Materials management in any health-care institution is that part of the entire hospital activity which deals with procurement, storage, transportation, distribution, maintenance etc.

Non-availability of an item, when required by the user in a hospital, could lead to stock-out and adversely affect the treatment of a patient, or even create a life-threatening situation.

On the other hand, overstocking of items could lead to blockage of finance, which in turn would be a costly proposition to any hospital. It is observed that about 40% of the funds in the health care industry are spending on materials

Hence, planning of logistics and supplies is a process of deciding what and how much of various items are to be kept in stock at a given time. It is also necessary to determine the lead-time involved and the appropriate quantity to be procured.

The main objectives of stores management are planning, acquisition, storage movement and control of materials so as to optimize personal physical facilities and capacity. It is a dynamic and systematic approach for the control of materials. It seeks to provide right materials of the right quality at the right time and of course from the right source

Goals and objectives

• The primary goal is to obtain materials of the best quality and continuity of supply at the lowest possible price.
• The other goal is to maintain the minimum of inventory of materials so as to free the working capital for other useful purposes.
• Finally, all activities in this functional area of management process should be carried out at a minimum cost.
• Given the goals, let us now identify the objectives of logistics management, which can ensure the best performance, and use of materials in a hospital. These are as follows:

Primary objectives

1. Good information system regarding the items
2. Right price of purchase
3. High turnover of the items
4. Low procurement and storage cost
5. Continuity in the supply of stores
6. Consistency in the quality of the product
7. Good supplier relations
8. Development of personnel carrying out materials management

Secondary objectives

1. Forecasting requirement
2. A favourable reciprocal relationship between end-user and Stores
3. Awareness of new materials and products
4. Standardization of items

Key Result areas

• Number of GRN received in Stores.
• Number of PR raised for Purchase.
• Number of Indent Issued to User dept.
• Manage the Inventory Accuracy Level.
• Reduce complaints from user dept

Receipt of materials: (Consumables)

• Receive the DC/ Invoice from the supplier.
• Check the invoice, PO and the materials for the quantity, appropriateness of brand and batch number.
• Goods should be received only at the Store.
• Crosscheck the date of expiry.
• After accepting goods put the received seal with date & Sign.
• If any material is being returned, before generating GRN, make an entry on book.
• Keep the original invoice / DC copy and hand over duplicate to the vendor.
• If the material has come through courier, attest only with the stamp “number of boxes received, contents not confirmed.
• Make the entry in the system by way of GRN
• Before finally authorizing the GRN, check the invoice, PO and the GRN amount and if not tallying take the approval of GM-Purchase before authorizing.
• After making GRN move the material to the appropriate place / Rack in the store.
• In case if PO is not there in the system, receive the goods and mention Received Pending Approval on the bill/DC and send the copy of bill/DC to Purchase department for further action and don’t move the goods in to store.
• If goods are emergency at the user end, send them through an acknowledgement.

The process takes place during the receipt of goods.

 Rejection of materials 

• Materials damaged/expired at the time of receipt of goods have to be returned to the suppliers at the same time. And the return goods have to be adjusted in the invoice/challan received and information should be given to the Purchase Head.
• Items supplied by the supplier without a purchase order and the same will be rejected to the company.
• At the time of the procedure or using to the patient if they find the sterile items like catheters, cannula, balloons are damaged the technician or the doctor who is using the item can reject the item by giving an explanation about the defect in the defect record form and handover the same to the respective Store. The same shall be informed to the accounts & Purchase Manager.
• Store incharge / Accounts & Purchase Manager will speak to the company person/suppliers and inform them about the defects and can ask the supplier to issue a credit note for the same or can replace the items.
• Rejected items register is maintained with remarks
• Rejected items will be issued by gate pass to the suppliers and copy of the same will be attested to the duplicate copy of the invoice for future reference.

Return of goods

• Make a list of goods that has to be returned.
• The returnable goods to be packed neatly and marked as ‘RETURN GOODS)
• The same to be updated in system / Talley as well
• Verify whether it has to be sent to the respective company or can be used in the other areas.
• Check the batch no if any.
• The store should bring to the notice of the Purchase department that the goods are received are rejected and has to be sent back to the suppliers
• Gate pass shall be generated in duplicate and call the supplier and request him to take back the goods and give credit note for the same, which can be adjusted in his bills or payments.
• File the acknowledged copy of gate pass in appropriate files – returnable and non-returnable.

Accounting process 

• After checking the goods comparing with an invoice and physical stock the same has to be received through system i.e., through GRN (Goods Received Note) and GRN & PO should be attached to the invoice / Challan.
• Invoice and Goods Received Note should tally with the items received physically. The invoice should be sealed with received seal and signed by the Stores in charge.
• The invoice/challan are forwarded for entry in software. The invoice/challan entered in the system is verified by Stores Incharge (Accounts Head).
• Challan is filed separately. Once the invoice is received for that particular challan the GRN number is mentioned on the invoice and forwarded to Accounts for payment through purchase.
• Purchase verifies the payment terms and indicates the due date for the payment of particular bill verify.
• Account department will make cheques, as per the due dates mentioned in the invoice.

Storage of materials 

Storing area

• Materials are stored in the general store & cupboards on1st &2nd flr.
• The materials are stores in
  • Open shelves
  • Locked Cupboards
• All items received shall be stored in the appropriate racks/section.

Expired and near-expiry items

• At the time of condemnation meeting discuss about expiry products at every 3rd Saturday of the month. store in charge assistant will check the expiry dates of all the items i.e., disposables and list out the same,
• Check the expiry date of items before 60 days of its expiry and list out the same and return the same to the suppliers and request them to give long expiry dated items or can request the suppliers to give credit note. 

Indent and Issue process 

• All materials should be issued only against the indent.
• Arrange the indented materials & pack the same in the appropriate boxes after counting.
• If indented material is not available, look for alternate and issue the same, physically and in the system.
• Enter issue details in the system; a copy of indent form is to be kept in the store the above-mentioned procedure is recorded in the software.

Condemnation of materials

• There is a Material Condemnation Committee which approves the condemnation of materials.
• The user departments will send the details of materials that cannot be used further.
• The Condemnation Committee looks at the details and physically checks the materials and confirms the suitability for disposal.
• The scrap value is estimated.

  Inventory management system

• The Inventory Management System that is followed in the Stores is “First In First Out” (FIFO).
• Reorder levels are fixed for all the major categories of materials.
• The orders are placed considering the Reorder level and the lead time required by the supplier.