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Materials Management

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 Materials Management
*Amandeep kaur

*Assistant Professor, Khalsa College of Nursing, Amritsar, Punjab, India.

Solitaire.8730@yahoo.in

Abstract
Materials management is related to planning, procuring, storing and providing the appropriate
material of right quality, right quantity, at right place in right time so as to coordinate and
schedule the production activity in an integrative way for an industrial undertaking. Most
industries buy materials, transport them in to the plant, change the materials into parts, assemble
parts in to finished products, sell and transport the product to the customer. The basic need of
material management is to pay the lowest possible prices, consistent with quality and value
requirement for purchasing of materials. Materials management integrates all materials functions
i.e. demand estimation, procurement, receipt and inspection, storage, issue and use, maintenance
and repair, disposal & accounting and information system. Indian institute of Material
Management has set up CRIMM in Kolkata jointly with the Indian Institute of Social Welfare
and Business Management (IISWBM).

Key Words: Procurement, CRIMM, IIMM, IISWBM.

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 INTRODUCTION

“To spend money is easy.

To spend it well is hard.”
Wesley C. Michel

Materials management is simply the process by which an organization is supplied with the goods
and services. It also needs to achieve its objectives of buying, storage and movement of
materials. Materials management is related to planning, procuring, storing and providing the
appropriate material of right quality, right quantity at right place in right time so as to coordinate
and schedule the production activity in an integrative way for an industrial undertaking. Most
industries buy materials, transport them in to the plant, change the materials in to parts, assemble
parts in to finished products, sell and transport the product to the customer. All these activities of
purchasing of materials, flow of materials, converting them in to the final product, supplying and
selling the product at the market requires various types of materials to manage and control their
storage, flow and supply at various places. It is only possible by efficient materials management.
Materials management in the health care system is concerned with providing the drugs, supplies
and equipment needed by health personnel to deliver health services. About 40 percent of the
funds in the health care system are used up for providing materials.

DEFINITION
According to International Federation of Purchasing and Materials Management, “materials
management is a total concept having its definite organization to plan and control all types of
materials, its supply and its flow from raw stage to finished stage so as to deliver the product to
customer as per his requirements in time.”
This involves materials planning, purchasing, receiving, storing, inventory control, scheduling,
production, physical distribution and marketing. It also controls the materials handling and its
traffic. The materials manager has to manage all these functions with proper authority and
responsibility in the materials management department.

AIMS OF MATERIALS MANAGEMENT

The aims of materials management are as follows:

To get -

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 1. The right quality of supplies

2. The right quantity of supplies

3. at the right time

4. at the right place

5. for the right cost

PURPOSES OF MATERIALS 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 services

FOUR BASIC NEEDS OF MATERIAL MANAGEMENT

1. To have adequate materials on hand when needed

2. To pay the lowest possible prices, consistent with quality and value requirement for

purchases materials

3. To minimize the inventory investment

4. To operate efficiently

MODES OF WORKING

 Centralization System
 Decentralization System

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 The main advantages and disadvantages of centralization are:

Advantages Disadvantages

Easier to implement common policies and More bureaucratic – often extra layers in the

practices for the business as a whole hierarchy

Prevents other parts of the business from Local or junior managers are likely to get

becoming too independent much closer to customer needs

Easier to co-ordinate and control from the Lack of authority down the hierarchy may

centre – e.g. with budgets reduce manager motivation

Economies of scale and overhead savings Customer service does not benefit from

easier to achieve flexibility and speed in local decision-making

Greater use of specialization

Quicker decision-making (usually) – easier

to show strong leadership

In a decentralized structure, decision-making is spread out to include more junior managers in

the hierarchy, as well as individual business units or trading locations.
Good examples of businesses which use a decentralized structure include the major supermarket
chains like WM Morrison and Tesco. Each supermarket has a store manager who can make
certain decisions concerning areas like staffing, sales promotions. The store manager is
responsible to a regional or area manager. Hotel chains are particularly keen on using

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 decentralized structures so that local hotel managers are empowered to make on-the-spot
decisions to handle customer problems or complaints.
The main advantages and disadvantages of this approach are:

Advantages Disadvantages

Decisions are made closer to the customer Decision-making is not necessarily “strategic”

Better able to respond to local circumstances More difficult to ensure consistent practices
and policies (customers might prefer
consistency from location to location)

Improved level of customer service May be some diseconomies of scale will exist
– e.g. duplication of roles

Consistent with aiming for a flatter Who provides strong leadership when needed
hierarchy (e.g. in a crisis)?

