Specific learning objective
• Objective
• Why it is important ?
• Concepts in material management
• COMPONENTS
Inventory control
Demand forecasting
Procurement
Condemnation
Social marketing
Maintanence technique
OBJECTIVE
 To establish and operate an efficient and effective system that ensures supply
of required quantity and quality of material when and where it is needed.
Why the management of materials should receive a high priority?
 Large proportion of health expenditure is on materials-25% to 40% is spent on
purchase of matrerial
 The materials supplies are not satisfactory at present-common medicines are
out of stock,very close to expiry date
 The number of items of medical and non medical supplies is large
 The implementation of immunization programme demands the cold- chain
system for vaccines
Contraceptive supply is an high priority activity- generally supervision is
lacking,fresh stock is distributed first and previous stock unutilized for long
periods ,record keeping is not satisfactory
Concept of social marketing is to be supported
CONCEPTS IN MATERIAL MANAGEMENT
STANDARDISATION
or “variety reduction” must be undertaken to reduce the number of different
items to be procured.
VALUE ANALYSIS
 This is an analysis of the procedure of procurement helps in getting the “best
buy”,consistent with quality
 Usually “A” and “B” items are selected for value analysis
 eg. Substitution or design modification,using commercial quality,analysis of
packaging costs,manufacture by a more efficient process
MATERIAL INFORMATION SYSTEM
 Maintaining accurate inventory records with less than 5 % error rate.
 Through Bin Card System for each item for deciding reorder levels,or Periodic
review system
MATERIALS AUDIT
 To evaluate the effectiveness of the materials management on an annual basis
 Material cost per patient-day(MCPPD)=Total material costs per day/Total
hospital cost per day
 A high MCPPD implies higher per day patient costs
 Calls for improvement in techniques of material mangement
 MATERIALS PLANNING
 Involves planning,organizing and controlling the flow of matrials from their
procurement to their distribution at points of use.
 Helps achieve cost reduction through reduced investment on inventory;control of
pilferage and obsolescence;standarisation;value analysis;bulk purchase; and use of
cheaper substitutes
INVENTORY CONTROL
INVENTORY
Refers to stocks of goods having economic value.
INVENTORY CONTROL
Method of maintainence stock at a level at which purchasing and stocking costs
are the lowest possible without interference with supply.
FUNCTIONS OF INVENTORY
1. Aims at neutralising uncertainties of demand and supply
2. Helps maintaining buffer stock (safety stock)- Preventing stock-outs
3.Satisfies demand during lead time(i.e.time period between placing of orders
and actual receipt of goods).
4.Bulk purchase helps in containing costs.
PROBLEM FACED
 Maintaining huge stock amounts to locking up money,which could have spent
more gainfully in some other way.
 Large storage space and require staff to store and handle various items.
 Danger of drugs not being utilized before date of expiry,of pilferage.
 Thus inventory control has objective of maintaining optimum stock.
METHODS OF INVENTORY CONTROL
 ABC (Always better control) -Annual expenditure incuured on item
 VED ANALYSIS(vital,essential,desirable)-criticality in patient care
 SDE ANALYSIS(scarce,difficult,easily available)-based on availabity of
materials in the market
 FSN ANALYSIS(fast,solw,non-moving items)-based on rate of
consumption
ABC ANALYSIS
A items-high annual expenditure
daily stock review
high frequency of procurement
Decision by top level management
B items-intermediate in annual expenditure
twice weekly stock review
decision by middle levels of management
C items-low in annual expenditure
twice weekly stock review
low frequency of procurement
decision by lower levels of mangement
• CLASS A: 10% of total
inventories contributing
towards 70% of total
consumption value.
• CLASS B: 20% of total
inventories, which account for
about 20% of total
consumption value.
• CLASS C: 70% of total
VED ANALYSIS
Vital – inventory that consistently needs to be kept in
stock.No substitutes available. Forming about 10% of total items
• Essential – Their absence can be tolerated for short periods and
substitutes may be available. E items constituting about 40% of total
items
• Desirable – Whose absence can be tolerated for longer periods and
COMBINATION OF ABC AND VED ANALYSIS
category Kind of items Monitoring priority Safety stock/buffer
stock
Level of
management
cat 1-
AV/BV/CV/AE/AD
Vital/expensive Maximum
attention-
continuously
monitored
low Top level
Cat 2-BE/CE/BD Essential/average Little less priority moderate Middle level
Cat 3-CD Desirable/inexpensive Lowest priority high Lowest level
FSN ANALYSIS
• Fast Moving (F) = Items that are
frequently issued/used
• Slow Moving (S) = Items that are
issued/used less for certain period of
time
• Non-Moving (N) = Items that are not
issued/used for more than certain
duration
A list of non moving items
should be formed and to ensure that
fresh orders are not placed ordinarly
SDE ANALYSIS
SCARCE items
Imported items
Known to be frequently in short supply
DIFFICULT items
Difficult to obtain in adequate quantity and
quality immediately
EASILY AVAILABLE items
No difficult is experienced in their purchase
immediately
Analysis according to SDE helps to avoid out of
stock position of items by management with
reference to their free availability
VARIOUS POLICIES FOR INVENTORY CONTROL
• TWO BIN POLICY OR
REORDER LEVEL
Bin card is record of stock
received from supplier ,issue,and
stock- in- hand for each item.
Orders are placed stock in hand
reaches predetermined level(reorder
level).
Size of the order and time of
ordering vary over the entire
financial year.
Periodic review or cyclical policy
The stock position is reviewed at fixed time intervals(review periods),
If the stock in hand reaches minimum level(s),order is placed so that
maximum level level is attained(S)-optional replacement or S,s policy
size of the order may vary but the time interval for placing order is
constant,simultaneously for different items.
Followed for the items received from Medical Store Department.
One- For- One Order Policy
When one unit of item is issued, an order is placed for one unit in
order to replenish stock.
This policy is used for expensive A items and for slow moving items
in health system
Static Inventory Policy
While undertaking one time projects,single procurement is made that
is adequate for entire duration of projects
Just- In- Time Policy
Supplies are delivered to service points just when they are needed.
