Material management in healthcare systems is crucial for ensuring the efficient and effective delivery of care while managing costs and resources.

1. INTEGRATED
MATERIAL
MANAGEMENT

2. Integrated Materials Management
Definition
“Materials Management is a function responsible for
- coordination of planning, sourcing, purchasing,
moving, storing & controlling the materials in an
optimum manner
- so as to provide a pre-decided service level to the
customer at a minimum cost”

3.  The concept of Integrated Materials
Management evolved as a rationale for
bringing all the materials related activities
under one common head viz. the Materials
Manager to permit uninterrupted flow of raw
materials, components & parts from the
suppliers to the corporation, to all consumer
points in the organization & distribution of
finished goods at minimum cost.

4. Broad Functions
Materials Planning & Programming
- Purchasing
- Inventory Control
- Receiving
- Storekeeping
- Materials Handling and Transportation
- Scrap & Surplus Disposal
- Disposal Cost Reduction Techniques like Value
Analysis
- Standardization
- Variety Reduction
- Forecasting & Market Analysis

5.  Integrated MM also encompasses Production
Planning on one hand & Distribution of
finished goods to customers on the other.
Companies which have these activities
transferred under the Integrated MM set-up,
have found encouraging results by the way of
improved coordination & reduced inventories.

6. Objectives of Integrated Material
Management:
The fundamental objectives of an integrated
material management approach can be
viewed as:
(a) Procuring better value
(b) Obtaining better yield
(c) Reducing investments in stock through
Inventory control and material flow.

7. Advantages of Integrated
Material Management:
1. Better Accountability:
 By effective centralization of authority and
responsibility for all aspects of materials function,
a clear cut accountability is established.
 This helps in evaluating the performance of
materials management in an objective manner.
2. Better Co-Ordination:
 When the materials manager is responsible for all
functions it results in better support and co-
operation in the accomplishment of the materials
function.
 Better co-ordination create an atmosphere of trust
and better relation between the user departments
and the materials management department.

8. 3. Improved Performance:
 As all the inter-related functions are integrated
organizationally, better performance and effectiveness is
achieved.
 The need for materials is promptly brought to the notice by
materials planning and purchase department is supplied with
stock levels and orders status by stores department.
4. Adaptability to Computerization:
 The Centralization of materials functions has made it possible
to design data processing systems.
 The integrated materials management facilitates the
collection, process and analysis of data, leading to better
decisions. Computerization can be economically introduced
under an integrated set-up.

9. Organization structure of materials functions
As subordinate function reporting to other functional Head
Chief Executive
Production
Manager
Also
Production
Control
& Stores
Purchasing
Manager
Also
Stock Control
Sales Manager
Also
Transportation
Other Manager

10. Organization structure of materials functions
As independent management function at par with any other
management function reporting to Chief Executive
Chief Executive
Production
Manager
Materials
Manager
Purchasing
Stores
Stock Control
Transportation
Sales
Manager
Other
Manager

11. Which of the two organizational structure
to be adopted depends on the factors:
- How important are MM activities to the unit and
for that matter to organization?
- Will Unit suffer substantially if MM does not
perform effectively as it ought to?
- How much funds blocked in inventory and
constraints of working capital?

12. Which of the two organizational structure to be
adopted depends on the factors:
- How important it is that MM activities be closely
coordinated with O&M, others & Accounts
Department?
- Is it essential that materials cost be controlled
tightly and effectively?
- What is absolute value of purchases?
- What is the range and variety of materials
purchased?

13. Advantages of integration of materials
management functions:
 Better coordination and reduction of inter-
departmental conflicts. This is accomplished by
eliminating buck passing between sub-functions
and providing a Central Figure (Head of MMD)
to balance conflicting objectives.
 Reduction of inventory level and greater
assurance of materials availability by better
coordination and communication with user
departments and among sections of MMD

14. Advantages of integration of materials
management functions:
 Improved supplier relation results from ensuring
delivery schedule on the basis of latest
inventory position and production requirements
 Paper work and duplication of work reduced
through better coordination and proper
communication among persons performing the
related functions.

15. Advantages of integration of materials
management functions:
 Improved customer services often results from
reduced delivery time.
 Reduced overall cost of materials as a result of
using more scientific and economical methods
in planning, acquisition, storage and control of
materials.

16. Centralization Versus Decentralization of
Materials Functions:
 A company with several operating plant faces
one additional organizational problem.
- To what extent should materials management
functions be centralized at corporate level?
 There may be complete centralization or
complete decentralization or develop an
organization somewhere between these two
extremes.

17. Centralization Versus Decentralization of
Materials Functions:
Factors to be considered:
 Similarity of the classes of materials used in each of
plant. If a firm’s plants use different materials,
centralization offers only minimal benefits,
 Size of each individual materials department.
Centralization is more advantageous when a firm’s
individual plants do not have large materials department.

18. Centralization Versus Decentralization of
Materials Functions:
 Geographical dispersion of plants: Closure the
firm’s plant are located geographically, the
feasible centralization becomes.
 No and size of plants: If there are large No of
plant of fairly big size, centralization will become
difficult & create more problems in availability of
materials than any gains.

19. Centralization Versus Decentralization of
Materials Functions:
Advantages of Multi-plant Centralization:
 Scope of greater specialization.
 Consolidation of materials requirements and
economy through bulk purchases.
 Better coordination with suppliers
 Lesser buying cost.

20. Centralization Versus Decentralization of
Materials Functions:
Advantages of Multi-plant Decentralization:
 Better coordination with operating departments.
 Greater flexibility with operating departments.
 Effective use of local suppliers and facilities.

21. Centralization Versus Decentralization of
Materials Functions:
 Greater autonomy and accountability.
 Lesser lead- time and resultant reduction in
inventories.
 Faster decision on purchases and
clarifications to vendors.

22. Centralization Versus Decentralization of
Materials Functions:
 Faster payment to the supplier.
 Lesser stock-out and rush purchases.