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Update On Our Category Management Service Providers – Medical Consumables Categories

7 November 2022

NHS Supply Chain continues to evolve the design of its Target Operating Model (TOM).

As part of the procurement process, we are looking to change our service provider model, by implementing a new category management service with five distinct categories. Three of the new category groupings will be directly managed by NHS Supply Chain – Capital Equipment, Medical Devices and PPE.

Procurement exercises are already underway for Medical Consumables, Food and Non-medical Supplies with tender responses having been received for the four lots. Procurement is following the Competitive Procedure with Negotiation process – initial bid evaluation and moderation has been completed, with the first review gateway reached.

Following a thorough evaluation of the tender responses, we have taken the decision to stop the Category Management Service Provider procurement on Lot 1 (Surgical Products and Consumables) and Lot 2 (Rehabilitation and Community). These categories will now transition into the central NHS Supply Chain team by 1 May 2023.

We are operating in a challenging economic environment and we are continuing to focus on simplifying how we operate and partner more expertly with our stakeholders.

The NHS needs us to:

  • Deliver greater value from these critical categories for our NHS partners. Through transferring these categories in-house we will have direct control. This will allow us to partner more expertly with stakeholders on the development of category strategies.
  • Provide a more resilient supply chain. Given the unprecedented global challenges that are continuing to impact supply chains following COVID-19, EU Exit and the war in Ukraine, having direct control over these categories will support us to provide a more resilient supply chain. We will be able to work more strategically with those suppliers whose product portfolios cross different categories. This will simplify the way we work with suppliers.
  • Enhance commercial capability through the creation and implementation of the Procurement Centre of Excellence within the central NHS Supply Chain team. The Procurement Centre of Excellence will create the standard for NHS Supply Chain in Category Management, Strategic Procurement, Sourcing, and Supplier Relationship Management, building on the foundations that already exist within the organisation. Transferring these categories in-house will deliver efficiencies which will save the NHS money and allow us to invest in developing enhanced capacity and capability.

To date we have successfully transferred two of the original Category Towers in-house this year, working in collaboration:

  • NHS Supply Chain: Large Diagnostic Capital Equipment Including Mobile and Services transitioned on 1 July 2022 from DHL Life Sciences. 
  • NHS Supply Chain: Orthopaedics, Trauma and Spine, and Ophthalmology transitioned on 1 November 2022 from Collaborative Procurement Partnership (CPP).

Next Steps

  • We are continuing the procurement process for the remaining lots – Lot 3 (Food) and Lot 4 (Facilities, including Office Solutions) and these categories will continue to be delivered through a service provider model, overseen by NHS Supply Chain.
  • The proposal is to transition PPE categories by 1 February 2023 and Category Towers 6 and 8 by 1 May 2023.
  • It’s also proposed that Category Towers 1, 2, 3 and 5 will transition into the central NHS Supply Chain team by 1 May 2023.

All category and category tower transfers are key to implementing the next iteration of NHS Supply Chain’s TOM.

Our long term vision and strategy is to ensure that we align with the strategic priorities of the wider NHS so that we can bring greater value to the health and care system and make it easier for the NHS to put patients first.

We thank our service providers for all of their continued hard work and commitment in supporting the NHS to deliver excellent patient care.