Roopa Talwar

LECTURER
DEPT. OF HOSPITAL ADMINISTRATION
JNMC
 Introduction

• Store is a place where excess material is kept which

will be used as and when required. Loss of items,
deterioration, obsolescence and inadequacy [of what
is stored to what is needed] are treated as ‘part of
life’.
 Introduction
• Store management is “ to receive materials, to protect
them while in storage from damage & unauthorized
removal, to issue the material in the right quantities,
at the right time to the right place and to provide these
service promptly and at least cost”.
• The stores management is vital in hospitals since
uninterrupted supply of many items are to be ensured
at all times.
• There is hardly anything which will not be required in
a hospital sometimes or the other hence it becomes
obligatory on the part of hospital stores officer that all
the stores are procured in adequate quantities but not
in quantities so as to lock up too much capital, stored
properly so that they do not get damaged during
storage, used properly to ensure turnover by utilizing
older stocks and storing fresh stocks and above all
accounting meticulously for all items.
 Objectives of store
• In the chain of internal customers and suppliers, stores
has several internal customers. As a matter of fact all
functions of management are internal customers to
stores. Customers as usual expect Quality Cost and
Delivery from every supplier. Stores also have to deliver
these customer expectations. In the process of
discharging this obligation Stores perform some activities
that are functions of Stores.
 Objectives of store

• Minimizing cost of production through

minimizing cost on materials
• Maintaining the value of materials
• Service to user departments
• Establishing Co-ordination with other
departments
• Advising materials Manager
 Functions of Stores
1. Receipt
2. Storage
3. Retrieval
4. Issue
5. Records
6. Housekeeping
7. Control
8. Surplus management
9. Verification
10. Interaction & coordination
 Receipt
• Any item of goods or material that enters the
organization always enters through the stores. Similarly,
every item unless specifically excluded, has to leave
through the store. Stores is the final account keeper of
all materials.

• Material sent by any supplier after the security

clearance comes to the stores. Stores check the
document carried by the carrier, known as Delivery
Challan, against the copy of the Purchase Order placed
on the supplier by the organization.
 Receipt
• Once the adequacy is established and quantity is verified the
material is sent for testing for quality parameters.

• Some times quality control tests are elaborate and time

consuming. If the policy of receipt is to unload the material
subject to quality control acceptance, it is cleared for
unloading.

• Unloaded material is kept on the hold if it not yet cleared by

quality control department. If the material is rejected it is
sent back to the supplier after clear documentation.
 Storage
• Once the unloaded material is approved by the
quality control department, as per the quality plan in
the quality system, it is moved to a specific place in
the stores layout.

• The material is so stored that it becomes easy to

retrieve and issue subsequently.

• Storage should also ensure protection against

deterioration, damage and pilferage.
 Storage
• Detailed system is adopted for location and labeling
of items while in storage. Storage plan is made
keeping in mind,
1. nature of the product- physical state, toxicity,
inflammability and other hazards
2. volume and weight- heavy or light
3. movement frequency- fast moving or slow moving
4. point of use
 Retrieval
• Easy and quick retrievability of items that are demanded
by the internal customers.

• Easy identification, maximum space utilization and

minimum handling are key factors to retrieval functions.

• It is common knowledge in many of the companies that

after hours of searching for the item is declared to be out
of stock. This causes hold up of production process and
avoidable urgent purchase of out of stock material. This
function takes place as per established retrieval system.
 Issue
• Fulfilling customer demand for the item in minimum
time, keeping quality high and cost minimum is
issue.
• An internal customer doesn’t pay the price but he
has to fulfill requirement of authorization for the
demand.
• A duly authorized indent or requisition for the item
is the key
 Records
• Maintaining records of receipt and issue.
• Updating the stock levels as per movement of
materials.
• Basic records of store are bin card and stock register.
– Bin card ( implies quantity record of reciepts,issue &
balance of materials) is placed on the bin in which items
are stored. This gives information about receipt, issue and
balance.
– stock register gives all the information in the bin card and
also the value.
 Housekeeping
• Maintenance of spic and span cleanliness in
the store and ensuring principle of Place for
Everything and Everything in its place is fully
implemented.

• Good housekeeping ensures satisfactory work

practices
 Control
• Taking measures to ensure material plan is being adhered
to.

• Any changes in consumption pattern or replenishment

pattern are closely monitored for corrective action.

• Material movement is watched to identify nonmoving

material for disposal. Effective control puts into effect
management objective of ‘no shortage and no excess’.
 Surplus management
• Effective disposal system for unneeded
material to reduce inventory cost and
proactive measures to eliminate deterioration
and obsolescence.

• Obsolete items are good in all respect but

have no useful role in the company due to
changes that have occurred in the course of
time.
 Surplus management
• Surplus items are those that have accumulated due
to faulty planning, forecasting and purchasing. Hence
a usage value is associated with these items.

