HOSPITAL STORES MANAGEMENT

Store Types
General Store

Pharmacy Store

Main Store

Sub Stores

General Store:
Mission The mission of the General Store Department is the acquisition of the right goods, in the right quantity, at the right place, from the right supplier, at the right cost, with a minimum inventory and operating investment, in order to service the needs of the Medical Center.

Core Tasks:
Stores purchase Inventory Control Material Management

Terms Clarity:
PURCHASE: An act of obtaining an article by making payments in terms of money or its equivalent, to buy for a price. INVENTORY: is itemized list of goods with their estimated worth, specifically annual account of stock taken in any business. CONTROL: An act of exercise, directing, guiding or retaining power over.

PURCHASE: After forecasting demand and after verifying budgetary allocation, purchase is initiated.
The basic steps are as follows: 1) Preparing detailed specifications 2) Inviting offers by (a) quotations (b) tenders (c) direct enquiry 3) Preparation of tabulated comparative statement of the offers received. 4) Testing of samples/taking demonstration 5) Placing purchase order.

INVENTORY:refers to the physical stocks of items which are kept idle in the store, but are essential for smooth functioning of the hospital.

1. 2.
3. 4.

5.

Importance & Need: To facilitate uninterrupted supply To guard against the risk of unpredictable changes in demands To take advantage of price fluctuations To exercise effective control over a) procurement b) holding c) distribution Effective inventory management seeks to determine optimal level of stores items.

Techniques for Inventory control:

ABC analysis: (Always Better Control) - About 10% of the items take away the budget allocation to the extent of 70% of the total allocation. These are grouped as A category items. - About 20% of items consume 20% of the budget. These are grouped as B category items. - About 70% of the inventory which will amount to only 10% of the total expenditure. These items are grouped as C category items.

Cont.
ABC ANALYSIS
ITEMS QUANTITY % CONS. OF BUDGET ALLOCATION

A B C

10% 20% 70%

70% 20% 10%

Limitations of A-B-C Analysis:

a)The A-B-C Analysis, in order to be

fully effective, should be carried out with standardisation and codification. b)It indicates nothing regarding profitability or criticality. c)The A-B-C analysis should be reviewed periodically so that changes in prices and consumption are taken into account.

VED Analysis: (Vital, Essential & Desirable)

- Vital: Items without which treatment comes to standstill i.e. non availability cant be tolerated. - Essentials: Items whose non availability can be tolerated for 2-3 days, as similar or alternative items are available.

- Desirable: Items whose non availability can be tolerated for a longer period.

Cont
VED ANALYSIS
Item Percentage

Vital Essential Desirable

10% 40% 50%

Importance:
As V-E-D analysis is based on the

criticality of the item, at times it can be used in the case of some materials which are difficult to obtain. It gives some indication about the items that should be disposed off so as to trim the inventories. This analysis is very relevant for drugs, instruments and equipments needed in operation theatre and critical care units.

Economic Order Quantity: (EOQ)

According to EOQ approach optimum level of investment in inventory is one where total cost of ordering cost and investment carrying cost will be minimum. EOQ = 2 AO PI A = Annual requirements in units O = Ordering Cost P = Price per unit I = Inventory carrying cost

Economic order quantity

ECONOMIC ORDER OF QUANTITY(EOQ)

PURCHASING COST

CARRYING COST

Cont.....
Ordering

Cost: The cost to get the items on inventory is ordering cost. This includes cost of staff, communications, stationary and travel. Inventory carrying cost: This includes cost of staff, space, storage facilities, security, insurance and wastage.

Balancing Carrying against Ordering Costs

Annual Cost ($)
Higher Minimum Total Annual Stocking Costs Total Annual Stocking Costs Annual Carrying Costs Annual Ordering Costs Smaller EOQ Larger Order Quantity

Lower

Material Management:
Materials management for, General medical supplies Housekeeping and sanitary supplies Stationary and printing forms Operating room supplies Plant engineering, mechanical equipment

Materials management has 4 main components:

1) Obtaining or acquiring 2) Storage 3) Distribution 4) Exercising control

Acquisition of materials can be done by following methods:

a. At departmental or sectional level i.e. decentralized At Hospital level centralized purchase By a group or chain of hospitals: Having same management control e.g.. Municipal or government hospital b. Chain of corporate hospitals having common governing body e.g. Apollo hospitals, Wockhardt hospital etc. c. Three or four hospitals situated in the same city making joint, common purchase.

Personnel:
Materials Manager or over all

in-charge Store Keeper Store assistants Helpers Security personnel