EFFICIENCY IN PROCUREMENT
Jayesha Mistry of NHS Supply Chain explains how her organisation can save trusts millions of pounds through innovative procurement measures.
O
pen any paper or health publication and you will be faced with the same
question, under several different guises, but the underlining problem rarely chang- es – how to save millions in the NHS with- out compromising quality and care?
Cue NHS Supply Chain, who since October 2006 have committed to saving the NHS £1bn through aggregating spend in order to deliver better product pricing.
Over £200m in savings have been gener- ated to date through innovative procure- ment solutions and through our commit- ment to delivering savings.
We are well on track to meet the £1bn sav- ings target by 2016.
The National Audit Office’s (NAO) recent report has highlighted that better pro- curement can achieve substantial savings, but it also recognised the complexity sur- rounding procuring healthcare consuma- bles and the variance in cost throughout the market, which is often unrelated to the volume of product purchased.
Nick Gerrard, NHS Supply Chain’s chief executive officer said: “We agree with the report’s key findings; that greater savings could be achieved through product stand- ardisation and rationalisation and through greater use of volume commitment deals.
“Our business strategy for 2011 is focussed on greater use of these proven procure- ment techniques to produce greater effi- ciency savings for our NHS customers.”
He continued: “We also welcome the rec- ommendation around greater price trans- parency on prices being charged by indi- vidual suppliers to trusts.
“We are currently working with the Department of Health through the Quality Innovation Productivity and Prevention (QIPP) programme to help deliver the £1.2bn savings required from NHS pro- curement.”
How can NHS Supply Chain save trusts millions of pounds?
Nick Gerrard
1) Recognise that procurement is a strategic priority
The NAO report called on NHS chief ex- ecutives to consider procurement as a stra- tegic priority. NHS Supply Chain is well placed to help NHS chief executives face this challenge, as our aim is to ensure that pricing for our NHS customers represents the best value.
We will continue our work with NHS chief executives to help their trusts achieve the necessary efficiency savings. The more NHS spend we can aggregate, the better the savings will be for new and existing customers.
2) Make use of our innovative pro- curement tools
Our aim is to drive down product prices through transformational procurement techniques, such as e-auctions. NHS Supply Chain have managed 90 e-auctions over the last two years, which typically de- liver around 15% savings per auction.
Our initiative, quoted in the NAO report, to standardise nurses’ uniforms with Doncaster and Bassetlaw NHS Foundation Trust reduced costs for 23,000 garments a year by more than 50% from £300,000 to £148,000 annually.
3) Avoid duplication – why waste money?
The NAO report referenced the amount of duplication and wastage that can be com- monplace in trusts. It has found that many trusts are buying the same or similar items that don’t get used and as a result are of- ten wasted. The report has also recognised that duplication in contracting adds signif- icant unnecessary cost to the whole system – to suppliers and to individual trusts.
NHS Supply Chain have pioneered new sustainable methods by which trusts can avoid the additional costs of holding ex- cess stock, which takes up valuable stor- age space. Our materials management service ensures that demand is managed and stock is not wasted.
4) The NHS Supply Chain team
In order to achieve the best results, you need to start with a team that are the best at what they do. At NHS Supply Chain we are proud to say that from our CEO through to our delivery drivers we all share the same vision - to be the first choice for our customers.
5) Our Results
Having generated over £200m in savings to date, NHS Supply Chain are now in a position where we are able to offer savings to any trust; greater spend commitment and collaboration will serve to enhance the savings available.
According to the report, NHS trusts could save £500m a year if they collaborated their spend on a wide range of basic con- sumables that could include anything from A4 paper to disposable gloves.
Ultimately trusts have the choice to decide what they buy and from where and from whom, but in the current landscape NHS Supply Chain could enable trusts to cap- ture simple savings that may have been missed.
FOR MORE INFORMATION
To find out how NHS Supply Chain can work with your trust, contact your local account manager or visit:
www.supplychain.nhs.uk
national health executive Mar/Apr 11 | 39
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