PRESENTED BY:-

Dr. SARITA THAKUR

(Lecturer)
 MATERIAL
MANAGEMENT &
procurement
Introduction
Material management is a scientific technique, concerned
with planning, organizing and controlling the flow of
materials from their initial purchase through internal
operations to the service point through distribution.
The material management in the health care system is
concerned with providing the drugs, supplies and equipment
needed by health personnel to deliver health services..
CONTI----------------
About 40 percent of the funds in the health care system
are used up for providing materials.
It is of great importance that materials of right quality are
supplied to the consumers
 Objective of material management

Primary Secondary
•Right price
•Forecasting
•High turnover
•Inter-departmental
•Low procurement
•& storage cost harmony
•Product improvement
•Continuity of supply
•Standardization
•Consistency in quality
•Make or buy decision
•Good supplier relations
•New materials & products
•Development of personnel
•Favorable reciprocal
•Good information system
relationships
Basic principles of material
management
1. Effective management & supervision
It depends on managerial functions of
• Planning
• Organizing
• Staffing
• Directing
• Controlling
• Reporting
• Budgeting
Basic principles of material management
2 Sound purchasing methods
3.Skillful & hard poised negotiations
4.Effective purchase system
5.Should be simple
6.Must not increase other costs
7.Simple inventory control programme
Elements of material management
1. Demand estimation
2. Identify the needed items
3. Calculate from the trends in Consumption during
last 2 years.
4. Review with resource constraints
Functional areas of material
management
1. Purchasing
2. Central service supply
3. Central stores
4. The print shops
5. The pharmacy
6. Dietary
& Linen services
 Inventory control

It 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 balance
Functions of inventory control

•To provide maximum supply service,

consistent with maximum efficiency &
optimum investment.

•To provide cushion between forecasted &

actual demand for a material
 ABC ANALYSIS
(ABC = Always Better Control)
This is based on cost criteria.
It helps to exercise selective control when confronted with
large number of items it rationalizes the number of orders,
number of items & reduce the inventory.
About 10 % of materials consume 70 % of resources
About 20 % of materials consume 20 % of resources
About 70 % of materials consume 10 % of resources
 VED ANALYSIS
•Based on critical value & shortage cost of an item
– It is a subjective analysis.
• Items are classified into:
Vital:
• Shortage cannot be tolerated.
Essential:
• Shortage can be tolerated for a short period.
Desirable:
 Shortage will not adversely affect, but may be using
more resources. These must be strictly Scrutinized
V E D ITEM COST

A AV AE AD CATEGORY 1 10 70%

B BV BE BD CATEGORY 2 20 20%

C CV CE CD CATEGORY 3 70 10%

CATEGORY 1 - NEEDS CLOSE MONITORING & CONTROL

CATEGORY 2 - MODERATE CONTROL.
CATEGORY 3 - NO NEED FOR CONTROL
 PROCURMENT OF EQUIPMENT
Points to be noted before purchase of
an equipment:
• Latest technology
• Availability of maintenance & repair facility, with
minimum down time
• Post warranty repair at reasonable cost
• Upgradeability
• Reputed manufacturer
• Availability of consumables
• Low operating costs
•Installation
•Proper installation as per guidelines
 PROCURMENT OF EQUIPMENT
Points to be noted before purchase of
an equipment:
• Latest technology
• Availability of maintenance & repair facility, with
minimum down time
• Post warranty repair at reasonable cost
• Upgradeability
• Reputed manufacturer
• Availability of consumables
• Low operating costs
•Installation
•Proper installation as per guidelines
 HISTORY SHEET OF EQUIPMENT :

History sheet

Name of equipment After sales arrangement

Code number Guarantee period
Date of purchase Warranty period
Name of supplier Life of equipment
Name of manufacturer Down time / up time
Date of installation Cost of maintenance
Place of installation Unserviceable date
Environmental control Date of condemnation
Spare parts inventory Date of replacement
Techn. Manual / circuit
diagrams / literatures
Maintenance sheet:
Annual maintenance contract [AMC]
Starting date
Expiry date
Service / repair description
Materials / spares used
Cost of repairs
In-house
Outside agency
EQUIPMENT MAINTENANCE &
CONDEMNATION

Maintenance & repairs:

Preventive maintenance
Master maintenance plan
Repair of equipment
PREVENTIVE MAINTENANCE

• Purchase with warranty & spares.

• Safeguard the electronic equipments with: (as per guidelines)
• Voltage stabilizer, UPS
• Automatic switch over generator
• Requirement of electricity, water, space, atmospheric
conditions, etc. Must be taken into consideration
• Well equipped maintenance cell must be available
• All equipment must be operated as per instructions with trained
staff
CONT----------
• Monitoring annual maintenance contracts. (AMC)
• Maintenance cell
• Communications between maintenance cell & suppliers of
the equipment.
• Follow-up of maintenance & repair services
• Repair of equipment
• Outside agencies
• In-house facility
CONDEMNATION & DISPOSAL
Criteria for condemnation:
The equipment has become:
1. Non-functional & beyond economical repair
2. Non-functional & obsolete
3. Functional, but obsolete
4. Functional, but hazardous
5. Functional, but no longer required
PROCEDURE FOR CONDEMNATION

1. Verify records.
2. History sheet of equipment
3. Log book of maintenance & repairs
4. Performance record of equipment
5. Put up in proper form & to the proper authority
DISPOSAL

1. Circulate to other units, where it is needed

2. Return to the vendor, if willing to accept
3. Sell to agencies, scrap dealers, etc
4. Auction
5. Local destruction
To declare articles of store or stock surplus or unserviceable

