Slide 1Slide 2Slide 3Slide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Slide 24Slide 25Slide 26Slide 27Slide 28Slide 29Slide 30Slide 31Slide 32Slide 33Slide 34Slide 35Slide 36Slide 37Slide 38Slide 39Slide 40Slide 41MATERIAL MANAGEMENTByDR.I.SELVARAJ, I.R.M.SSr.D.M.O (Selection Grade Officer) (on study leave),INDIAN RAILWAYS MEDICAL SERVICEB.Sc., M.B.B.S., D.P.H (Madras medical college, Recognized by MCI)., D.I.H., PGCH&FW (NIHFW, New Delhi)III rd year Post graduate student in M.D Community medicineDepartment of Community medicineSree Ramachandra Medical College,Porur,ChennaiDefinitionIt is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution.ORMaterial management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination.AIM OF MATERIAL MANAGEMENT To get 1. The Right quality 2. Right quantity of supplies 3. At the Right time 4. At the Right place 5. For the Right costPURPOSE 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 fluctuations in consumption•To provide reasonable level of client servicesPrimary•Right price•High turnover•Low procurement •& storage cost•Continuity of supply•Consistency in quality•Good supplier relations•Development of personnel•Good information systemObjective of material managementSecondary•Forecasting•Inter-departmental harmony•Product improvement•Standardization•Make or buy decision•New materials & products•Favorable reciprocal relationshipsEconomy in material management•Containing the costs •Instilling efficiency in all activitiesFour basic needs of Material management1. To have adequate materials on hand when needed2. To pay the lowest possible prices, consistent with quality and value requirement for purchases materials3. To minimize the inventory investment4. To operate efficientlyBasic principles of material management 1. Effective management & supervisionIt depends on managerial functions of •Planning•Organizing•Staffing•Directing•Controlling •Reporting•Budgeting2. Sound purchasing methods3.Skillful & hard poised negotiations4.Effective purchase system5.Should be simple6.Must not increase other costs7.Simple inventory control programmeElements of material management1. Demand estimation2. Identify the needed items3. Calculate from the trends in Consumption during last 2 years.4. Review with resource constraintsFunctional areas of material management1. Purchasing2. Central service supply3. Central stores4. The print shops5. The pharmacy6. Dietary& Linen servicesPROCUREMENT1. Directorate general of supply & disposal (DGS & D, Govt. Of India]2. Medical stores depot (M. S.D. Government of India, Ministry of H & FW]3. Private or public sector undertakings.4. Receiving donations.Procurement cycle•Review selection•Determine needed quantities•Reconcile needs & funds•Choose procurement method•Select suppliers•Specify contract terms•Monitor order status•Receipt & inspectionObjectives of procurement system•Acquire needed supplies as inexpensively as possible•Obtain high quality supplies•Assure prompt & dependable delivery•Distribute the procurement workload to avoid period of idleness & overwork•Optimize inventory management through scientific procurement proceduresOpen tender •Public bidding, resulting in low prices•Published in newspapers•Term - 4 weeks•Quotations must be sent in the specific forms that are sold, before the time &date mentioned in the tender form•In technical items, ‘two packets or two bins’ system is followed. Offers are given in two separate packets.•Technical bid •Financial bid Cont……•First technical bid is opened & short listed•Then financial bid of selected companies are opened & lowest is selected •Delayed tenders & late tenders are not accepted. But if, in case of delayed tenders, if the rate quoted is very less, then it can be accepted.•Quotations are opened in presence of indenting department, accounts & authorized persons of party•Validity of tenders – generally 90 daysEarnest money 2 % of the tender amount or as decided has to be paid along with all quotations. In case of default 1/5 is withheld Restricted or limited tenderFrom limited suppliers (about 10)Lead-time is reducedBetter qualityNegotiated procurementBuyer approaches selected potential Suppliers & bargain directlyUsed in long time supply contractsDirect procurementPurchased from single supplier, at his quoted pricePrices may be highReserved for proprietary materials, or low priced, small quantity & emergency purchasesRate contract Firms are asked to supply stores at specified Rates during the period covered by the ContractSpot purchaseIt is done by a committee, which includes an officer from stores, accounts & purchasing departmentsRisk purchaseIf supplier fails, the item is purchased from other agencies & the difference in cost is recovered from the first supplierPoints to remember while purchasing•Proper specification•Invite quotations from reputed firms•Comparison of offers based on basic price, freight & insurance, taxes and levies•Quantity & payment discounts•Payment terms•Delivery period, guarantee•Vendor reputation(reliability, technical capabilities, Convenience, Availability, after-sales service, sales assistance)•Short listing for better negotiation terms•Seek order acknowledgementStorage•Store must be of adequate space•Materials must be stored in an appropriate place• in a correct way•Group wise & alphabetical arrangement helps in•identification & 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 stockIssue & useCan be centralized or decentralizedInventory controlIt 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 balanceFunctions of inventory control•To