MATERIAL MANAGEMENT

By
DR.I.SELVARAJ, I.R.M.S
Sr.D.M.O (Selection Grade Officer (on !t"dy lea#e,
INDIAN RAIL$A%S MEDI&AL SERVI&E
B.Sc., M.B.B.S., D.'.( (Madra! )edical colle*e, Reco*ni+ed ,y M&I.,
D.I.(., 'G&(-.$ (NI(.$, Ne/ Del0i
III rd year 'o!t *rad"ate !t"dent in M.D &o))"nity )edicine
De1art)ent of &o))"nity )edicine
Sree Ra)ac0andra Medical &olle*e,
'or"r,&0ennai
Definition
It i! concerned /it0 1lannin*, or*ani+in* and
controllin* t0e flo/ of )aterial! fro) t0eir initial
1"rc0a!e t0ro"*0 internal o1eration! to t0e !er#ice
1oint t0ro"*0 di!tri,"tion.
OR
Material )ana*e)ent i! a !cientific tec0ni2"e,
concerned /it0 'lannin*, Or*ani+in* -&ontrol of flo/
of )aterial!, fro) t0eir initial 1"rc0a!e to de!tination.
AIM O. MATERIAL MANAGEMENT

To *et
3. T0e Ri*0t 2"ality
4. Ri*0t 2"antity of !"11lie!
5. At t0e Ri*0t ti)e
6. At t0e Ri*0t 1lace
7. .or t0e Ri*0t co!t
'8R'OSE O. MATERIAL MANAGEMENT

To *ain econo)y in 1"rc0a!in*

To !ati!fy t0e de)and d"rin* 1eriod of re1leni!0)ent

To carry re!er#e !toc9 to a#oid !toc9 o"t

To !ta,ili+e fl"ct"ation! in con!")1tion

To 1ro#ide rea!ona,le le#el of client !er#ice!

'ri)ary

Ri*0t 1rice

(i*0 t"rno#er

Lo/ 1roc"re)ent

- !tora*e co!t

&ontin"ity of !"11ly

&on!i!tency in 2"ality

Good !"11lier
relation!

De#elo1)ent of
1er!onnel

Good infor)ation
!y!te)
O,:ecti#e of )aterial )ana*e)ent
Secondary

.oreca!tin*

Inter;de1art)ental
0ar)ony

'rod"ct i)1ro#e)ent

Standardi+ation

Ma9e or ,"y deci!ion

Ne/ )aterial! - 1rod"ct!

.a#ora,le reci1rocal
relation!0i1!
Econo)y in )aterial )ana*e)ent

&ontainin* t0e co!t!

In!tillin* efficiency in all acti#itie!

.o"r ,a!ic need! of Material
)ana*e)ent
3. To 0a#e ade2"ate )aterial! on 0and /0en needed
4. To 1ay t0e lo/e!t 1o!!i,le 1rice!, con!i!tent /it0
2"ality and #al"e re2"ire)ent for 1"rc0a!e!
)aterial!
5. To )ini)i+e t0e in#entory in#e!t)ent
6. To o1erate efficiently
Ba!ic 1rinci1le! of )aterial )ana*e)ent
3. Effecti#e )ana*e)ent - !"1er#i!ion
It de1end! on )ana*erial f"nction! of

'lannin*

Or*ani+in*

Staffin*

Directin*

&ontrollin*

Re1ortin*

B"d*etin*
4. So"nd 1"rc0a!in* )et0od!
5.S9illf"l - 0ard 1oi!ed ne*otiation!
6.Effecti#e 1"rc0a!e !y!te)
7.S0o"ld ,e !i)1le
<.M"!t not increa!e ot0er co!t!
=.Si)1le in#entory control 1ro*ra))e
Ele)ent! of )aterial )ana*e)ent
3. De)and e!ti)ation
4. Identify t0e needed ite)!
5. &alc"late fro) t0e trend! in &on!")1tion d"rin* la!t
4 year!.
6. Re#ie/ /it0 re!o"rce con!traint!
."nctional area! of )aterial )ana*e)ent
3. '"rc0a!in*
4. &entral !er#ice !"11ly
5. &entral !tore!
6. T0e 1rint !0o1!
7. T0e 10ar)acy
<. Dietary
- Linen !er#ice!
'RO&8REMENT
3. Directorate *eneral of !"11ly - di!1o!al
(DGS - D, Go#t. Of India>
4. Medical !tore! de1ot (M. S.D. Go#ern)ent
of India, Mini!try of ( - .$>
5. 'ri#ate or 1",lic !ector "nderta9in*!.
6. Recei#in* donation!.
'roc"re)ent cycle

Re#ie/ !election

Deter)ine needed 2"antitie!