It is difficult in the health system(demand may vary
seasonally,epidemics)
Economic Order Quantity
• Optimum quantity of an item that should be ordered at a point in time (cost
effective quantity)-combination of order and carrying cost are the least
• EOQ=√2× (annual usage in units) ×order cost/annual carrying cost per unit
• Order cost/purchase cost-cost incurred at the time of placing order
• Annual usage-forcasted annual usage in terms of units of the items
• Carrying cost/holding cost-cost incurred to hold inventory on hand
DEMAND FORECASTING
• Is a process of estimating future demand based on that of the past
• It is necessary to prevent excess stock of some items and stock out of
other items,to calculate buffer stock,and to calculate the variability in
demand and lead time
• Database required for demand forecasting
• 1.inventory levels and shelf life for various items
• 2.investment on inventory-capital investment ,holding cost,and value of
the items
• 3.record of transactions-store,indent records and consumption pattern over the
past two years
• 4.maintenance –downtime costs(cost of remaining idle due to stock outs) and
manpower requirements
• 5.user opinion and complaints from users
Factors influencing demand
 Average demand
Sesonal variations e.g demand for anti diarrhoea medicines during monsoon
Cyclical variations e.g due to changes in lifestyle of the people
Random variations (inherent variations devoid of any pattern)
Auto -correlation -Value of demand at any point of time in relation to
its own past values(persistence of occurrence of demand)
Advertising and product promotion
Methods for demand forecasting
Subjective qualitative techniques
Based on user opinion and judgement of the health manager
Used in situations where information is not available eg.new
medicine launched in the market;adequate records are not available for
A and B items
• Time series analysis
• Past data are used to predict future demand using mathematical techniques such as
arithmetic average (average of past demand).
• Economic indicators
• study of relationship of economic indicatiors with demand e.g.personal income
,GNP,Per captia income,etc.
• Econometric (or causal )models
• Assume that it is possible to identify the underlying factors that might influence
the variable that is being forecast e.g.occurrence of diarrhea associated with
monsoon
• Judgemental forecasting methods
• Incorporate intitutive judgements,opinions,and probability estimates.
• Methods include composite forecast,survey,delphi method(expert opinion
method),scenario building, etc.
• Uses of demand forecasting
• 1.health management:To forecast demand for medicines and vaccines and to
forewarn health managers to meet different situations
• 2.marketing:helps in forecasting demand for a product or service
• The Delphi technique is a systematic process of forecasting using
the collective opinion of panel members. The structured method of
developing consensus among panel members using Delphi
methodology has gained acceptance in diverse fields of medicine.
PROCUREMENT OF MATERIALS
Policies for procurement
• Centralised procurement
• Centralised authority is established for procurement of materials.
• Centralised procurement is the norm in the Government health sector
• ADVANTAGES
• Cost reduction because of bulk orders and procurement directly from
manfacturers
• centralised inspection and quality control
• DISADVANTAGES
Increased lead time
Does not consider the opinion of end users and therefore satisfaction is lacking
Decentralised procurement
authority and responsibility delegated to peripheral units
this policy usually followed by private sector
ADVANTAGES
Reduced lead time
better user satisfaction since user opinion is considered
Top level management is relieved from routine tasks
• DISADVANTAGE
• Increased purchase price because smaller quantities are ordered by each unit.
• Duplication of work by all units.
Rate contract system
• Combines the merits of the both centralised and decentralised procurement.
• The consuming unit place orders with the supplier at the prices fixed in the
contract for a financial or a two-year period.
•Sources for procurement in the health sector
• Directorate general of supplies & disposals(DGS&D)
• This is centralized agency established by government of india
• Medical store depots(MSD)
• Six MSDs have been established under the control of directorate general of
health services(DGHS)
• Each item in the MSD allotted a vocabulary of medical store(VMS)
number,which should be mentioned in the indent by the units making the
requistion.
• Public sector units,small scale industries,and cooperatives
• while purchasing from these organisations, not required to call for
quotations.
• Government department are authorized to give a price preference of up to ten
percent.
• In many government hospitals ,bedsheet and linen are purchased from
handloom industries or from prison cooperatives,which sell items
manufactured from prisoners.
• Local purchase committee
 These committees are empowered to float tender enquiries.
 After approval from purchase committee,purchases are made
 This type of procurement is used in both public and corporate hospitals.
Import
Under the liberalization policy,the central government has amended many stringent
rules and regulations that governed import of items
Public sector do not require an import license for items listed under open general
licence(OGL) e,g live saving medicine and essential equipment.
For non-OGL items ,import licenses are required
Private organization require clearance from reserve bank of india,before
opening a letter of credit
To avail of exemption from customs duty,organization should obtain a “Not
Manufactured In Country”(NMIC) certificate from directorate general of
technical development and few central government institutions, and “Customs
duty exemption certificate” from Director General of Health Services(DGHS)
• Procedure for procurement
• Assessment of needs
• The requirement is assessed on basis of requistion from user department or
estimation from past knowledge,patient load.
• Public sector ,it is necessary to determine whether the given items is
covered under Rate contract or indents
Standar.
• The items should be classified for selective inventory control
• Specifications
• It is necessary to specify details(quality,quantity,and technical specifications
if any)of the items while submitting requistion.
• The requisite quality standards, such as ISI,ISO,Agmark,or pharmaceutical
standards are to be specified for the item to be procured,packaging,spare
parts and accessories.
• The requisition should also mention about guarantee/warranty period desired
and maintanence service contract.
• Selection of suppliers
• It is necessary to maintain records on past performance of suppliers and
gather information about reliabity of new suppliers
• Preference ought to be given to those who undertake to service the
equipment even after guarantee period expires.
• Local availability of spare parts and maintanence personnel should be
confirmed
• In the government sector suppliers are determined by DGS&D,MSDs and
priority is given to public sector units ,cooperatives,and small scale
indusrtries-thus scope for supplier selection is restricted.
• Determining price &quality
• The price should include cost of equipment,value added tax(VAT),and local
taxes where applicable,maintanence cost,and contract for preventive
maintanence.
• However,in government sector, auditors usually do not favour expenditure
on preventive maintanence when the equipment is functional
• The current practice of placing the order with suppliers who quote the
lowest price may hamper quality.
• Budgetary provisions must be made for purchase of accessories,spares.
• Placing orders
• The “lead time” is period between placement of orders and actual receipt of
goods.
• Lead time is prolonged in situations where procurement is centralized.
