NHS Supply Chain Parliamentary Brief - ‘Delivering On Sustainability’

Thursday 8 December 2011

The Climate Change Act (2008) set ambitious, legally binding targets for the UK to achieve carbon emissions reductions of at least 34% by 2020 and 80% by 2050. As the largest organisation in the UK the NHS aims to support the achievement of these targets by reducing its carbon emissions.

The 2009 NHS Carbon Reduction Strategy in England outlined the ambition for the NHS “to play a leading and innovative role in ensuring a shift to a low carbon society”¹. The NHS Carbon Reduction Strategy asked NHS organisations to have a board approved Sustainable Development Management Plan (SDMP) in place by April 2010. As a result, the NHS is working to address climate change within the framework of sustainable development.

Whilst sustainability has become an important part of the functions and operations across the NHS, challenges remain.

Since 1990, the NHS has increased its carbon footprint by 40%. It is responsible for 21 million tonnes of CO2 equivalent emissions per year. Of those, some 60% are estimated to come from the extraction, processing, manufacture, distribution and disposal of NHS purchased goods and services.

To reverse the trend in carbon emissions growth, the 2009 Saving Carbon Improving Health, NHS Carbon Reduction Strategy for England established that the NHS should have a target of reducing its 2007 carbon footprint by 10% by 2015. Achieving this target will include tackling emissions from procurement as the greatest contributor to the overall carbon footprint. For that reason, every NHS organisation is tasked with minimising wastage at the buying stage and working in partnership with suppliers to lower the carbon impact of the goods and services they procure.

NHS Supply Chain is committed to supporting the sustainability challenge.

NHS Supply Chain’s commitment to sustainability

As an organisation, NHS Supply Chain is committed to making more efficient use of natural resources across all business activities. We aim to improve water, energy and fuel efficiency and increase recycling whilst reducing packaging and emissions from distribution centres and fleet vehicles.

NHS Supply Chain is certified to ISO 14001, the International Environmental Management System Standard, across its seven distribution centres in the UK. Through setting objectives and maintaining operational procedures, we are able to manage our environmental impact as a business and ensure we reach the level of improved environmental performance we set out to achieve.

With more than half of carbon emissions across the NHS being attributed to the procurement of products and services, NHS Supply Chain recognises the huge opportunity for savings to be made through the development and implementation of sustainable solutions for NHS organisations. We therefore continually strive to ensure that sustainability is an integral part of our day to day business and work to deliver carbon efficient and innovative practices.

NHS Supply Chain’s achievements

Since its inception in 2006, NHS Supply Chain has worked with its suppliers and customers to devise new models and processes to make progress towards the NHS carbon reduction target. Through innovative ways of managing our vehicle fleet and close relationships with our suppliers, we have managed to reduce the carbon footprint of deliveries, both from suppliers and onwards to our customers to help reduce the impact of the healthcare supply chain on the environment.

Carbon efficient transport and delivery

NHS Supply Chain achieves carbon efficiencies from the transportation of goods and services through the consolidation of deliveries and use of low carbon technologies:

By using NHS Supply Chain as a supplier for a large proportion of its consumables orders, the Royal Liverpool and Broadgreen University Hospital NHS Trust (RLBUH) see’s fewer deliveries, a reduced carbon footprint from deliveries and less congestion at its loading bay. NHS Supply Chain worked with the procurement team at RLBUH to calculate the carbon emissions from deliveries at their Liverpool site. Data captured over a ‘typical week’ of operation showed that across an average year, deliveries to the trust emitted an estimated 54 tonnes of carbon from vehicle emissions.

The study estimated that, due to the consolidation of large volumes of products on one delivery rather than multiple smaller deliveries, NHS Supply Chain deliveries were almost four times more carbon efficient than other suppliers. The consolidation of orders, deliveries and invoices moreover meant additional back office savings for RLBUH.

The consolidation of routes across the South West of England has enabled NHS Supply Chain to reduce the carbon footprint of deliveries whilst maintaining service levels. Before 2009, 60 NHS Supply Chain vehicles made approximately 500 deliveries a day from the distribution centre in Bridgwater to over 3,000 locations in the South West area. Investigating ways to reduce the number of vehicle trips, NHS Supply Chain divided the area into five separate geographical zones and then organised journeys so that each zone received a delivery service once a week. Having launched the initiative in 2009 after extensive consultation with customers, NHS Supply Chain has saved an estimated 10,400 vehicle miles a year – a total annual carbon emission reduction of five tonnes.

NHS Supply Chain has seen a significant reduction in carbon emissions from its fleet of delivery vehicles. NHS Supply Chain is supportive of new technologies and we therefore supported trials of the world’s first 18 tonne hybrid drive distribution vehicle. The vehicle incorporates a regular diesel engine that is activated only when the vehicle reaches a certain speed. At low speed, a battery and electric motor create the power source. We work closely with our fleet engineering team to support trials of new technologies, helping the research and development of these technologies in ‘real-life’ trials.