Good way of training and developing junior Harder to achieve tight financial control – risk
management of cost-overruns

Should improve staff motivation

ELEMENTS

Material management integrates all materials functions which includes the following:

 Demand Estimation

 Procurement

 Receipt and inspection

 Storage

 Issue and use

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  Maintenance and repair

 Disposal

 Accounting and information system

DEMAND ESTIMATION
A large variety and number of materials are used in hospitals and other health care institutions.
The Advisory Committee for development of surgical instruments, equipment and appliances
identified 3200 items of instruments and equipment being used in a hospital. This is just to
illustrate the variety and diversity of stores used for patient care in hospital situation. There is
need for variety of reduction of materials; as less the number of materials, less will be the
problems of planning and management of the same. Along with variety reduction there is need
for laying down proper specification of the materials. In this area, the Indian Standard Institute
has been and is playing a very important role by standardizing a large number and variety of
instruments and equipment. The ISI has set up a number of technical committees to work out the
details of standards of surgical instruments, glassware, anesthesia equipment, dental machine,
artificial limbs, surgical dressing, utensils, electro medical instruments, rubber goods, etc. This
should always be done keeping in view the trends in consumption pattern over the last 2-3 years,
objectives of the organization, changing clientele and changing emphasis on various programs
and activities in the health field. In this field a “sound data base” and use of advance projection
techniques are of great use. These techniques are relatively simple and medical administrator
should use them frequently to streamline the MP and MS system.

PROCUREMENT
Most of the states and other organizations have laid down detailed set of rules and regulations
regarding the procedure of ordering for materials. The financial authority is also vested in
various levels of the administrative hierarchy. The basic spirit behind all these rules, regulations,
procedures etc. is to maximize the value of money invested in the purchase of stores.
Organizations like Directorate General of Supplies and Disposals (DGSD) play a crucial role in
purchase which involves heavy costs. Many states have medical stores or depots which are
centralized agencies of procurement and stocking of medical stores. There is also a system of
fixed contract or running rate contract which is followed in large organization and some State
Governments Limited tenders, rate enquiries local spot and emergent purchase form a part of the
complex sub-system of procurement. It would neither be appropriate nor feasible to go into the
details of these procedures as they are specific to different states/organization.

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 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

Normally three types of contractual services are offered by DGSD. These are:

a) Fixed quantity contract: This type of contract is generally entered into where firms are
called upon to offer to supply a definite quantity of stores by a specified date. Such contracts, are
binding on both the purchasing as well as supplying agency.

b) Running Contract: These are contracts for the supply of an approximate quantity of stores at
a specified price during a certain period of time.

C) Rate Contract: These are the most important contracts as far as health institutions are
concerned. Under these contracts the firms are asked to supply stores at specific rates during the
period covered by the contract. No fixed quantities are mentioned. The purchaser is bound to
order from the contractor all stores under the contract, which are required to be purchased.

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

INVENTORY CONTROL
Inventory control means stocking adequate number and kind of stores so that the materials are
available whenever required and wherever required. This has to be done at an optimum outlay of
financial and human resources.

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 VALUE ANALYSIS
The obvious and elementary principle of material use is the right quality of the material. This
includes questioning and analysis of each specification to see if it could be amended or
substituted to maximize the end use of a material. This process of analysis of the intrinsic value
of the material for achieving the objectives of the organization is termed as value analysis. This
is a vital function of a materials manager. The following considerations help to carry out the
value analysis.
a. Can the material be dispensed with?
b. Can it be simplified?
c. Will a standard material do?
d. Is its value proportionate to its cost?
e. Is anything cheaper but equally good available in the market?
f. Would not it be better to manufacture it?

