Material Management System
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making sure that services go successfully from one source to an end user—includes several areas of the hospital and could drastically affect medical institution expenses.
MATERIALS MANAGEMENT SYSTEM
Executing this function in a manner that
• lessens expenses and • ensures adequate cash flow
• could be used as a first step in the process of purchasing. This is used internally to identify a need for an item. • generally is a document which is made by a user to notify the purchasing department regarding needed items and services.
purchase request
PURCHASE REQUEST This document specifies
a. quantities, as well as a b. timeframe for the items requested. c. authorization information needed to proceed with the purchase.
• plays an important part in refining the quality of healthcare services, since the lives of the people are on the line, as well as because medical costs are increasing. • is one of the biggest expenses for most medical institutions.
Inventory Control
can be wildly inaccurate. It is difficult to predict disease and accident patterns, and patients are notoriously reluctant to switch doctors, hospitals and health insurance. Tracking inventory in comparison to actual sales is essential. This prevents waste, frees up cash that would have gone to excess inventory and helps medical companies identify trends they might not have seen before.
Alignment With Sales Projections
A company that routinely fails to serve the best interests of patients can quickly find itself being investigated, sued or simply shunned by health-care consumers. Tracking inventory can be extremely important in maintaining the responsiveness of a medical company. This applies not only to front-line health providers but also to the suppliers of those providers. Knowing what inventory is on hand and what items are needed can keep a medical company responsive and prevent closer scrutiny by regulators.
Compliance With Regulations
Inventory control helps medical companies understand buying cycles. Instead of responding to needs for supplies and equipment, inventory personnel can anticipate needs based on previous cycles. Smoothing ordering out to fit predictable cycles can eliminate shortages and overages. Buying cycles can also be tracked to determine whether trends are shifting and need to be adjusted.
Establishing Buying Cycles
the “Inventory Item Maintenance” screen has many sections. The upper portion contains master information. Additional options appear after the selection of an existing item.
Material Management Systems
is used for maintenance of the attributes of an inventory item, such as product type, item class, item type, etc. If the balance and order activity is zero (0), items can be deleted using this option
“Item Tab”
form specifies inventory levels across all warehouses.
“Item Availability”
In some cases, there are instances where items are damaged either upon receiving from the supplier or during the move from the source to another location. Some suppliers allow returns of the said goods that have indents or the like, with a guarantee of replacement without any additional payments.
ITEM INDENTS AND ISSUES
is the minimum quantity of an item that a company has in stock, so when the stock reached the minimum quantity stated, the item must then be re-ordered
Re-order level
• are the start point of a sale or purchase process. • lead to getting information from a vendor / supplier for the requirement at hand. • lead to establishing a connection with the right vendor / supplier in order to get a quotation, place the order and receive the requirements.
Enquiries
• consist of various pieces of vital information of a requirement towards a sale /purchase. • state important information such as price, delivery times, delivery details, payment terms, taxation etc. • being accepted an order is placed for the requirements.
Quotations
is a stated intention, either spoken or written, to engage in a commercial transaction for specific products or services. From a buyer’s point of view it expresses the intention to buy and is called a purchase order. From a seller’s point of view it expresses the intention to sell and is referred to as a sales order. When the purchase order of the buyer and the sales order of the seller agree, the orders become a contract between the buyer and seller.
Orders
• is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. • indicates the sale transaction only.
Invoices
is a document for requesting prices and delivery information from a vendor before the purchase order.
Purchase Quotations
• the information tracked enables one to choose the right vendor for the purchase. • helps in lessening expenses, improving the quality and increasing on-time delivery. • allows one to compare offers in order to pick the appropriate vendor for the purchase scenario. Afterwards, one can create the purchase order from the selected quotation.
Purchase Quotations
Companies typically maintain a list of ?, from which inventory items are usually purchased.
Preferred Vendors
Preferred Vendors
-On-time performance -Reasonable costs -High quality of products and services -Fully licensed, bonded, and insured -Good Business practices
on the other hand, is a document which records a business transaction between the buyer and the seller. A buyer issues his order, and upon seller acceptance of the order, a legally binding contract is created between the parties (SAP, 2012).
Purchase Orders
A simple Purchase Order will identify the following basic elements:
• Buyer: name, address, and contact info of party giving money for goods • Seller: name, address, and contact info of party receiving money for goods • Order Number: a unique ID number to track each business transaction • Item Description: details, quantity of goods, cost per unit, and total price of goods • Shipping Address: where the goods will be shipped • Shipping Date: when the goods will be delivered to the final location • Billing Address: location of where the invoice should be sent so the Buyer can pay • Signature: signature of Buyer offering to buy and signature of Seller accepting • Order Date: when the business transaction occurred
The person who creates the document, either a purchase request or order, is the originator. Upon adding documents to the material management system, the system checks for any approval requirements. If the document fails to meet the requisites for an approval, the originator is notified that the document needs approval. The document is temporarily saved as a draft.
Approval Process