Materials Management Proposal

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Materials Management Proposal

Laura Dean

2/7/2011

Materials Management Proposal

Materials and operations management play a crucial role in the success of any organization. Of particular importance to the materials and operations divisions is management’s complete understanding of the hospitals functions as a whole entity. After reading this paper, one will understand the importance of materials management and operations management as well as how both departments must work together to ensure the hospital runs efficiently and maintains profitability. Furthermore, one will also understand the importance of a supply chain and possible constraints to the implementation of the process. Additionally, one will understand the effects of a new collaborative planning process and why such a process is beneficial to the hospital. Finally, suggestions will be given to enable the hospital to manage the supply chain in situations of disaster.

Role of Materials and Operations Management

Materials management is perhaps the most important part of health care as "total expenditures can total nearly 50% of a hospital's budget" (Langabeer, 2008, p. 241). Materials managers are held responsible for many functions. However, the most important attribute a materials manager must possess is coordination. “Materials management directs the healthcare supply chain by coordinating the flow of goods from manufacturers, through distributors, through hospital receiving docks, to the point of ultimate use or consumption” (Langabeer, 2008, p. 242).

Operations management is another important function of a hospital. “Healthcare operations management is the quantitative management of the supporting business systems and processes that transform resources (or inputs) into healthcare services (outputs)” (Langabeer, 2008, p. 6). Just as materials managers have many functions and goals, so too do operations managers. Key functions of the operations manager include “workflow, physical layout, capacity design, physical network optimization, staffing levels, productivity management, supply chain and logistics management, quality management, and process engineering” (Langabeer, 2008, p. 6). Goals of the operations manager include reducing costs, reducing variability and improving logistics flow, improving productivity, improving the quality of customer service, and continuously improving business processes (Langabeer, 2008). However, the most important goal operations managers must strongly consider when implementing a materials management plan is reducing costs. Operations managers have many opportunities to reduce costs. Costs can be reduced by analyzing budgets, tracking resources, and finding ways to reduce product and services costs. “Finding waste, improving utilization, and generally stabilizing and reducing the overall cost of delivering services are essential functions” (Langabeer, 2008, p. 9). The most effective way for operations managers to reduce costs is to record all aspects of the organization and periodically review progress either monthly or quarterly. “A hospital with appropriate tracking and management systems will be much more likely to reduce costs because it understands the underlying cost structure” (Langabeer, 2008, p. 9). A few ways materials management influences operations management are as follows: "the nature of the activities" in the materials management department "is actually quite operational, they have an impact on downstream departments and patient satisfaction, they are labor-intensive processes, and many times they draw from the same labor talent pool" (Langabeer, 2008, p. 244).

Constraints to the Supply Chain

Constraints are inevitable and every organization is prone to them whether the organization is in the manufacturing sector or service sector. A few constraints hospitals face include “managing supply levels, higher labor costs, space constraints, and multiple...
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