our daily activities
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