MATERIAL MANAGEMENT

To spend money is easy To spend it well is hard -Wesley C Michel

INTRODUCTION: Material management is an important and integral component of resource management; and resource management covering both human and materials management, is an essential aspect of the organizing function of management. It may be recalled that the organizing function is concerned with co-coordinating and synchronizing the 5 Ms-viz men, money, materials, machine and moral. CONCEPT Material management is a scientific technique, concerned with Planning, Organizing and Control of flow of materials, from their initial purchase to destination. It is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution. The material management in the health care system is concerned with providing the drugs, supplies and equipment needed by health personnel to deliver health services.. About 40 percent of the funds in the health care system are used up for providing materials. It is of great importance that materials of right quality are supplied to the consumers. Material Management is concerned with providing the drugs, supplies and equipment needed by health personnel to deliver health services. The right drugs, supplies and equipment must be at the right place, at the right time, and in the right quantity in order that health personnel deliver health services. Without proper material health personnel cannot work effectively, they feel frustrated and the community lacks confidence in the health services and unless appropriate materials are provided in proper time and are required quantity, productivity of personnel will not be up to expectation. Material management integrates all materials functions

Planning for materials Demand estimation Purchasing Inventory management Inbound traffic Warehousing and stores Incoming quality control

Definition: Materials Management is defined as an organizational concept in which a single manager has authority and responsibility; principally concerned with the flow of materials into an organization (purchasing, production, planning and scheduling,

incoming traffic, inventory control, receiving and stores normally are included). National Association of Purchasing Management (USA) Material Management is defined as planning, organizing and controlling aspects involved in ensuring availability of necessary materials, supplies, drugs and equipment as and when required. (S.L Goel) Material management is defined as the planning, directing, controlling and coordination of all activities with material and inventory requirement from the point of their inspection to their introduction into the manufacturing process. (L. J. DeRose).

Material management is the functional responsibility for the coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner so as to provide a pre-decided services to the customer at a minimumMaterials can essentially be categorized under three heads, viz., vital essential and desirable. These three categories must determine how much quantity of each item should be in stock for a' storekeeper. Goals of materials management Materials management function must achieve a number of basic objectives. The aim is to develop a system that will ensure right quality of stocks at all times, properly stored, easily retrievable, and available whenever required to meet the ultimate goal of good patient care in an effective, efficient and economical manner. The goals include the following: Optimum materials acquisition: the purchase of materials must be governed by the most effective purchase, storage, handling and usage practices, Optimum inventory turnover; inventories of all items must be maintained at the optimum level. Good vendor relationship: the organizations relationship with its suppliers has a direct bearing on its ability to procure materials on the best possible terms. Materials cost control: materials purchase process must be economical. There must be a continuous cost reduction programme. Effective issue and distribution: the system of issues and distribution must cater to economical holdings at the point of usage with no possibility of accumulation of large quantities of stock. Elimination of losses and pilferage: wastage and pilferage should be controlled by a system of internal audit. To summarize, the materials management function caters to planning for materials, its demand, estimates, procurement, stocking, and issue to ensure availability of right material, in Right quantities, at right time, at right price, from right sources, at least cost. PURPOSE The purposes of material management are to: Provide specified materials, drugs and supplies in required quantity and quality as and when required. Cut down material costs through standardization Develop knowledge and skills of health care

 Increase efficiency of health care systems. OBJECTIVES There are eight primary and seven secondary objectives which can ensure the performance and use of materials in an organization. Many of these objects conflict with each other. Balancing of these various conflicting objectives is one of the main before the materials manager. Materials' management should ensure the fulfillment of the following objectives: To develop a system of supplies whereby there will be right quantity of stock of items properly stored, easily retrievable and distributed close to the points of usage, whenever required, at a given time. In case, there is not enough stock, the work in the organization may have to be stopped and the men and mechanized will remain idle. On the other hand, if there is over-stocking of raw materials, it will unnecessarily block capital in inventories. The reduction in inventory costs both carrying costs and ordering costs. To ensure that the resources available are used most effectively and the stores are purchased at most economical price consistent with the quality. To bring about co-ordination among the various sections in the organization, i.e., in a company to bring co-ordination among the financial manager, production manager and marketing manager. To ensure that the sale of finished goods is not affected. To avoid wide fluctuations in production. To be alive to the charges in the market in respect of new products. OBJECTIVE OF MATERIAL MANAGEMENT

