Written by Nicole Miles L. Supat

Edited and Reviewed by Reuben J C. Los Baños, Ph.D.

Back then, managing materials needed pen, paper, and predictions for listing the supplies so they wouldn’t run out or pile up. Today, the manual process is still present but takes a lot of time. In today’s digital age, systems have been developed for faster and easier management of materials. Material Management is the process that organizations use to control and manage their materials flow, components, and goods from the producer to the consumer.

Material Management System is a framework or tool used to facilitate the process of material management. It helps organizations control, plan, order, and store materials to ensure everything that is needed is available when and where it is needed, without waste.

There are five principles of obtaining materials and services in material management: the right material, right quantity, right time, right price, and right source. It is essential to have these key objectives to help companies and organizations improve operations, reduce costs, and have an effective flow.

●      Right Material

This refers to the correct item or product needed. It must have a specific function and quality in order to meet the requirements of the user. An example of this is healthcare workers needing medical or surgical gloves, not the regular cleaning gloves.

●      Right Quantity

The materials needed are enough for the market and the user, not too many and not too few, minimizing the risk of stock shortages and waste. The correct amount of materials reduces product loss and increases productivity and smooth operations. For example, a bakery ordering 30 kilos of flour, not 80 kilos that might expire.

●      Right Time

This ensures materials are available or delivered exactly when they’re needed. Tracking the movement of the product and reducing the delays in operations helps reduce disruption in the workflow. Examples are supplies needed in the hospital and in a coffee shop. It must be delivered ahead of time so that there won’t be any standby or interruptions when needed.

●      Right Price

Buy materials that are affordable and of good quality. If you want the lowest price, it is important to balance the quality and cost to reduce the possible negative impact of the final product. An example of this is choosing the strong and affordable paper bags over the cheap ones that easily tear.

●      Right Source

When choosing a source, it must be reliable and accurate. You must pick a supplier who produces high-quality goods and delivers on time. Buying a Xiaomi pen from the official store over other stores with a similar product is an example of this objective. This ensures safety, speed, and good quality products, avoiding issues.

What is the Purpose of Material Management?

There are different purposes of material management to enhance customer satisfaction and improve overall supply chain efficiency. Here are some main goals of material management:

●      Ensure a Continuous and Efficient Supply of Materials

In order for operations not to stop, the system makes sure that the materials needed are accessible on time and of decent quality. For example, in building a dog house, you run out of nails and wood, so the operation stops. But material management helps avoid that.

●      Minimize Costs and Waste

The system avoids overbuying, spoilage, or over-storage, which saves money and reduces waste. You don’t want to spend too much money or throw things away because they expired or were damaged. An example of this is buying enough fruits and vegetables for the week so they don’t spoil.

Other purposes of material management are:

●      Forecast Material Requirements

You can predict future material needs using your past data and schedules. For example, if you make salad 5 times every week for your family, you’ll know that you need the same amount of cucumber and lettuce next week. This can also ensure that the ingredients needed will not rot.

●      Optimize Inventory Levels

Avoid having too many or too few materials. Just have enough to smoothly work without wasting space, money, or energy. For instance, sellers place more toys during the holidays and less stock during regular months.

●      Improve Purchasing Efficiency

The system helps you buy materials smartly, from choosing the right suppliers to tracking the best prices with fast deliveries. Buying from a nearby seller who offers discounts, gives free extra items, and delivers on the same day is an example of this purpose.

●      Ensure Quality and Compliance

It ensures only approved quality goods that meet the standards and are safe to use. For example, it is most likely for you to buy gadgets that are certified to avoid selling fake and unsafe items.

What is an Example of Materials Management?

A material management system is used before, during, and after they are needed, depending on the situation of the operation. This is important in some industries, including:

●      Hospitals and Clinics

Monitoring Personal Protective Equipment (PPE) in a hospital is important in the medical industry to avoid the spread of infections during emergencies. To make sure all medical staff have what they need, the hospitals reorder supplies before running out based on usage.

●      Schools and Offices

To ensure smooth daily work, teachers and workers track how much bond paper and ink are used each month. Supplies are restocked regularly so that teachers don’t run out during exams or workers fail to print tasks.

●      Restaurants and Cafés

They use a system to monitor the daily use of ingredients needed, like coffee beans, milk, fruits, and others. Based on the actual usage and expected customers, orders are made every week to avoid spoiled ingredients and make sure fresh food is served for the customers.

●      Factories and Manufacturing

Materials are ordered in advance, tracked, and used efficiently. A toy factory calculates the amount of plastic and paint needed to reach monthly production targets. This helps maintain continuous production and reduce waste.

●      Construction Sites

To keep the project on schedule and on budget, the system tracks the delivery and use of cement, steel, bars, and tools. The materials must arrive just before they are needed, and no excess is wasted.

What is Materials Management in the Hospital?

Materials management in the hospital is the same as in all other industries. It is the organized and efficient handling of all supplies, specifically both medical and non-medical, that is needed to smoothly operate the hospital. It’s making sure doctors, nurses, and other staff always have what they need without wasting resources and time. The objectives are to maintain care quality, avoid shortages, control costs, and reduce waste.