Reconcile need! - f"nd!

&0oo!e 1roc"re)ent )et0od

Select !"11lier!

S1ecify contract ter)!

Monitor order !tat"!

Recei1t - in!1ection
O,:ecti#e! of 1roc"re)ent !y!te)

Ac2"ire needed !"11lie! a! ine?1en!i#ely a! 1o!!i,le

O,tain 0i*0 2"ality !"11lie!

A!!"re 1ro)1t - de1enda,le deli#ery

Di!tri,"te t0e 1roc"re)ent /or9load to a#oid 1eriod of

idlene!! - o#er/or9

O1ti)i+e in#entory )ana*e)ent t0ro"*0 !cientific

1roc"re)ent 1roced"re!
O1en tender

'",lic ,iddin*, re!"ltin* in lo/ 1rice!

'",li!0ed in ne/!1a1er!

Ter) ; 6 /ee9!

@"otation! )"!t ,e !ent in t0e !1ecific for)!

t0at are !old, ,efore t0e ti)e -date )entioned in
t0e tender for)

In tec0nical ite)!, At/o 1ac9et! or t/o ,in!B

!y!te) i! follo/ed. Offer! are *i#en in t/o
!e1arate 1ac9et!.

Tec0nical ,id

.inancial ,id
Cont

.ir!t tec0nical ,id i! o1ened - !0ort li!ted

T0en financial ,id of !elected co)1anie! are

o1ened - lo/e!t i! !elected

Delayed tender! - late tender! are not acce1ted. B"t

if, in ca!e of delayed tender!, if t0e rate 2"oted i!
#ery le!!, t0en it can ,e acce1ted.

@"otation! are o1ened in 1re!ence of indentin*

de1art)ent, acco"nt! - a"t0ori+ed 1er!on! of 1arty

Validity of tender! C *enerally DE day!

Earne!t )oney
4 F of t0e tender a)o"nt or a! decided 0a! to ,e 1aid
alon* /it0 all 2"otation!. In ca!e of defa"lt 3G7 i! /it00eld
Re!tricted or li)ited tender
.ro) li)ited !"11lier! (a,o"t 3E
Lead;ti)e i! red"ced
Better 2"ality
Ne*otiated 1roc"re)ent
B"yer a11roac0e! !elected 1otential S"11lier! - ,ar*ain
directly
8!ed in lon* ti)e !"11ly contract!
Direct 1roc"re)ent
'"rc0a!ed fro) !in*le !"11lier, at 0i! 2"oted 1rice
'rice! )ay ,e 0i*0
Re!er#ed for 1ro1rietary )aterial!, or lo/ 1riced, !)all
2"antity - e)er*ency 1"rc0a!e!
Rate contract
.ir)! are a!9ed to !"11ly !tore! at !1ecified Rate!
d"rin* t0e 1eriod co#ered ,y t0e &ontract
S1ot 1"rc0a!e
It i! done ,y a co))ittee, /0ic0 incl"de! an officer
fro) !tore!, acco"nt! - 1"rc0a!in* de1art)ent!
Ri!9 1"rc0a!e
If !"11lier fail!, t0e ite) i! 1"rc0a!ed fro) ot0er
a*encie! - t0e difference in co!t i! reco#ered fro)
t0e fir!t !"11lier
'oint! to re)e),er /0ile 1"rc0a!in*
'ro1er !1ecification
In#ite 2"otation! fro) re1"ted fir)!
&o)1ari!on of offer! ,a!ed on ,a!ic 1rice, frei*0t - in!"rance,
ta?e! and le#ie!
@"antity - 1ay)ent di!co"nt!
'ay)ent ter)!
Deli#ery 1eriod, *"arantee
Vendor re1"tation
(relia,ility, tec0nical ca1a,ilitie!, &on#enience, A#aila,ility, after;
!ale! !er#ice, !ale! a!!i!tance
S0ort li!tin* for ,etter ne*otiation ter)!
See9 order ac9no/led*e)ent
Stora*e
Store )"!t ,e of ade2"ate !1ace
Material! )"!t ,e !tored in an a11ro1riate 1lace
in a correct /ay
Gro"1 /i!e - al10a,etical arran*e)ent 0el1! in
identification - retrie#al
.ir!t;in, fir!t;o"t 1rinci1le to ,e follo/ed
Monitor e?1iry date
.ollo/ t/o ,in or do",le !0elf !y!te), to a#oid
Stoc9 o"t!
Re!er#e ,in !0o"ld contain !toc9 t0at /ill co#er
lead ti)e and a !)all !afety !toc9
I!!"e - "!e
&an ,e centrali+ed or decentrali+ed
In#entory control
It )ean! !toc9in* ade2"ate n"),er and
9ind of !tore!, !o t0at t0e )aterial! are
a#aila,le /0ene#er re2"ired and /0ere#er
re2"ired. Scientific in#entory control re!"lt!
in o1ti)al ,alance
."nction! of in#entory control

To 1ro#ide )a?i)") !"11ly !er#ice,

con!i!tent /it0 )a?i)") efficiency -
o1ti)") in#e!t)ent.

