MATERIAL MANAGEMENT

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MATERIAL MANAGEMENT - In Hospital Services

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Prof. G. Muthamilselvi, M.Sc. (N), MHRM, DALL, Ph.D., PRINCIPAL, VMCON, Puducherry.

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MATERIAL MANAGEMENT

INTRODUCTION:

INTRODUCTION Materials are an essential resource to achieve the objectives of a health care organization. While about 60 per cent of the funds of health sector are consumed to provide manpower health care being a labour intensive activity almost 40 %of the funds are used up for providing materials. In the absence of materials required for health care activities, the manpower deployed is rendered non-functional. Therefore, it is of great importance that materials of right quality are supplied to the consumers in high quality at right quantity at right time and at right place of use.

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A process of encompassing acquisition, shipping, receiving, evaluation, warehousing and distribution of goods, supplies and equipment. definition

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To get The Right quality Right quantity of supplies At the Right time At the Right place For the Right cost AIM OF MATERIAL MANAGEMENT

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To gain economy in purchasing To satisfy the demand during period of replenishment To carry reserve stock to avoid stock out To stabilize fluctuations in consumption To provide reasonable level of client services Increase efficiency of health care systems Develop knowledge and skills of health care Provide materials in required quantity and quality as and when required PURPOSE OF MATERIAL MANAGEMENT

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To have adequate materials on hand when needed To pay the lowest possible prices, consistent with quality and value requirement for purchases materials To minimize the inventory investment To operate efficiently Four basic needs of Material management

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1. Effective management & supervision. It depends on managerial functions of Planning Organizing Staffing Directing Controlling Reporting Budgeting 2. Sound purchasing methods 3. Skillful & hard poised negotiations 4. Effective purchase system 5. Should be simple 6. Must not increase other costs 7. Simple inventory control programme Basic principles of material management

Materials management functions:

Materials management functions Material planning and programming Purchasing and outsourcing Transportation and material handling Storekeeping and warehousing Codification

Contd…:

Contd … 6. Inspection and quality control 7. Standardization and evaluation of all products 8. Distribution 9. Cost reduction through value analysis 10. Inventory control 11. Disposal of surplus / obsolete material

ELEMENTS OF A MATERIALS MANAGEMENT SYSTEM:

ELEMENTS OF A MATERIALS MANAGEMENT SYSTEM Demand estimation Procurement Receipt and inspection Storage Issue and use Maintenance and repair Disposal Accounting and information system.

Demand Estimation:

Demand Estimation A large number of items are used in the hospital. The advisory committee for development of surgical instruments, equipment and appliances (1963) identified 3200 items of instruments, equipments and applications being used in the hospital. This should always be done keeping in view the trends and changing emphasis on various programmes and activities in the health field.

Procurement:

Procurement Procurement is the acquisition of goods and/or services at the best possible total cost of ownership, in the right quality and quantity, at the right time, in the right place and from the right source for the direct benefit or use of corporations, individuals, or even governments.

OBJECTIVES OF PROCUREMENT SYSTEM:

OBJECTIVES OF PROCUREMENT SYSTEM Acquire needed supplies as inexpensively as possible Obtain high quality supplies Assure prompt and dependable delivery Distribute the procurement workload to avoid period of idleness and overwork Optimize inventory management through scientific procurement procedures

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Review selection Determine needed quantities Reconcile needs & funds Choose procurement method Select suppliers Specify contract terms Monitor order status Receipt & inspection Procurement cycle

METHODS IN PROCUREMENT PROCESS AND NEGOTIATION STRATEGIES:

METHODS IN PROCUREMENT PROCESS AND NEGOTIATION STRATEGIES Open tender Restricted or limited tender Negotiated procurement Direct procurement Rate contract Spot purchase Risk purchase Many suppliers strategy For Govt. Institutions Fixed Quantity Contract Running Contract Rate Contract

POINTS TO REMEMBER BEFORE PURCHASE OF AN EQUIPMENT:

POINTS TO REMEMBER BEFORE PURCHASE OF AN EQUIPMENT Latest Technology Availability of maintenance and repair facility, with minimum down time Post warranty repair at reasonable cost Upgradeability Reputed manufacturer Availability of consumables Low operating costs Installation Proper installation as per guidelines

Receipt and Inspection:

Receipt and Inspection The stores ordered are received in the sore. A reasonable sound policy and methodology of inspection of incoming stores is an essential element of MP and MS. The inspection policy should enuciate the sampling procedure for inspection and this procedure must be followed. Basic facilities for such examination be created in the organization itself depending upon the size of stores turnover, governmental and commercial chemical laboratories should also be made use of for analysis of chemical composition of drugs etc.

