ABC, VED, HML Analysis in Material management

ABC, VED, HML Analysis in Material management


Introduction In health care system, material management is concerned with providing the drugs, supplies and equipment needed by health personnel to deliver health services. The right drugs, supplies and equipment must be at the right place, at the right time, and in the right quantity in order that health personnel deliver health services. Inventory control it is an important aspect of material management. Inventory control is a scientific system which indicates as to what to order, when to order, and how much to order, and how much to stock so that purchasing costs and storing costs are kept as low as possible. Objectives of Inventory Control 1. 2. 3. 4. 5. To To To To To keep the investment on inventories to the minimum. minimize idle time by avoiding stock outs and shortages. avoid carrying cost. improve quality of care with lesser inventory. avoid obsolescence of inventor

Techniques in Inventory Control ABC Analysis (Always Better Control) VED Analysis (Vital, Essential, Desirable) HML Analysis (High, Medium, Low) FSN Analysis (Fast, Slow moving and Non-moving) SDE Analysis (Scarce, Difficult, Easy) ABC Analysis
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2. A very close control is exercised over A items while less stringent control is adequate for those in the category B. 2. HML Analysis in Material management ABC analysis is the analysis of the store items cost criteria. 5. 3. A – Items represent the high cost centre.12/23/13 ABC. which avoids being money wise. C1. and less attention for category C. 2. 3. Safety stocks high Management be done at lower levels. 3. the next 20% for 20% of value and the last 70% account for 10% of value. 3. 2.moving Obsolete Number of items 10% of total items 20% of total items 70% of total items Rupee value in items 70% 20% 10% An understanding of the movement of items helps to keep proper levels of inventories by deciding a rational policy or reordering. 4. Items Moderate control Purchase based on rigid requirements Reasonably strict watch and control Safety stocks moderate Management be done at middle level Items Ordinary control measure Purchase based on usage estimates Controls exercises by store keeper. A1. 5. and C. 4.blogspot. Class A B C FSN Analysis It is based on rate of consumption.. B1.in/2013/04/abc-ved-hml-analysis-in-material. 4.items represent low cost centres. It will be seen that first 10% of items approximately account for 70%. It is a simple approach.html 2/4 . stock items are separated into three classes with the following characteristics VED ANALYSIS drjayeshpatidar. It has been seen that a large number of items consume only a small percentage of resources and vice. The items can be classified into: 1. 4. B items represent the immediate cost centres. The cost of each item is multiplied by the number used in a given period and then these items are tabulated in descending numerical value order. Items Tight controls Rigid estimates of requirements Strict and close watch Safety stocks should be low Management of items should be done at top management level.versa. Fast moving Slow moving Non. 5. This method is based on the fact that some stock items have a much higher annual usage value than others. VED. This after doing a cost analysis.

2.C categories. It must be noted that a material manager has drjayeshpatidar. in some public organizations which are static or inefficiently managed.Unit value > 1000 (Sanctioned by higher officials) M . essential and desirable stores. Vital: items without which treatment comes to standstill: i.in/2013/04/abc-ved-hml-analysis-in-material. Indifferent attitude towards hospital formulary Fear of change Poor supervision and control Unfair practice due to vested interest. A. Although not included in scientific VED analysis. i. because similar or alternative items are available.12/23/13 ABC. vital and essential items are always in stock which means a minimum disruption in the services offered to the people. essential items are stocked in medium amounts.html 3/4 . Essential: items whose non availability can be tolerated for 2-3 days. H .e.availability can not be tolerated. and desirable items we stocked in small amounts.Unit value < 100 ABC & VED Analysis (Matrix module: criticality Vs cost) It is possible to conduct a two dimensional analysis taking into consideration cost on one hand . By stocking the items in order of priority.curtains 3 Ultrasonic wash machine 6 Electronic BP machine 9 Cell 1 contains vital and high cost items like defibrillator. essential and desirable items varies from hospital to hospital depending on the type and quantity of workload. 3. a) b) c) d) e) Thoughtless continuation of previous purchase. VED. there is a peculiar category of ‘U’ items which can be grouped as unnecessary.B.Unit value 100 to 1000 L . HML Analysis in Material management The stores when subjected to analysis based on their criticality can be classified into vital. on an average vital items are 10%. non. Although the proportion of vital. and critically VED on the other. essential items are 40% and desirable items make 50% of total items available. 1. Findings of ABC and VED analysis can be coupled and further grouping can be done to evolve a priority system of management of stores: Coupling matrix model Cat I Cat II Cat III V E D A Av Ae Ad B Bv Be Bd C Cv Ce Cd An example for the coupling matrix model for equipment between criticality and cost V H M L Defibrillator 1 Ventilator 4 Oxygen regulator 7 E X-ray machine 2 Electric cautery 5 Patient trolley 8 D Air. Desirable: items whose non availability can be tolerated for a long period. The vital items are stocked in abundance. This analysis is termed as VED analysis.e. SDE Analysis Unit value is the basis of this analysis and not the annual consumption value.blogspot. These unnecessary items get purchased due to the following reasons.

but required in small quantity (A) should receive highest priority.blogspot. Items with low criticality (D) and which are required in big quantity should receive least priority.( 2 nd edn). 2. Nursing administration. 4.html 4/4 . 6. 1990. Conclusion A thorough understanding and use of the techniques of materials management would help in ordering the supplies when needed.in/2013/04/abc-ved-hml-analysis-in-material. 3. Vol 1 ( first edn). an integrated approach. Category II items: these items are of intermediate importance and should be under control of the officer in charge of the stores. ( oxygen regulator) Category I items: these items are the most important ones and require control by the administrator himself. New Delhi: Indian hospital association. 2000 Posted 15th April by Dr.( First edn). Hospital stores management. 2003 Kumar R& Goel SL. Jayesh V Patidar drjayeshpatidar. VED. Category III items: these items are of least importance which can be left under the control of the store keeper. HML Analysis in Material management to comprehensively supervise category 1 items since an item may be a low cost one but critical for patient care. 2004. Kulkarni G R. ( Ist edn). Gupta S& Kanth S. keeping them safely and in working order. New Delhi: Jaypee brothers.New Delhi: Deep & deep publications. Items with high criticality (V). Newdelhi: Jaypee brothers medical publishers (p) ltd. The grouping will essentially depend upon the strategy of management and the environment of functioning. Pai P.12/23/13 ABC. 2003. Ghei P N. Mumbai: the national book depot. This also prevents chances of non availability of equipments and drugs as being out of stock of these reduces the usefulness of the hospital system. Managerial accounting for hospitals. References 1. controlling their use. Basavanthappa B T. Effective hospital management. Mumbai: Ridhiraj enterprise. Selected reading in hospital administration. 5. Hospital administration and management. However these simple techniques can be effective in material management system.

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