material management Flashcards
Material Management
Purchasing
Stockroom
– oversees the ordering of supplies and
the processing of invoices from vendors
Purchasing
maintains security and inventory levels
and issues supplies throughout the facility
Stockroom
Clinical laboratories as a business require raw
materials for successful operation. Whereas,
equipment idled by breakdowns or lack of supplies is
an economic loss for business, the same situation in
the clinical laboratory can seriously interfere with the
delivery of patient care
Purchasing
GOALS OF MATERIAL MANAGEMENT:
➔ Supplies arrive in a timely manner
➔ Spoilage is reduced to a minimum
➔ Back orders and delays are avoided
➔ Storage space is used to the best advantage
➔ The most economically advantageous price is
obtained
➔ Financial resources are not tied up in inventory
SEQUENCE OF PURCHASING:
- Product Specification
- Orders
- Receive
- Inventory
- Record
In order to determine the best products for laboratory
use, time must be spent on product research
leading to the development of product specifications.
Product Research and Specification
is a document authorizing the purchase of a
product or service from a vendor
● purchase order could be classified as release orders
or standing orders:
Purchase Order
an annual contract in
which the company agrees to deliver goods
at a predetermined price and on an
established schedule.
Standing order
goods should be unpacked and inspected as soon
as possible to ensure that everything is delivered or
that some acknowledgement of back ordered items
is made. Damaged or defective goods should be
identified early in order to assure replacement
credit.
Receiving and Accounts Payable
3 methods to track inventory levels namely:
Perpetual system
Periodic system
Random checks
are used to document the value
of supplies at a specific time. This snapshot
verification procedure is a key part of financial
accounting and is especially useful in confirming the
accuracy of perpetual systems, which can easily
become distorted if not meticulously maintained.
Random checks
keep account of the inventory
each time a product is used
. Perpetual system
is more common at the bench
department level. Once a week or at another
specified time the stock level is counted, and
appropriate supplies are ordered.
Periodic system
is that point at which on hand supplies
are sufficient to carry the laboratory through until
goods on order are received
The low level
is that level which will meet the
laboratories requirement for a longer period of time,
such as several months to a year
the upper limit
The Primary Factors Determining the said limits are:
● Anticipated delivery time for each item.
● Available storage space
● The shelf life of item
● The anticipated rate of usage
- One method for determining
when and how much to reorder is to establish a set
point at which inventory is to be recorded and a
reorder to level to be maintained
Minimum-Maximum
- a major technique developed by
manufacturers to take advantage of inventory
management opportunities is a Japanese model
called just in time ordering.
. Just in time
which answers the question of how much to
order at one time
EOQ - economic order quantity
also referred to as the reorder point which
provides the base or safety level for reordering
inventory
EOP - economic order period system
which helps establish the best times to order
to take advantage of the EQP and EOP
ROT - retention of title
– determining the level of inventory
needed is based on the workload of the laboratory
. Annual usage
this information can be
obtained by dividing the amount of supplies ordered
in a year by 365 days.
Average daily usage
– the cost of running a centralized
purchasing department is directly tied to the number
of purchase orders placed, and the associated work
involved with keeping track of invoices as products
are shipped and received. This figure is obtained by
dividing the expenses of the purchasing section by
the number of purchase orders issued.
. Cost of ordering
this involves decisions
based on bulk orders, space utilization, and whether
it is better to have the product on hand or in the
supplier’s warehouse. When the vendor is holding
the stock, the institution’s money is available for the
purposes
Annual holding cost
– cost per unit is a straightforward
calculation once the decision has been made as to
be the best price available. Factors such as quantity
discounts and container size affect this decision.
Dividing the purchase price by the container size
provides this value
Cost per unit
the amount of lead time, or advantage
notice, needed between placing an order and its
arrival is an especially important consideration. It
influences the minimum inventor that must be kept in
stock, as well as the quantity that needs to be
requested.
Lead time