The supply order ought to specify the place of delivery,sufficient warranty
period and penalty clause.
Orders once placed ,should be followed by regular correspondence for
expediting the supplies
• Receipt of goods and inspection
• On receiving the consignment,the packaging should be inspected to rule
out tampering,and also inspect the quantity & quality of supplied material.
• After checking the condition of goods, “goods received” note is prepared.
• Sub standards supplies ought to be rejected and discrepancies such as
shortage in quantity,damage should be followed.
• If quality of supplies is suspect ,these should be sent to designated
laboratories for quality control tests.
• Storage
• It should have adequate facilites e.g.light,ventilation,cupboards etc.
• Storage conditions such as cold chain,should conform to the specifications of
the manufacturer.
• In general, all consignments must be protected from vagaries of weather
e.g.dampness,rains and it should be free from rodent nuisance and other
vermins.
• Poisonous drugs and narcotics should be stored separately in locked cupboards.
Distribution to service points
• FETCH AND CARRY SYSTEM:A person in user department is responsible
for maintaintaing adequate stocks,requistioning the required items, and
processing the indents from central stores.
• fetch and carry system is practiced in sub center and primary health center and
are collected from district office
• PAR-LEVEL SYSTEM:supply quotas are established for each item for each
user department and these quotas are reviewed periodically.
.
• The distribution of supplies to wards in a hospital usually follows this
system
TOTAL-SUPPLY-CART-EXCHANGE SYSTEM:the supply cart includes
all items used by the user department.
PAR SYSTEM:This is a combination of par-level and total-supply-cart-
exchange systems.
• Consumption is identified by user departments- “A” items are reviewed
daily ;while “B” and “C” Items are reviewed twice weekly.
• concept of distribution cycle
• The sequence of cyclical activities that maintain a steady supply of
materials to the service points is called the distribution cycle
• To ensure that right supplies,in the right quantities are made available
to the right locations at the right tie,when required
• Determine requirement
• Condemnation of materials
• materials are of two types-
• Consumbales-last for a short period of time e.g.linen
• Non –consumables-last for many years e.g medical instruments.
• The principle- every non consumable equipment or material has a certain life
period ,after which,it has to be condemned.
Need for condemnation
1.Repairs are not economical after considerable period of use
2.Equipment may become obsolete or hazardous to operate
3.In the public sector,the procedure for condemnation does not start unless the
old equipment is condemned,
4.Unservicable equipment occupy space and also vulnerable to pilferage.
Prequisites for condemnation
 In order to avoid audit objections, records related to equipment ought to be
maintained
Records include history sheet of equipment;logbook of utilization;logbook of
maintanence and repair.
The depreciation value of equipment should be calculated before
recommending condemnation
Protocols
Condemnation by competent authority
• An officer who has the financial power to purchase equipment is competent to
condemn it.
• Technical equipment like photo copiers,vehicles and deep freezers need
certification from competent technical authority.
• This procedure is practiced in private sector
Condemnation by duly constituted board
• This procedure is practiced in public sector
• equipment is recommened for condemnation by heads of department or in–
house engineering units
• A duly constituted board ,which meets once in three months,physically
examines the equipment before it is condemned
Procedure for disposal of condemned equipment
Disposal by burning
• Non consumable materials that are a potential health hazard and confidential
documents are burnt in front of duly appointed board.
Disposal by auction
• Usually ten per cent of the book price of the equipment is fixed as the “reserve
price”(minimum bid) for auction and sealed tenders are called for buying by
placing advertisements in newspaper.
• The minimum bid for each item is declared in an open auction,which is
supervisied by a duly constituted board.
• The highest bidder pays 25 % of the bid amount on the fall of the hammer
and the remaining 75% within one week,before removing the auctioned
equipment.
MAINTENANCE MANAGEMENT
Maintanence management is a combination of efforts
• To maximise reliability and availability of equipment
• Minimise wear and tear,thus extending the useful life of the equipment
• To ensure operational readiness of vital and emergency equipment and
• To ensure safety of personnel.
Maintenance is economically feasible when assets are expensive and cost of
maintenance is relatively low.
• Types of maintenance
• Unplanned maintenance/breakdown/emergency maintenance
• It refers to repairing equipment in case it stops functioning.
• Repair should be undertaken only as a last resort because it is not cost
effective for an organization.
• Breakdowns causes increased damage to the equipment and also result in
opportunity costs.
• There is no policy of conducting periodic systemic checkup by skilled
personnel.
• Planned maintenance
• It comprises daily and preventive maintenance
• Daily maintenance is carried out each working day by the users
themselves e.g.daily cleaning of microscope before and after use ,daily
vehicle check carried out by drivers.
• Preventive maintenance is systematic check up carried out by skilled
personnel
• A policy of planned maintenance entails the upkeep of the following
records
• 1.assets register or dead stock register.
• 2.history sheet of the equipment(contains details of the equipment since
itsprocurement)
• 3.work order/job card/maintenance request/work requistion
• 4.maintenance schedule card (indicates the schedule –
weekly,monthly,annualy,and planned lubrication and replacement of parts
based on usage)
• 5.maintenance procedure card(indicates specifications of work to be done)
• Preventive maintenance reduces the incidence of breakdown,minimizes
operating costs and ensures safety of operations.It is categorized as follows-
1.CONDITION- BASED MAINTENANCE
• Maintenance is undertaken when closely monitored parametrs,such as
emission,vibrations,changes in alignment,deviate from permissible limits.
2.TIME- BASED MAINTENNACE
• This type is based on anticipated wear and tear e.g. number of Kilometers
travelled by a vehicle
3.RUNNING MAINTENANCE:
maintenance work is carried out when the equipment is working
4.SHUT-DOWN MAINTENANCE:
Maintenance work that is undertaken after shutting down functional equipment
Maintenance strategies
The management has to plan for maintenance of equipment and make adequate
budgetary provisions
 If in house or centralized workshops are set up,personnel will need induction
and inservice training and an inventory of tools and spare parts needs to be
maintained
Work priority ought to be predetermined .top priority –emergency services and
vital equipment;while offices,furnitures and housekeeping equipment receive
low priority
The workshops are vulnerable to pilferage and therefore should be accessible
only to authorized personnel.
