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Is procurement delivering for you?

Monday 1 June 2015

At the recent HFMA Finance Directors Forum, Suzanne Tracey, Chair of HFMA FT Finance Faculty and Director of Finance and Business Development at Royal Devon & Exeter NHS Foundation Trust co-hosted, a plenary session with David Pierpoint, Managing Director of Customer Engagement at NHS Supply Chain to discuss procurement, the challenges that trusts are currently facing and some of the potential solutions.

The plenary session was attended by 75 Directors of Finance and the discussion quickly identified some key barriers for driving savings and efficiencies through procurement channels within trusts. Some Directors of Finance identified the difficulties they face when trying to access networks, finding relevant examples of clinically led engagement on procurement.

Growing deficits and increasingly difficult cost improvement targets are challenges faced by many NHS trusts’ finance departments; the question is what can be done to cut costs and maintain value? Reviewing procurement practices and working with partners to identify new opportunities still has a major role to play in achieving significant recurrent savings, to offset some of the financial pressure for providers.

A key source of these opportunities can be accessed by working with local representatives of NHS Supply Chain’s customer boards many of who are NHS Directors of Finance.

“Through working in small localised geographies you can pick off the quick savings opportunities – but what about the bigger opportunities? By forging partnerships that form part of a larger demographic we can collectively determine greater efficacies of supplies that will allow standardisation and rationalisation of thousands of products”, said David Pierpoint.

“We have realigned ourselves to support NHS trusts to implement sustainable procurement solutions that can deliver not only savings but also create effective partnerships with longevity. But in order to do this effectively, we need to adopt a more collaborative approach.” continues David.

NHS Supply Chain’s Customer Board, chaired by Sir Ian Carruthers at a National level aims to champion a more collaborative approach between NHS Supply Chain and NHS trusts with a view to maximise the efficiencies and savings opportunities that are available now. Suzanne Tracey Chairs the Southern Board.

Suzanne was clear on the challenges ahead and emphasised the need to drive efficiencies from procurement, “We need to work together to address how we refocus our efforts in order to accelerate savings. By increasing transparency through sharing volume, purchasing practices, prices paid and best practice we can determine where there are tangible opportunities to utilise key savings programmes such as the [NHS] Core List.”

“These programmes have been developed in response to the very real challenges that we are facing, and allow trusts to review requirements and to switch products [to a clinically acceptable alternative] or to standardise products across wards and trusts which could again secure savings with the confidence that all products have been evaluated and are available for trust clinical evaluations too.” continues Suzanne.

How do we move forward? - “We have invested in our teams to ensure they can help you reach your goals; to support you to realise savings by having our teams work closely with your procurement and clinical teams to identify where and how savings are generated. This approach will only work if you contribute towards this; where we work with trusts at a strategic level and have sight of their plans, data and requirements – we can leverage the best savings and this is the level of engagement that we would like to achieve with all of our customers.” adds David.

“We have committed to reducing our pricing on clinical consumables by 10% and are on track to deliver £150 million in cash releasing savings by March 2016. With over £75 million of these savings delivered to date [End March 2015], our journey doesn’t end here - having a more collaborative approach and reducing purchasing in small localised pockets we can continue to leverage the best possible price. NHS Supply Chain has with the Department of Health written to all our suppliers to notify them that we will not be accepting any price increases and will continue to identify ways in which we can generate savings for you now and long after March 2016 but we have to work together to deliver this.” concludes David.

To support the delivery of savings NHS Supply Chain is implementing mechanisms where maximum value from activity is passed on directly to customers. By having a more transparent approach demand could be shared with suppliers to lower pricing. Working with the Customer Board, Clinical Nurse Advisors (CNA’s) and procurement teams it is possible to achieve greater savings opportunities through utilising channels such as the [NHS] Core List and Compare and Save programmes.

“In this session we have heard loud and clear directly from Directors of Finance that getting clinicians from Medical Directors and their wider teams to lead and not just engage on procurement is key to effective purchasing. It’s critical to have active sponsorship from board level on procurement so that there is greater transparency and engagement between clinicians (their product expertise and requirements) and procurement teams know how. I will be working with the Customer Board and within the South to understand how we can engage with you to drive efficiencies and promote standardisation. It has been fantastic to hear your insights and I urge you all to contact myself or the NHS Supply Chain team to learn about the opportunities available to you.” concludes Suzanne.

To find out more about savings opportunities available through NHS Supply Chain, speak to your account manager or visit: www.supplychain.nhs.uk/savings and to find out more about the Customer Board and the work that they are doing in your region visit: www.supplychain.nhs.uk/about-us/customer-board

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