This document discusses various aspects of hospital supplies and equipment management. It covers topics like classification of supplies vs equipment, purchase of items through different departments, definition and elements of material management, factors for budgeting purchases, quality considerations for purchases, central supply services, and factors influencing material purchases. Inventory control techniques like ABC analysis, VED analysis, and FSN analysis are explained. Key aspects of procurement, storage, and inventory management are also summarized.

1. Bivin JB

2. Introduction
• Management of Hospital supplies &
equipments
• Supplies are items that are used up or
consumed
– Eg: drugs, surgical goods (disposables, glass
wares), chemicals, antiseptics, food materials,
stationeries, the linen supply etc.
• Equipment is used for more permanent type
of article
– Fixed equipment are items attached to the walls
or floors (eg; steriliser,)
– Movable equipment includes furniture,

3. Purchase of supplies &
equipments
• Done through
– General store
– Dietary department and
– Pharmacy department

4. Definition
• Material management is a scientific
technique, concerned with planning,
organizing and controlling the flow of
materials from their initial purchase
through internal operations to the service
point through distribution.
• About 40 percent of the funds in the health
care system are used up for providing
materials.

5. Elements
Planning for materials
Demand estimation
Purchasing
Inventory management
Inbound traffic
Warehousing and stores
Incoming quality control

6. Factors for Budgeting a
purchase
– Transport charges ( local delivery reduce the
transport charge)
– Incidental costs
– Cost of chemicals and other consumable to be used
with the equipment (eg; ECG paper for an ECG
machine )
– Operating cost (hiring a technician )
– Cost of maintenance service; 10-20% of hospital
equipment may remain idle if serving is not done
periodically.
– Cost of technology obsolesces: when a better quality
appears in market there is tendency to discard the old
model.
– Replacement cost of equipment

7. When purchasing an article;
• It should be durable, non-corroding, non
toxic and safe for use.
• Should have standard shapes and
dimensions to fit into various situations
• Reparability and spare part availability of
the article
• Inter-changability of the article (Exchange
facility)

8. Continues…
• All surgical instruments used in a hospital
should be sterilisable and they should
stand the tests for leakage, hydraulic
pressure tests for bursting etc
• Should have accuracy in measurements
• Should have ease of operation

9. The Central Supply Service
• The central supply varies hospitals to
hospital
• Some hospital the central soppy room
deals with only the sterile supplies and
ward trays.
• Some hospitals all types of equipment
such as oxygen, suction, ward trays,
catheters, syringes etc supplied centrally

10. Factors in Material Purchase
1. Type of service provided by the hospital
2. Age of patients: children need different type
and amount of equipments than adults.
3. Sex- men and women sometime require
different type of equipment.
4. Degree and type of illness- neurologic
patients sometimes require more bedsides,
rubber mattress and linen than patients with
other type of illness.
5. Cost of items- cost of items will limit the
purchase of number of equipment.

12. Electric supply and installations
Water supply
Disposal of waste
Ventilation and environment control

13. Transport
Supply of medical gases , compressed
air, hot water, vacuum suction and
gas plants
Laundry
Fire hazard
Communication

14. WHO

15. Scope of services
• Essential clinical services- medicine, surgery,
paediatrics., OBG, and acute
psychiatry(when necessary)
• Optional clinical services – oral surgery,
orthopaedic surgery, otolaryngology,
neurology and psychiatry.
• Essential clinical support- anaesthesia,
radiology and clinical laboratory
• Optional clinical support services- pathology
and rehabilitation including physiotherapy.

16. Essential medical equipment
• Diagnostic imaging equipment –it include x-ray
and ultrasound equipment. X-ray equipment can
be stationary in one room or mobile
• laboratory equipments
• Refrigerator – an ordinary household refrigerator
with a freezer unit, for storing preparations,
vaccines, blood etc.
• Instillation and purification apparatus - it should
be made of metal that resists acid, and alkali
and should be free standing.

17. Electrical medical equipment.
• Portable electrocardiograph
• Defibrillator( external)
• Portable anaesthetic unit
• Respirator
• Suction pump
• Operating theatre
• Delivery table
• Diathermy unit

18. Other equipments
• Autoclave
• Small sterilizers
• Cold chain
• Ambulance
Small, inexpensive equipment and
instruments
• BP apparatus, oxygen manifolds,
stethoscope, diagnostic sets and
spotlights.

20. Introduction
• Material planning is the scientific way of
determining the requirements that goes
into meeting production needs within the
economic investment policies.
• It is done at all stages and all levels of
management. Material planning is based
on certain feedback information and
reviews.

