1. Materials Management Definitions:
The process, which integrates the flow of supplies into, through and out of the organisation.
The planning, organisation and control of all aspects of inventory embracing procurement, warehousing, work in progress and distribution of finished goods.
Purpose:
The balance between costs and performance (service level)
Traditionally the focus has been on price alone
Now best practice to concentrate on the TOTAL ACQUISITION COST

2. What costs should we consider when acquiring drugs or any other goods or services? How can these costs be controlled or reduced?
See additional word document
Price-Cost Iceberg

3. Pharmacy supply chain (therapeutic substitution)
supplier
95%
supplier
95%
supplier
A typical supply chain
supplier
95%
supplier
100%
supplier
E.g.
100 watt light bulbs, baked beans
Minijets / ampoules – Fungizone / Ambisome
SEEKING ALTERNATIVES
More expensive
Time consuming
Most supply chains accept some unavailability. Pharmacy does not – therapeutic substitution
HOLISTIC APPROACH
Consider consequences of actions on others (Exports)
Whole health economy – Formulary decisions
Panic / bulk buying during shortages is unethical, exacerbates supply difficulties, inhibits information, within supply chain
Strategically managed products
Ethical issues – media stories
Environmental issues – carbon foot print, minimise transportation
Pharmacy supply chain (therapeutic substitution)

4. Tender Evaluation Exercise
Evaluate the tenders and identify your preferred supplier.
Explain the reasons for your decisions.
FORK LIFT TRUCK Not Euro truck as can’t go outside
Not Global Truck as battery life only 10 hours
Trucks UK cheaper than Betta Trucks but what about the warranty
PHARMACEUTICAL
X Supplier A multiple order quantity 20 and delivery charge £20
X Supplier B erratic lead-time
X Supplier C customer service poor
Supplier D. Would you reconsider if the price was £150? What if the product is clinically vital?