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MANAGEMENT
Concepts
Material management is concerned with providing the
drugs, supplies and equipment needed by health
personnel to deliver health services.
The right drugs, supplies and equipment must be at the
right place, at the right time and in the right quantity in
order that health personnel deliver health services.
Objectives
To reduce cost of material
Ensure a good support with suppliers(vendors)
Effective and efficient handling of materials at all stages
and in all sections.
Low purchase price
Maintaining continuous supply
Maintaining quality
Cordial relationship with supplier
Standardization
Product improvement
Interdepartmental harmony
Economic forecasting
Principles of material
Management
Effective management and supervision; it deals on
material functions of ;planning, organizing, staffing,
controlling, report and budgeting.
Sound purchasing method
Skillful and hard poised negotiation
Effective purchase system
Should be simple
Simple inventory control program
PROCESS OF MATERIAL
MANAGEMENT
1.Budgeting and material planning.
2.Demand forecasting.
3.Procurement
4.Receipt, inspection and payment.
5.Storage
6.Inventory control.
PROCESS OF MATERIAL
MANAGEMENT
1.Budgeting and material planning.
2.Demand forecasting.
3.Procurement
4.Receipt, inspection and payment.
5.Storage
6.Inventory control.
DEMAND FORECASTING
Forecasting is a process of estimating the relevant
events of future, on the basis of analysis of their past
and present behavior.
Forecasting emphasis should be placed on those items
that represent a significant investment in inventory.
Demands for materials could be certain or predictable,
and uncertain or unpredictable.
Bulk price can be affected with maximum price
discounts through demand forecasting.
Methods of forecasting
Last period demand
Arithmetic average
Moving average
PROCESS OF MATERIAL
MANAGEMENT
1.Budgeting and material planning.
2.Demand forecasting.
3.Procurement
4.Receipt, inspection and payment.
5.Storage
6.Inventory control.
PROCUREMENT
An effective procurement system aims at purchasing of
items of acceptable quality, in appropriate quantities, at
the minimum price and within the available time.
Objectives of procurement
system
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
TYPES OF PURCHASING
Centralized Purchasing
When one person or the department makes purchases
of all the materials required by an organization, it is
called centralized purchase.
Advantages
1. To ensure better control.
2. It develops specialized knowledge skills and efficiency
for economic purchases.
3. Technical manpower relieved from responsibilities, the
manpower will be utilized in their own disciplines like
doctors and nurses in the hospital.
4. It diverts influence or domination by other
departments.
Disadvantages
1. It is somewhat slow.
2. Problems relating to a particular material can be
solved locally but in this case everything is referred to
the central unit, which may be cause of dissatisfaction
and delay.
2. Decentralized purchasing
The user department is responsible for purchasing.
Advantages
a. The user will have better and more in depth knowledge of the
requirements in his unit or department, local suppliers and storage
facilities etc.
b. The purchase officer will respond faster to needs in emergencies.
c. The purchase officer will produce better liaison and tight control.
Disadvantages
Duplication of activities in each department.
Purchasing cost increases.
Technical manpower like doctors, nurses in hospitals is
utilized for the purchase functions which is diversion
from their main area of work.
3. Combined purchasing
It is partly centralized and partly decentralized.
PROCESS OF MATERIAL
MANAGEMENT
1.Budgeting and material planning.
2.Demand forecasting.
3.Procurement
4.Receipt, inspection and payment.
5.Storage
6.Inventory control.
PROCESS OF MATERIAL
MANAGEMENT
1.Budgeting and material planning.
2.Demand forecasting.
3.Procurement
4.Receipt, inspection and payment.
5.Storage
6.Inventory control.
PROCESS OF MATERIAL
MANAGEMENT
1.Budgeting and material planning.
2.Demand forecasting.
3.Procurement
4.Receipt, inspection and payment.
5.Storage
6.Inventory control.
INVENTORY CONTROL
It is the process of having the necessary equipment and
supplies available at the appropriate time.
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.
PRINCIPLES OF INVENTORY
MANAGEMENT
Lead time:
This is the time required to obtain the supply once the
need is determined, i.e. it is the average number of
days between placing an order and receiving the
material.
ABC Analysis
The cost of each item is multiplied by the number used
in a given period and then these items are tabulated in
descending numerical value order.
It will be seen that first 10% of items approximately
account for 70%, the next 20% for 20% of value and the
last 70% account for 10% of value.
It has been seen that a large number of items consume
only a small percentage of resources and vice- versa.
A- Items
Tight controls
Rigid estimates of requirements
Strict and close watch
Safety stocks should be low
Management of items should be done at top
management level.
B- Items
Moderate control
Purchase based on rigid requirements
Reasonably strict watch and control
Safety stocks moderate
Management be done at middle level
C- Items
Ordinary control measure
Purchase based on usage estimates
Controls exercises by store keeper.
Safety stocks high
Management be done at lower levels..
FSN Analysis
It is based on rate of consumption.
The items can be classified into:
Fast moving
Slow moving
Non- moving
Obsolete
VED ANALYSIS
The stores when subjected to analysis based on their
criticality can be classified into vital, essential and
desirable stores. This analysis is termed as VED
analysis.
Vital: items without which treatment comes to
standstill: i.e. non- availability can not be tolerated.