This document provides an overview of material management in healthcare organizations. It defines material management and discusses its purpose, objectives, elements and principles. The key elements discussed include demand estimation, planning, procurement, storage, inventory control, and quality control. Various scientific analyses for inventory control are also covered, including ABC analysis. The document emphasizes the importance of proper care, safekeeping and maintenance of equipment and materials to support patient care.

1. UNIT – V
MATERIAL
MANAGEMENT
BY:
MS. LAMNUNNEM HAOKIP
SENIOR TUTOR (OBG)
SSNSR, SU

2. INTRODUCTION
Every organization, big or small, depends on materials and
services from other organizations to varying extend.
Theses materials and services are obtained through
exchange of money and the physical arrangement of all,
this is called material management.
The goal of material management is to provide an
unbroken chain of components for production to
manufacture goods on time for the customer’s use.

3. DEFINITION
Material management is defined as a system of planning,
organizing, directing, coordinating, controlling and
maintaining adequate equipment and supplies whereby
there will be right quantity and quality of the stock items
properly stored, easily retrievable and distributed for the
use whenever required at a given time.

4. PURPOSES OF MATERIAL
MANAGEMENT
To gain economy in purchasing.
To satisfy the demand during period of
replenishment.
To carry reserve stock to avoid stock out.
To stabilize fluctuation in consumption.
To provide reasonable level of client services.

5. FOUR BASIC NEEDS OF MATERIAL
MANAGEMENT
To have adequate materials on hand when needed.
To play the lowest possible prices, consistent with
quality and value requirement for purchases materials.
To minimize the inventory investment.
To operate efficiently.

6. OBJECTIVES OF THE MATERIAL
MANAGEMENT
Right quality
Right
quantity
Right time
Right
source
Right
price

7. OTHER OBJECTIVES OF THE MATERIAL
MANAGEMENT
To buy at the lowest price, consistent with desired
quality and service.
To maintain a high inventory turnover, by reducing
excess storage, carrying costs and inventory losses
occur due to deteriorations, obsolescence and
pilferage.
To maintain continuity of supply, preventing
interruption of the flow of materials and services to
users.

8. ELEMENTS OF MATERIAL MANAGEMENT
DEMAND ESTIMATION:
• A large number of items are used in the hospital. It is
based on identifying the required items, calculating from
the trends in consumption during previous years and
reviewing with resources constraints.

9. PLANNING:
• Material planning is a scientific way of determining the
requirements that goes into meeting production needs
within the economic investment policies. It aims at right
quality, right quantity, right time, right place and right cost.
Material planning is done at all the stages and levels of
management and is based upon certain feedback
information reviews.

10. PROCUREMENT:
• Procurement is the process of acquisition of goods or
services required as raw materials (direct procurement)
or for operational purposes (indirect procurement). It
means to gain, buy, purchase, acquire etc. Points to be
noted while procuring the goods such as looking for latest
technology, availability of maintenance and repair facility,
low operating cost, up grade ability, installation guidelines
etc.

11. PROCUREMENT OF THE MATERIAL DEPENDS ON:
– Prioritization of purchase of material.
– Fixing the price.
– Calling for tenders/quotations
– Evaluation of the tenders/quotations
– Placement of orders
– Ensuring receipt of material.
– Making the payment.

12. PROCUREMENT CYCLE:
Review
selection
Determine needed
quantities
Agreements
between needs &
funds
Choosing
appropriate
procurement
method
Selecting
supplies
Specify contact
terms
Monitor
order status
Receipt storage &
inspection

13. NEGOTIATION:
Procurement by negotiation is a battle of wits and art of embodying
sophisticated tactics and manoeuvres by both the buyer and the suppliers.
It is an art of arriving at common understanding through bargaining on the
essential points for the contract such as delivery, specification, price and
payment terms, etc. Because of the inter relationships of these factors with
many others.
It is a difficult art and requires the exercise of executive judgement, tact and
commonsense and the bargaining power will definitely be influenced by the
preparedness of the buyer as well as the place and time of negotiation.

14. PURCHASING:
Purchasing is one of the important functions of administration and the goals of
purchasing are to purchase at a right price, right quality, right quantity, right
contractual terms, right time, right source, right material, right place, right mode
of transportation, right attitude with techniques such as value analysis, material
intelligence, purchase research, SWOT analysis, purchase budget, lead time
analysis etc.

15. ELEMENTS OF MATERIAL MANAGEMENT
STORAGE:
The store division is one of the supportive service as the name
suggests, supplying surgical items, general items, linen and
stationary items to the different departments in the institute. The
main surgical store in the hospital has been segregated into surgical
stores, general stores linen and stationary stores.

