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  • Material Management
    By: HAITHAM M. ABU HASH

    Budgeting and cost management in any healthcare institution always considered as a nightmare; the noisiest and most tiring part in budgeting is always material planning and consumption forecast either for a single department or for the entire facility. The old method or principle in supplying healthcare facilities as we know was evaluating one month consumption and at the end multiply it with 12 to cover the whole year of supplies and consumables; having said that we end up with a bulk of goods corded on the shelves waiting the proper time to be utilized. This method is only focuses on keeping the service running regardless of the waste resulted out of this procedure; this waste comes up due to many reasons and in many shapes: 1.Purchasing huge amounts of goods without planning ends up with expired and very short expiry dates materials. 2.Purchasing goods based on one moth consumption always ending with either shortage of stuff or corded goods on the shelves, because monthly activity varies from month to month. 3.Dedicating a sum of money on a shape of goods or materials which might be used and might not according to the activity of service and because it is not preplanned or calculated before. 4.Due to unplanned situations, materials might be purchased on urgent basis in case if shortage or ZERO stock, in such situations the prices always jumping up because of the top urgent demand, which is one of the trading roles.

    5.On the other hand when the expiry fears floats in minds the return stock policy will be used badly by the vendors and will take this opportunity to take the stock back a very low price or at least will be ex-changed in a very minimum amount of new expiry dates materials. So due to the above mentioned challenges, a new thinking direction came up with the research and studies concluded with MATERIAL MANAGEMENT & MATERIAL PLANNING specialists who are the key persons and the fine tuners of this process.

    Since then the old principle was disproved and replaced by new strategies in material planning and management. In markets language all principles innovated by the researchers and the planners came with a full benefits to the end users, because the same advantages given to the vendor or supplier out of these principles were given to the end user.

    Methods of Material Planning & Management styles: 1.Consignment order:- this means the vendor will supply the facility with the agreed amount of goods without having any deposit of payments in advance, and on weekly basis or every two weeks, a representative from the company comes to check the used quantity and to be replenishes the shelves and at the end of this process the compensation of the consumed quantity will be paid to the vendor accordingly and with no waste of time, efforts, materials and with always keeping the needed medical service running with no any obstacles. 2.Blanket Order: - it is calculating a full year consumption based on the monthly activity and the end user assumption of activity increase percentage, so by this way the order will cover one year but will be delivered into installments during the year, and again what ever been delivered by the vendor will be paid, so the payment will not be for the whole year quantity ordered on the spot or on order. 3.PPMS:- an electronic material management system based on an experts calculations and end users assumptions, this will have some fixed parameters to work on like ( Top up system-weekly, re-order point-up on consumption, expiry indicator-3-6 month before expiry , emergency level – 1 month running service and crises level – 2 weeks running service).

    By going through the previous concepts or principles we can choose efficiently the proper one for any institution. -For example private sector healthcare institutions prefer the first two methods, because it keeps the cash flow above the negative trend line. -Public healthcare institutions prefer the third one always due to the work load and to have many phases before they end up with a ZERO stock for any reason. My opinion all principles should be used in all healthcare facilities in order to stop materials waste and in order to deal with each unit and department in the hospital or the healthcare institutions according to their needs and consumption. This is the only way how we can turnaround the amount and quantity of waste we do face every single minute in our professional life and to be able to use this amount of fund in any other aspect in our units either expansion, overtime payments, getting locums when needed or replacing our broken or faulty equipment without getting any kind of burden on the institution's budget.

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