Materials_Management_Proposal

Materials Management Proposal Michael Battaglio OPSHC571 Professor Chris Millen October 25, 2010 In today's healthcare market, organizations need to find ways to keep expenses low and increase their efficiency so they can maximize profits. Collaborative planning processes can greatly aide companies looking to accomplish both these goals simultaneously. Materials managers and operations managers play an important part in ensuring the smoothness of operations within a business. Each player has a part that they must play if the company is to be successful. The role of a materials manager is very important in any business but especially within the healthcare field. Materials management deals with the "administration of all activities concerned with the ordering, storage, and movement of materials. This includes the storage of raw materials and parts and the manning of production operation centers". (AllBusiness.com,  2007) These managers play an important part in ensuring the smooth and continuous operation of business "Operations management deals with the design and management of products, processes, services and supply chains. It considers the acquisition, development, and utilization of resources that firms need to deliver the goods and services their clients want." (MIT Sloan School Of Management, 2010). Operations managers work hand in hand with materials managers to get the job done and keep business operating. Within the hospital there may arise different constraints that threaten to stop or slow down the supply chain. Possible constraints are shortages of equipment, miscommunication and lack of money. Shortages of equipment is a big problem within a healthcare organization as this will mean employees are not able to treat patients and therefore not be able to do their job. Often times shortages are noticed during bigger events such as an outbreak, or a natural disaster where large amounts of employees needing the same thing are seen at the same time. Miscommunication is the largest constrain companies face today. Not ordering the proper items, not ordering the proper quantity, not receiving items on time are all problems that could affect how a business supply chain is going. Communication between vendors, distributors, manufactures and the facility itself is vital to the success of business. When ordering products, a constant flow of communication will ensure not only that the products they order are correct but that the quantity and delivery dates are right. Lack of money can be a constraint in any aspect of business but when it comes to the supply chain it can stop the chain. Lack of funds means there is no ordering of new equipment and facilities may have to just work with the equipment they currently have. Lack of funds will most likely involve just new equipment and not replenishing supplies. Companies cannot work without replenishing supplies but can work with older equipment for a while. Collaborative planning is "vendor managed inventory (VMI) arrangement in which both buyer and supplier share internal information to integrate their plans, forecasts, and delivery schedules to ensure a smooth flow of goods and services as they are needed." (Business Dictionary.com, 2010). Collaborative planning could be a good idea for hospitals to use when wanting to strengthen their supply chain. Collaborative planning allows managers to share information amongst each other and also with distributors, vendors and manufacturers so that each entity shares the same information at the same time. This shared information will allow each entity to view information in real time and use it to better service each other. Collaboration will help keep constant track of inventory and update ordering to ensure smooth operations of the business. Collaboration also saves on miscellaneous expenses for things just as inventory and transportation of goods. Also because information is shared amongst all partners less time will be spent by managers to convey this information, leaving them more time to do other tasks. These are some of the major benefits hospitals need to look at when determining if this is the ideal route to go to increase efficiency and reduce costs. Reduced spending and extra available time for managers to have doing other tasks are the ideal reasons for hospitals to switch over to collaborative planning. Reducing the costs within an organization is a great way to increase profits and within the medical field costs are ever rising and they need to find ways to combat these rising costs. Reduced costs can then be reallocated to different areas of the hospital including acquisition of new assets or remodeling of building to compete with competition. Even after the changeover to collaborative planning process there will still be times that the hospital will be short with supplies. One of the best examples would be during a hurricane, plane accident, fire or other disaster where large amounts of patients may come in at the same time for the same thing. There is no proper way to prepare for these things as there is no telling when they will occur. Hospitals can attempt to combat these events by always keeping extra stock of things that they use most often. Another things they can do would be to find a vendor that is very close in the area, even if their prices are slightly higher that they can use in case of an emergency. Even if prices are slightly higher they will still turn a profit and not have to turn down patients. Also this will require the hospital to find a distributor who can ship the items quickly if needed. Low expenses and high efficiency of employees are vital in today's market especially in the healthcare field if companies want to compete. Experienced operations managers need to work along with materials managers to ensure processes are running smoothly and that proper communication lines are being kept with vendors, manufacturers and distributors. Collaborative planning processes is a way to accomplish all these goals and it would be ideal for hospitals to adopt this way of doing business. Bibliography  AllBusiness.com. (2007). Materials Management Definition | Business dictionaries from AllBusiness.com. Retrieved from http://www.allbusiness.com/glossaries/materials-management/4955096-1.html    BusinessDictionary.com. (2010). collaborative planning, forecasting, and replenishment (CPFR) definition. Retrieved from http://www.businessdictionary.com/definition/collaborative-planning-forecasting-and-replenishment-CPFR.html MIT Sloan School Of Management. (2010). What is Operations Management' - Operations Management. Retrieved from http://mitsloan.mit.edu/omg/om-definition.php