Materials management information systems (MMISs) automate the continuous cycle of supplies procurement and usage throughout the care delivery organization (CDO).

Traditionally, MMISs have included the following functional modules:

• Requisitioning: Including online requisition generation and approval.
• Ordering: Purchase order (PO) generation and EDI or Web-based transmission to vendor.
• Receiving: Receipt generation and tracking.
• Distribution: Tracking where and when supplies are dispersed throughout the organization.
• Usage: Including usage tracking and charging of supplies to patient accounts.
• Invoice and payment processing–invoice tracking, EDI or Web transmission of payments, and forwarding of financial data to the general ledger system.
• Inventory management–support for just-in-time or par-level inventory and automatic requisitioning when supplies drop to user-defined levels.
• Vendor database: Bidding, contract management, and online vendor supply catalogs.
• Management reporting.

MMISs can significantly improve the way CDOs automate supply requisition, purchase, receipt, storage, and distribution. EDI and Web-based transmission of purchase orders, remittances, and accompanying documents between suppliers and CDOs expedites the speed and accuracy of payments and deliveries. MMISs control the flow of supplies and corresponding information throughout the CDO. Materials management software significantly improves the way a CDO manages clinical and nonclinical inventory and determines when to replenish supplies. EDI has evolved from mere paperless ordering to include invoicing and management of the CDO’s relationships with suppliers and distributors.

Materials management encompasses all areas within the organization.

Purchasing/accounting, patient registration, nursing stations, laboratory, radiology, pharmacy, operating room, medical records, laundry, housekeeping, mailroom, and kitchen/dietary planning are among the many functional groups that can benefit from an

MMIS. Materials management is an unending cycle of requisitioning, purchasing, receiving, storing, and distributing supplies. A well-implemented system can demonstrate an ROI and save the CDO additional money annually by controlling expenses and maintaining a JIT or stockless inventory. MMISs improve patient care by automatically requisitioning supplies or by alerting users when volumes are low. An SCM solution can be used to order supplies from predetermined vendors over the Internet. The technology improves worker productivity by reducing the paperwork and time associated with manual supply requisitioning. Inventory management also includes forecasting of required supplies, based on recorded usage. This is a convenience feature for all types of supplies and a critical feature for perishable supplies or those in high use in clinical environments.

Healthcare executives must reduce costs as well as increase revenues in order to maintain profitability. An MMIS’ greatest advantage to a CDO is cost savings. Other benefits– such as accessibility of vital supplies and improved work processes for staff members—all support the primary benefit of bottom-line improvement. An MMIS reduces the amount of costly storage space required to warehouse supplies not needed in the short term.

It allows administrators to track the price, distribution, usage, and location of individual supplies. It enables users to more readily identify which vendors provide the best prices and delivery response times. It permits the organization to charge supplies directly to patient accounts in a timely manner. It can help contain costs by automatically soliciting vendor bids and making purchase recommendations.