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An IntroductionNHS Supply Chain
Patrick Johnson30 April 2007
Agenda
An introduction to NHS Supply Chain
The Procurement Process
Working with Suppliers
NHS Supply Chain
Who is NHS Supply Chain?
A 10 year contract to provide procurement and other supply chain services to the NHS in England
The organisation comprises over 1700 colleagues from:
– DHL
– NHS Logistics
– NHS Purchasing and Supply Agency
– Novation
NHS Supply Chain Sites
Runcorn, Cheshire
Normanton, West Yorkshire
Alfreton, Derbyshire
Bury St Edmunds, Suffolk
Maidstone, Kent
Bridgwater, Somerset
DHL
DHL Logistics:
– Is part of a global group – Deutsche Post World Net
– DPWN employs 500,000 people worldwide
– Employs over 70,000 staff in the UK in over 600 locations
DHL Logistics has a rich history of working in the healthcare sector:
– Management of NHS Logistics’ site in Bridgwater
– Manages significant logistics operations for NHS trusts in London:
• has generated major savings for trusts
• enabled medical staff to focus on patient care
– Works with most of the major technology and pharmaceutical suppliers
Commercial Arrangements
NHS trusts are not obliged to use NHS Supply Chain
Prices will include a margin as they have previously
Cost base transferred from Department of Health for NHS Logistics Authority and NHS PASA; increased by new recruitment
No underwrite of profit for DHL but upper cap in place
Governance
Relationship with the NHS managed by the Business Services Authority
Contract contains extensive audit rights
NHS has step in rights for service failure
Our Vision
NHS Supply Chain will deliver customer-focused, procurement driven supply chain services to the NHS,
enabling health providers to achieve sustainable value, focus on quality patient care and control costs
A target of over £1 billion savings of the course of the contract term
Procurement Overview
Product Categories
Food and kitchen
Print and stationery
Laundry and cleaning
Bedding and linen
Uniforms and clothing
Furniture and office
equipment
Medical supplies
Dressings
Patient appliances
Laboratory equipment
Procurement Overview
NHS Supply Chain aims to:
– Deliver the highest quality products at the lowest total cost to
the NHS
– Use our customers’ purchasing volume to increase market
share for suppliers while decreasing costs
– Provide suppliers of all sizes access to our 600+ customers
– Promote new technologies and innovative products to relevant
customers at the best possible value
– Support supply efforts via marketing and sales programmes
Product Pricing Strategy
NHS SUPPLY CHAIN
Trust 1High Volume/Commitment
££
Trust 2Moderate Volume/Commitment
£££
Trust 3Low Volume/Commitment
££££
Supplier
Differential pricing based on volume and commitment to supplier
Procurement – Key Stages
Identify Customer Needs
Tender Development
Tender Analysis
Issue Resolution/Clarification
Decision Making
Finalising the Award
Launching the Agreements
Records Retention
Product assessment; market assessment; market research; choose procurement procedures
Finalise contract award matrix; define final specifiications; send to all eligible tenderers
Determine total delivered cost and quality available; compare among tender respondents
Clarify terms and conditions; focus on value for money;develop implementation plans; finalise supplier agreement
Determine low best tender based on contract award matrix;involve councils and task forces; make recommendations
Finalise supplier agreement; draft contract summary;begin contract approval process
Notify all tenderers and customers; develop marketing planin collaboration with supplier; perform sales training
Provide legal department with original signed copy of agreement
Product Councils
A key principle of the procurement model is to engage clinical professionals in the assessment process
Key functions will include
– ensuring that all products are assessed using a consistent process
– reviewing and recommending supplier contract shortlists
– analysing financial and non-financial information against an agreed matrix
Each council will meet twice a year and have ongoing contact
A variety of recruitment channels – including NHS Trusts and professional bodies
Product Councils and Task Forces
Strategic Information
Council
Capital Equipment & Facilities
Laboratory Council
Food CouncilRespiratory
CouncilDiagnostic Imaging
Council
Anaesthesia Council
Orthopaedic Council
Cardiology Council
Paediatrics Council
Wound Management
Nursing & Clinical Practice
Council
Perioperative Council
Materials Management
Council
Working with Suppliers
Working with Suppliers
A series of events and meetings with suppliers and trade associations
Ongoing information and updates via the website – including the procurement calendar
Feedback provided on procurement decision making process
Explore the opportunities for new approaches
– marketing and promotion activities
– supply chain reorganisation
Ongoing contact with other organisations in the Innovation Landscape
Innovation Landscape
Summary
NHS Supply Chain will build on existing knowledge, relationships and capabilities
We believe working with other organisations with an interest in procurement a key part of this process
We will implement new pricing strategies driven by customer commitment in order to deliver savings to the health service
There will be new opportunities for suppliers to grow market share
Questions & Answers