Material management

‘
TOPIC
ON
“Material Management”
Presented by:
Mr. Manjunath. Beth
Associate professor
&
HOD OF MSN DEPARTMENT

Material Management:
Planning
and
Procurement
“To spend money is
easy
To spend it well is
hard”
Presented By: Mr. Manjunath. M. Beth (Lecturer) Dept: Med-Sur-Nsg

Introduction
Material management
 It is a scientific technique
 It is concerned with
1. Planning
2. Organizing &
3. Controlling
 The flow of materials from their initial purchase through
internal operations to the service point through distribution.
 The material management in the health care system is
concerned with providing the drugs, supplies and equipment
needed by health personnel to deliver health services..

• About 40 percent of the funds in the health care
system are used up for providing materials.
• It is of great importance that materials of right
quality are supplied to the consumers (A person
who buys a product).

Material management integrates all materials functions
1. Planning for materials
2. Demand estimation
3. Purchasing
4. Inventory (A complete list of items) management
5. Inbound traffic (Departure of goods to its original point by proper
signals or guidelines)
6. Warehousing and stores ( a large wholesale/ retail store / a large
building where raw materials or manufactured goods may be stored)
7. Incoming quality control

DEFINITION
“ Material planning is the scientific way of
determining the requirements that goes into
meeting production needs within the economic
investment policies”.
OR
“It is a scientific technique concerned with
planning, organizing and control of materials from
their initial purchase to destination”.

• It is done at all stages and all levels of
management.
• Material planning is based on certain feedback
information and reviews.

Aim of material management planning
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
Five
Rights

Purpose of material management
planning
1. To gain economy (a financial saving) in purchasing
2. To satisfy the demand during period of
replenishment (fill up again after some has been used).
3. To carry reserve stock to avoid stock out
4. To stabilize fluctuations (Rise/Fall) in consumption
(buying a products).
5. To provide reasonable (not too expensive) level of
client services.

Basic principles of material management Planning
I. Planning
II. Organizing
III. Staffing
IV. Directing
V. Controlling
VI. Reporting
VII.Budgeting
2. Sound (based on solid judgment)
purchasing methods
3. Skillful and hard poised (calm &
confident) negotiations
4. Effective purchase system
5. Should be simple
6. Must not increase other costs
7. Simple inventory control
programme
1. Effective management
& supervision

Elements of material management
Planning
1. Demand estimation.
2. Identify the needed items.
3. Calculate from the trends in Consumption.
4. Review with resource constraints/limits.

PROCUREMENT

Objectives of procurement system
1. Acquire needed supplies as inexpensively as
possible.
2. Obtain high quality supplies.
3. Assure (confidently) prompt and dependable delivery.
4. Distribute the procurement workload to avoid period
of idleness (laziness / not working) and overwork.
5. Optimize (make best use of available resource) inventory
management through scientific procurement
procedures.

Procurement cycle
1. Review selection
2. Determine needed quantities
3. Reconcile needs and funds
4. Choose procurement method
5. Select suppliers
6. Specify contract terms
7. Monitor order status
8. Receipt and inspection

Procure = obtain
compliance = the action or fact of complying
(ready to accept something)

Procurement process
1. Create planning & organization (identify)
2. Locate suppliers (price)
3. Place order
4. Order
5. Receive order
6. Distribute order
7. allocate costs
8. Process payment
9. Research

Methods in Procurement Process and Negotiation
Strategies
1. Open tender
2. Restricted or limited tender
3. Negotiated procurement
4. Direct procurement
5. Rate contract
6. Spot purchase
7. Risk purchase
8. Many Suppliers Strategy
9. Few Suppliers Strategy

Points to remember while purchasing
• Proper specification
• Invite quotations from reputed firms
• Comparison of offers based on basic price, freight
(transport of goods in bulk by truck/train/ship/Aircraft) and
insurance, taxes and levies (Raise in fine fee structure).
• Quantity and payment discounts.
• Payment terms.
• Delivery period, guarantee.

Procurement of equipments
1. Latest technology.
2. Availability of maintenance and repair facility, with
minimum down time.
3. Post warranty repair at reasonable cost.
4. Upgradeability.
5. Reputed manufacturer.
6. Availability of consumables / use availbility of
resources.
7. Low operating costs.
8. Installation.
9. Proper installation as per guidelines.

Storage
• Store must be of adequate space.
• Materials must be stored in an appropriate place in a
correct way.
• Group wise and alphabetical arrangement helps in
identification and retrieval (diffculities).
• First-in, first-out principle to be followed.
• Monitor expiry date.
• 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.

Conclusion
• Material management is an important management
tool which will be very useful in getting the right
quality and right quantity of supplies at right time.
• Having good inventory control and adopting sound
methods of condemnation and disposal will
improve the efficiency of the organization.
• Principles of material management and
procurement are applicable to every organization
as well as individuals.

Material management

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