Comment

19.12.18

NHS Supply Chain: Driving the way forward

Source: NHE Nov/Dec 2018

Jin Sahota spent two years at the Department of Health and Social Care (DHSC) establishing the future operating model for the new NHS Supply Chain. Now, as the organisation’s CEO, he talks about what’s changed.

Over the next five years we have set ourselves an ambitious goal of delivering £2.4bn of savings for the NHS by providing clinically assured, high-quality products at the best value for NHS trusts, by using the immense collective purchasing power of the NHS.

Our contribution ensures that each pound we liberate from negotiating a better deal is another pound for our frontline services and, in turn, for enhancing patient care.

Why was there a need to transform NHS procurement?

Often overlooked, procurement is an area that commands high spend; it can make a real difference and bring money back to the frontline.

The NHS currently spends £5.7bn on everyday hospital consumables, common goods, high-value healthcare consumables, and capital medical equipment. Although savings have been made in procurement, there is still huge potential for the NHS.

In February 2016, Lord Carter published a report identifying unwarranted variation in procurement across the NHS and the need to improve operational efficiencies in the way the NHS chooses, uses, and purchases supplies.

Following the report, the Procurement Transformation Programme was established by the DHSC to undertake this transformation and deliver a new NHS Supply Chain.

The new NHS Supply Chain

The new operating model for NHS Supply Chain is now in place and operational. There are 11 specialist Category Tower service providers delivering medical, capital and non-medical products and services, and two support services for logistics and supporting technology.

The management function of the new NHS Supply Chain, Supply Chain Coordination Limited (SCCL), manages the towers and ensures that they work on behalf of the NHS to deliver clinical and non-clinically assured, high-quality products at the best value. The towers will do this through a more sustainable approach, including more rigorous and responsive management of supplier accountability, as well as through category strategy development.  

Our goal of saving £2.4bn by 2022-23 will be achieved by:

  • Reducing unwarranted price variation and increase product range optimisation across the NHS;
  • Delivering clinically-assured, high-quality products at the best value and supporting procurement activity across the NHS;
  • Leveraging the buying power of the NHS at a national level;
  • Increasing usage of NHS Supply Chain from 40% to 80%.

What has been achieved so far

Our aspiration was to set up one of the most powerful procurement entities in Europe, and our achievements show that we are realising this vision.

To date we have awarded over £1.5bn of contracts, successfully launched the new management function, and set up a new office in Nottingham, with the majority of our staff now based there. SCCL now employs around 245 staff.

The SCCL Board has now been formed and I am very pleased that we have a new chair and four non-executive directors with expertise in commercial, technology, clinical and finance.

In addition, we have set up a Clinical and Product Assurance (CaPA) team, which is now part of NHS Supply Chain, to ensure that the voices of Allied Health and Care Professionals (AHCPs) and patients are heard throughout the procurement process and beyond. Led by Jo Gander, CaPA aims to connect expertise across the health and care system to ensure products procured via NHS Supply Chain meet the required standards and represent the needs of the end users.

I am very proud of the progress made so far, but there’s no room for complacency – our work has just begun. Key strategic initiatives for 2019-20 include:

  1. Deliver savings for the NHS

There will be a change to how the NHS Supply Chain model is funded as we move to a centrally-funded model with a more transparent pricing policy, ʻBuy Price=Sell Price,ʼ in April 2019. We are continuing to work through the details of the new model, that will deliver savings of £150m by 2019-20.

  1. Reducing product and price variation

NHS Improvement’s Nationally Contracted Products (NCP) initiative, operated by NHS Supply Chain, will expand over the coming year. The principles of the initiative – reducing product and price variation across the NHS, reducing NHS spend by collaboration, and consolidation of NHS purchasing power – will continue to be central to the development of Category Tower service providers’ procurement strategies.

  1. Meet the diverse needs of the NHS

Customers’ experience of the NHS Supply Chain service is of vital importance. We are investing in our account management teams to provide an increased level of support across all sectors of the NHS. These teams now work closer with trusts to understand their future needs and provide dedicated support for agreed account plans with targeted propositions.