• Scrap is wastage generated due to processes like

turning, boring drilling etc. and also due to bad
manufacturing. it is said that in India nearly Rs. 2500
crores are tied up as obsolete, surplus and scrap
items.
 Verification
• Stock verification to eliminate gap between
information and physical stock. In stores some items
are maintained as stock items. The stores triggers the
procurement cycle for such items when a
predetermined reorder level is reached. Hence
correct stock position through verification is critical
to ensure ‘no shortage and no excess’ for the item.
 Interaction & coordination
• Very close interaction between Purchasing,
production, quality control and engineering functions
is obviously needed in the discharge of the functions
discussed so far. It also becomes necessary to
coordinate the flow of material samples and
information through a network of departments for
performance of stores functions. Besides, every
management function being an internal customer
interaction is very important.
 Types of Stores
• Centralized store
• Decentralized store
 Centralized or decentralized stores
organization
• Centralized stores concept is to store all items
at a central place and control materials
movement from this central place. Whereas
• Decentralization concept is moving the
material to the respective consumer function
or directly to the points of use.
 Features of centralized stores
organization
1. Effective supervision and control.
2. Issue at single point reduces cost of
issue
3. Reduced personnel requirement
4. Efficient layout for stores
5. Better handling technology
6. Better inventory checks
7. Maintenance of optimum stores
8. Elaborate documentation
 Advantages of centralized store
• The variety of goods can be supplied to all
users from one small location.
• Less manpower will be required.
• Better control of materials is possible.
• Material handling will be easy.
• Wastage and deterioration of materials will be
less.
Disadvantages of centralized store
• It may not be suitable for large manufacturing
concern.
• More staff will be required for shifting &
transportation of the materials to various
production units.
• Record keeping is difficult.
 Features of decentralized stores
organization
1. Reduced handling
2. Customer friendly
3. Fewer production stoppages
4. Visual management is easier
Advantages of decentralized stores
• Reduced material handling and associated
cost.
• Less chances of bottlenecks and delays.
• Convenient for every department to draw
materials.
• Less transportation time.
Disadvantages of decentralized stores
• Coordination and control of all decentralised
store is a challenge to management.
• Labor utilization may suffer due to low store
activity level.
 Types of Hospital Stores
1. Non Consumable Stores: These stores may be
utilized repeatedly.
2. Consumable Stores: These stores are utilized
only once.
 Planning of Hospital Stores
1. Medical and Drug Stores
2. Surgical Stores
3. General Stores
4. Linen Stores
5. Stationery Stores
6. Dietary Stores
7. Engineering and Maintenance
 Indenting of Stores
1. Annual Indents
2. Supplementary Indents
3. Emergent Indents
 Annual Indents
• It is the forecast of requirements for the coming
financial year.
• It should be prepared carefully each year after taking
into account the existing stock position, last one
year’s average consumption (mean of last three years)
and quantities required for the next year.
• It should give complete specifications of each item,
likely source of procurement and the approximate
cost which should not exceed the financial allocations
of the department for that year.
• The annual indent should be submitted by 1st January
each year for ensuing financial year.

• Indents for consumable and non consumable stores

should be submitted separately.
 Supplementary Indents
• Normally there should be no supplementary indents.
• However, if needed, it should be submitted separately,
provided it is certified that items included therein could
not be foreseen at the time of submission of the annual
indents and are urgently required during the year.
• It many be submitted by 1st August of every year provided
the limit of financial allocation for the year has not
exceeded.
 Emergent Indents
• This may be avoided as far as possible, and should
only be resorted to when the demand is of immediate,
inescapable nature and funds of the departmental
allocation are available.
• All demands should be signed by the officer incharge
of the department concerned before forwarding to the
purchase department.
• It can be submitted any time of the year with
approval.
 Duties of the Store Keeper
• The items on stores should be placed in such a
way that these can be easily located to ensure
the availability of products.
• To maintain the stores premises neat and
clean. Adequate storage and preservation
should be provided.
• Efficient and effective inventory control
• To ensure that materials are issued against
authorised requisitions only
• To keep up-to-date record of materials issued,
received and balance in stock.
• Store keeper is the custodian of stores and is
responsible for its safety and security.
• He is accountable for any variation in the quantities
of stocks under his charge.
 Control of Stores
• Closed door system: the stored material is held
under lock and key. Entry into the store is restricted
authorized persons only. Physical movement of the
material is only with authorized documents only.
Maximum security and tight control on movement
are features of this system

• Open stores system: In this system material is stored

near point of use and there is restriction on
consumption. Control passes on to the operations
department
• In hospital situation, closed system is usually
followed since storage of materials is
inevitable as the needs of daily utilization is
variable and emergency needs are not always
foreseeable.
• The hospital stores should be centralized.
 Stores Layout
• Physical arrangement of storage facilities
for efficient receipt, storage and issue of
materials is called as layout of stores. In a
properly arranged store, the material are
properly maintained. It involves
minimum of handling and optimum
utilization of space.
 Factors affecting stores layout

• Type of Stock
• Volume of stock
• Availability of space
• Physical factors
Essentials of Stores Design