21. Aim
• 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

22. Basic Principles
Sound purchasing methods
Skillful and hard poised negotiations
Effective purchase system
Should be simple
Must not increase other costs
Simple inventory control programme

23. Elements
Demand
estimation
Identify the
needed
items
Calculate from
the trends in
Consumption
Review with
resource
constraints

24. Procurement

25. 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

26. Procurement Cycle
Review
selection
Determine
needed quantities
Reconcile
needs and
funds
Choose
procurement
method
Select
suppliers
Specify
contract
terms
Monitor order
status
Receipt and
inspection

27. Methods of Procurement
1.Open
tender
2.Restrict
ed or
limited
tender
3.Negotiate
d
procuremen
t4.Direct
procureme
nt
5.Rate
contract
6.Spot
purchase

28. Points to Remember
Proper specification
Invite quotations from reputed firms
Comparison of offers based on basic price, freight and
insurance, taxes and levies
Quantity and payment discounts
Payment terms
Delivery period, guarantee

29. Procurement of Equipments
• Latest technology
• Availability of maintenance and repair facility,
with minimum down time
• Post warranty repair at reasonable cost
• Upgradeability
• Reputed manufacturer
• Availability of consumables
• Low operating costs
• Installation
• Proper installation as per guidelines

30. Storage
• Store must be of adequate space
• Appropriate method of store
• Group wise and alphabetical arrangement
helps in identification and retrieval
• 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

31. Inventory Control

32. Definition
• Inventory control is a scientific system
which indicates as to what to order, when
to order, and how much to order, and how
much to stock so that purchasing costs
and storing costs are kept as low as
possible.

33. Objectives
• To keep the investment on inventories to
stock outs and shortages.
• To avoid carrying cost.
• To improve quality of care with lesser
inventory.
• To avoid obsolescence of inventor

34. Techniques
ABC
Analysis
(Always
Better
Control)
VED
Analysis
(Vital,
Essential,
Desirable)
HML
Analysis
(High,
Medium,
Low)
FSN
Analysis
(Fast,
Slow
moving
and Non-
moving)
SDE
Analysis
(Scarce,
Difficult,
Easy)

35. ABC Analysis
• ABC analysis is the analysis of the store
items cost criteria.
• It divides inventory into 3 categories A, B &
C based on their annual consumption
value.
• Also known as Selective Inventory Control
Method (SIM)
• ABC analysis has universal application for
fields requiring selective control.

36. Continues…
• It has been seen that a large number of items
consume only a small percentage of
resources and vice- versa.
• A – Items represent the high cost centre, B
items represent the immediate cost centres,
and C- items represent low cost centres.
• A very close control is exercised over A items
while less stringent control is adequate for
those in the category B, and less attention for
category C.

37. ABC Process
Make the list of all
items of inventory.
Determine the
annual volume of
usage & money
value of each
item.
Multiply each
item’s annual
volume by its
rupee value.
Compute each
item’s percentage
of the total
inventory in terms
of annual usage in
rupees.

38. ABC
Top 10% of all items which have the
highest rupee percentages -“A” items.
Next20% of all items with the next
highest rupee percentages -“B” items.
70% of all items with the lowest rupee
percentages - “C” items.

39. Advantages of ABC
• Helps to exercise selective control
• Gives rewarding results quickly
• Helps to point out obsolete stocks easily.
• Helps better planning of inventory control
• Provides sound basis for allocation of
funds & human resources.

40. VED Analysis
• Vital items
– Its shortage may cause havoc & stop the work in
organization.
– Are stored adequately to ensure smooth operation.
• Essential items
– Here, reasonable risk can be taken.
– They should be sufficiently stocked to ensure regular flow
of work.
• Desirable items
– Its non availability does not stop the work because they
can be easily purchased from the market as & when
needed.
– They may be stocked very low or not stocked

41. ABC Vs VED
Category “V” items “E” items “D” items
“A” items Constant
control &
regular follow
up
Moderate
stocks
Nil stocks
“B” items Moderate
stocks
Moderate
stocks
Low stocks
“C” items High stocks Moderate
stocks
Very low
stocks

42. FSN Analysis
• FSN: Fast moving, Slow moving & Non
moving
• Classification is based on the pattern of
issues from stores & is useful in controlling
obsolescence.
• Date of receipt or last date of issue,
whichever is later, is taken to determine the
no. of months which have lapsed since the
last transaction.
• The items are usually grouped in periods of
12 months.
• It helps to avoid investments in non moving
or slow items. It is also useful in facilitating

43. References
1. Basavanthappa B T. Nursing administration. ( Ist
edn). New Delhi: Jaypee brothers medical publishers
(p) ltd; 2000.
2. Gopalakrishnan & Sunderasan: Material
Management, Prentice Hall of India Pvt Ltd. New
Delhi, 1979.
3. Kulkarni G R. Managerial accounting for hospitals.
Mumbai: Ridhiraj enterprise; 2003.
4. Kumar R& Goel SL. Hospital administration and
management. Vol 1 ( first edn).New Delhi: Deep &
deep publications;
5. Gupta S& Kanth S. Hospital stores management, an
integrated approach.( First edn). New Delhi: Jaypee
brothers; 2004.