To 1ro#ide c"!0ion ,et/een foreca!ted -

act"al de)and for a )aterial
Econo)ic order of 2"antity
EO@ H A#era*e Mont0ly &on!")1tion I Lead Ti)e Jin
)ont0!> K B"ffer Stoc9 C Stoc9 on 0and
Re;order le#elL !toc9 le#el at /0ic0 fre!0
order i! 1laced.
A#era*e con!")1tion 1er day ? lead ti)e K
,"ffer !toc9
Lead ti)eL D"ration ti)e ,et/een 1lacin*
an order - recei1t of )aterial
Ideal C 4 to < /ee9!.
AB& ANAL%SIS
(AB& H Al/ay! Better &ontrol
T0i! i! ,a!ed on co!t criteria.
It 0el1! to e?erci!e !electi#e control /0en confronted
/it0 lar*e n"),er of ite)! it rationali+e! t0e n"),er of
order!, n"),er of ite)! - red"ce t0e in#entory.
A,o"t 3E F of )aterial! con!")e =E F of re!o"rce!
A,o"t 4E F of )aterial! con!")e 4E F of re!o"rce!
A,o"t =E F of )aterial! con!")e 3E F of re!o"rce!
AAB ITEMS
S)all in n"),er, ,"t con!")e lar*e a)o"nt
of re!o"rce!
M"!t 0a#eL

Ti*0t control

Ri*id e!ti)ate of re2"ire)ent!

Strict - clo!er /atc0

Lo/ !afety !toc9!

Mana*ed ,y to1 )ana*e)ent

A&B ITEMS
Lar*er in n"),er, ,"t con!")e le!!er a)o"nt of
re!o"rce!
M"!t 0a#eL

Ordinary control )ea!"re!

'"rc0a!e ,a!ed on "!a*e e!ti)ate!

(i*0 !afety !toc9!

AB& analy!i! doe! not !tre!! on ite)! t0o!e are
le!! co!tly ,"t )ay ,e #ital
ABB ITEM
Inter)ediate
M"!t 0a#eL

Moderate control

'"rc0a!e ,a!ed on ri*id re2"ire)ent!

Rea!ona,ly !trict /atc0 - control

Moderate !afety !toc9!

Mana*ed ,y )iddle le#el )ana*e)ent

VED ANALYSIS
Ba!ed on critical #al"e - !0orta*e co!t of an ite)
It i! a !",:ecti#e analy!i!.
Ite)! are cla!!ified into:
Vital:
S0orta*e cannot ,e tolerated.
E!!ential:
S0orta*e can ,e tolerated for a !0ort 1eriod.
De!ira,le:

S0orta*e /ill not ad#er!ely affect, ,"t )ay ,e "!in* )ore

re!o"rce!. T0e!e )"!t ,e !trictly Scr"tini+ed
V E D ITEM &OST
A AV AE AD &ATEGOR% 3 3E =EF
B BV BE BD &ATEGOR% 4 4E 4EF
& &V &E &D &ATEGOR% 5 =E 3EF
&ATEGOR% 3 ; NEEDS &LOSE MONITORING - &ONTROL
&ATEGOR% 4 ; MODERATE &ONTROL.
&ATEGOR% 5 ; NO NEED .OR &ONTROL
SDE ANAL%IS
Ba!ed on a#aila,ility
Scarce
Mana*ed ,y to1 le#el )ana*e)ent
Maintain ,i* !afety !toc9!
Diffic"lt
Maintain !"fficient !afety !toc9!
Ea!ily a#aila,le
Mini)") !afety !toc9!
.SN ANAL%SIS
Ba!ed on "tili+ation.
.a!t )o#in*.
Slo/ )o#in*.
Non;)o#in*.
Non;)o#in* ite)! )"!t ,e 1eriodically re#ie/ed to 1re#ent
e?1iry
- o,!ole!cence
(ML ANAL%SIS
Ba!ed on co!t 1er "nit
(i*0e!t
Medi")
Lo/
T0i! i! "!ed to 9ee1 control o#er con!")1tion
at de1art)ental le#el for decidin* t0e fre2"ency of 10y!ical #erification.
'RO&8RMENT O. E@8I'MENT
'oint! to ,e noted ,efore 1"rc0a!e of an
e2"i1)entL

Late!t tec0nolo*y

A#aila,ility of )aintenance - re1air facility,

/it0 )ini)") do/n ti)e

'o!t /arranty re1air at rea!ona,le co!t

81*radea,ility

Re1"ted )an"fact"rer

A#aila,ility of con!")a,le!