Medical Supplies

These supplies are directly used for patient care and treatment:

• Gloves, masks, gowns
• Medicines and vaccines
• Laboratory supplies
• Syringes, needles, bandages
• IV fluids

Non-Medical Supplies

These help hospital operations:

• Linens
• Cleaning tools and disinfectants
• Office and printing supplies
• Kitchen or food service materials

In hospitals, managing supplies efficiently is crucial to ensure there is continuous patient care. Especially when hospitals are dealing with emergencies and other risks, every item must be available before or when needed.

This is why the material management process plays an important role in ensuring the right items are planned, purchased, stored, and distributed properly across departments.

●      Predicting Supply Needs

Estimation of how many and what kinds of supplies are needed is a must in hospitals. This is done by looking at the number of patients, types of treatments, and past usage.

●      Managing Stock Levels

Hospitals must keep just the right amount of supplies. The systems used in the hospital help track items and alert when it’s time to reorder.

●      Working with Suppliers

Hospitals need good relationships with their suppliers to make sure the delivery of quality materials is fast and reliable. Good communication also helps solve problems quickly and get better prices.

●      Delivering Supplies to the Right Place

Supplies must be delivered on time to the correct place. Smooth transportation and delivery systems help avoid shortages and delays.

During the process, there are departments that are involved, such as the purchasing unit, central stores, pharmacy, and the support chain or the logistics team.

• Purchasing units are the ones that buy the items.
• Central stores stock and manage inventory for non-medical supplies.
• A pharmacy handles drugs and medical consumables.
• The supply chain or logistics team manages the full movement of materials, from purchase to usage.

What is the Inventory Management System of a Hospital?

Inventory Management System in a hospital is a system used to track, record, and manage the stock of medical and non-medical supplies to make sure the hospital has the right items available at the right time.

You can store and manage your stocks using either manual or digital methods. Manuals like paper logs, stock cards, or Excel sheets. The system is simple but slower when used. Digital, such as software systems, can be used for faster and more accurate tracking. An example of this is Medtech, which manages medical supplies and patient records.

There are benefits in using an inventory system in a hospital, such as better planning, less waste, accurate stock levels, and quicker restocking decisions.

●      Better Planning

With the help of the system, hospitals can plan more wisely by estimating the supplies needed and when to order. This helps check that the right items are available when needed for surgeries, treatments, or emergencies.

●      Less waste

If you estimate your needed materials, you can prevent overstocking and reduce expired items. Especially in hospitals that always deal with many items that can expire, like medicines and IV fluids.

●      Accurate stock levels

Reducing human error is important in a hospital setting. One mistake can ruin the whole operation. Using the inventory system keeps reliable data on what’s in stock.

●      Quick restocking decisions

The system speeds up reordering, especially during emergencies or high demand. It alerts the staff automatically when stock is low, saving time and making sure items are always available.

Which Inventory System is Often Used in Healthcare Materials Management?

Below are some common inventory systems that are often used in healthcare materials management. These are used in the hospital to avoid expiry and overstocking and ensure the timely availability of supplies.

●      Just-In-Time (JIT)

This system does not store large quantities, but only the supplies ordered when needed. It avoids stockpiling items that may expire and decreases storage space and costs. For instance, hospitals order surgical gloves weekly or daily based on their actual usage instead of storing boxes for months. The stored gloves may cause bacteria when used and infect more people who are sick.

●      Perpetual Inventory System

The system gives real-time updates every time something is added or used. This helps continuous tracking of the exact stock levels, alerting the staff when to reorder important items. For Example, a nurse removes 3 vials of insulin from a machine like an Omnicell. So the inventory system automatically updates the stock count, not needing manual logging.

●      ABC Analysis

The items are categorized by value and usage frequency. This helps hospitals focus on managing important and costly items more carefully than just buying the supplies without knowing their significance.

“A” are high-value and low-quantity items. These should be monitored daily (e.g., implants, surgical instruments).

“B” are moderate-value and moderate-usage items. These are tracked regularly or weekly (e.g., gloves, syringes).

“C” are low-value and high-quantity items. These are basic items that are used frequently and are monitored monthly (e.g., cotton balls, alcohol swabs).

●      Barcoding & RFID

Supplies are tagged with barcodes or chips to automatically scan, track, and monitor the supplies used. This system reduces human error and makes locating items fast and easy. An example of this is when staff in the hospital use gloves, masks, and gowns. These are scanned using barcodes to subtract the items used from the total in storage, reducing insufficiency.

How Do Hospitals Keep Track of Inventory?

The hospitals handle lots and thousands of items that always need to be taken note of accurately to avoid waste and shortages. They use techniques like barcode scanning, RFID technology, and serial numbers to track inventory.

Staff like inventory managers and storekeepers are involved in overseeing all the stock records and orders, handling these items, and tracking the smooth operations in delivery.

They use the following tools to help manage items and keep the operations running smoothly.

• Dashboards are used to view current inventory in real time.
• Reports and logs track deliveries, usage, and restocking.
• Stockroom databases are digital systems that are used to store all the inventory information.

Good material management means less waste, fewer delays, and better results. With the right system, everything runs smoothly.

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