Material Management

Basics

Saurabh Banerjee

MBA Hospital
Management , 2nd Year
, Sept 6-10, 2021
•Why you should know about
materials management
• Hospitals require a variety of materials and supplies
which are essential in providing good patient care.
• These supplies have to be obtained at most
economical rates in right quantity and right quality
at right time.
• Effective management of these supplies is possible
through the scientific system of materials
management
• The goal of a good hospital supply system is to ensure
that there is adequate stock of required items, so
that an uninterrupted supply of all essential items is
maintained, taking due care that we do not overstock
the supplies which not only locks up the capital, but
also gives room to pilferage and obsolescence.
• We should also ensure that these items are properly
stored, controlled, made retrievable and distributed
to the points of usage.
•Materials management is concerned
with the planning, organizing and
controlling the flow of materials, from
their initial purchase through internal
operations to the distribution or to the
service points in hospitals .
 Materials Management
• Materials Management is an essential part of any organization.
• Especially in a Hospital, Materials Management Department plays a
vital role in the smooth and efficient function of it.
• It means the management of materials likes
1. Planning,
2. Purchasing,
3. Store & inventory control,
4. Care and preservation,
5. Receiving and Issue of materials,
6. Accounting and disposal of scrap.
 • The most important purpose served by
stores is to provide an uninterrupted
service to the various user
departments.

Stores are • In the case of a Hospital we can say the

Operation Theatre, Wards, Specialty Clinics,
very Units, Refraction Departments,
Registration, Admission Departments etc.
important in are the user departments.
• The successful and efficient
material functioning of a department depends
management mainly upon how best the materials
are supplied by stores department to
them.
• Further stores often equated directly with
money, as materials have money value.
• Materials department of a 300-bed hospital located in a sub-
metro city, providing multispecialty service, having 300 beds
and a patient turnover of 300 per day.
• This hospital handles as many as 2,500 items of materials,
holds an inventory of Rs 120,000 per bed, which is about 11
per cent of the turnover,
• Deals with as many as 1,000 suppliers in an urban area, and
• raises about 1,000 store receipt vouchers and 500 purchase
orders every month
•Career opportunities
The objectives of the materials department are to:

1. Purchase materials in time and as required by the user

departments for the smooth functioning of the hospital.
2. Maintain optimum levels of stock in order to avoid wastage,
scrap and obsolescence.
3. Keep in contact with user departments to ensure that the
quality supplied to them is of specified standards.
4. Procure the specified material for the best or acceptable price
to make it available in time and to the right user.
5. Maintain good vendor relationship.
Type of materials
used in a hospital
•Typically, the type of materials
used in a hospital can be
classified into medical and non-
medical items
 MEDICAL ITEMS
1. Capital items, such as X-Ray, CAT Scan and MRI.
2. Expensive materials that are actually consumables, such
as Stent, which is used in cardiac surgeries.
3. Consumables, such as IV fluids, catheters, syringes,
gloves, drugs and medicines which are under the
purview of the pharmacy department.
4. Consumables used in the operation theatre, such as
surgical items, dressings, gauze, cotton wool, pads,
masks and gowns.
NON-MEDICAL ITEMS
1.Housekeeping—linen, toiletries, washing materials
and blankets.
2.Printing and stationery—note pads, doctor’s pads,
OHP sheets and record books.
3.Food and beverage—vegetables, grocery and kitchen
items.
4.Engineering and maintenance—spares and repair
parts for the upkeep of capital items, tools and testing
instruments.
Hospital Equipment's – Video
•Organization
chart of the
materials
department
 Materials
department

