1. Dr. Kulkarni (Prof. of PSM, B.Y.L.Nair Medical
College)
Dr. Shilpa
MATERIAL MANAGEMENT

2. Definition
 Material may be defined as equipment,
apparatus and supplies procured, stocked and
utilized by an organization
 Management is a process which is applied to
convert inputs into outputs (goods or services)
or a process of planning, organizing, staffing,
directing and controlling, usually by a manager

3. Material Management
 A scientific technique concerned with planning,
organizing & control of flow of materials from
their initial purchase to destination
 An organizational concept in which a single
manager has the authority and responsibility
for all activities, principally concerned with the
flow of materials into an organization-
purchasing, production, planning, scheduling,
incoming traffic, inventory control, receiving
and stores normally included (National Assn.
Of Purchasing Mgmt-USA)

4. MM is a new concept in health care field. Modern
tech. of efficient MM were developed in USA
during second world war which helped them to
make a spectacular progress in improving their
productivity.
MM is a new concept in India introduced in
sixties. In last few years increasing awareness in
different areas of management is found. Hospital
organizations are an ideal situation for application
of this concept as 25-40 % of budgetary
expenditure is done on accomplishing the store
function.
Many hospitals have adopted this management to
provide efficient patient care
MM in health care Institutions

5. Why material management is of
importance
 Financially: Large proportion (25-40%) of health
expenditure is on materials
 For better availability: Material supplies are not
satisfactory at present
 Complex requirement: Medical and non-medical items
are more in number
 To maintain cold chain for vaccines
 Contraceptives are to be supplied to all over country
 Social marketing is to be supported
 There is need and potential for increased efficiency
and effectiveness

6. AIM
To ensure
1. The Right quality
2. Right quantity of supplies
3. At the Right time
4. At the Right place
5. At the Right cost

7. Primary Objectives
 Most important aspect of MM is to obtain correct
quality of materials at lowest possible cost (economic
order quantity)
 High inventory turn over
 Low storage cost (reduce capital and recurring
expenditure)
 Maintain continuous supply
 Maintain quality of purchase
 Cordial relationship with suppliers
 Low pay roll costs
 Development of vendors
 Good records
 Avoid wastage

8. Secondary objectives
These contribute to achieve primary objectives
 Favorable reciprocal relation
 New materials and product
 Economic make and buy
 Standardization
 Product improvement
 Interdepartmental harmony
 Economic forecast

9. Elements of MM
 Identification of items
 Estimating demand
 Purchase and procurement
 Inspection and quality control
 Storage
 Inventory control
 Issue procedure
 Maintenance, repairs, condemnation
 Information system

10. Material planning
 A ) Identification of items for eg: drugs. WHO
has published a guideline list of basic or
essential drugs, which are indispensable and
necessary for health needs and updated time
to time.
Finalization of drugs to be purchased for
hospitals or health centers , a committee may
be formed of clinicians, pharmacologists,
administrators, medical stores etc. to make
short lists..the lists should contain the non-
proprietary generic names, which helps in
lowering the cost .

11.  B. Estimate future demands: Time trend over
a period of 2-3 yrs, requirements may be
estimated for different items, fluctuations,
unusual occurrences in past, stock out
positions, excess stock . Any anticipatory
changes should also be considered.

12. Material planning
Planning for routine imm. In a sub center
1.Estimation of beneficiaries
2. Estimation of vaccines and logistics
Eg: for pregnant women TT vac. Coverage
Total population in a village
Annual target of pregnant women by multiplying the actual
headcount of pregnant women(by 2,for an estimate of 1 yr)
=A
Monthly target of pregnant women (A÷12)= B
Beneficiaries per month= B×2 doses=C
Requirements of vaccine vial (wastage of 25%, WMF of 1.33;
C ×1.33÷10
Syringes per month=C ×1.1

13.  Purchase procurement
Purchase is a strategic activity, directed
towards acquiring materials, supplies,
equipments and services for the purpose of
consumption and rendering services by
organization in an efficient manner.
Each organization has a purchase policy. This
saves time in making fresh decisions every
time and maintains uniformity.

14. Centralised purchasing
enables quality
control, improved
negotiating capacity,
hence minimizes the
cost.
may be delay in
supply and in
distribution of the
stores, possibility of
consumer
dissatisfaction
Advantage: Disadvantages :

15. Decentralized purchasing
 The peripheral units are
responsible for purchase
and distribution hence top
authority can get more
time for other organization
activity. Will be faster to
needs in emergencies,
better liaison and tight
control as purchase officer
will have more depth
knowledge of
requirements.
 Can be expensive as
replication by each dept,
increases manpower
consumption since they
have to spare time for
other than their regular
work. If purchase is not
managed well, inspection
and quality control can
suffer, inferior goods may
be supplied and out of
stock situations is common
Advantages Disadvantage:

16. Purchase
record
Specification
file
Need
recognized,
demand
estimated
Tender/enquiry/imports
Suppliers records

17. Follow up
Invoice
check

18. Inspection and quality control
 ISO and ISI stipulates standard of quality. It is
preferable to purchase items that bear such
certification , in other cases inspection is done before
purchasing/acceptance.
 Organizations/officers should be aware of
unscrupulous supplies (quality)/un ethical practice
(payments) of supplies
 Qualified Quality control inspectors are usually
appointed for this purpose.
 After receiving goods are sent to testing lab for
evaluation, the receiving personnel prepares a
detailed Material receipt note(MRN), in case of
rejected goods, a Goods rejected memo is prepared.

19. Storage of materials
 Medical and non-medical items to be kept
separate
 Convenient place for receipt of supplies and
delivery with adequate space and facilities,
preferably located in basement
 Combustible and non-combustible substances to
be kept separate
 Place to be free from rodents
 Poisonous and narcotic substances to kept
separately
 Most recently received drugs are placed behind
old stock on the shelf, should be well arranged,
placing drugs in shelves in alphabetically order
corresponding to essential drug list
 Rule of first in first out (FIFO) should apply

20.  After receiving materials, check consignment
belongs to you, later check the materials in detail,
quarantine and separate if materials are not in
conformity with order and intimate the supplier
immediately, MRN to be prepared if they are
correct and enter in stock ledger with out any
mistakes and submitted to stores manager.
Materials are arranged and stored as necessary.
Indenting of stores:
Annual
Supplementary
Emergent
Local purchase
Purchase committee

21.  Tender system is a form purchasing materials
at competitive price, without compromising the
quality to be transparent and accountable to
people .
 Single tender
 Limited tender- by registered firm /short listing
 Open tender (NIT)
 Global tender

22. Forecasting
 Forecasting: A process of estimating the relevant
events of future, on the basis of their past and
present analysis.
 Sales forecasting is to be done first and then
should be converted into material requirement
 Various methods are business barometers (state
of economy), time series analysis (chronological
order), extrapolation, visionary forecast, market
research, Delphi method, panel consensus,
moving average method, exponential smoothing,
input-output / diffusion index, correlation analysis,
regression model, econometric model, opinion
poll, casual model.

23. summary
material
management
material
planning
purchase &
procurement
inspectio
n
&quality
control
storage
inventory
control
issue
procedur
e
maintenance &
repairs
information
system