Academic journal article Journal of Purchasing & Materials Management

Hospitals Materials Management: Systems and Performance

Academic journal article Journal of Purchasing & Materials Management

Hospitals Materials Management: Systems and Performance

Article excerpt

Hospital Materials Management: Systems and Performance

This study was designed to examine the relationship between hospital materials management performance and the use of a computerized inventory control system. Twenty-two general hospitals in the state of Georgia were analyzed. Research findings indicate that those hospitals using computer-based systems exhibited a better fill-rate performance, but also experienced significantly higher inventory and labor costs per average daily census. Implementation and maintenance problems appear to be probable causes for the poor performance.


In most hospitals, the materials management function is responsible for the complete supply process--from purchasing to distribution. Functional areas under the materials management organization typically include purchasing, central service supply, central stores, and the print shop. Other departments sometimes included are the pharmacy and the laundry.

Hospital materials management performance centers around four basic goals:

* To have material on hand when needed

* To pay the lowest possible prices, consistent with quality

and value requirements for purchased materials

* To minimize inventory investment

* To operate efficiently Consequently, a performance measurement approach for a system functioning in this environment must include both purchasing and inventory management.[2]

A large number of factors impact the organization and supervision of a hospital materials management department. Large hospital chains offer their individual hospitals volume purchasing contracts and specialized information systems. Materials managers in such systems rarely negotiate prices. Their concern is primarily with contract compliance and inventory management. Nonprofit or independent hospitals may join national or regional group purchasing organizations to obtain price discounts. Rural hospitals tend to have larger inventories than urban hospitals because of the increased lead time from suppliers. Additionally, they also may have difficulty recruiting management talent. These are but a few of the many variable impacting hospital materials management.

An effective hospital materials management information system (HMMIS) automates the materials distribution and control process. A fully integrated HMMIS typically includes a computerized inventory control system, a computerized patient supply charge system, and electronic data interchange (EDI) links with many of the hospital's suppliers.

The study discussed in this article examined the relationship between a number of materials management performance factors and the use of a computerized inventory control system. The use of computers to manage inventory in hospitals has grown steadily during the past ten years.[3] Software is now readily available to manage inventory with a personal computer. In addition, there has been rapid acceptance of EDI in the hospital industry. Acceptance of computerized patient charge systems has also grown at an increasing rate.

It is commonly understood that computers can lead to greater productivity through the replacement of tedious manual tasks. Failures in system implementation, however, can result in diminished performance.[4] Important factors contributing to improved productivity include a successful implementation and follow-up. The neglect of adequate postimplementation review can contribute significantly to system deterioration.[5]


The American Hospital Association classifies hospitals into five major groups: (1) nonfederal government, (2) federal government, (3) investor-owned for-profit, (4) nongovernment nonprofit, and (5) osteopathic. Institutions participating in this study were "general" hospitals located in the state of Georgia that were classified in the nonfederal government, nongovernment nonprofit, and investor-owned groups. …

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