Title 3. MANAGEMENT OF MATERIALS AND FINANCE.pdf ✅

PHARMD GURU Page 1 MANAGEMENT OF MATERIALS AND FINANCE MATERIAL MANAGEMENT DEFINITION: It is concerned with the planning, organizing & controlling the flow of materials from their initial purchase through internal operations to the service point through distribution. AIMS OF MATERIAL MANAGEMENT: To get:  The right quality.  Right quality of supplies.  At the right time.  At the right place.  For the right cost. PURPOSE OF MATERIAL MANAGEMENT:  To gain economy in purchasing.  To satisfy the demands during period of replenishment.  To carry reserve stock to avoid stock out.  To stabilize fluctuations in consumption.  To provide reasonable level of client services. HOSPITAL PHARMACY-ORGANISATION AND MANAGEMENT
PHARMD GURU Page 2 OBJECTIVES OF MATERIAL MANAGEMENT: Primary Secondary Right price & high turn over Forecasting low procurement & storage cost Inter – departmental harmony Continuity of supply Product improvement Consistency in quality Standardization Good supplier relationships Make or buy decision Development of personnel New materials & products Good information system Favourable reciprocal relationships ECONOMY IN MATERIAL MANAGEMENT:  Containing the costs.  Instilling efficiency in all activities. 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 purchase materials. 3) To minimize the inventory investment. 4) To operate efficiently. BASIC PRINCIPLES OF MATERIAL MANAGEMENT: 1. Effective management & supervisions. It depends upon managerial functions of:  Planning.  Organizing.  Directing.  Controlling.  Reporting.  Budgeting.
PHARMD GURU Page 3 2. Sound purchasing methods. 3. Skillful & hard poisoned negotiations. 4. Effective purchase system 5. Should be simple 6. Must not increase other costs 7. Simple inventory control programme ELEMENTS OF MATERIAL MANAGEMENT:  Demand estimation.  Identify the needed items.  Calculated from the trends in consumption during last 2years.  Review with resource constraints. FINANCES 1. Primary source- charges received from the patient. 2. Charges received by the patients are either fully paid by himself or from third party. 3. Research work. 4. Invested endowment funds. 5. Other types of investment. 6. Gifts, contributions towards general functional expenses. MANAGEMENT OF FINANCE IN HOSPITAL PHARMACY INVENTORY CONTROL: DEFINITION: Inventory control may be defined as a scientific method of finding out how much stock should be maintained in order to meet the production demands and be able to provide right type of material at right time in right quantities and at competitive prices. Various methods of Inventory control ABC, VED, EOQ, Lead time, Safety stock : ABC ANALYSIS:
PHARMD GURU Page 4 ABC plan is based upon segregation of materials for selection control. It measures the money value, i.e., cost significance of each material item in relation to total cost and material value. A items B items C items  It covers 10% of total inventory.  It covers 20% of total inventory.  It covers 70% of total inventory.  It consumes about 70% of total budget.  It consumes about 20% of total budget.  It consumes about 10% of total budget.  Very strict control.  Very moderate control.  Very loose control.  It requires either no safety stocks or low safety stocks.  It requires low safety stocks.  It requires high safety stocks.  It must be handled by senior officer.  It can be handled by middle management.  It can be handled by any office management. ADVANTAGES DISADVANTAGES  This technique helps for control of material on selective base  ABC analysis should be changed periodically up to dates but it is difficult task to change frequently.  This technique reduces clerical costs.  Standardization and codification become difficult.  It is proper and powerful method for cost reduction. VED ANALYSIS: VED analysis is based on the criticality of an item.  V - It is for vital items without which a hospital cannot function.  E - It is for essential items without which a hospital can function but may affect the quality of the services.  D - It is for desirable items, unavailability of which with not interferes with function.