16. ELEMENTS OF MATERIAL MANAGEMENT
INVENTORY:
Inventory is an essential record to be kept regulatory as certain items in the
patient care unit, which may disappear of break easily need a daily count. Like
stethoscope, laryngoscopes, scissors, BP apparatus etc. to discover the risk
items, other items can be counted annually or biannually like furniture.
Inventory check of the entire ward should be done on selected days when
patients are less in the unit. All the personnel's like staff nurses, ward helpers
and ward check must be involved in inventory check to ensure adequacy of
materials in the unit which will enhance the patient care.

17. ELEMENTS OF MATERIAL MANAGEMENT
CONDEMNATION:
condemnation is stocking with the non-functional and obsolete articles or
equipments to prevent their reuse if the cost of repair of any device increases
than the actual cost of it, then it should be condemned as per the
organizational policy. The condemned articles are some times kept for
auction send for cannibalizations i,e. to extract out the parts of the device
which can be reused out of condemned articles. The ward in charge should
fill the condemnation form and through proper authorities is sent to
condemnation committee where further action is decided upon.

18. PRINCIPALS OF MATERIAL
MANAGEMENT
BASIC PRINCIPALS:
1. Effective management and supervision.
2. Sound purchasing methods.
3. Skilful and hard poised negotiations
4. Effective purchase system
5. Should be simple
6. Must not increase other costs.
7. Simple inventory control programme.

19. OTHER PRINCIPALS:
1. Based on need assessment:
 Ultimate aim: right quality, right quantity, right price, right source at
right time at the right place.
 Centralize the purchase system.
 Back-up of good systems management.

20. 2. Finding the right source:
 Supplies catalogue.
 Print media: trade directories, trade journals, newspapers, yellow
pages.
 Salespersons.
 Trade exhibition, fairs, conferences.
 Colleagues in similar field.
 Internet.

21. 3. Negotiation:
 Possible because of huge margins.
 Pass on to patients.
 Not at the cost of quality.
 Win-win situation for all.
 Maintain relationship.

22. 4. Receiving :
 Establish written protocols, assign responsibility.
 Checking of goods for quality, expiry etc.
 Cross check with purchase order and invoice/delivery challan.
 Proper record in designed registers.
 Signature of receiver and delivery system.
 Periodic checks.

23. 5. Inventory :
 Stocks to ensure uninterrupted supplies.
 The idle resources which have future economic value.
 Cushion between estimated and actual demand of materials.
6. Equipments:
 Assess the need: cost benefit analysis.
 Sources of information: web, conference, journals
 Bargain hard.

24.  Trial period.
 Warranty details
 Replacement, preventive maintenance
 Log book
 Insurance
 Obsolescence
 Training of staff.

25. QUALITY CONTROL
• Quality control or QC for short, is a process by which entities reviews the
quality of all factors involved in production. It is process based on measuring
identified quality attributes to ensure that the product or service delivered to
users is of a defined/agreed quality standard.
• QC is normally applied following production and defective items have to be
scrapped or re-worked.
• QC often incorporates statistical sampling from batches, such that only a
comparatively small proportion of all items need be tested to ensure a low level
of defective items reach the user.

26. • This approach emphasizes on three aspects:
Elements such as controls, job management, defined and well managed
processes, performance and integrity criteria and identification of records.
Competence, such as knowledge, skills, experience and qualifications.
Soft elements, such as personnel, integrity, confidence, organizational culture,
motivation, team spirit and quality relationship.

27. • Quality control includes product inspection, where every product is
examined visually and often using a stereo microscope for fine detail
before the product is sold into the external market.
• Inspectors will be provided with lists and descriptions of unacceptable
product defects such as cracks or surface blemishes etc.

28. TOTAL QUALITY CONTROL
• “Total Quality control”, also called as “Total quality Management”, is an
approach that extends beyond ordinary statistical quality control techniques
and quality improvement methods.
• It implies a complete overview and re-evaluation of the specification of a
product, rather that just considering a more limited set of changeable features
within an existing product.
• If the original specification does not reflect the correct quality requirements,
quality cannot be inspected or manufactured into the product.

29. • For instance, the design of a pressure vessel should include not only the
material and dimensions, but also operating, environmental. Safety, reliability
and maintainability requirements and documentation of finding about those
requirements.
• TQM refers to management methods used to enhance quality and productivity
in business organization. TQM is a comprehensive management approach that
works horizontally across an organization, involving all departments and
employees and extending backward and forward to include both supplies and
clients/customers.

30. • TQM is only one of many acronyms used to label management systems that
focus on quality.
• Health care services are the result of a number of materials used in the
process. As hospital administrators nurses should also know about the
materials and medical items such as perfusion materials, surgical
disposables, instruments, electrical, civil and engineering items for
maintenance, house keeping materials, linen, biomedical equipment.
• Drug, food items etc. Pay an effective role in improving the quality of health
care services.