Primary Right price High turnover Low procurement and storage cost Continuity of supply Consistency in quality Good supplier relations Development of personnel Good information system

Secondary Forecasting Inter-departmental harmony Product improvement Standardization Make or buy decision New materials and products Favourable reciprocal relationships

Procedures and Rules for Materials Management Procurement of materials is governed by certain procedures and rules prescribed by the government for materials management. These rules cover such activities: Estimation and budgeting for materials, Indent for materials, Placing indent with government stores as or local firms (RC), Receiving and verification of materials (quantity, quality, breakage, damage, expiry date, spoiled etc.), Transportation of materials, Taking into stock and storage of materials, Issuing materials. The methods of storage of materials All the poisonous drugs should be kept separately in compartments under the custody of Medical officer or supervisor concerned, All the general drugs, instrumental equipments, kept separately in the compartment under the custody of store keeper/pharmacist, All the insecticide and disinfectants kept separately under the custody of pharmacist, All vaccines should be kept stored in refrigerator with proper temperatures, All linen should be stored in compartment under the custody of store keeper. And insist a physical verification to be done at the end of every calendar year/financial year. If any articles are found unserviceable, a list has to be prepared, and the articles condemned by the competent authority. TEN GOLDEN RULES OF MATERIALS MANAGEMENT There are certain rules that every materials manager should know and practice: Rule One: Successful materials management is built upon an effective management system and good supervision. It follows then that if there isn't an effective management system, there isn't good materials management either. Rule Two: Purchase order is often called the umbilical cord of the purchasing process. For internal control and a smooth flow of goods, the receiving store, the accounts and the requesting department should receive copies of the purchase order. The original goes to the vendor and a copy of it to the purchasing file. The procedure and documents should be simple. Initiation of every purchase order costs money. It should, therefore, be cost effective. Consider this: If the cost of initiating a purchase order is Rs 50 or 75, and the cost of the ordered commodities is Rs 100, it doesn't make business sense to continue this way. Rule Three: Centralize the purchasing system. Decentralized purchasing is contrary to all the underlying principles of good materials management. Centralized purchasing eliminates uncontrolled purchases by departments, secures a reduction in prices through improved purchasing methods and quantity buying and shipping, results in improved allocation of space, and reduces inventory costs and staff. It saves staff time.

Rule Four: Negotiation is the key to sound purchasing. Every purchase officer should learn the art of hard-nosed but ethical negotiation. Here are some tips for good and successful negotiation: Never purchase at list price. Negotiate for a bulk price for the quantity the hospital would need for the whole year, and then get the price for any quantity you want to purchase. Regardless of how much you buy always asks for a discount. Always get a price protection on the agreed price. Start negotiating price protection for two years. Even if you end up with a short period, it is worthwhile. Try to get at least a month's time to pay the invoice. Always keep in mind that there are tougher negotiators than you. They may be getting a better price than you do. Remember, it is the quality and determination of the negotiator which always get a good price in buying and not the reputation and size of the hospital. Rule Five: There should be an effective receiving system with responsibility, accountability and internal control built into the system. The fundamental rule is that the three functions of purchasing, receiving and paying of invoices should be handled by three different persons. So also the receiving person should be different from the issuing person. Receiving is one of the most important functions of materials management which should be carried out professionally and ethically. Rule Six: Establish an optimum level of inventory and a simple but effective inventory control programme. The inventory should not be so large that you can replenish it only with the aid of a computer. Remember the dictum: The secret to managing an inventory is to control it, not count it. Rule Seven: Establish effective and result-oriented requisition and distribution systems. The goal of the distribution system is the right item to the right place at the right time in the right quantity and at the least total cost. Rule Eight: Establish written policies and procedures. Internal control in materials management starts with them. Rule Nine: If you want to buy the right supply in the right quantity at the right place and time, and simultaneously effect cost containment, standardization and evaluation of all products and services is a good place to start with. Rule Ten: Wherever possible, go for contract purchasing through prime vendors. That is, buy the entire categories of supplies from a single source on negotiated terms of quantity, quality, price and time. By being innovative in their purchasing approaches, hospitals can create a buyer's market instead of competing with one another in a seller's market. Since contract purchase encompasses all supplies of a certain category, hospitals can get the best deal in a fraction of the time and effort they spend on traditional purchase. A host of items, from medical-surgical to dietary items, can be purchased through prime vendors.

Good material nurse managers adopt the following procedures: taking inventory regularly and systematically, requisitioning at indenting according to actual needs receiving and inspecting incoming items, storing and protecting items, issuing items for use, Proper use of items.

