Six Best Practices in Hospital Materials Management

Hospital materials management has suffered from many of the same problems as materials management world wide. Many of the best practices in hospital materials management link back to the same strategic sourcing methodology in production materials management.

These best practices in hospital materials management are generating the same substantial cost reduction and service level improvements seen across the manufacturing and retail industries. Where once hospitals just managed materials, now they are looking to manage materials, expenses and even human capital.

In the 2003 Annual Association for Healthcare Resource & Materials Management conference, a team composed of several major medical center leaders identified six critical components of Best-In-Class hospital materials management. They are:

  1. Manage Dollars, not just Materials. While in a hospital setting, critical stocks must be available in the right place at the right time, many healthcare organizations currently fail to analyze what is the right place and how much is required where.
  2. Collaborate with Physicians and Nursing Staff. In hospital materials management environments that do not use strategic cost management, administration personal operate the materials management program with little to no input from the actual working staff.
  3. Consider total cost, not just price. From ordering costs to the carrying costs of materials, it is critical for health care setting materials managers to calculate true cost of inventory instead of looking strictly at dollars spent. For example, requiring expedited delivery because of an out of stock may prove more expensive than the required materials.
  4. Create integrated Policies and Procedures. Using centralized ordering systems, such as those offered in an e procurement environment, help improve adherence to ordering policies and procedures. This reduces maverick spending and helps ensure consistent stock quality.
  5. Develop a process, not departmental focus. Using consistent processes makes it easier to evaluate the efficiency of the materials management method used. Pharmacy inventory management practices should look largely identical to operating room inventory management practices.
  6. Develop team focused, not individual focused processes. One person cannot make or break a process. While it is encouraged to have specialists in material management rather than making multiple team members execute the process, the processes should support team goals, not the preferences of one staff member.

By developing a materials management program that reflects these six best practices in hospital materials management, your medical group can cut costs and improve patient outcomes.


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