  1. Providing clinical assurance

We are driving better efficiency in procurement across trusts and suppliers. Our CaPA team will help ensure greater clinical involvement and assurance in purchasing decisions. By working with programmes such as the National Wound Care strategy, we will ensure that we keep the voice of the clinician at the heart of everything we do.

The new operating model will focus on value rather than unit price. Our concern is on whole-system cost, not just quick fixes that can potentially cost the NHS more in the long term.

We can only achieve this with the support from our customers, suppliers and partners. Collaboration is crucial to the success of the new NHS Supply Chain.

 

Enjoying NHE? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Comments

There are no comments. Why not be the first?

Add your comment

 

national health executive tv

more videos >

latest healthcare news

Glasgow hospital design to be reviewed after post-mortem links child’s death to pigeon infection

23/01/2019Glasgow hospital design to be reviewed after post-mortem links child’s death to pigeon infection

The Scottish health minister has ordered a review of the design of Glasgow’s flagship Queen Elizabeth University Hospital (QEUH) after an i... more >
Outgoing NHS digital chief wrote ‘puff piece’ for future employer in ‘jaw-droppingly inappropriate’ behaviour

23/01/2019Outgoing NHS digital chief wrote ‘puff piece’ for future employer in ‘jaw-droppingly inappropriate’ behaviour

NHS England’s outgoing chief digital officer has been criticised for “jaw-droppingly inappropriate” behaviour after she announc... more >
Spending on agency staff has ‘increased markedly’ by 171% to cover vacancies across Welsh NHS

23/01/2019Spending on agency staff has ‘increased markedly’ by 171% to cover vacancies across Welsh NHS

NHS spending on agency staff in Wales has risen 171% in the last seven years, the majority of which is spent by the health service to provide cov... more >
681 149x260 NHE Subscribe button

the scalpel's daily blog

Gentleness: an underrated quality in effective leadership

14/01/2019Gentleness: an underrated quality in effective leadership

Dean Royles, strategic workforce advisor at Skills for Health and co-author of ‘An Introduction to Human Resource Management,’ returns to write for NHE for his blog series on effective leadership. “It is not in your top three, Dean…” The difficulty in asking for feedback is that sometimes, occasionally, people will be honest with you. It can be humbling and troubling in equal measure. It’s somet... more >
read more blog posts from 'the scalpel' >

interviews

How can winter pressures be dealt with? Introduce a National Social Care Service, RCP president suggests

24/10/2018How can winter pressures be dealt with? Introduce a National Social Care Service, RCP president suggests

A dedicated national social care service could be a potential solution to surging demand burdening acute health providers over the winter months,... more >
RCP president on new Liverpool college building: ‘This will be a hub for clinicians in the north’

24/10/2018RCP president on new Liverpool college building: ‘This will be a hub for clinicians in the north’

The president of the Royal College of Physicians (RCP) has told NHE that the college’s new headquarters based in Liverpool will become a hu... more >
Duncan Selbie: A step on the journey to population health

24/01/2018Duncan Selbie: A step on the journey to population health

The NHS plays a part in the country’s wellness – but it’s far from being all that matters. Duncan Selbie, chief executive of Pu... more >
Cutting through the fake news

22/11/2017Cutting through the fake news

In an era of so-called ‘fake news’ growing alongside a renewed focus on reducing stigma around mental health, Paul Farmer, chief exec... more >

last word

Hard to be optimistic

Hard to be optimistic

Rachel Power, chief executive of the Patients Association, warns that we must be realistic about the very real effects of continued underfunding across the health service. It’s now bey... more > more last word articles >

editor's comment

25/09/2017A hotbed of innovation

This edition of NHE comes hot on the heels of this year’s NHS Expo which, once again, proved to be a huge success at Manchester Central. A number of announcements were made during the event, with the health secretary naming the second wave of NHS digital pioneers, or ‘fast followers’, which follow the initial global digital e... read more >

health service focus

Innovative mobile solution meeting NHS demand

07/01/2019Innovative mobile solution meeting NHS demand

EMS Healthcare report on the first fleet of m... more >
National Health Executive fuels the Northern Powerhouse with official partnership

21/11/2018National Health Executive fuels the Northern Powerhouse with official partnership

Cognitive Publishing, the home of leading hea... more >