STORAGE OF AN EQUIPMENT:

STORAGE OF AN EQUIPMENT Stores must be of adequate space & size to accommodate all the drugs, instruments and appliances Sufficient number of steel racks with shelves to be provided Medical store should be situated near to other stores It should be easily accessible to the suppliers as well as indentors Materials must be stored in an appropriate place in a correct way Refrigeration should be provided for storage of thermo labile items, A graded temperature zone concept is essential in medical stores Group wise and alphabetical arrangement helps in identification and retrieval First-in, first-out principle to be followed Monitor expiry date Follow two bin or double shelf system, to avoid Stock outs Reserve bin should contain stock that will cover lead time and a small safety stock

ISSUE AND USE:

ISSUE AND USE Can be centralized or decentralized Centralized: The head office will have only one material department under the rigid control of all the material. Decentralized: Along with head office material management division will be their in many locations with minimum amount of autonomy

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EQUIPMENT MAINTENANCE Maintenance & repairs Preventive maintenance Master maintenance plan Repair of equipment

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Purchase with warranty & spares. Safeguard the electronic equipments with, Voltage stabilizer, UPS. Automatic switch over generator. Requirement of electricity, water, space, Atmospheric conditions, etc. Must be taken into consideration. Well equipped maintenance cell must be available. All equipment must be operated as per instructions with trained staff. Monitoring Annual Maintenance Contracts (AMC). Communications between maintenance cell & suppliers of the equipment. Follow-up of maintenance & repair services. Repair of an Equipment Outside Agencies. In-house Facility. PREVENTIVE MAINTENANCE

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Criteria for condemnation: The equipment has become Non-functional & beyond economical repair Non-functional & obsolete Functional, but obsolete Functional, but hazardous Functional, but no longer required CONDEMNATION

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Circulate to other units, where it is needed Return to the vendor, if willing to accept Sell to agencies, scrap dealers, etc Auction Local destruction DISPOSAL

Accounting & information system:

Accounting & information system Inventory control: It means stocking adequate number and kind of stores, so that the materials are available whenever required and wherever required. Scientific inventory control results in optimal balance.

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To provide maximum supply service, consistent with maximum efficiency & optimum investment. To provide cushion between forecasted & actual demand for a material Functions of inventory control

PRINCIPLES OF INVENTORY MANAGEMENT:

PRINCIPLES OF INVENTORY MANAGEMENT There are two Determination of order quantity Determination of reorder point of record level

SELECTIVE CONTROLS IN MATERIAL MANAGMENT:

SELECTIVE CONTROLS IN MATERIAL MANAGMENT ABC analysis VED analysis HML analysis XYZ analysis FSN analysis SDE analysis GOLF analysis SOS analysis

OBJECTIVES OF INVENTORY:

OBJECTIVES OF INVENTORY To reduce financial investment in inventor’s To facilitate smooth production operation If an offer of discount comes for a bulk purchase, to decide whether to go bulk purchaser not.

CLASSIFICATION OF AN INVENTORY:

CLASSIFICATION OF AN INVENTORY Raw Material Inventories Finished Goods Inventory In Process Inventory Indirect Inventory Transaction Inventory Speculative Inventory

ADVANTAGES OF INVENTORY:

ADVANTAGES OF INVENTORY Delivery in time Possibility of discount for bulk purchase Unforeseen circumstances can be handled to some extent Workers and machinery needn’t idle

DISADVANTAGES OF INVENTORY:

DISADVANTAGES OF INVENTORY Working capital is tied up More space required Increases insurance charges Increased overhead expenses Changes of damage, pilferage replacement etc is more Increase change for obsolescence

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(ABC = Always Better Control). This is based on cost criteria. It helps to exercise selective control when confronted with large number of items it rationalizes the number of orders, number of items & reduce the inventory. About 10 % of materials consume 70 % of resources About 20 % of materials consume 20 % of resources About 70 % of materials consume 10 % of resources ABC ANALYSIS

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Small in number, but consume large amount of resources Must have Tight control Rigid estimate of requirements Strict & closer watch Low safety stocks Managed by top management ‘A’ ITEMS Intermediate Must have Moderate control Purchase based on rigid requirements Reasonably strict watch & control Moderate safety stocks Managed by middle level management ‘B’ ITEMS Larger in number, but consume lesser amount of resources Must have: Ordinary control measures Purchase based on usage estimates High safety stocks  ABC analysis does not stress on items those are less costly but may be vital ‘C’ ITEMS

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‘C’ ITEMS VED ANALYSIS Based on critical value & shortage cost of an item It is a subjective analysis. Items are classified into Vital Shortage cannot be tolerated. Essential Shortage can be tolerated for a short period. Desirable Shortage will not adversely affect, but may be using more resources. These must be strictly Scrutinized

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  V E D   ITEM COST A AV AE AD CATEGORY 1 10 70% B BV BE BD CATEGORY 2 20 20% C CV CE CD CATEGORY 3 70 10% CATEGORY 1 - NEEDS CLOSE MONITORING & CONTROL CATEGORY 2 - MODERATE CONTROL. CATEGORY 3 - NO NEED FOR CONTROL

ROLE OF NURSE MANAGER:

ROLE OF NURSE MANAGER Ensuring regular and adequate flow of supply Monitoring quality & safety of the materials Indenting, receiving, storing, checking for all necessary equipment and supply Maintaining of emergency stocks Arranging and assisting in audit Participation in policy making for material management Evaluating the efficacy of the material management system followed in particular nursing unit

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Material management is an important management tool which will be very useful in getting the right quality & right quantity of supplies at right time, having good inventory control & adopting sound methods of condemnation & disposal will improve the efficiency of the organization & also make the working atmosphere healthy any type of organization, whether it is Private, Government ,Small organization, Big organization and Household. Even a common man must know the basics of material management so that he can get the best of the available resources and make it a habit to adopt the principles of material management in all our daily activities CONCLUSION

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T H A N K U

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