Departmental Study of

Submitted by:

Dr.Dinesh Kumar Internee Medical Service

CONTENTS

S.I.Order Particulars A Introduction

B Floor Map C Purchase Department-Ownership

D Scope E Location

F Hierarchy G Procedures

H Purchase cycle

I Stores –Scope

J Purpose

K Responsibility L Departmental Hierarchy

M Departmental Structure N Budget Considerations

O Material Management Process

P Vendor Identification Q Receipt, Inspection and Storage

R Inventory Turnover S Stock Verification

T Issue and Distribution U Disposal/Condemnation

V Minimizing loss and Pilferage

W Consumption Pattern X Documents Generated

AA Pharmacy AB Hierarchy

AC Procedures for rising indents for IP/OP

INTRODUCTION

Fortis group acquired S L Raheja hospital, after it signed an operation and

management (O&M) agreement with the 140-bed multi-specialty hospital at

Mahim on April 06 2009.

According to the press release “This is the second hospital to be taken over

by Fortis Group in Mumbai. Earlier, it had taken over the Hiranandani

hospital in Navi Mumbai. Fortis had acquired this tertiary care hospital for

Rs 25 crore in 2007”. The Mumbai projects are part of the group’s plans to

have a total capacity of 6,000 beds by 2012.

S. L. Raheja (A Fortis Associate) Hospital is a 140 bedded, multi-specialty

facility that provides comprehensive & affordable care to patients suffering

from various ailments. Known widely as a leading hospital for advanced

management in Diabetes & Oncology, the hospital is poised to develop as a

centre of excellence in Diabetes, Oncology, Trauma, Cardiac Sciences,

Emergency Services and critical care under the professional management of

Fortis healthcare.

Director for the Mumbai Zone for Fortis Healthcare Ltd and CEO of

S. L. Raheja (Fortis Associate) Hospital, Mumbai since March 2009 is

Dr. Uma Nambiar (Qualified Neurosurgeon and Healthcare administrator)

Floor Map in S L Raheja Hospital

Raheja hospital is a 12 storiyed building with North wing & south wing with

patient lift 6 in number, additional service lift for support staff 2 in number,

Reception , Toilets, Dirt Utility room , Pantry , Fire Exit door , AC Shaft duct

in all the floors.

DEPARTMENTS FLOORS NORTH WING SOUTH WING

Ground Floor Radiology department : C T Scan , Mammography , X-Ray , Sonography

Pharmacy,Cafeteria,TPA & Medical social worker cell , Front desk , Material Management

First Floor Blood bank : Blood component room , Apheresis room, Store Laboratory services

Auditorium (100 people capacity), Pantry, Administration departments ( H R , I T , Marketing, Finance ), Board rooms.

Second Floor Operation Theater Complex ( 7 rooms )

Cath lab******

Third Floor General OPD 18 dept ( Except oncology department all departments present ) Dirty Utility , Toilet

******

Fourth Floor Maternal & Child care department : Maternity ward , Lamaze Center , Antenatal Clinic , Post natal clinic , drinking water , physiotherapy,IVF

Maternal & Child care department : Labor room , LDR Suite, OT, Waiting Lounge , Dirty Utility , Toilet , Nicu

Fifth Floor ICU : 33 beds Ophthalmology department , Stress test ( 2d)

Artificial Kidney Dialysis Unit (Nephrosis)

2 rooms ,Rx room , Waiting area

Sixth Floor Male Wards : IPD a) General class:16 beds b) Economy Class: 12

beds Nursing station , toilets Infection Control Department

Female Wards : IPD a) General class : 16 b) Economy class : 12

Nursing station , toilets

Seventh Floor Male Wards : IPD a) Private : 5 beds b) Semi Private : 10

beds Nursing station , toilets

Female Wards : IPD a) Private : 5 beds b) Semi Private : 10

beds Nursing station , toilets

Eighth Floor ****** ******

Ninth Floor Pediatric oncology IPD First Class Beds : 6 Second Class Beds : 8

Tenth Floor OPD – Oncology Consultation room : 8 Medical record department Clinical research department