Material Planning "Material planning is the scientific way of determining the requirements that goes into meeting production needs within the economic investment policies. (Gopalakrishnan & Sunderasan) It is done at all stages and all levels of management. Material planning is based on certain feedback information and reviews. Aim of material management planning To get:

The Right quality Right quantity of supplies At the Right time At the Right place For the Right cost

Purpose of material management planning

To gain economy in purchasing To satisfy the demand during period of replenishment To carry reserve stock to avoid stock out To stabilize fluctuations in consumption To provide reasonable level of client services

Basic principles of material management Planning Effective management and supervision It depends on managerial functions of:

Planning Organizing Staffing Directing Controlling Reporting Budgeting Sound purchasing methods Skilful and hard poised negotiations Effective purchase system

Should be simple Must not increase other costs Simple inventory control programme

Procurement Most organizations have a detailed set of rules and regulations regarding the procedure for ordering for materials. In the Government systems DGHS play a crucial role in purchasing materials of heavy cost. Objectives of procurement system Acquire needed supplies as inexpensively as possible Obtain high quality supplies Assure prompt and dependable delivery Distribute the procurement workload to avoid period of idleness and overwork Optimize inventory management through scientific procurement procedures Procurement cycle

Review selection Determine needed quantities Reconcile needs and funds Choose procurement method Select suppliers Specify contract terms Monitor order status Receipt and inspection

Methods in Procurement Process and Negotiation Strategies Open tender Public bidding, resulting in low prices Published in newspapers Quotations must be sent in the specific forms that are sold, before the time and date mentioned in the tender form Technical bid Financial bid Restricted or limited tender From limited suppliers (about 10) Lead-time is reduced Better quality Negotiated procurement Buyer approaches selected potential Suppliers and bargain directly Used in long time supply contracts

Direct procurement Purchased from single supplier, at his quoted price Prices may be high Reserved for proprietary materials, or low priced, small quantity and emergency purchases Rate contract Firms are asked to supply stores at specified Rates during the period covered by the Contract. Spot purchase It is done by a committee, which includes an officer from stores, accounts and purchasing departments Risk purchase If supplier fails, the item is purchased from other agencies and the difference in cost is recovered from the first supplier Many Suppliers Strategy Many sources per item Adversarial relationship Short-term Little openness Negotiated, sporadic POs High prices Infrequent, large lots Delivery to receiving dock Few Suppliers Strategy 1 or few sources per item Partnership Long-term, stable On-site audits and visits Exclusive contracts Low prices (large orders) Frequent, small lots Delivery to point of use Points to remember while purchasing Proper specification Invite quotations from reputed firms Comparison of offers based on basic price, freight and insurance, taxes and levies Quantity and payment discounts Payment terms Delivery period, guarantee Vendor reputation (reliability, technical capabilities, Convenience, Availability, after sales service, sales assistance) Short listing for better negotiation terms Seek order acknowledgement

Procurement of equipments Points to be noted before purchase of an equipment: Latest technology Availability of maintenance and repair facility, with minimum down time Post warranty repair at reasonable cost Upgradeability Reputed manufacturer Availability of consumables Low operating costs Installation Proper installation as per guidelines Storage Store must be of adequate space Materials must be stored in an appropriate place in a correct way Group wise and alphabetical arrangement helps in identification and retrieval First-in, first-out principle to be followed Monitor expiry date Follow two bin or double shelf system, to avoid Stock outs Reserve bin should contain stock that will cover lead time and a small safety stock Issue and use Can be centralized or decentralized Inventory control It means stocking adequate number and kind of stores, so that the materials are available whenever required and wherever required. Scientific inventory control results in optimal balance. Functions of inventory control To provide maximum supply service, consistent with maximum efficiency and optimum investment. To provide cushion between forecasted and actual demand for a material