Maintennace personnel must be trained to use personal protective
equipment(helmets,gloves,welder’s goggles)
In- house maintenance
 The workshop and maintenance facility is located within the premises and
should be adequately staffed with skilled personnel and stocked with spare
parts and requisite tools.
 In-charge person should have adequate powers to decide on repairs and
purchase of crucial components.
 Major hospitals usually have an in-house maintenance section under
biomedical engineer
Centralised maintenance
 In large organizations that are geographically spread out a centralized
worshop undertakes major repairs
 The workshop also serves as a training centre for in-house workshop
personnel
 In-charge person should have authority for technical decision making and
financial powers for purchase of emergency spares.
Out sourced maintenance
• In this work is carried out by a contractor.
• This is costly in the long term and should be resorted to only if facilites are
not available
• However for small organisations outsourcing maintenance work may be cost
effective through savingsin expenses on space and personnel.
SOCIAL
MARKETING
“Refers to application of commercial marketing
concepts,tools,resources,skills,and technologies to encourage socially
beneficial behaviour among those segments of population not served or not
adequately served by existing public or private systems”
Marketing experts Philip Kotler and Gerald zaltman pioneered the concept of
social marketing in 1971,when they reconised same marketing principle that
were being used to sell products to consumers could be used to
sell,ideas,attitudes, and behaviours.
• India is the first country that has accepted social marketing to further
family welfare programme.
• The aim is to achieve the social goals of increasing the number of
couples using contraceptives
• It also happens to be one of the earliest examples of public –private
partnership.
• A number of leading Fast Moving Consumer Goods(FMCG) companies
have cooperated with government in social marketing by piggybacking
nirodh to their products.
• Social marketing offers attractive benefits to family wefare programme
by making contraceptives available efficiently and conveniently through
the existing shops all over the country including rural area.
• It has potentiality of reaching couples in an easy and cost- effective way.
• Concepts related to social marketing include
• EDU-ENTERTAINMENT:refers to the use of traditional entertainment
media for educational purposes
• In some programmes ,health issues are potrayed within entertainment
programming.
• These programmes hold great promise for reaching audiences with important
lifestyle information at a time when thery are likely not resisting the message
• MEDIAADVOCACY
• Strategic use of mass media for advancing a social or public policy initiative
initiative promotes a range of strategies, such as creative epidemiology and issue
framing,in order to increase public support for more effective policy level
approaches to public health problem.
• The “Five P’s” of marketing
• Product
• In order to have a viable product,people must first perceive that they have
a felt need or a problem and that the product being earmarked for
promotion offers a solution for satisfying that felt need.
• Product selected for marketing may include-
• 1.physical products(condoms,ocp, insecticide-impregnated bed
nets,helmets)
• 2.services(periodic health check-ups,screening for cervical and breast
cancer)
• 3.practices(promotion of blood and organ donation,no-tobacco
campaigns,breast feeding,oral rehydration therapy,eating a balanced
diet,preventing drug abuse)
• 4.ideas (environment- friendly ideas,recycling of waste products,no-
plastic campaigns)
• Price
• The price of the product refers to monetary as well as the non-monetary
cost of a product.
• These non-monetary costs include psychological,social,or convenience
costs.
• Reducing this costs greatly increases the chances that a new idea /product
will be adopted.
• Costs>benefits-adoption of the product will be low
• Benefits>costs- adoption of the product is much greater
• Perception of costs and benefits can be determined through research,and
used in positioning the product
• Place
• The greater the number of distribution sites and more convient and
appropriate the places where the product can be found the better chance
that awareness and use of the product is facilitated.
• Commercial distributing networks is less expensive and more effective
than government setting up a separate marketing organization.
• This may include clinics,shpos,mass media vehicles or demonstration
• Promotion
• This comprises the ways in which the audience is made aware of the
product,such as
• integrated use of paid advertising,public relations,promotion,media
advocacy,peronal selling,in-store displays,media events,and enterainment
vehicles
• The promotion focus on generating and sustaining demand for the
product.
Positioning
• Refers to psychological “image” of the product.
• Social-psychological theories, supplemented with empirical
evidence,helps in determining the variables for adoption of the product.
• Additional “Four P’s” for social marketing
• Weinreich has described additional “Four p’s”-
• Publics
• Refers to both the external and internal groups involved in the programme
• External groups-target audience,secondary audiences,gatekeepers in the
community
• Internal groups-who involved some way with the programme
• Partnership
• It is essential to collaborate with other organization in the community(that have
similar goals)
• To make impact on social and health issues
• Policy
• Social marketing programme can succeed in motivating individual
behaviour change but difficult to sustain unless the environment supports
that change
• Purse strings
• It is necessary to determine sources for long term funding(government
grants or donations)in order to sustain social marketing programme.
• Adoption of change
• product should be socially and culturally acceptable to the target population
• Beneficiaries should possess the necessary knowledge and skills to adopt
the changed behaviour and use the marketed product
• Roger’s model
• Individuals or groups pass through stages of
awareness,interest,trial,evaluation and adoption
• David kline’s theory
• change of behaviour is more complex than change of attitude.
• In process of adoption,Indiviual passes through stages of
• understanding,
• motivation to alter the status quo
• Decision to change behaviour
• Gives a trial to new behaviour and
• Decides to sustain it or reject it.
• Middleton &laphani’s concept of demand generation
• Efforts at demand generation is oriented towards groups that are inclined
towards behaviour change
• For instance ,confectioneryitems are targeted at children and lifestyle
products at adolescents and youth.
• Seven doors model
• Developed by les robinson,presumes that people tend to adopt voluntary
changes because they are un happy,frustrated,or dissatisfied with their
lives or business
• Three kinds of “enabling factors” that assist occurrence of changes
are-
• 1.rationalisations
• 2.confidence
• 3.convenience
• In the 7 doors model,Adoption of change-social phenomenon
• Family ,friends,colleagues are involved as a “triggers” of change.
• “Change spaces”are times and places (facilitated workshops,field
days,hands on demonstration events) where potential actors can give their
full attention to a desired future and the steps needed to acheive it.
• Adoption of change ought to deliver ease,cost savings,status or prestige.
• It must actually reduces the dissatisfaction that led to the initial
involvement of the individual in the programme.

Material mangement (1).pptx

  • 1.