Day Care Unit Rooms : 4 Beds : 8

Eleventh Floor IPD

IPD Suites : 5 room Library

Twelfth Floor ****** HR Department , Medical Services

Basement Purchase department , CSSD , Maintenance department

****** Various project Under construction

Departmental Study of SLRH

Purchase Department

Ownership:

Hospital Purchase department run by hospital. It has not been out sourced

to any external agency

Scope of Hospital Purchase department:

Studies have estimated that materials in larger hospitals accounted for more

than 40 per cent of total hospital budget. Material management

encompasses acquisition, shipping, receiving, evaluation, warehousing and

distribution of all goods, supplies and equipment for an organization. In

SLRH nursing units, laboratory, X-ray and other department make their own

purchases, negotiate prices and maintain their own inventory. Purchasing is

decentralized in SLRH

Activities for placement of orders

Purchase records

Purchase reports

Maintenance of vendor relationship

Forecasting and planning

Checking invoices and Inspection

Location:

As the department generates moderate traffic of hospital personnel and

vendors to and from outside the hospital it is situated on the basement level

which is far away from the other traffic areas within the hospital. It is close

to the unloading dock which is in ground floor area big enough to handle

trucks bringing in supplies

Hierarchy:

CEO

Materials Head

Pharmacy Manager Purchase Manager

Pharmacist Pharmacy officers Executive

Pharmacy Pharmacy Store In charge Attendents Attendents

Store Officer

Attendents

Procedures in Purchase department:

Requirement from user department Purchase requisition form

Purchase department

Send ENQUIRY to the vendors

Get QUOTATION from vendors

Study and compare the quotation with our cost

Negotiate the quotation to fix the price

Place the ORDER to the right vendor

Follow up with the vendor

Get the material

GRN Inspect the material Challan Invoice

Stores credit the material

Finace

Department

Payment to vendors

Purchase Cycle

P request Follow up

PO Acceptance

PO

Enquiry

Quotation

PO

I R

PO

Goods

Inspection Report (IR)

Payment

Other User Department

Purchase Department

Supplier

Stores Accounts

Department

STORES

Scope:

The scope of the department relates to effective management of material. It

covers purchasing and management of Hospital Consumables, Printing &

Stationary; Hospital wares Medical and Non Medical equipments pertaining

to the needs of the entire Hospital.

Purpose:

The purpose of the department is to plan for, acquire, store, move and control materials to optimize the usage of facilities and capital funds and to provide customer service in accordance with organizational goals. Responsibility:

Materials head Manager and in charge – General Store

Departmental Hierarchy:

Materials Head

Store In charge

Store Officer

Attendant

Department Structure:

The wider function of the material management department of the hospital comprises of two basic functions – a) Purchase Function b) Stores Function. The hospital has integrated the purchase and the store functions into one department Material Management Purchase Central Store

MATERIAL MANAGEMENT PROCESS: 1. Demand Forecasting and Planning: The Hospital uses a large variety of material for patient care .The department undertakes standardization of products i.e. grouping items of similar specifications together and hence it facilitates the department to forecast and plan its material requirements. The material used in the hospital is broadly classified into seven categories: Capital Assets Consumables Hospital Wear Printing and Stationary Linen Instruments Consignment.

2. Purchase: The Department undertakes centralized purchasing of all materials excluding pharmaceutical items. The Material Management department purchases the items on the following two bases: Reorder Level Request for purchase of items from the User Department or

Management.

Vendor Identification: 1. General Items such as Stationeries, Consignment item etc: Identified through quotation received, past experience with the supplier 2. Equipments: The decision to purchase any equipment for the hospital is taken by a multidisciplinary committee known as purchase committee. The committee evaluates the need for any equipment in commensurate with the scope of services provided by the hospital.

Emergency Purchase: In case of immediate need to buy any item the Material head / Executive has to authorize such need. After receiving the instruction for immediate purchase of any item the store in charge first checks for the supplier of the product among the registered list of vendor’s .If the supplier of the item is available among the registered vendors, the supplier is informed to supply the product immediately. In case the required items are not available with the registered vendors of the hospital, the in charge contacts the most accessible supplier of the product and purchases the items in order to cope up with the emergency need. Once the need is over and the future requirement of the item is foreseen, normal purchasing procedure is followed.