Elements of a Materials Management System

Material planning and management (MP and M) is a system having numerous elements. Proper functioning of each of the elements (sub-systems) coupled with interdependence of all the sub-systems to achieve the primary objectives are the classical characteristics of the MP and M system. The major sub-systems of MP and M system are: a. Demand estimation

b. Procurement c. Receipt and inspection d. Storage e. Issue and use f. Maintenance and repair g. Disposal h. Accounting and information system. Demand Estimation A large variety and number of materials are used in hospitals and other health care institutions. The Advisory Committee for development of surgical instruments, equipment and appliances (1963) identified 3200 items of instruments and equipment being used in a hospital. This is just to illustrate the variety and diversity of stores used for patient care in a hospital situation. There is, therefore, need for variety reduction of the materials; as less the number of materials, less will be the problems of planning and management of the same. Along with variety reduction there is need for laying down proper specification of the materials. In this area, the Indian Standard Institute has been and is playing a very important role by standardizing a large number and variety of instruments and equipments. The ISI has set up a number of technical committees to work out the details of standards of surgical instruments, glassware, anaesthesia equipments, dental machine, artificial limbs, surgical dressing, utensils, and electromedical Instruments, rubber goods, etc. Along with standardization, variety reduction, and proper classification of materials a major area of activity of MP and MS is demand estimation of each category of material. This should always be done keeping in view the trends in consumption pattern over the last 2-3 years, objectives of the organization, changing clientele and changing emphasis on various programmes and activities in the health field. In this field a "sound data base" and use of advance projection techniques are of great use. These techniques are relatively simple and medical administrator should use them frequently to streamline the MP and MS system. Procurement Having drawn up the list of requirements, the next step in MP and MS is the process of procurement of these materials. Most of the states and other organizations have laid down detailed set of rules and regulations regarding the procedure of ordering for materials. The financial authority is also vested in various levels of the administrative hierarchy. The basic spirit behind all these rules, regulations, procedures etc. is to maximize the value of money invested in the purchase of stores. Organizations like Directorate General of Supplies and Disposals (DGSD) play a crucial role in purchase which involve heavy costs. Many states have medical stores depots which are centralized agencies of procurement and stocking of medical stores. There is also a system of fixed contract or running rate contract which is followed in large organization and some State Governments Limited tenders, rate enquiries local spot and emergent purchase form a part of the complex sub-system of procurement. It would neither be appropriate nor feasible to go into the details of these procedures as they are specific to different states/organization. However, the role of DGSD needs special mentioning in the sub-system of procurement of bulk materials.

Normally three types of contractual services are offered by DGSD. These are: a. Fixed quantity contract This type of contract is generally entered into where firms are called upon to offer to supply a definite number of quantity of stores by a specified date. Such contracts, are binding on both the purchasing as well as supplying agency. b. Running contract These are contracts for the supply of an approximate quantity of stores at a specified price during a certain period of time. c. Rate contract these are the most important contracts as far as health institutions are concerned. Under these contracts the firms are asked to supply stores at specific rates during the period covered by the contract. No fixed quantities are mentioned. The purchaser is bound to order from the contractor all stores under the contract, which are required to be purchased. The list of direct demanding officers (DDO) forms integral part of the contract and the supplies are delivered to DDO's in response to orders received from DDO's direct. DGS and D keeps a close watch over the progress of rate contract performance with the help of a high powered committee on drugs which includes amongst others Drug Controller of India, CGHs, ESIS, DG, AFMS, DGHS, Director General of Technical Development, CMO Railway and Medical Supdts. Of large hospitals. The system of purchase through rate Contracts has been commended by medical authorities as this system offers maximum flexibility in ordering specified quantities of materials at periodic intervals. This helps to maintain optimum inventories and minimize the chances of deterioration or obsolescence of the medical stores. The quality of the products is also assured to a large extent as only reported concerns are entered into contract with. Value Analysis The obvious and elementary principle of material use is the right quality of material. This includes questioning and analysis of each specification to see if it could be amended or substituted to maximize the end use of material. This process of analysis of the intrinsic value of the material for achieving the objectives of the organization is termed as value analysis. This is a vital function of a materials manager. The following considerations help to carry out the value analysis. a. Can the material be dispensed with? b. Can it be simplified? c. Will a standard material do? d. Is its value proportionate to its cost? e. Is anything cheaper but equally good available in the market? f. Would not it be better to manufacture it? Receipt and Inspection The stores ordered are received in the store. A reasonable sound policy and methodology of inspection of incoming stores is an essential element of MP and MS. The inspection policy should enunciate the sampling procedure for inspection and this procedure must be followed. The lot thus picked up by a random sampling method be subjected to physical and chemical inspection. Basic facilities for such examination be created in the organization itself depending upon the size of stores turnover, governmental and commercial chemical laboratories should also be made use of for analysis of chemical composition of drugs etc.

