PURCHASE MANAGEMENT IN

HOSPITALS

PRESENTED BY:

Dr. Debanjana Ghosh Dr. Prabhpreet Kaur Dr. Prashanth Kulala Dr. Sandip Kr Neogi Shwetnisha Bose

CONTENTS

• WHAT IS PURCHASE MANAGEMENT

• PURCHASE CYCLE

• FEATURES OF PURCHASE MANAGEMENT

• PRINCIPLES OF PURCHASE MANAGEMENT

• PURCHASE MANAGEMENT IN HOSPITALS

WHAT IS PURCHASE MANAGEMENT?

Purchasing management directs the flow of goods and services in a company and handles all data relating to contact with suppliers.

Purchasing management directs the flow of goods and services in a company and handles all data relating to contact with suppliers.

EFFECTIVE PURCHASING MANAGEMENT REQUIRES :

1.Supply chain

2.Business and tax laws

3.Invoice and inventory procedures

4.Transportation and logistic issues

EFFECTIVE PURCHASING MANAGEMENT REQUIRES :

1.Supply chain

2.Business and tax laws

3.Invoice and inventory procedures

4.Transportation and logistic issues

PURCHASE CYCLE

WHAT IS PURCHASE CYCLE???

Frequency with which an inventory item is ordered or consumers buy a goods or service.Frequency with which an inventory item is ordered or consumers buy a goods or service.

STEPS IN PURCHASE CYCLE

1. Recognition of need

2. Specify the need

3. Determine sourcing option :a. Supplier list availableb. Supplier list not available

i. Searchii. Qualify

1. Recognition of need

2. Specify the need

3. Determine sourcing option :a. Supplier list availableb. Supplier list not available

i. Searchii. Qualify

4. Establish price and terms:

A buyer should know the nature of the market and the market value of the material or service.

5. Prepare purchase order:

A purchase order is used to purchase materials.

4. Establish price and terms:

A buyer should know the nature of the market and the market value of the material or service.

5. Prepare purchase order:

A purchase order is used to purchase materials.

STEPS (Cont.)

6. Deliver purchase order :

The usual methods of delivery are by hand, mail, courier, electronically or by fax.

7. Expediting:

An activity to ensure that materials or services are being delivered or performed in the manner and timing agreed.

8. Receive and inspect:

In receiving, items are accepted or rejected based on the documentation. Once acceptance is made, the company is obligated to pay for what was received.

6. Deliver purchase order :

The usual methods of delivery are by hand, mail, courier, electronically or by fax.

7. Expediting:

An activity to ensure that materials or services are being delivered or performed in the manner and timing agreed.

8. Receive and inspect:

In receiving, items are accepted or rejected based on the documentation. Once acceptance is made, the company is obligated to pay for what was received.

9. Approval and payment:

Approval based on a "three-way match" of the purchase order/contract, the receiving document and the invoice.

10. Maintain records:

Detailed records must be maintained to satisfy government auditors and as a reference for the company.

9. Approval and payment:

Approval based on a "three-way match" of the purchase order/contract, the receiving document and the invoice.

10. Maintain records:

Detailed records must be maintained to satisfy government auditors and as a reference for the company.

FEATURES OF PURCHASE MANAGEMENT

BASIC PRINCIPLES

1). Based on need assessment.

2). Ultimate aim: Right quality

right quantity

right prices

right source and

at right time to the right place

3). Centralize the purchase system.

1). Based on need assessment.

2). Ultimate aim: Right quality

right quantity

right prices

right source and

at right time to the right place

3). Centralize the purchase system.

Purchasing is difficult in the hospital setting and is extremely complex.

Supply costs are the second largest expense for hospitals

Managing materials, supplies and their associated costs consumes 15 to 30 percent of net patient revenues

Hospital supply expenses represent 25 to 30 percent of the organization's total spend. As the front line in patient care, hospitals are under intense scrutiny.

Purchasing is difficult in the hospital setting and is extremely complex.

Supply costs are the second largest expense for hospitals

Managing materials, supplies and their associated costs consumes 15 to 30 percent of net patient revenues

Hospital supply expenses represent 25 to 30 percent of the organization's total spend. As the front line in patient care, hospitals are under intense scrutiny.

PURCHASE MANAGEMENT IN HOSPITALS

Hospital purchasing departments are under pressure to perform. The product should always available when it is needed.

Should be cost effective.

Hospitals can't afford inventory failure. The right products must be in the right place at the right time.

Most hospitals work with distributors to manage supplier relationships and deliver goods: Gives hospital organizations a feeling of security--and relief.

Stock in hospital should be controlled.

Hospital purchasing departments are under pressure to perform. The product should always available when it is needed.

Should be cost effective.

Hospitals can't afford inventory failure. The right products must be in the right place at the right time.

Most hospitals work with distributors to manage supplier relationships and deliver goods: Gives hospital organizations a feeling of security--and relief.

Stock in hospital should be controlled.

Healthcare purchasing industry changes quickly and dramatically : crucial to get a handle on organization position and identify the opportunities that exist for improvement in purchasing management.

The challenge as a purchasing and materials management personnel is to be ready--not only to embrace the change, but also to drive it.

Despite financial constraints, hospitals have to maintain – and in some cases increase – budgets for patient safety.

Individual departments in a hospital act as individual buying centres but also there exist a mind boggling number of intermediaries.

Healthcare purchasing industry changes quickly and dramatically : crucial to get a handle on organization position and identify the opportunities that exist for improvement in purchasing management.

The challenge as a purchasing and materials management personnel is to be ready--not only to embrace the change, but also to drive it.

Despite financial constraints, hospitals have to maintain – and in some cases increase – budgets for patient safety.

Individual departments in a hospital act as individual buying centres but also there exist a mind boggling number of intermediaries.

The ultimate aim is to transform a sick patient to a healthy person at a reasonable cost, in the shortest possible time and with superior patient satisfaction.

The ultimate aim is to transform a sick patient to a healthy person at a reasonable cost, in the shortest possible time and with superior patient satisfaction.