    Specific learning objective •Objective • Why it is important ? • Concepts in material management • COMPONENTS Inventory control Demand forecasting Procurement Condemnation Social marketing Maintanence technique
  • 2.
    OBJECTIVE  To establishand operate an efficient and effective system that ensures supply of required quantity and quality of material when and where it is needed. Why the management of materials should receive a high priority?  Large proportion of health expenditure is on materials-25% to 40% is spent on purchase of matrerial  The materials supplies are not satisfactory at present-common medicines are out of stock,very close to expiry date
  • 3.
     The numberof items of medical and non medical supplies is large  The implementation of immunization programme demands the cold- chain system for vaccines Contraceptive supply is an high priority activity- generally supervision is lacking,fresh stock is distributed first and previous stock unutilized for long periods ,record keeping is not satisfactory Concept of social marketing is to be supported
  • 5.
    CONCEPTS IN MATERIALMANAGEMENT STANDARDISATION or “variety reduction” must be undertaken to reduce the number of different items to be procured. VALUE ANALYSIS  This is an analysis of the procedure of procurement helps in getting the “best buy”,consistent with quality  Usually “A” and “B” items are selected for value analysis  eg. Substitution or design modification,using commercial quality,analysis of packaging costs,manufacture by a more efficient process
  • 6.
    MATERIAL INFORMATION SYSTEM Maintaining accurate inventory records with less than 5 % error rate.  Through Bin Card System for each item for deciding reorder levels,or Periodic review system MATERIALS AUDIT  To evaluate the effectiveness of the materials management on an annual basis  Material cost per patient-day(MCPPD)=Total material costs per day/Total hospital cost per day
  • 7.
     A highMCPPD implies higher per day patient costs  Calls for improvement in techniques of material mangement  MATERIALS PLANNING  Involves planning,organizing and controlling the flow of matrials from their procurement to their distribution at points of use.  Helps achieve cost reduction through reduced investment on inventory;control of pilferage and obsolescence;standarisation;value analysis;bulk purchase; and use of cheaper substitutes
  • 9.
    INVENTORY CONTROL INVENTORY Refers tostocks of goods having economic value. INVENTORY CONTROL Method of maintainence stock at a level at which purchasing and stocking costs are the lowest possible without interference with supply. FUNCTIONS OF INVENTORY 1. Aims at neutralising uncertainties of demand and supply 2. Helps maintaining buffer stock (safety stock)- Preventing stock-outs
  • 10.
    3.Satisfies demand duringlead time(i.e.time period between placing of orders and actual receipt of goods). 4.Bulk purchase helps in containing costs. PROBLEM FACED  Maintaining huge stock amounts to locking up money,which could have spent more gainfully in some other way.  Large storage space and require staff to store and handle various items.  Danger of drugs not being utilized before date of expiry,of pilferage.  Thus inventory control has objective of maintaining optimum stock.
  • 11.
    METHODS OF INVENTORYCONTROL  ABC (Always better control) -Annual expenditure incuured on item  VED ANALYSIS(vital,essential,desirable)-criticality in patient care  SDE ANALYSIS(scarce,difficult,easily available)-based on availabity of materials in the market  FSN ANALYSIS(fast,solw,non-moving items)-based on rate of consumption
  • 12.
    ABC ANALYSIS A items-highannual expenditure daily stock review high frequency of procurement Decision by top level management B items-intermediate in annual expenditure twice weekly stock review decision by middle levels of management C items-low in annual expenditure twice weekly stock review low frequency of procurement decision by lower levels of mangement
  • 14.
    • CLASS A:10% of total inventories contributing towards 70% of total consumption value. • CLASS B: 20% of total inventories, which account for about 20% of total consumption value. • CLASS C: 70% of total
  • 15.
    VED ANALYSIS Vital –inventory that consistently needs to be kept in stock.No substitutes available. Forming about 10% of total items • Essential – Their absence can be tolerated for short periods and substitutes may be available. E items constituting about 40% of total items • Desirable – Whose absence can be tolerated for longer periods and
  • 16.
    COMBINATION OF ABCAND VED ANALYSIS category Kind of items Monitoring priority Safety stock/buffer stock Level of management cat 1- AV/BV/CV/AE/AD Vital/expensive Maximum attention- continuously monitored low Top level Cat 2-BE/CE/BD Essential/average Little less priority moderate Middle level Cat 3-CD Desirable/inexpensive Lowest priority high Lowest level
  • 18.
    FSN ANALYSIS • FastMoving (F) = Items that are frequently issued/used • Slow Moving (S) = Items that are issued/used less for certain period of time • Non-Moving (N) = Items that are not issued/used for more than certain duration A list of non moving items should be formed and to ensure that fresh orders are not placed ordinarly
  • 19.
    SDE ANALYSIS SCARCE items Importeditems Known to be frequently in short supply DIFFICULT items Difficult to obtain in adequate quantity and quality immediately EASILY AVAILABLE items No difficult is experienced in their purchase immediately Analysis according to SDE helps to avoid out of stock position of items by management with reference to their free availability
  • 20.
    VARIOUS POLICIES FORINVENTORY CONTROL • TWO BIN POLICY OR REORDER LEVEL Bin card is record of stock received from supplier ,issue,and stock- in- hand for each item. Orders are placed stock in hand reaches predetermined level(reorder level). Size of the order and time of ordering vary over the entire financial year.
  • 21.
    Periodic review orcyclical policy The stock position is reviewed at fixed time intervals(review periods), If the stock in hand reaches minimum level(s),order is placed so that maximum level level is attained(S)-optional replacement or S,s policy size of the order may vary but the time interval for placing order is constant,simultaneously for different items. Followed for the items received from Medical Store Department.
  • 22.
    One- For- OneOrder Policy When one unit of item is issued, an order is placed for one unit in order to replenish stock. This policy is used for expensive A items and for slow moving items in health system Static Inventory Policy While undertaking one time projects,single procurement is made that is adequate for entire duration of projects Just- In- Time Policy Supplies are delivered to service points just when they are needed. It is difficult in the health system(demand may vary seasonally,epidemics)
  • 23.