Investments made in sound sampling policy and procedure will go a long way in assuring the right quality of materials supplied to the organization. Storage The medical stores should be situated near the other stores of the hospital. It should be easily accessable to suppliers as well as indentors. Location of the store will, therefore, be guided by the flow activity of the stores. The store should be of adequate size to accommodate all the drugs, instruments, appliances etc. required for use in form of steel racks with shelves. Refrigeration should be provided for storage of thermolabile items. A graded temperature zone concept is essential in medical stores. Separation of stores of various types, i.e. injections, tablets, local use agents from others, poisons from non-poisonous, inflammable from non-inflammable etc. dictates the layout of the stores. Drugs and medicines should be grouped according to the pharmacological actions and in accordance with the classification adopted in the formulary. Alphabetical arrangement group-wise enables easy identification and retrieval. Items received later from the suppliers should be stored behind similar items and the principle of First in First out (FIFO) should be adopted. Inventory Control Inventory control mean stocking adequate number and kind of stores so that the materials are available whenever required and wherever required. This has to be done at an optimum outlay of financial and human resources. High inventory level leads to high cost of inventories by: a. Locking the finance b. Large storage space c. Large handling and administration charges d. Obsolescence e. Spoilage etc. On the contrary, low inventories may lead to frequent stock outs and high shortage cost. Balancing the cost of carrying high inventories and the cost of shortages is done through a system of scientific inventory control.

ABC ANALYSIS IN MATERIAL MANAGEMENT

ABC analysis is the analysis of the store items cost criteria. It is a simple approach, which avoids being penny wise and pound foolish. Of the various techniques, ABC classification is the most important technique. The cost of each item is multiplied by the number used in a given period and then these items are tabulated in descending numerical value order. It will be seen that first 10% of items approximately account for 70%, the next 20% for 20% of value and the last 70% account for 10% of value. It has been seen that a large number of items consume only a small percentage of resources and vice- versa. A Items represent the high cost centre, B items represent the immediate cost centres, and C- items represent low cost centres. A very close control is

exercised over A items while less stringent control is adequate for those in the category B, and less attention for category C. By concentrating on controlling A- items, and to a lesser degree on B items, it will be possible to control the inventory quiet effectively both in the way of cost control and lessening the risk of stock out. Since A items are of the highest value and are required in large numbers they could be purchased more frequently and the others, B & C items less frequently. In so far as inventory control is concerned the following guidelines will help in keeping the system optimum (i.e. Healthy balance between financial constraints and purchase of required quantity of materials) A- Items: 1. 2. 3. 4. 5. Tight controls Rigid estimates of requirements Strict and close watch ( monitoring) Safety stocks should be low Management of items should be done at top management level.

B- Items 1. 2. 3. 4. 5. Moderate control Purchase based on rigid requirements Reasonably strict watch and control Safety stocks moderate Management be done at middle level

C- Items 1. 2. 3. 4. 5. Ordinary control measure Purchase based on usage estimates Controls exercises by store keeper. Safety stocks high Management is done at lower levels.

Rate of consumption: Close study of each item from the point of view of movement of store or consumption rate is a strong tool for proper inventory control. The items can be classified into: 1. 2. 3. 4. Fast moving Slow moving Non- moving Obsolete

An understanding of the movement of items helps to keep proper levels of inventories by deciding a rational policy or reordering. This method is based on the fact that some stock items have a much higher annual usage value than others. This after doing a cost analysis, stock items are separated into three classes with the following characteristics.

Class A B C

Number of items 10% of total items 20% of total items 70% of total items

Rupee value in items 70% 20% 10%

Steps in computing A-B-C analysis: procedure of A-B-C analysis

First we are trying to prepare a list of items and calculate their annual usage in rupees. This can be obtained by multiplying the quantity (number of units) of the item consumed in one year by its unit price. Arranging all these items in the descending order of their individual dosage in rupees. That means the first item in the list will now show the maximum annual usage in rupees, the second item the second maximum, the third item the third maximum and so on. After having done this the total of annual usage in rupees is put at the bottom of the list. Those items which together form about 70% of the total annual usage may be total annual usage may be categorized as A items. Similarly. Items which contribute the next 20 to 25 % of the aggregate are listed as B items. The rest which contributes 5 to 10% of the total percentage of annual usage are called C items. Placing of the orders on the basis of this classification.

