Materials_Management

Material management is a common term, also an umbrella term, for a collaboration of departments within a health care organization (usually hospitals) that deals with “acquiring, storing, distributing, and replenishing materials and supplies” (citations pg 241). It may also include “central stores and warehousing, revenue charge capture for supplies and equipment, sterile processing, laundry and linen operations, mail and courier services, and patient transportation” (citations pg 241). The head of the material management is the Chief Financial Officer, who supervises Accounting, Budget and Planning, and Director of Material Management. The Director of Material Management supervises the actions of Associate Directors of Support Services, Logistical Operations, Purchasing, and Finance and Systems. By setting up a strong material management team, the hospitals can significantly reduce its total expenditures by direct control of the movement of healthcare-associated goods in an efficient manner by implementing logistics management. Logistics management is “that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements” (CSCMP 2006; pg 242). Material management coordinates “the flow of goods from the manufactures, through distributors, through hospitals receiving docks, to the point of ultimate use or consumption” (citation pg242). A centralized coordination of the chain allows the clinical department to focus on patient welfare instead of performing non-clinical tasks. Per the size of this hospital, only a handful of people are needed to set up an effective material management, when compared to a larger hospital. The material management should have all-rounded skills in “customer service, logistics, human resources, finance, and business analysis”, for a successful a result. Material management can reduce the total cost and increase financial values by joining a group purchasing organization (GPO). A GPO is a collaboration of multiple healthcare organizations for a sole purpose of increasing bargaining power with the vendors. By creating GPOs, the vendors are likely to reduce their prices to lock their contracts with the hospitals. GPOs can reduce supply cost by “1% to 15%” (pg.262).