Purchase Stores
department Department
•PURCHASE
PURCHASE
• All regular items are purchased on the basis of reorder levels
maintained in the stores.
• In the case of medical equipment, the approval of the head of the
user department is required.
• For equipment's that have to be imported, the purchase department
coordinates with the accounts department for opening a letter of
credit with the bankers.
• Some hospitals have the system of providing a running monthly
budget of a specified amount, which is a percentage of the hospital
collections, for purchases.
• All purchases are centralised for all departments in the hospital
•MAIN STORE
 MAIN STORE- Receiving of materials
• The main store supplies materials to all other stores in the
hospital.
• Materials are accepted by the store through a delivery
challan, which is stamped as received.
• Before accepting them, items are inspected, and those which
are damaged and rejected are returned to the supplier.
• After the inspection, a stores receipt voucher is prepared,
based on the delivery challan.
 MAIN STORE- Issue of materials
• Materials are issued against a materials requisition
slip.
• In the stores, items are arranged department wise,
with numeric codes for item groups.
• Twice a week, the stock levels of items in the
radiology, nephrology, cardiology, laboratory
services and housekeeping departments are sent to
the purchase department
 MAIN STORE-
• The main store holds over 1,500 items, which cost over Rs 45 lakh a
month.
• The most expensive item is the pacemaker and arterial stent,
which are valued at Rs 60,000 a piece.
• The fastest moving items are soaps and tissue paper.
• About 1,000 suppliers may provide service to a well-developed sub-
metro city hospital.
• On an average, a stock of one month’s consumption of capital
goods is held in the main store.
• One week’s consumption of spares and parts are stocked.
•OT, LABORATORY AND CATH
LAB STORES
• A catheterization
laboratory, commonly
referred to as a cath
lab, is an
examination room in
a hospital or clinic
with diagnostic
imaging equipment
used to visualize the
arteries of the heart
and the chambers of
the heart and treat
any stenosis or
abnormality found
Cath Lab
Operation
theater
OT
 OT, LABORATORY AND CATH LAB STORES
• These stores receive materials from the main store.
• They are open for two shifts in a day—8 am to 8 pm.
• The stock of materials is taken on a daily basis.
• Cath Lab and OT stores prepare trays for each case
requisitioned.
• Each tray has a collection of items as per the orders
of the concerned doctor.
•In the OT stores, about 300 items are held in
store, carrying a value of over Rs 20 lakh.
•The most expensive item is injection
Supacef, and the fastest items are IV fluids,
syringes and gloves
•In the OT stores, about 300 items are held in
store, carrying a value of over Rs 20 lakh.
•The most expensive item is injection
Supacef, and the fastest items are IV fluids,
syringes and gloves
•On an average, a stock of one month’s
consumption is held in the laboratory
store and the cath lab store.
•The OT store holds items needed for two
or three months of consumption.
•FOOD AND BEVERAGE STORE
FOOD AND BEVERAGE STORE
• Vegetables bought by the daily consumption store are
purchased according to an estimate.
• Perishable items are stored in the refrigerator.
• The food and beverage store stocks over 250 items for about
10 days of consumption.
• Vegetables are cleaned with cold water.
• Utensils, serving plates, spoons, tumblers, and so on, are
sterilized.
• Leftover food is given away in sealed polythene bags
•PRINTING AND STATIONERY
STORE
 PRINTING AND STATIONERY STORE
• The printing and stationery store may handle as many
as 400 items of the value of about four lakhs in a
month.
• The most expensive item is computer stationery, and
the fastest-moving items are requisition books.
• As many as 20 suppliers may provide their services in an
urban city.
• The printing and stationery store holds between two
and three months of consumption
•Procedure
• Any department in the hospital in need of material fills the requisition
slip and sends it to the materials department

• The materials department checks regarding its availability, using the

materials stock file and materials transaction file

• If the item is available, a comparison is made with the stock in hand.

• If the quantity available covers the quantity required, the item is

supplied or issued to the department which made the requisition.

• Then the transaction is noted in the materials transaction file.

Dealer file—for selecting the dealer, and the order
file—for placing the order.

• In case the stock in hand of the item is scarce or not available,

the item is ordered by using the dealer file—for selecting the
dealer, and the order file—for placing the order.
• In some situations, the materials department may check if the
item is locally available.
• If it has to be imported, it is sent to the finance department to
help open the letter of credit. Then an order is placed with the
selected supplier.
• This transaction is entered into the order file.
• Once the material is received, it is inspected to check
whether it tallies with the number ordered, and for
damage, if there is any, with the help of the order file.
• If found satisfactory, the receipt is recorded in the
materials stock file.
• The stock received and inspected is finally stored in
the main store, from where the material is issued in
required quantities to the requisitioning
department.
•Documentation
Materials stock file

1. Name of item
2. Code number
3. Class (A, B, C)
4. Lead time to procure
5. EOQ
6. Stock as on previous order
7. Value of item as on previous order
8. Unit price for previous order
Material transaction file

1. Name of item
2. Code number
3. Stock as on previous day
4. Number of units issued
5. Number of units received
6. Stock at the end of current day
Order file-for placing the order.
1. Code number of item
2. Code number of supplier
3. The next best supplier
4. Value of the order
5. Quantity of the order
6. Date of expected receipt
Dealer file- for selecting the dealer

1.Name of item
2.Name of the supplier
3.Supplier code
4.Lead time for the item
5.Price at which previously purchased
6.Per cent discount given
• Thanks