Comment

04.07.18

Transforming the NHS procurement landscape

Source: NHE May/June 2018

Gerard McGeary, director of strategy & corporate communications at Supply Chain Coordination Ltd, a body set up by the Department of Health and Social Care (DHSC), talks about the incoming changes in the new NHS Supply Chain operating model.

The new NHS Supply Chain operating model (formerly known as the Future Operating Model) is the design of a new supply chain service that will deliver clinically-assured, high-quality products at the best value and support procurement activity across the NHS.

As one of the biggest publicly-funded healthcare systems in the world, the NHS currently spends £5.7bn on everyday hospital consumables, common goods, high-value healthcare consumables and capital medical equipment.

In February 2016, Lord Carter’s report  into efficiency and productivity in the NHS identified unwarranted variation in procurement, resulting in the need to improve operational efficiencies to help transform an already fragmented procurement landscape.

This was to be achieved via the Procurement Transformation Programme (PTP), established by the DHSC to undertake this transformation and deliver a new NHS Supply Chain.

The PTP was tasked to deliver a new operating model, replacing the existing NHS Supply Chain contract with NHS Business Services Authority and DHL Supply Chain Ltd by March 2019. The aim of the new operating model is to ensure NHS needs and objectives are at the heart of the delivery of a new supply chain service.

The new NHS Supply Chain service will reduce unwarranted price variation and work to increase product range optimisation across the NHS, increasing value for money and providing more consistency in both clinical and patient experience.

The new operating model will:

  • Leverage the buying power of the NHS at national level;
  • Realise savings of £2.4bn over five years (from 2015-16) which can be reinvested into frontline services;
  • Increase usage of NHS Supply Chain from 40% to 80%.

In order to minimise impact for customers, implementation of a new NHS  Supply Chain will be via a phased approach throughout 2018-19, helping to provide trusts, suppliers and the current service with time to prepare and continue business as usual.

Once the Category Towers and enabling services are embedded, their strategies will be implemented that will include product optimisation and better value for money.

There are a number of key  benefits  that the new NHS Supply Chain will bring to trusts and suppliers. Providers will be able to channel savings back into frontline services; release more time for clinical activities; increase NHS clinical involvement in purchasing decisions; and introduce new products more effectively.

Suppliers will be able to lower sales and marketing costs; have a single route into the national market; take advantage of a joined-up approach across the NHS; and gain a clear route for innovative products.

Services going live

On 1 April, a new management office went live and is now part of the NHS family. The office will be the central delivery function of the new operating model, driving commercial objectives and overseeing continuous improvement within overall service delivery.

Eleven Category Towers, each having a separate contract with the NHS, will be the category specialist procurement function of the new NHS Supply Chain.

The towers will go live in two phases and work on behalf of the NHS to deliver clinical and non-clinical assured, high-quality products at the best value.

They will do so through a more sustainable approach, including more  rigorous and responsive management of supplier accountability, as well as category strategy development.

Six Medical Category Towers went live on 8 May, joining one of the Non-Medical Category Towers, Crown Commercial Services, who went live in October 2017. The Medical Tower contracts were awarded to DHL Supply Chain Ltd, Health Solutions Team Ltd and NHS Collaborative Procurement Partnership.

The remaining Non-Medical Category Tower contracts were awarded to Foodbuy and NHS North of England Commercial Procurement Collaborative, with the Capital Category Tower contracts being awarded to DHL Supply Chain Ltd and Akeso & Company. These will go live on 5 July.

Logistics will be operated by a single national logistics provider including home delivery service with the warehouses, systems, vehicle fleet and all other assets currently being used by NHS Supply Chain (belonging to the NHS).

Transactional services and supporting technology will initially be delivered using current assets, systems and technology as owned by the NHS. These contracts will be fully operational in early 2019.

The overall aim of the new NHS Supply Chain is to leverage the collective buying power of the NHS to provide clinically-assured products at the best value which meet the diverse needs of NHS organisations, our patients and public.

 

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

Uni of Sheffield scientists synthesize new compound to improve PDT

26/02/2020Uni of Sheffield scientists synthesize new compound to improve PDT

Photodynamic therapy (PDT) could see its success rate when treating cancer improve after researchers at the University of Sheffield successfully ... more >
New treatment offers hope for people suffering with chronic cough

26/02/2020New treatment offers hope for people suffering with chronic cough

Researchers at the University of Manchester may be able to offer hope to millions suffering from a chronic cough, after a new study revealed a ne... more >
Two million people in England at risk of developing Type 2 diabetes

25/02/2020Two million people in England at risk of developing Type 2 diabetes

New NHS figures show around two million people in England are at risk of developing Type 2 diabetes, the highest figures on record. Coming a... more >

the scalpel's daily blog

Too much emphasis on leadership development… and not enough

24/02/2020Too much emphasis on leadership development… and not enough

Words by Dean Royles and Kevan Taylor, who continue their regular contribution to NHE’s blog content. Kevan and Dean work in organisations and systems providing strategic support, advice and development. Every time the NHS goes through one of its many, many structural reorganisations, there is a renewed emphasis on the importance of leadership development. This is a good thing. We know the importance and value of good leadership a... more >
read more blog posts from 'the scalpel' >

interviews

Mike Farrar, Swim England - Last Word

07/12/2019Mike Farrar, Swim England - Last Word

Mike Farrar Chairperson of Swim England Would you talk us through your previous roles within the NHS? I’ve held a number of ... more >
Matt Hancock says GP recruitment is on the rise to support ‘bedrock of the NHS’

24/10/2019Matt Hancock says GP recruitment is on the rise to support ‘bedrock of the NHS’

Today, speaking at the Royal College of General Practitioners (RCGP) annual conference, Matt Hancock highlighted what he believes to be the three... more >
NHS dreams come true for Teesside domestic

17/09/2019NHS dreams come true for Teesside domestic

Over 20 years ago, a Teesside hospital cleaner put down her mop and took steps towards her midwifery dreams. Lisa Payne has been delivering ... more >
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 >

last word

Haseeb Ahmad: ‘We all have a role to play in getting innovations quicker’

Haseeb Ahmad: ‘We all have a role to play in getting innovations quicker’

Haseeb Ahmad, president of the Association of the British Pharmaceutical Industry (ABPI), sits down with National Health Executive as part of our Last Word Q&A series. Would you talk us th... 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

Royal Voluntary Service: The power of NHS volunteers

25/02/2020Royal Voluntary Service: The power of NHS volunteers

Sam Ward, Deputy CEO and Director of Services... more >
APCC: Cracking down on illegal sales of medicines with communication

25/02/2020APCC: Cracking down on illegal sales of medicines with communication

Hardyal Dhindsa, Association of Police and Cr... more >