    Economic Order Quantity •Optimum quantity of an item that should be ordered at a point in time (cost effective quantity)-combination of order and carrying cost are the least • EOQ=√2× (annual usage in units) ×order cost/annual carrying cost per unit • Order cost/purchase cost-cost incurred at the time of placing order • Annual usage-forcasted annual usage in terms of units of the items • Carrying cost/holding cost-cost incurred to hold inventory on hand
  • 25.
    DEMAND FORECASTING • Isa process of estimating future demand based on that of the past • It is necessary to prevent excess stock of some items and stock out of other items,to calculate buffer stock,and to calculate the variability in demand and lead time • Database required for demand forecasting • 1.inventory levels and shelf life for various items • 2.investment on inventory-capital investment ,holding cost,and value of the items
  • 26.
    • 3.record oftransactions-store,indent records and consumption pattern over the past two years • 4.maintenance –downtime costs(cost of remaining idle due to stock outs) and manpower requirements • 5.user opinion and complaints from users Factors influencing demand  Average demand Sesonal variations e.g demand for anti diarrhoea medicines during monsoon Cyclical variations e.g due to changes in lifestyle of the people Random variations (inherent variations devoid of any pattern)
  • 27.
    Auto -correlation -Valueof demand at any point of time in relation to its own past values(persistence of occurrence of demand) Advertising and product promotion Methods for demand forecasting Subjective qualitative techniques Based on user opinion and judgement of the health manager Used in situations where information is not available eg.new medicine launched in the market;adequate records are not available for A and B items
  • 28.
    • Time seriesanalysis • Past data are used to predict future demand using mathematical techniques such as arithmetic average (average of past demand). • Economic indicators • study of relationship of economic indicatiors with demand e.g.personal income ,GNP,Per captia income,etc. • Econometric (or causal )models • Assume that it is possible to identify the underlying factors that might influence the variable that is being forecast e.g.occurrence of diarrhea associated with monsoon
  • 29.
    • Judgemental forecastingmethods • Incorporate intitutive judgements,opinions,and probability estimates. • Methods include composite forecast,survey,delphi method(expert opinion method),scenario building, etc. • Uses of demand forecasting • 1.health management:To forecast demand for medicines and vaccines and to forewarn health managers to meet different situations • 2.marketing:helps in forecasting demand for a product or service
  • 30.
    • The Delphitechnique is a systematic process of forecasting using the collective opinion of panel members. The structured method of developing consensus among panel members using Delphi methodology has gained acceptance in diverse fields of medicine.
  • 33.
    PROCUREMENT OF MATERIALS Policiesfor procurement • Centralised procurement • Centralised authority is established for procurement of materials. • Centralised procurement is the norm in the Government health sector • ADVANTAGES • Cost reduction because of bulk orders and procurement directly from manfacturers • centralised inspection and quality control
  • 34.
    • DISADVANTAGES Increased leadtime Does not consider the opinion of end users and therefore satisfaction is lacking Decentralised procurement authority and responsibility delegated to peripheral units this policy usually followed by private sector ADVANTAGES Reduced lead time better user satisfaction since user opinion is considered Top level management is relieved from routine tasks
  • 35.
    • DISADVANTAGE • Increasedpurchase price because smaller quantities are ordered by each unit. • Duplication of work by all units. Rate contract system • Combines the merits of the both centralised and decentralised procurement. • The consuming unit place orders with the supplier at the prices fixed in the contract for a financial or a two-year period.
  • 36.
    •Sources for procurementin the health sector • Directorate general of supplies & disposals(DGS&D) • This is centralized agency established by government of india • Medical store depots(MSD) • Six MSDs have been established under the control of directorate general of health services(DGHS) • Each item in the MSD allotted a vocabulary of medical store(VMS) number,which should be mentioned in the indent by the units making the requistion.
  • 37.
    • Public sectorunits,small scale industries,and cooperatives • while purchasing from these organisations, not required to call for quotations. • Government department are authorized to give a price preference of up to ten percent. • In many government hospitals ,bedsheet and linen are purchased from handloom industries or from prison cooperatives,which sell items manufactured from prisoners.
  • 38.
    • Local purchasecommittee  These committees are empowered to float tender enquiries.  After approval from purchase committee,purchases are made  This type of procurement is used in both public and corporate hospitals. Import Under the liberalization policy,the central government has amended many stringent rules and regulations that governed import of items Public sector do not require an import license for items listed under open general licence(OGL) e,g live saving medicine and essential equipment.
  • 39.
    For non-OGL items,import licenses are required Private organization require clearance from reserve bank of india,before opening a letter of credit To avail of exemption from customs duty,organization should obtain a “Not Manufactured In Country”(NMIC) certificate from directorate general of technical development and few central government institutions, and “Customs duty exemption certificate” from Director General of Health Services(DGHS)
  • 40.
    • Procedure forprocurement • Assessment of needs • The requirement is assessed on basis of requistion from user department or estimation from past knowledge,patient load. • Public sector ,it is necessary to determine whether the given items is covered under Rate contract or indents Standar. • The items should be classified for selective inventory control
  • 41.
    • Specifications • Itis necessary to specify details(quality,quantity,and technical specifications if any)of the items while submitting requistion. • The requisite quality standards, such as ISI,ISO,Agmark,or pharmaceutical standards are to be specified for the item to be procured,packaging,spare parts and accessories. • The requisition should also mention about guarantee/warranty period desired and maintanence service contract.
  • 42.
    • Selection ofsuppliers • It is necessary to maintain records on past performance of suppliers and gather information about reliabity of new suppliers • Preference ought to be given to those who undertake to service the equipment even after guarantee period expires. • Local availability of spare parts and maintanence personnel should be confirmed • In the government sector suppliers are determined by DGS&D,MSDs and priority is given to public sector units ,cooperatives,and small scale indusrtries-thus scope for supplier selection is restricted.
  • 43.
    • Determining price&quality • The price should include cost of equipment,value added tax(VAT),and local taxes where applicable,maintanence cost,and contract for preventive maintanence. • However,in government sector, auditors usually do not favour expenditure on preventive maintanence when the equipment is functional • The current practice of placing the order with suppliers who quote the lowest price may hamper quality. • Budgetary provisions must be made for purchase of accessories,spares.
  • 44.
    • Placing orders •The “lead time” is period between placement of orders and actual receipt of goods. • Lead time is prolonged in situations where procurement is centralized. The supply order ought to specify the place of delivery,sufficient warranty period and penalty clause. Orders once placed ,should be followed by regular correspondence for expediting the supplies
  • 45.