Sr. Nature of Powers Authority Extent of powers

No.
1. To declare articles of stores or AD Full Powers
stock surplus or unserviceable HOD Upto Rs. 20.00lakh
HOO Upto Rs. 1.00lakh
2. To sanction sale of articles of
stores or stock declared
surplus or unserviceable buy
competent authority
i) By Pubic auction or through HOD Full Powers
advertised tender HOO Full Powers

ii) By Private treaty or AD Full Powers

negotiations HOD Upto Rs. 3.00 lakh
HOO Upto Rs. 0.50 lakh
PROFORMA FOR PREPARING LIST OF
UNSERVICEABLE ARTICLES
1. Sr. Number
2. Name of Article
3. Quantity
4. Page number of Stock Register
5. Actual Book Value
6. Reason for writing off
7. Proposed Mode of disposal
8. Anticipated amount of public auction
9. Date of Purchase
10. Funds out of which purchased
11. Remarks, if any
To declare articles of store or stock surplus or
unserviceable
1. Additional Director Rs.1,00,000
2. Joint Controller (F&A) Rs. 90,000
3. Principal, Govt. college SCERT/GCTE./ Skt.Rs. 60,000
Colleges
4. Dy. Directors posted at Districts
Rs. 50,000
5. Principal, GSS Schools
Rs. 35,000
6. HM of HS/Other Heads of Office
i.e Librarian, NCCHQ Rs. 25,000

(Revised vide Director Higher Education letter

No. EDN-(4)3(C)2/2002 dated 30 October, 2008)
Procedure for write-off
 Separate cases be prepared in r/o articles purchased
out of Government Funds and out of Student’s funds.
 The list of the article, required to the written off may
be prepared and should be got counter signed by the
inspecting officer after physically verifying and
inspecting the articles proposed to be written off.
 Actual date of purchase be recorded.
 CONT---------------------------
It should be ensured that the articles of
dead stock which are in use for less than 15
years are not recommended for writing off,
expect in exceptional cases where reasons
for the same are to be furnished in detail.
In case of loss is caused other than normal
wear and tear, the matter has to be
investigated.
 CONT------------------
 In the cases where the losses to the stock and store
are proved to be caused by negligence of Govt.
Employee, the same may be recovered from
her/him/them.
 On such cases of losses of stock and store should
be recommended for writing off where no official(s),
on investigation is/are found guilty of the same.
 CONT----------------
Normally the articles written off from the
stock register should be disposed off
through public auction.
 In case the proposed mode of disposing
them off is one other than that of public
auction, reasons as to why the articles
cannot be put to public auction should be
furnished in detail
 CONT-------------
The amount realised by way of public option should
be credited to the receipt head in a Govt. Treasury in
case the articles were purchased out of the Govt.
Contingencies.
If purchased out of students funds the amount so
released may be deposited in the respective fund’s
account.
The Head of office/institution will verify the store
physically at least once in a year and suggest the
unserviceable articles to be written off, on the
recommendation of the committee.
 CONT----------------
All the inspecting officers, will ensure that
articles recommended to be written-off have
physically been checked by them.
In case any loss or damage is caused to the
Govt. due to the false reports given by the
Inspecting Officer, he will be liable for
disciplinary action and shall be responsible
for the said loss/damage personally.
 CERTIFICATES REQUIRED TO BE FURNISHED ON THE LIST OF
ARTICLES PROPOSED TO BE WRITTEN-OFF BY THE MEMBERS OF
THE COMMITTEE

 The articles proposed for writing-off have been physically checked

by us and found unserviceable and irreparable. Therefore,
recommended to be written off. It is also certified that there is no
negligence on the part of any Govt. employee which may call for
any disciplinary action by a higher authority (to be signed by the
Members of Committee ):
(a) Stock I/C (b) Two Sr. Teachers, (c) Head of the Institution
 (iii) The articles proposed to be written off have been lost
and no Govt. Employee, on investigation was found
responsible for the same. It is further certified that the
above loss does not disclose a defect in the rules or
procedure the amendment of which would require the
order of a higher authority (to be signed by the Head of
Office/ Institution)
(iv) The articles enlisted above have been lost or
rendered unserviceable owing to a natural
calamity.
The copies of the detailed report of the
Investigating Officer on this account are
enclosed in quadruplicate. It is further certified
that the above loss does not disclose any defect
in the rules or procedure the amendment of
which would require order of a higher authority
(to be signed by Head of Office /Institution
only).
Note- Certificates (i) and (ii) In case of articles rendered
unserviceable owing to normal wear and tear
Certificate (iii) In case the articles lost but where no
Govt. employee could be fixed responsible for the said
loss, and
Certificate (iv) for articles lost or rendered unserviceable,
caused due to a natural calamity.
(In case of certificates (iii) and (iv) separate
certificates of the Inspecting Officers are not
necessary as the report of the Investigating Officer
in such cases, will be considered sufficient).
 In the cases where the losses to the stock and store are
proved to be caused by negligence of Govt. Employee,
the same may be recovered from her/him/them.
 On such cases of losses of stock and store should be
recommended for writing off where no official(s), on
investigation is/are found guilty of the same.
Normally the articles written off from the
stock register should be disposed off
through public auction. In case the
proposed mode of disposing them off is one
other than that of public auction, reasons
as to why the articles cannot be put to
public auction should be furnished in detail
CONCLUSION

Material management is an important management tool which

will be very useful in getting the right quality & right quantity
of supplies at right time, having good inventory control &
adopting sound methods of condemnation & disposal will
improve the efficiency of the organization & also make the
working atmosphere healthy any type of organization, whether
it is Private, Government ,Small organization, Big organization
and Household.

Even a common man must know the basics of material

management so that he can get the best of the available
resources and make it a habit to adopt the principles of material
management in all our daily activities