31. INVENTORY
• Inventory is a record of all the materials procured, stored and
utilized in the hospitals. It includes a detailed list of all the materials
along with their specification and standard number.

32. PURPOSES OF INVENTORY
 To make an account of the materials held in the ward to check against the
recommended standards.
 To maintain adequate items to be used as and when required.
 To find out any defects in the materials and to request repair or replacement,
if necessary.
 To determine the date and time of maintenance of the equipments.
 To identify any loss or damage of any material and rep[lacing it at proper
time.
 To put the list of defective items which are irreparable or condemnation.

33. INVENTORY CONTROL
• Inventory control is the method of inventory check, in which
stocking up of the material in adequate quantity and kind of material
according to the desired specifications is kept as per the finance and
policies of the organization.

34. TYPES OF INVENTORY CONTROL
1. High inventory: Stock the materials at a large scale.
2. Low inventory: Stock the materials in less amount.
3. Scientific inventory control: Stocking of materials in adequate quantity
which helps in keeping the balance of the cost of earnings, high inventory
and cost of shortage. Scientific inventories are classified into ABC analysis.

35. VARIOUS SCIENTIFIC ANALYSIS OF INVENTORY
CONTROL
1. ABC analysis: There are tree categories of items i.e. Items A, Items B and
Items C. This analysis is based on the annual consumptions value of the
items. Items in “A” category are of high level, expensive and close schedule
control. Items in “B” category are of moderate control and purchase is based
on rigid requirements whereas in type ‘C” items are less expensive than ‘A’
and ‘B’ category and can be purchase in bulk.

36. VARIOUS SCIENTIFIC ANALYSIS OF INVENTORY
CONTROL
2. VED analysis: Here the items are categorized as ‘Vital’, ‘Essential’ and
‘Desirable’. This analysis is based on criticality of the items and stock is
maintained in order of the requirements of the items.
3. HML analysis: Here the items are categorized as High cost, Medium cost and
low cost. The inventory is based on unit cost of the items.

37. VARIOUS SCIENTIFIC ANALYSIS OF INVENTORY
CONTROL
4. FSN analysis: Here the items are categorized as fast moving, slow moving
and non moving. The inventory is based on the rate and speed of
consumption. The purpose is to control obsolescence of non moving items.
5. SDE analysis: Here the items are categorized as scarce to procure, difficult
to procure and easy to procure. The inventory control in this is based upon
difficulty in procurement and market availability of the items.

38. CARE OF EQUIPMENTS
• This is a vital step to be followed in material management. Care of the
equipments until these are issued for use, is the responsibility of the person
receiving the goods. The procured materials are to be inspected thoroughly,
before they are stored in a proper place such as a store. A professionally
managed store has a process and space within, to receive the procured
materials, keep them for as long as they are not required for use and then to
move them out of stores for use (Issue).

39. CARE OF EQUIPMENTS
• The basic responsibilities of a store manager are to act as a control-ling agent
for parts, supplies materials and to provide service to users of those goods.
The purpose of safe stock keeping is to ensure safety and preservation of the
stocked materials, to their receipts, issue and accounting. The objective is to
efficiently and economically provide the right materials at the time when they
are required and in the condition, in which they are required.

40. The basic functions to manage a store are as follows:
• Receiving the procured material.
• Safe keeping of goods.
• Disposal of undesirable goods.
• Inventory control.

41. SAFEKEEPING OF GOODS
• It is the process of preserving the received material in a good condition, till
the time these are issued. It is an essential step in material management.
The organization has to spend money on space i.e. expenditure on land,
equipment, machinery and other facilities provided such as electricity,
people i.e. salaries and wages, insurance, maintenance costs, stationary,
communication expenses and the cost to maintain the inventory etc.

42. SAFEKEEPING OF GOODS
 Materials should be prevent from moisture from
ground, dust and insects which can spoil the materials.
 All items particularly those with limited life should be
issued on ‘first in’, ‘first out’ basis.

43. SAFEKEEPING OF GOODS
• Care should be taken during stacking and storing the items.
• A careful record of expiry date is desirable.
• The floor of the store room should be concrete, windows should be
kept at minimum one meter above the floor level.
• Rat holes should be closed to control the rodents. Pesticide spray
should be on regular basis.

44. BENEFITS OF SAFEKEEPING
• Minimum investment.
• Continuous flow of material.
• Protection and preservation.
• Proper storage for improved output.
• Minimum wastage.
• Co-ordination and cooperation.
• Minimum investment.