    • Receipt ofgoods and inspection • On receiving the consignment,the packaging should be inspected to rule out tampering,and also inspect the quantity & quality of supplied material. • After checking the condition of goods, “goods received” note is prepared. • Sub standards supplies ought to be rejected and discrepancies such as shortage in quantity,damage should be followed. • If quality of supplies is suspect ,these should be sent to designated laboratories for quality control tests.
  • 46.
    • Storage • Itshould have adequate facilites e.g.light,ventilation,cupboards etc. • Storage conditions such as cold chain,should conform to the specifications of the manufacturer. • In general, all consignments must be protected from vagaries of weather e.g.dampness,rains and it should be free from rodent nuisance and other vermins. • Poisonous drugs and narcotics should be stored separately in locked cupboards.
  • 47.
    Distribution to servicepoints • FETCH AND CARRY SYSTEM:A person in user department is responsible for maintaintaing adequate stocks,requistioning the required items, and processing the indents from central stores. • fetch and carry system is practiced in sub center and primary health center and are collected from district office • PAR-LEVEL SYSTEM:supply quotas are established for each item for each user department and these quotas are reviewed periodically. .
  • 48.
    • The distributionof supplies to wards in a hospital usually follows this system TOTAL-SUPPLY-CART-EXCHANGE SYSTEM:the supply cart includes all items used by the user department. PAR SYSTEM:This is a combination of par-level and total-supply-cart- exchange systems. • Consumption is identified by user departments- “A” items are reviewed daily ;while “B” and “C” Items are reviewed twice weekly.
  • 49.
    • concept ofdistribution cycle • The sequence of cyclical activities that maintain a steady supply of materials to the service points is called the distribution cycle • To ensure that right supplies,in the right quantities are made available to the right locations at the right tie,when required • Determine requirement
  • 50.
    • Condemnation ofmaterials • materials are of two types- • Consumbales-last for a short period of time e.g.linen • Non –consumables-last for many years e.g medical instruments. • The principle- every non consumable equipment or material has a certain life period ,after which,it has to be condemned. Need for condemnation 1.Repairs are not economical after considerable period of use 2.Equipment may become obsolete or hazardous to operate
  • 51.
    3.In the publicsector,the procedure for condemnation does not start unless the old equipment is condemned, 4.Unservicable equipment occupy space and also vulnerable to pilferage. Prequisites for condemnation  In order to avoid audit objections, records related to equipment ought to be maintained Records include history sheet of equipment;logbook of utilization;logbook of maintanence and repair.
  • 52.
    The depreciation valueof equipment should be calculated before recommending condemnation Protocols Condemnation by competent authority • An officer who has the financial power to purchase equipment is competent to condemn it. • Technical equipment like photo copiers,vehicles and deep freezers need certification from competent technical authority. • This procedure is practiced in private sector
  • 53.
    Condemnation by dulyconstituted board • This procedure is practiced in public sector • equipment is recommened for condemnation by heads of department or in– house engineering units • A duly constituted board ,which meets once in three months,physically examines the equipment before it is condemned
  • 54.
    Procedure for disposalof condemned equipment Disposal by burning • Non consumable materials that are a potential health hazard and confidential documents are burnt in front of duly appointed board. Disposal by auction • Usually ten per cent of the book price of the equipment is fixed as the “reserve price”(minimum bid) for auction and sealed tenders are called for buying by placing advertisements in newspaper.
  • 55.
    • The minimumbid for each item is declared in an open auction,which is supervisied by a duly constituted board. • The highest bidder pays 25 % of the bid amount on the fall of the hammer and the remaining 75% within one week,before removing the auctioned equipment.
  • 56.
    MAINTENANCE MANAGEMENT Maintanence managementis a combination of efforts • To maximise reliability and availability of equipment • Minimise wear and tear,thus extending the useful life of the equipment • To ensure operational readiness of vital and emergency equipment and • To ensure safety of personnel. Maintenance is economically feasible when assets are expensive and cost of maintenance is relatively low.
  • 57.
    • Types ofmaintenance • Unplanned maintenance/breakdown/emergency maintenance • It refers to repairing equipment in case it stops functioning. • Repair should be undertaken only as a last resort because it is not cost effective for an organization. • Breakdowns causes increased damage to the equipment and also result in opportunity costs. • There is no policy of conducting periodic systemic checkup by skilled personnel.
  • 58.
    • Planned maintenance •It comprises daily and preventive maintenance • Daily maintenance is carried out each working day by the users themselves e.g.daily cleaning of microscope before and after use ,daily vehicle check carried out by drivers. • Preventive maintenance is systematic check up carried out by skilled personnel • A policy of planned maintenance entails the upkeep of the following records
  • 59.
    • 1.assets registeror dead stock register. • 2.history sheet of the equipment(contains details of the equipment since itsprocurement) • 3.work order/job card/maintenance request/work requistion • 4.maintenance schedule card (indicates the schedule – weekly,monthly,annualy,and planned lubrication and replacement of parts based on usage) • 5.maintenance procedure card(indicates specifications of work to be done)
  • 60.
    • Preventive maintenancereduces the incidence of breakdown,minimizes operating costs and ensures safety of operations.It is categorized as follows- 1.CONDITION- BASED MAINTENANCE • Maintenance is undertaken when closely monitored parametrs,such as emission,vibrations,changes in alignment,deviate from permissible limits. 2.TIME- BASED MAINTENNACE • This type is based on anticipated wear and tear e.g. number of Kilometers travelled by a vehicle
  • 61.
    3.RUNNING MAINTENANCE: maintenance workis carried out when the equipment is working 4.SHUT-DOWN MAINTENANCE: Maintenance work that is undertaken after shutting down functional equipment Maintenance strategies The management has to plan for maintenance of equipment and make adequate budgetary provisions
  • 62.
     If inhouse or centralized workshops are set up,personnel will need induction and inservice training and an inventory of tools and spare parts needs to be maintained Work priority ought to be predetermined .top priority –emergency services and vital equipment;while offices,furnitures and housekeeping equipment receive low priority The workshops are vulnerable to pilferage and therefore should be accessible only to authorized personnel.
  • 63.