Example: The Company has 10 items mentioned in the table. Table: 1 A-B-C analysis usage in rupees Items Annual Unit cost in usage units rupees Annual usage Rs: (2)(3) 4 5000 6000 1000 150 10000 400 24000 700 Ranking

1 101 102 103 104 105 106 107 108

2 20,000 30,000 10,000 500 50,000 8000 60,000 700

3 0.25 0.20 0.10 0.30 0.20 .05 0.40 1.00

5 4 3 6 9 2 8 1 7

109 110 Total

9000 50

0.50 2.00

4500 100 Rs: 51,850

5 10

Table: 1 shows a representative ABC analysis where 10 items have been studied and annual usage extended by unit cost to get annual usage in rupees. Table: 2 A-B-C ranking Ranking Item Annual Cumulative Cumulative Category usage annual percentage Rs. usage Rs. 1 107 24000 24000 46.28 A 2 3 4 5 6 7 8 9 10 105 10000 102 6000 101 5000 109 4500 103 1000 108 106 104 110 700 400 150 100 34000 40000 45000 49500 50500 51200 51600 51750 51850 65.57 77.14 86.78 95.47 97.39 98.14 99.51 99.81 100.00 A B B C C C C C C

Table 2 shows the ranking and assignment of A, B and C categories of items. Table 3: Summary of A-B-C analysis: Class A B C Item 107,105 102,101 109,103,104 106,108,110 % of items 20 20 60 Rs: (per Cumulative group) percentage of Rs. 34000 65.57 11000 6850 21.21 13.22

Table 3 shows a summary ABC analysis showing that 20% of the items represent 65.57 % of annual usage 20 percent of the item represent 21.21% of annual usage and 60% of the items represent only 13.22 % of annual usage. A items are ordered more frequently and I small quantities (i.e. few weeks requirements) while C items are ordered just once or twice a year to obtain the entire years requirement. Nurses' Role in Material Management A ward is often referred to as a Nursing unit. This implies that a ward is actually under the control of the Nurse Incharge for its maintenance and for running its day- to- day patient care activities. Material management consequently is an onus that lies on the Nurse in charge as well on all members of the Nursing team. The Nursing responsibilities in relation to material management are listed below: Ensure regular and adequate flow of supply of necessary equipment, supplies, drugs and solutions. Monitor and sustaining the quality and safety of the materials used including drugs and solutions. Issue of items on the basis of "First in First out and regular checking of expiry dates of drugs contribute, towards safety, Indenting, receiving, storing, checking and timely replenishing of all necessary equipment, supplies, drugs and solutions. Maintain emergency and buffer stocks Arrange for preventive maintenance wherever necessary Maintain inventory and stock of all items and supplies Arrange for condemnation of articles in accordance with the laid down policies of the organisation and maintaining of a dead stock register. Arrange and assisting in audit of materials Participate in policy making for material management. Participate in tender/procurement sub-committees. Orient Nursing personnel on material management policies from time to time. Evaluate the efficacy of the material management system followed in particular Nursing unit. Principles of administration applicable in material management are: Discipline - Involves observance of norms, rules regulations and established procedures. Unity of command - Refers to having one superior to give commands. Unity of Direction - Refers to having single superior requirements of specific departments. Nurses involved in material management are required to abide by these principles.

Importance In Nursing The importance of material management in nursing cannot be over emphasized. for any nursing technique or procedure from very simple to complex and invasive

nursing procedures, materials are required; be it administration of an oral medication an intra-muscular injection or performance of a dressing, materials are essential. it can be seen that no nursing procedure can be undertaken without appropriate and adequate materials-whether these are performed in institutional or community settings. Conclusion Material management is an important management tool which will be very useful in getting the right quality and right quantity of supplies at right time, having good inventory control and adopting sound methods of condemnation and disposal will improve the efficiency of the organization and also make the working atmosphere healthy any type of organization, whether it is Private, Government, Small organization, Big organization and Household. Even a common man must know the basics of material management so that he can get the best of the available resources and make it a habit to adopt the principles of material management in all our daily activities References: 1. Basavanthappa B T. Nursing administration. ( Ist edn). New Delhi: Jaypee brothers medical publishers (p) ltd; 2000. 2. Gopalakrishnan & Sunderasan: Material Management, Prentice Hall of India Pvt Ltd. New Delhi, 1979. 3. Kulkarni G R. Managerial accounting for hospitals. Mumbai: Ridhiraj enterprise; 2003. 4. Kumar R& Goel SL. Hospital administration and management. Vol 1 (first edn).New Delhi: Deep & deep publications; 5. Gupta S& Kanth S. Hospital stores management, an integrated approach. (First edn). New Delhi: Jaypee brothers; 2004.