Purpose of material management PDF | PPT

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: Sanjit Chaudhary
M-pharma (QA)
II nd semester



• It is concerned with planning, organizing and
controlling the flow of materials from their
initial purchase through internal operations to
the service point through distribution.


• Material management is a scientific
technique, concerned with Planning, Organizing
&Control of flow of materials, from their initial
purchase to destination.


Aim of Material management.

• To get :

1. The Right quality.

2. Right quantity of supplies.

3. At the Right time. COST GOODS

4. At the Right place.

5. For the Right cost.


Purpose of material management.

• To gain economy in purchasing.

• To satisfy the demand during period of


• To carry reserve stock to avoid stock out.

• To stabilize fluctuations in consumption.

• To provide reasonable level of client services.


Objective of material management
Primary. • Secondary

• Right price • Forecasting

• High turnover • Inter-departmental

• Low procurement & harmony

storage cost • Product improvement

• Continuity of supply • Standardization

• Consistency in quality • Make or buy decision

• Good supplier relations • New materials & products

• Development of

• Good information system
• Avoid wastage


Basic principles of material
management .

1. Effective management & supervision
• It depends on managerial functions of
• Planning
• Organizing
• Staffing
• Directing
• Controlling
• Reporting
• Budgeting
2. Sound purchasing methods
3.Skillful & hard poised negotiations
4.Effective purchase system
5.Should be simple
6.Must not increase other costs
7.Simple inventory control programme


Material planning
• Purchase procurement
 Purchase is a strategic activity, directed

towards acquiring materials, supplies,
equipments and services for the purpose of
consumption and rendering services by
organization in an efficient manner.

 Each organization has a purchase policy. This
saves time in making fresh decisions every
time and maintains uniformity.


1.Centralized purchasing 2.Decentralized purchasing

• Advantage : • Advantage :
• The peripheral units are responsible for

• enables quality control, purchase and distribution hence top
improved negotiating authority can get more time for other
capacity, hence minimizes organization activity. Will be faster to

needs in emergencies, better liaison and
the cost. tight control as purchase officer will have

• Disadvantages : more depth knowledge of requirements.
• Disadvantages:

• may be delay in supply and • Can be expensive as replication by each
in distribution of the stores, dept
possibility of consumer • increases manpower consumption since
dissatisfaction they have to spare time for other than

their regular work.
• If purchase is not managed well,

inspection and quality control can suffer,
inferior goods may be supplied and out
of stock situations is common


Need recognized,
Specification spelt demand estimated


Indent prepared

Check specifications/price Purchase specification

Purchase plan

Select suppliers Tender/enquiry/imports
Suppliers records


Finalize rates, terms

Purchase order

Supplier acceptance Follow up

Delivery, receipt and inspection Invoice

Payment made


1.General Controls
• There should be written procedures describing the receipt,

identification, quarantine , storage, handling, sampling,
testing, and approval or rejection of materials.

• Manufacturers of intermediates and/or APIs should have
a system for evaluating the suppliers of critical materials.

• Materials should be purchased against an agreed
specification, from a supplier or suppliers approved by the
quality unit(s).

• If the supplier of a critical material is not the manufacturer
of that material, the name and address of that
manufacturer should be known by the intermediate
and/or API manufacturer.

• Changing the source of supply of critical raw materials
should be treated according to Section 13, Change


2. Receipt and Quarantine
• Upon receipt and before acceptance, each container or grouping of containers

of materials should be examined visually for correct labelling (including
correlation between the name used by the supplier and the in-house name, if
these are different), container damage, broken seals and evidence of tampering
or contamination. Materials should be held under quarantine until they have
been sampled, examined or tested as appropriate, and released for use.

• Before incoming materials are mixed with existing stocks (e.g., solvents or
stocks in silos), they should be identified as correct, tested, if appropriate, and
released. Procedures should be available to prevent discharging incoming
materials wrongly into the existing stock.

• If bulk deliveries are made in non-dedicated tankers, there should be assurance
of no cross-contamination from the tanker. Means of providing this assurance
could include one or more of the following:

• – certificate of cleaning
• – testing for trace impurities
• – audit of the supplier.
• Large storage containers, and their attendant manifolds, filling and discharge

lines should be appropriately identified.
• Each container or grouping of containers (batches) of materials should be

assigned and identified with a distinctive code, batch, or receipt number. This
number should be used in recording the disposition of each batch. A system
should be in place to identify the status of each batch.


3.Sampling and Testing of Incoming Production

• At least one test to verify the identity of each batch of material should be
conducted . A supplier’s Certificate of Analysis(COA) can be used in place of
performing other tests, provided that the manufacturer has a system in place to
evaluate suppliers.

• Full analyses should be conducted on at least three batches before reducing in-
house testing. However, as a minimum, a full analysis should be performed at
appropriate intervals and compared with the Certificates of Analysis. Reliability
of Certificates of Analysis should be checked at regular intervals.

• Processing aids, hazardous or highly toxic raw materials, other special
materials, or materials transferred to another unit within the company’s control
do not need to be tested if the manufacturer’s Certificate of Analysis is
obtained, showing that these raw materials conform to established

• Visual examination of containers, labels, and recording of batch numbers
should help in establishing the identity of these materials. The lack of on-site
testing for these materials should be justified and documented.


• Samples should be representative of the batch of material from
which they are taken. Sampling methods should specify the number
of containers to be sampled, which part of the container to sample,
and the amount of material to be taken from each container.

• The number of containers to sample and the sample size should
be based upon a sampling plan that takes into consideration the
criticality of the material, material variability, past quality history of
the supplier, and the quantity needed for analysis.

• Sampling should be conducted at defined locations and by
procedures designed to prevent contamination of the material
sampled and contamination of other materials.

• Containers from which samples are withdrawn should be opened
carefully and subsequently reclosed. They should be marked to
indicate that a sample has been taken.



• Should handled and stored in a manner to prevent degradation,
contamination, and cross-contamination.

• Materials stored in fiber drums, bags, or boxes should be stored off the floor
and, when appropriate, suitably spaced to permit cleaning and inspection.

• Materials should be stored under conditions and for a period that have no
adverse affect on their quality .

• Poisonous and narcotic substances to kept separately
• Placing drugs in shelves in alphabetically order corresponding to essential

drug list
• Rule of first in first out (FIFO) should apply
• Rule of first to expire first out (FEFO)
• Certain materials in suitable containers can be stored outdoors, provided

identifying labels remain legible and containers are appropriately cleaned
before opening and use.

• Rejected materials should be identified and controlled under a quarantine
system designed to prevent their unauthorised use in manufacturing.



• Materials should be re-evaluated as
appropriate to determine their suitability for
use (e.g.,after prolonged storage or exposure
to heat or humidity).



information system


purchase &
maintenance & repairs










• National institute of Health & Family Welfare
(NIHFW, New Delhi)

• ICH Topic Q 7Good Manufacturing Practice
for Active Pharmaceutical Ingredients.


•Thank you