    Maintennace personnel mustbe trained to use personal protective equipment(helmets,gloves,welder’s goggles) In- house maintenance  The workshop and maintenance facility is located within the premises and should be adequately staffed with skilled personnel and stocked with spare parts and requisite tools.  In-charge person should have adequate powers to decide on repairs and purchase of crucial components.
  • 64.
     Major hospitalsusually have an in-house maintenance section under biomedical engineer Centralised maintenance  In large organizations that are geographically spread out a centralized worshop undertakes major repairs  The workshop also serves as a training centre for in-house workshop personnel  In-charge person should have authority for technical decision making and financial powers for purchase of emergency spares.
  • 65.
    Out sourced maintenance •In this work is carried out by a contractor. • This is costly in the long term and should be resorted to only if facilites are not available • However for small organisations outsourcing maintenance work may be cost effective through savingsin expenses on space and personnel.
  • 66.
    SOCIAL MARKETING “Refers to applicationof commercial marketing concepts,tools,resources,skills,and technologies to encourage socially beneficial behaviour among those segments of population not served or not adequately served by existing public or private systems” Marketing experts Philip Kotler and Gerald zaltman pioneered the concept of social marketing in 1971,when they reconised same marketing principle that were being used to sell products to consumers could be used to sell,ideas,attitudes, and behaviours.
  • 67.
    • India isthe first country that has accepted social marketing to further family welfare programme. • The aim is to achieve the social goals of increasing the number of couples using contraceptives • It also happens to be one of the earliest examples of public –private partnership. • A number of leading Fast Moving Consumer Goods(FMCG) companies have cooperated with government in social marketing by piggybacking nirodh to their products.
  • 68.
    • Social marketingoffers attractive benefits to family wefare programme by making contraceptives available efficiently and conveniently through the existing shops all over the country including rural area. • It has potentiality of reaching couples in an easy and cost- effective way. • Concepts related to social marketing include • EDU-ENTERTAINMENT:refers to the use of traditional entertainment media for educational purposes
  • 69.
    • In someprogrammes ,health issues are potrayed within entertainment programming. • These programmes hold great promise for reaching audiences with important lifestyle information at a time when thery are likely not resisting the message • MEDIAADVOCACY • Strategic use of mass media for advancing a social or public policy initiative initiative promotes a range of strategies, such as creative epidemiology and issue framing,in order to increase public support for more effective policy level approaches to public health problem.
  • 70.
    • The “FiveP’s” of marketing • Product • In order to have a viable product,people must first perceive that they have a felt need or a problem and that the product being earmarked for promotion offers a solution for satisfying that felt need. • Product selected for marketing may include- • 1.physical products(condoms,ocp, insecticide-impregnated bed nets,helmets)
  • 71.
    • 2.services(periodic healthcheck-ups,screening for cervical and breast cancer) • 3.practices(promotion of blood and organ donation,no-tobacco campaigns,breast feeding,oral rehydration therapy,eating a balanced diet,preventing drug abuse) • 4.ideas (environment- friendly ideas,recycling of waste products,no- plastic campaigns)
  • 72.
    • Price • Theprice of the product refers to monetary as well as the non-monetary cost of a product. • These non-monetary costs include psychological,social,or convenience costs. • Reducing this costs greatly increases the chances that a new idea /product will be adopted. • Costs>benefits-adoption of the product will be low • Benefits>costs- adoption of the product is much greater
  • 73.
    • Perception ofcosts and benefits can be determined through research,and used in positioning the product • Place • The greater the number of distribution sites and more convient and appropriate the places where the product can be found the better chance that awareness and use of the product is facilitated. • Commercial distributing networks is less expensive and more effective than government setting up a separate marketing organization. • This may include clinics,shpos,mass media vehicles or demonstration
  • 74.
    • Promotion • Thiscomprises the ways in which the audience is made aware of the product,such as • integrated use of paid advertising,public relations,promotion,media advocacy,peronal selling,in-store displays,media events,and enterainment vehicles • The promotion focus on generating and sustaining demand for the product.
  • 75.
    Positioning • Refers topsychological “image” of the product. • Social-psychological theories, supplemented with empirical evidence,helps in determining the variables for adoption of the product. • Additional “Four P’s” for social marketing • Weinreich has described additional “Four p’s”-
  • 76.
    • Publics • Refersto both the external and internal groups involved in the programme • External groups-target audience,secondary audiences,gatekeepers in the community • Internal groups-who involved some way with the programme • Partnership • It is essential to collaborate with other organization in the community(that have similar goals)
  • 77.
    • To makeimpact on social and health issues • Policy • Social marketing programme can succeed in motivating individual behaviour change but difficult to sustain unless the environment supports that change • Purse strings • It is necessary to determine sources for long term funding(government grants or donations)in order to sustain social marketing programme.
  • 78.
    • Adoption ofchange • product should be socially and culturally acceptable to the target population • Beneficiaries should possess the necessary knowledge and skills to adopt the changed behaviour and use the marketed product • Roger’s model • Individuals or groups pass through stages of awareness,interest,trial,evaluation and adoption
  • 79.
    • David kline’stheory • change of behaviour is more complex than change of attitude. • In process of adoption,Indiviual passes through stages of • understanding, • motivation to alter the status quo • Decision to change behaviour • Gives a trial to new behaviour and • Decides to sustain it or reject it.
  • 80.
    • Middleton &laphani’sconcept of demand generation • Efforts at demand generation is oriented towards groups that are inclined towards behaviour change • For instance ,confectioneryitems are targeted at children and lifestyle products at adolescents and youth. • Seven doors model • Developed by les robinson,presumes that people tend to adopt voluntary changes because they are un happy,frustrated,or dissatisfied with their lives or business
  • 81.
    • Three kindsof “enabling factors” that assist occurrence of changes are- • 1.rationalisations • 2.confidence • 3.convenience • In the 7 doors model,Adoption of change-social phenomenon • Family ,friends,colleagues are involved as a “triggers” of change.
  • 82.
    • “Change spaces”aretimes and places (facilitated workshops,field days,hands on demonstration events) where potential actors can give their full attention to a desired future and the steps needed to acheive it. • Adoption of change ought to deliver ease,cost savings,status or prestige. • It must actually reduces the dissatisfaction that led to the initial involvement of the individual in the programme.