RECEIPT AND INSPECTION

The stores ordered are received in the store. A reasonable sound policy and methodology of
inspection of incoming stores is an essential element of MP and MS. The inspection policy
should enunciate the sampling procedure for inspection and this procedure must be followed.
The lot thus picked up by a random sampling method subjected to physical and chemical
inspection. Basic facilities for such examination can 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. Investments made
in sound sampling policy and procedure will go a long way in assuming the right quality of
materials supplied to the organization.

STORAGE
The medical stores should be situated near the other stores of the hospital. It should be easily
accessible to suppliers as well as indentors. Location of the store will, therefore, be guided by the
flow activity of the stores. The store should be of adequate size to accommodate all the drugs,
instruments, appliances etc. required for use in form of steel racks with shelves. Refrigeration
should be provided for storage of thermo labile items. A graded temperature zone concept is
essential in medical stores. Separation of stores of various types, i.e. injections, tablets, local use
agents from others, poisons from non-poisonous agents, inflammable from non-inflammable
agents etc. dictates the layout of the stores. Drugs and medicines should be grouped according to
the pharmacological actions and in accordance with the classification adopted in the formulary.
Alphabetical arrangement group-wise enables easy identification and retrieval. Items received
later from the suppliers should be stored behind similar items and the principle of First in First
out (FIFO) should be adopted.

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 PROCEDURES AND RULES OF MATERIAL MANAGEMENT
Procurement of materials is governed by certain procedures and rules prescribed by the
government for materials management. These rules cover such activities:
 Estimation and budgeting for materials
 Indent for materials
 Placing indent with government stores as or local firms (RC)
 Receiving and verification of materials (quantity, quality, breakage, damage, expiry date,
spoiled etc.)
 Transportation of materials
 Taking into stock and storage of materials
 Issuing materials

THE METHODS OF STORAGE OF MATERIALS:

 All the poisonous drugs should be kept separately in compartments under the custody of
Medical officer or supervisor concerned
 All the general drugs, instrumental equipment, kept separately in the compartment under
the custody of store keeper/pharmacist
 All the insecticide and disinfectants kept separately under the custody of pharmacist
 All vaccines should be kept stored in refrigerator with proper temperatures
 All linen should be stored in compartment under the custody of store keeper
And insist a physical verification to be done at the end of every calendar year/financial year. If
any articles are found unserviceable, a list has to be prepared, and the articles condemned by the
competent authority.
The HA (M) in collaboration with the HA (F) is required to check at regular intervals at sub-
centres, the availability of requisite medicine and replenishment of items and preventive
maintenance.

CENTRE FOR RESEARCH IN MATERIALS MANAGEMENT (CRIMM)

Indian institute of Material Management has set up CRIMM in Kolkata jointly with the Indian
Institute of Social Welfare and Business Management (IISWBM). A MOU was signed with
IISWBM ON 17th February, 1997. IISWBM is the first management institute of India, setup in
1953 and inaugurated by Pt. Jawaharlal Nehru, the then Prime Minister of India. CRIMM was
officially inaugurated on April 04th, 1997 at Kolkata.

Activities of CRIMM in brief

 To promote research in Materials Management discipline.

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  To create professorship, other faculty and research position for higher education in
Materials Management particularly as modules of Fellowship/Doctoral Programmes and
to conduct research in selected areas of Materials Management and allied disciplines.
 To collaborate with industry for furthering the academic advancement of Materials
Management and its application to industry.
 To take up project consultancy work in Materials Management.

Centre will act as a nodal point for co-ordination and integration of research information in the
field of Materials Management for on-going and completed research work in other countries.

BIBLIOGRAPHY:

1) Basvanthappa BT, Nursing administration, 1st edition, new delhi;jaypee brothers.

2) Material management in nursing. Material management (online). Available at http://
www.nursingplanet.com./education/material management.
3) Indian Institute of Materials Management. http://www.iimm.org/index.php/2016-02-24-12-
20-24/crimm

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