Sustainable procurement processes

NHS Supply Chain aims to promote high standards of social, ethical and environmental conduct across our procurement activities and work with our suppliers to adopt a similar responsible approach toward sustainable procurement:

NHS Supply Chain currently offers more than 100 fairly traded products within its catalogue and we hope to expand that range even further. We are also working towards greater focus on ethical criteria, with an initial focus on our surgical instrument contract. In addition, NHS Supply Chain works with suppliers to adopt a responsible approach toward sustainable procurement. This has included reducing supplier delivery mileage through the reconfiguration of pallets and packaging reduction initiatives. We have recently worked with trusts in the North West of England who have collaborated to SAVE 17.5% on milk through NHS Supply Chain. By leveraging their combined spend on milk; a collaboration of five NHS trusts and a local council in the North West are forecasting annual savings of more than £61,430 (17.5%). This has been achieved by rationalising the supplier base to two local dairies through a mini competition and eAuction run by NHS Supply Chain.

Working in partnership with its suppliers, NHS Supply Chain has implemented product innovations that achieve cost savings for customers and greater efficiency throughout the supply chain. NHS Supply Chain has seized the opportunity of changed European Union product regulations to work with suppliers to reduce product packaging for examination gloves. Changes in European product performance (EN) standards for examination gloves allowed suppliers to manufacture thinner products enabling a reduction in packaging by incorporating more gloves per pack. As a result NHS Supply Chain was able to procure a new range of boxes of 200s as opposed to the previous range of boxes of 100s, reducing environmental impact and delivering benefits to NHS trusts.

We are also working on the introduction of a new sustainability labelling scheme to improve the product information NHS Supply Chain can provide to NHS trusts. NHS Supply Chain believes that awareness raising can create a greater understanding and commitment to the principles of an effective sustainable procurement programme. We support the Department for Environment, Food and Rural Affairs (DEFRA) Government Buying Standards – a list of specifications for products which have been assessed for their impact on sustainability. To allow our customers to easily recognise which products meet the standards, NHS Supply Chain is working on introducing the Green Flag scheme. This will allow customers to know which products conform to Government buying standards allowing customers to make informed sustainable procurement choices.

NHS Supply Chain’s future challenges

NHS Supply Chain welcomes the emphasis that the NHS and the wider public sector have put on sustainable procurement as a fundamental element of delivering cost savings, carbon reductions and other environmental benefits. We will continue to further embed sustainability elements into our procurement processes and work with customers, suppliers and all other stakeholders to identify opportunities up and down the supply chain.

NHS Supply Chain’s approach

NHS Supply Chain will play its part as an organisation in achieving the Government’s overarching climate change targets. We have committed to improving our carbon efficiency by 15% by 2012 and 30% by 2020. To drive our sustainability objectives, we set ourselves a range of strict improvement targets every year. In 2011, NHS Supply Chain has set out to:

• Reduce electricity and gas used by its distribution centres by 12.5% and by 17%, respectively
• Improve energy efficiency in distribution centres by replacing mechanical handling equipment, re-lighting warehouse floor areas and rolling out of LED lighting where appropriate
• Increase recycling of waste from distribution centres to 75% and continue to reduce water consumption for every employee
• Reduce the tonnes of carbon per £ million revenue by a further 2.5%
• Replace the remaining old fleet of vehicles and undertake trials of the Fitch Fuel Catalyst2 on nine vehicles
• Collaborate with suppliers to cut down on packaging and identifying further opportunities to reduce carbon emissions in the supply chain
• Share best practice across the organisation, whilst promoting local improvements. We believe in effective stakeholder communications and will report on our performance against the above targets in 2012.

Conclusion

NHS Supply Chain’s commitment to the sustainability agenda has delivered some good benefits for the wider supply chain of the NHS that go beyond delivering cost savings and high quality services.

We were shortlisted for the European Supply Chain Excellence Awards for our contribution to environmental improvement and we remain committed to build on current achievements and identify further opportunities both up and down the supply chain.

About NHS Supply Chain

NHS Supply Chain is operated by DHL as Agent of the NHS Business Services Authority. It supports the National Health Service (NHS) and other healthcare organisations in England and Wales by providing end to end supply chain solutions.

NHS Supply Chain manages the sourcing, delivery and supply of healthcare products and food for over 1,000 NHS trusts and healthcare organisations. It provides a single point of access to over 600,000 products and its range includes bandages, sutures, food gloves, implants, medical and diagnostic equipment such as MRI scanners.

Contact for further information:

Joanna Morrison, Head of Public Affairs and PR
Tel: 07776 457201
Email: joanna.morrison@dhl.com

¹Saving Carbon, Improving Health NHS Carbon Reduction Strategy for England, p. 15

²Savings have been calculated by comparing 2009 and 2010 figures

³Reductions are from a baseline of 2008 for all distribution centres with the exception of Rugby where the baseline is 2009.

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