Lo/ o1eratin* co!t!

In!tallation

'ro1er in!tallation a! 1er *"ideline!

HISTORY SHEET OF EQUIPMENTL
History sheet
Name of equipment
Code number
Date of purchase
Name of supplier
Name of manufacturer
Date of installation
Place of installation
Date of commissioning
Environmental control
Spare parts inventor
!echn. "anual # circuit
diagrams # literatures
$fter sales arrangement
%uarantee period
&arrant period
'ife of equipment
Do(n time # up time
Cost of maintenance
)nserviceable date
Date of condemnation
Date of replacement
Maintenance !0eetL
Ann"al )aintenance contract JAM&>
Startin* date
E?1iry date
Ser#ice G re1air de!cri1tion
Material! G !1are! "!ed
&o!t of re1air!
In;0o"!e
O"t!ide a*ency
E@8I'MENT MAINTENAN&E - &ONDEMNATION
Maintenance - re1air!L
're#enti#e )aintenance
Ma!ter )aintenance 1lan
Re1air of e2"i1)ent
'REVENTIVE MAINTENAN&E
'"rc0a!e /it0 /arranty - !1are!.
Safe*"ard t0e electronic e2"i1)ent! /it0L (a! 1er
*"ideline!
Volta*e !ta,ili+er, 8'S
A"to)atic !/itc0 o#er *enerator
Re2"ire)ent of electricity, /ater, !1ace, at)o!10eric
condition!, etc. M"!t ,e ta9en into con!ideration
$ell e2"i11ed )aintenance cell )"!t ,e a#aila,le
All e2"i1)ent )"!t ,e o1erated a! 1er in!tr"ction! /it0
trained !taff
Monitorin* ann"al )aintenance contract!. (AM&
Maintenance cell
&o))"nication! ,et/een )aintenance cell - !"11lier! of
t0e e2"i1)ent.
.ollo/;"1 of )aintenance - re1air !er#ice!
Re1air of e2"i1)ent
O"t!ide a*encie!
In;0o"!e facility
&ONDEMNATION - DIS'OSAL
&riteria for conde)nation:
!he equipment has become:
3. Non;f"nctional - ,eyond econo)ical re1air
4. Non;f"nctional - o,!olete
5. ."nctional, ,"t o,!olete
6. ."nctional, ,"t 0a+ardo"!
7. ."nctional, ,"t no lon*er re2"ired
'RO&ED8RE .OR &ONDEMNATION
3. Verify record!.
4. (i!tory !0eet of e2"i1)ent
5. Lo* ,oo9 of )aintenance - re1air!
6. 'erfor)ance record of e2"i1)ent
7. '"t "1 in 1ro1er for) - to t0e 1ro1er a"t0ority
DIS'OSAL
3. &irc"late to ot0er "nit!, /0ere it i! needed
4. Ret"rn to t0e #endor, if /illin* to acce1t
5. Sell to a*encie!, !cra1 dealer!, etc
6. A"ction
7. Local de!tr"ction
&ON&L8SION
Material )ana*e)ent i! an i)1ortant )ana*e)ent tool /0ic0 /ill ,e
#ery "!ef"l in *ettin* t0e ri*0t 2"ality - ri*0t 2"antity of !"11lie! at
ri*0t ti)e, 0a#in* *ood in#entory control - ado1tin* !o"nd )et0od!
of conde)nation - di!1o!al /ill i)1ro#e t0e efficiency of t0e
or*ani+ation - al!o )a9e t0e /or9in* at)o!10ere 0ealt0y any ty1e
of or*ani+ation, /0et0er it i! 'ri#ate, Go#ern)ent ,S)all
or*ani+ation, Bi* or*ani+ation and (o"!e0old.
E#en a co))on )an )"!t 9no/ t0e ,a!ic! of )aterial )ana*e)ent
!o t0at 0e can *et t0e ,e!t of t0e a#aila,le re!o"rce! and )a9e it a
0a,it to ado1t t0e 1rinci1le! of )aterial )ana*e)ent in all o"r daily
acti#itie!
$c*no(ledgement
National institute of +ealth , -amil &elfare .N/+-&0 Ne( Delhi1