Biting the NHS procurement bullet: A procurement makeover at County Durham and Darlington NHS foundation trust could provide a model for the whole NHS
Millions of pounds are too often wasted in the way the NHS purchases products and services, from swabs to stationery. Until the health sector bites the bullet and gets its procurement house in order the financial impact of health reforms will achieve only partial success.
At County Durham and Darlington NHS foundation trust we have been through a major restructuring and a complete overhaul of our approach to procurement, leading to an upgrade of our skills and systems.
In 2011, the merger of the foundation trust with local PCTs led to changes in the way local health services were to be delivered, with a far greater focus on integrating services. The trust was split into three clinical care groups: care closer to home; surgery and diagnostics; and acute and long term. The newly defined groups meant procurement now needed to act as a partnership to these three distinct care groups, each with very specific and varied purchasing requirements.
Each group has a designated procurement representative involved in decision making at both a strategic and business level. This gives our procurement group visibility and credibility as consultative advisors on the products and services best suited to fulfilling each care group's strategy, while the care groups have the distinct advantage of being able to engage with procurement in the early stages of planning.
Our long term objective as an NHS trust has always been to achieve clear visibility of our 'cost per patient' and our trust is also the leader of a regional public sector purchasing consortium. This is going through major change to decentralise purchasing, making it as easy and as simple as possible for our large user community to buy the products and services they need.
It is obviously critical to have the right information about suppliers, products and prices. For this, we use a system called Wax Digital web3 Source to Pay, which has cut our admin and increased our ability to see our costs clearly. Without it, the procurement team could not support the new care groups with information and strategic guidance in the way we do. Another wider benefit is that accurate forecasting information has aided the process of integrated decision making among the groups' new teams.
We are developing our procurement systems in other ways, too. We want to make interaction with suppliers fully automated and integrated into the purchasing process, to ensure any queries can be dealt with at the beginning of the process rather than at the end, as a query on an invoice. We also want all our orders to be as accurate as possible. For these reasons, we have added the ability to manage suppliers and contracts to our systems and identified 300 suppliers that will be added to our supplier portal.
Suppliers can now simply post their invoices on the portal, reducing printing and postage costs. They will also able to upload and self manage their catalogues on the system, to give us the most up-to-date information and pricing – that's especially important with catering items like fresh fruit and vegetables, where prices could fluctuate week by week.
By the end of 2012 we want to be an organisation where procurement is woven into the very fabric of our business objectives, creating a model where product and service choices are realistic but not excessive. We have put purchasing and requisitioning further in the hands of our users, so they can easily order what they need, with reduced administrative cost, but with the ability to keep maverick spending fully under control.
I believe that within our consortium we have created a model for procurement that could be used across the entire NHS, if not the public sector as a whole.
At the moment many organisations are purchasing the same products and services with public money in silos. They are not getting best value and there is no visibility of spend or the potential to control it.
Health reform needs to be clearly focused on the most effective way of delivering the most needed health services for the country – but cost efficiency has to be part of this too.
Malcolm Preston is associate director of procurement at County Durham and Darlington NHS foundation trust Guardian Professional
Millions of pounds are too often wasted in the way the NHS purchases products and services, from swabs to stationery. Until the health sector bites the bullet and gets its procurement house in order the financial impact of health reforms will achieve only partial success.
At County Durham and Darlington NHS foundation trust we have been through a major restructuring and a complete overhaul of our approach to procurement, leading to an upgrade of our skills and systems.
In 2011, the merger of the foundation trust with local PCTs led to changes in the way local health services were to be delivered, with a far greater focus on integrating services. The trust was split into three clinical care groups: care closer to home; surgery and diagnostics; and acute and long term. The newly defined groups meant procurement now needed to act as a partnership to these three distinct care groups, each with very specific and varied purchasing requirements.
Each group has a designated procurement representative involved in decision making at both a strategic and business level. This gives our procurement group visibility and credibility as consultative advisors on the products and services best suited to fulfilling each care group's strategy, while the care groups have the distinct advantage of being able to engage with procurement in the early stages of planning.
Our long term objective as an NHS trust has always been to achieve clear visibility of our 'cost per patient' and our trust is also the leader of a regional public sector purchasing consortium. This is going through major change to decentralise purchasing, making it as easy and as simple as possible for our large user community to buy the products and services they need.
It is obviously critical to have the right information about suppliers, products and prices. For this, we use a system called Wax Digital web3 Source to Pay, which has cut our admin and increased our ability to see our costs clearly. Without it, the procurement team could not support the new care groups with information and strategic guidance in the way we do. Another wider benefit is that accurate forecasting information has aided the process of integrated decision making among the groups' new teams.
We are developing our procurement systems in other ways, too. We want to make interaction with suppliers fully automated and integrated into the purchasing process, to ensure any queries can be dealt with at the beginning of the process rather than at the end, as a query on an invoice. We also want all our orders to be as accurate as possible. For these reasons, we have added the ability to manage suppliers and contracts to our systems and identified 300 suppliers that will be added to our supplier portal.
Suppliers can now simply post their invoices on the portal, reducing printing and postage costs. They will also able to upload and self manage their catalogues on the system, to give us the most up-to-date information and pricing – that's especially important with catering items like fresh fruit and vegetables, where prices could fluctuate week by week.
By the end of 2012 we want to be an organisation where procurement is woven into the very fabric of our business objectives, creating a model where product and service choices are realistic but not excessive. We have put purchasing and requisitioning further in the hands of our users, so they can easily order what they need, with reduced administrative cost, but with the ability to keep maverick spending fully under control.
I believe that within our consortium we have created a model for procurement that could be used across the entire NHS, if not the public sector as a whole.
At the moment many organisations are purchasing the same products and services with public money in silos. They are not getting best value and there is no visibility of spend or the potential to control it.
Health reform needs to be clearly focused on the most effective way of delivering the most needed health services for the country – but cost efficiency has to be part of this too.
Malcolm Preston is associate director of procurement at County Durham and Darlington NHS foundation trust Guardian Professional
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