Receipt, Inspection and Storage: The vendor supplies the materials at the Central store unless it is some equipments (medical or non medical) etc which are directly installed in the site of operation. Whenever an item is delivered the same is verified in the presence of the Store In charge, Representative of the supplier and representative from the purchase committee of the hospital. Verification is done to ensure that the item is as per the order placed etc.

The following procedure is followed while receiving the supply:

No Yes

Receipt of supply in Specific Locations

Verification of supply against suppliers invoice

Is Verification

Cleared?

Yes/No

Supplier invoice is not

acknowledged

Items are returned

immediately.

Actions are taken as per

the terms of the MOU

Suppliers Invoice is

forwarded to the Security

Department for Clearance.

Store In charge approves the

invoice and forward it for

recording

Transaction is recorded in

the Goods Inward Register.

Invoice is forwarded to

Account for Payment and

the same is recorded in the

Bill Dispatch Counter

Supplier Reevaluation: Every Vendor with whom the hospital enters into agreement for the supply of materials are evaluated on a periodic basis so that their service standard could be determined .Any deviation in their performance as per the MOU are informed to them for correction .Incase they do not adhere to it appropriate actions are taken within the purview of the MOU entered with them.

Storage: The Central Stores undertakes centralized storing of all items except pharmaceutical products, food items and bulk equipments (which are directly installed at the site of operation).

Store Location: The location of stores once taken cannot be easily changed. It is costly to change the storage location at a later stage. In SLRH stores is located in the basement level with individual sub stores in department

Arrangement of Items: The items are designed in predetermined/designed racks inside the Central Stores. Items such as radiographic films, spirits etc which are inflammable are stored in separate location.

Stock Location Method: The items which are frequently used items are arranged are located in most easily accessible area so as to facilitate its quick identification and delivery to the user department.

Inventory Turnover: The Department has to keep a track of the proper turnover of the inventory so as to ensure efficient utilization of the item stored. Stock Turnover details are calculated on a monthly basis for each month and the report is submitted by the store in charge to the Material Head. The Department calculates the inventory turnover ratio by dividing the total value of inventory in rupees issued by the department by the value of the closing stock at the end of the month.

Stock Verification:

Verification of stock is done annually .It includes ground balances with the figures show in the stores ledger .However the department prepares a monthly report of the Purchase summary (category wise ) , Items issued during the month and the Closing stock at the end of each month and submits the report to the Material head for evaluation.

Inventory Control: The Hospital recognizes the importance of adequate supply of items in providing quality healthcare to the patients. For efficient management and control inventories the Material Management Department as classified on the basis of their cost value which is as follows : Classification Cost Value (in INR) A Not yet defined B Not yet defined C Not yet defined

The department low stock level for very high value items, usually they are purchased directly when the need arises , however the hospital maintains a list of vendors for the products so that purchase of the product can be affected quickly .The department maintains higher value of stock for items which are frequently used in the hospital. Lead Time: The lead time for general items is almost zero as the hospital at the time of awarding contracts includes a clause for the same; hence the suppliers are legally bound to supply such items at the earliest. For items like Laboratory reagents the lead time is 7days. The lead time for equipments and other such items is usually higher as it involves not only delivery lead time but also administrative lead time as administrative can take some time before giving the final approval for its purchase. Re-order level: The physical position of the stock is reviewed every month .Orders are placed depending on the stock on hand, rate of consumption and the lead time in such a way that the stock does not fall below the usage rate prior to the next review .

Issue and Distribution:

No Yes I

Indent request placed by the user department

Store Receives request and the items is searched

Item is

available in

store?

YES/NO

Procedure for Purchase

of the item is followed.

Items are dispatched

Items are collected by

the Department

Representative

Transaction is

recorded in the

Material Issue

Register

Minimizing Loss and Pilferage: Access to store is limited. Only authorized store personals can enter the main storage area. Every day evening before the store personals leave, the closing stock at the end of the day is evaluated and the store is locked. In case of Emergency the store can be opened with the permission of authorized person. The store is always under surveillance with camera at entrance and exit.

