“I can’t recall a time when there has been as much focus on “procurement” as right now, be it the introduction of the Future Operating Model re-shaping NHS Supply Chain, the performance reporting and benchmarking regime under NHS Improvement’s Model Hospital, to the drive for STP wide service consolidation. In this context where does “procurement” at a local level fit, what is the role of procurement at a Trust/STP level?
To answer this question, we first need to understand the full scope of the procurement function. It’s not simply about negotiating lower prices. That in many ways is the easy part. It’s also about contract management, building partnerships with industry, and crucially managing the supply chain. The scale/ complexity/ operational dependency of a Trust supply chain is arguably procurement’s greatest secret and greatest opportunity. In other sectors the supply chain function is recognised as fundamental to the operational performance of the organisation, the dependencies in a Trust are no different and arguably given the performance weakness of the inbound supply chain, more critical. It is worth noting that the typical performance level of both pharma and clinical supplies wholesalers is less than 90% so 1 in 10 of items Trusts order do not arrive first time.
We also need to understand the challenges facing Trusts. One key challenge is Capital. Trusts need ongoing investment to maintain, update, develop new services but have insufficient capital to do everything. Procurement has a role to take forward alternative approaches to achieve investment. For example working in partnership with industry to provide the capital. This year Guy’s signed a contract with a medical device company to build a centre of excellence for orthopaedics which over time will include a dedicated eight theatre facility doubling capacity.
A second key challenge is Efficiency. Although funding into the NHS is increasing demand is increasing faster so we need to do more for less. Procurement has a role to drive efficiency, again through partnership with industry, for example by adopting new technology/ innovation. Equally Procurement has a role of ensuring effective control and grip over the on-site supply chain. Across our local STP we are modelling the potential opportunity from adopting a sector wide approach. Assuming a combined pharma and clinical supply spend of £540m we estimate the annual level or expiry and waste and therefore efficiency opportunity could be up to £32m (6%) per annum. An opportunity of far greater impact and wider operational benefit than any national initiative focused on unit price alone.
For me procurement is at the “heart of the Hospital”, at the front-line supporting clinical teams by delivering an efficient supply chain and ensuring nursing time is released to focus on patient care, to the board room delivering industry partnerships to support the Trust achieve its strategic objectives. The role of procurement at a Trust and STP level is clear.”
David Lawson, Chief Procurement Officer, Guy’s & St Thomas’ NHS Foundation Trust/ SmartTogether Procurement Shared Service