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Driving procurement efficiencies to deliver £150 million in cash releasing savings back into the NHS

Tuesday 1 April 2014

In order for the NHS to continue to provide critical services it has been calculated that efficiency savings in the region of £2 billion must be secured through better procurement. NHS Supply Chain is pleased to announce that following challenges set by the Department of Health (DH), the Cabinet Office (CO), and the NHS Business Services Authority (NHSBSA) it will be working closely with its suppliers and customers over the coming months to deliver £150 million in cash releasing savings; that will be reinvested back into front-line patient care through implementing and driving crucial procurement efficiencies by March 2016.

Nick Gerrard, Chief Executive Officer at NHS Supply Chain says, “As a key supplier to the NHS, NHS Supply Chain and its suppliers are in a unique position to be able to drive greater efficiencies for the NHS and as such are committed to working with our suppliers to deliver these savings. NHS Supply Chain has a range of strategies to improve efficiency such as commitment, rationalisation and many other supply chain cost reduction activities.

“NHS Supply Chain is committed to driving this value for our customers and consequently, no price or cost increase will be accepted from our suppliers, the Department of Health has recently published guidance on combatting inflation directly to trusts advising them to also not accept any pricing or cost increase." continues Nick

“NHS Supply Chain is currently undergoing a range consolidation programme to reduce duplication and to streamline down to a tighter core product range within our national catalogue. We are confident that this will deliver the balance of quality, choice and value that NHS trusts need to deliver the best outcomes for their patients. Not only will this help to protect front-line patient services but it will also go some way to developing mechanisms to drive effective procurement in the years to come.” concludes Nick.


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Notes to editors

About NHS Supply Chain

Follow us on Twitter: @NHSSupplyChain

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.

The organisation was formed in 2006 from the NHS Logistics Authority and parts of the NHS Purchasing and Supply Agency (NHS PASA). NHS Supply Chain aims to provide over £1 billion of savings to the NHS by 2016.

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 ranging from bandages to sutures, from gloves to implants, and even diagnostic equipment such as MRI scanners.

Its management of the procurement process negates an NHS organisation’s need to tender through the Official Journal of the European Union (OJEU). Costs can also be reduced through its one-route solution that consolidates all products onto one invoice and delivery – this saves up to £1* per product in back office administration costs and removes up to 40 deliveries going into a trust compared with ordering goods separately. (*source: NHS Supply Chain 2009 value proposition study with Southampton NHS trust)

To ensure that its products are fit for today’s healthcare market, NHS Supply Chain works with suppliers of all sizes to ensure its range embraces high quality and innovative products; and engages with clinicians, the Department of Health and academic institutions to make sure that it is aware of the current requirements and latest developments in clinical practice. NHS Supply Chain’s product areas include:

  • Theatres
  • Dental
  • Audiology
  • Catering, including food
  • Infection control
  • Orthopaedics
  • Rehabilitation
  • Capital equipment, including finance and maintenance.

Based in Alfreton, Derbyshire, UK, the business employs around 2,400 staff in ten locations.

Delivering value to the NHS