Consumption Pattern: The General Department makes graphical analysis of the consumption pattern of different kind of products every month and compares the same with that of the previous month so as to be able to understand the change in the consumption pattern of the items for different category of items. Consumption pattern analysis helps the department in demand forecasting and material planning. The total quantity consumed for each category of item is calculated The Audit Committee also evaluates the performance of the department to satisfy the needs of the user departments .the performance is evaluated on the basis of the following parameters which are:

Timely availability of material Quality of the material Number of occasions when stock out have occurred.

Points:

Method of issuing materials is FIFO (First in First out)

Each department has a specific day in a week to collect materials from

store to sub stores.

Example : Accounts/Pharmacy/Billing –Monday ,

OT / CSSD / Laundry – Tuesday

Man Power in Purchase department:

Material Head – 1

Purchase manager-1

Executive-1

Stores incharge-1

Stores officer-2

Attendent-1

Timings: 10 Am – 6 Pm

For Returnable items gate pass are made which are signed by receiver,

authorized personnel, prepared personnel

For oxygen cylinders no gate pass are issued

Abbreviations:

P request-Purchase request PO-Purchase Order IR-Inspection Report HIS-Hospital information system GRN-Goods receive note

Recommendation:

As various new projects are coming up in SLRH, stores are short of a

staff. In my observation as the supplier comes in for delivery there is

only one person who is responsible for preparing the documents,

physical counting, receiving the materials and keeping the records

which makes the process long.

A separate area for receipt and inspection of materials and a separate

area for issues should be provided on the store premises, with

adequate office space.

Each item on inventory of the stores is best identified by a code

number which can be based on the generic name of the item or its

application. For example, Cotton which may have a classification

number 17 will have sub classifications cotton absorbent, cotton

nonabsorbent either in standard packing of 500 gm. or 50 gm.

Identification code will simplify the work process.

Popularity location system: In this system, emphasis is placed on

frequency of demand. Popular items are located in the most

advantageous position from the point of view of handling and issues.

For example Central portion of the stores should be used for small

popular items, upper shelves for light weight and least popular items

and lower shelves for light weight items.

The hospital can also introduce a system of internal audit to keep a close vigil on the activities of the store .The Internal Audit Committee can make periodic audit of the store at the end of every quarter .The Store Official has to submit detailed report to the Audit Committee.

PHARMACY

Ownership:

Hospital pharmacy runs by the hospital. It has not been outsourced to

any external agency.

Scope:

SLRH Pharmacy caters to the medicinal requirements of both IP as

well as OP patients.

Location:

It is conveniently situated on the ground floor, near to the cash

counter and reception area.

It covers an area approximately 350 sq feet

Licenses:

FDA Act

Drug and cosmetic act

Pharmacy act

Narcotic drugs and psychotropic substances act

SLRH fall under zone 4 of FDA, Mumbai

Licenses are adequately displayed

Hierarchy:

Head (Materials)

Deputy Manager

Pharmacists Pharmacy Officers

Pharmacy attendents pharmacy attendents

Storage Conditions:

Clinically for oncology SLRH Pharmacy has chemotherapy drugs that

are stored under lock and key, away from direct light as it may lead to

their deterioration due to their sensitive nature. Drugs for diabetics are

also stocked. The drugs of daily use are stocked alphabetically near

pharmacy’s entrance

Services:

IP

OP

Ward Issues

Man Power – 12 in number

Timings: 24 hrs / 365 days

8 hours per shift

Procedures for raising Indents and Stock Issuing:

For IP:

Ward

Doctor Prescription

Junior Doctor writes on Dr’s Sheet

Indent raised by nurse

Pharmacy receives it through HIS

Issues requirements and gives issue slips

For OP

Doctor’s Prescription

Patient/ Patients relatives/Attendent shows prescription at

pharmacy

Issuing of order slip to the Patient/attendant

Payment at the billing counter

Handing over the receipt to the pharmacy

Medicines issued