South Staffordshire and Shropshire Healthcare NHS Foundation Trust

Transcription

1 South Staffordshire and Shropshire Healthcare NHS Foundation Trust Document Version Control Document Type and Title: Authorised Document Folder: Procurement Strategy RED - Finance New or Replacing: Replacing F/RED/i (March 2004) Document Reference: F/RED/i Version No. v2.0 Implementation Date: Author: Approving body: Dorothy Lolley Acting Procurement Manager Finance & Performance Sub- Committee Approval Date: 8 th Ratifying body: Board of Directors Ratified Date: 28 th Committee, Group or Individual Monitoring the Document: Finance & Performance Sub- Committee Review Date: December 2015

2 Procurement Strategy/F/RED/i/v2.0 SSSFT Procurement Strategy 2012 to

3 Procurement Strategy/F/RED/i/v2.0 Contents 1 Executive Summary Introduction Scope of the Strategy Reference Framework The Strategy Introduction Strategic Influences Supplier Positioning How does the strategy fit with the Dept of Health Guidance

4 1 Executive Summary Procurement Strategy/F/RED/i/v2.0 Prior to April 2010, the Trust procurement provision was split into Shropshire and Staffordshire each having separate providers with non-integrated purchasing systems managed by other Trusts. Several attempts were made to draw up a strategy by both service providers however, an agreed strategy never came into being. In August 2010, the Shropshire provision was transferred to Burton Hospitals. In March 2012 the service was transferred into the Trust. There is no current Department of Health NHS Procurement Strategy; this is being announced later in However there is guidance from the Dept of Health to steer Trusts during this interim period. The Trust is in need of a strategy to prioritise and utilise the resources of the Trust to achieve the best overall value. The approach taken in this strategy is to analyse and categorise spend in order to ascertain how certain groups of spend are important or otherwise to the Trust and viewed from a suppliers point of view. High Importance to Organisation/ Spend Leverage Value for Money Characterised by competitive market place, finite list of products. Routine Non Critical Floor Stocks, Business as usual Characterised by many suppliers and many products with alternatives. Transactions are low value and high volume. Strategic Large spend typically capital spend. We are important to the supplier and the supplier is important to us. Requirements are complex, hard to define Bottleneck/High Dependency We are not important to the supplier, but the supplier is important to us. Low Market Complexity/Risk High The full details are in section 3.3. Implementation of the strategy will be demonstrated by:- Using eprocurement to record purchases made (exceptions apply see section 2.1) Using eprocurement to record contracts and spend against them Implementation of stock for F&E Increased use of NHS Supply Chain - 4 -

5 2 Introduction Procurement Strategy/F/RED/i/v Scope of the Strategy This strategy is for a 3 year period, this is to stabilise the procurement service for the Trust. The first priorities for the team are to ensure all staff use the electronic procurement system (where mandated) and to recover and establish the knowledge about contractual commitments of the Trust. The progress towards these goals will be reviewed in 12 months time. SSSFT s non pay spend is about 40m. For the first twelve months the strategy will exclude the purchase of drugs/medicines, clinical supplies from other NHS bodies, utilities, telephones and property rentals. These items have either recently been reviewed (telephones and utilities) and will be phased in over the last two years of the plan. 2.2 Reference Framework The Department for Health are planning to announce its strategy for the NHS later this year. However, there is an interim document which promotes 6 strands of guidance, this is in circulation with title of NHS Procurement; raising our game, details can be found at The key themes are:- Collaborate Adherence to a common coding system (GS1) Publish tenders over 10k, in Contracts Finder Work with suppliers, benefit from their creativity Standardisation Invest in electronic catalogue systems Greater use of procurement partners (eg NHS Supply Chain) Bench mark against peers in the NHS One of the strands of guidance is a document called NHS Standards of Procurement published in May 2012, there are 4 areas in which a procurement organisation should perform and set itself targets, they are:- Leadership People Process Partnership - 5 -

6 3 The Strategy Procurement Strategy/F/RED/i/v Introduction Management of the whole supply chain within the Trust is essential for the effective delivery of patient care. Trust staff who are actively involved in procurement processes have a responsibility to ensure that only fit for purpose equipment, consumables and services are procured, and that financial prudence is exercised. Throughout all procurement activity the Trust is required to adhere with Statutory and mandatory public procurement regulations, NHS policy and guidance, Trust Financial Governance Policy and European Procurement legislation relating to the NHS. 3.2 Strategic Influences There are many inputs which have been considered to formulate this strategy, they are:- Price Resources Contracts Standardisation Location EU Legislation Reactive purchases Planned Purchases One of Purchases Repeat Purchases Savings Best overall value Logistics Sustainable Procurement The aim of this strategy is to have a portfolio of regulated supplier relationships to ensure the best overall value for the Trust. This means there isn t one solution which fits every purchase. With this in mind I have looked at a supplier positioning theoretical model and applied this to our Trust. 3.3 Supplier Positioning By looking at the categories of spend within the Trust, we can decide on the best approach given the inputs in section 3.2 above how to maximise value. The diagram below is based on the work of Peter Kraljic (1982) which seeks to allocate procurement resources based on the balance of importance (often measured as spend) to the Trust versus the complexity or risk in the supplier base. This is widely used in practice at a strategic level to ensure the right focus and investment is given to areas of spend to ensure maximum value to an organisation

7 High Importance to Organisation/ Spend Leverage Value for Money Characterised by competitive market place, finite list of products. Categories of Spend:- Food * Office Furniture Laundry Drug Testing Kits Photocopiers Computers Water piped Planned F&E Maintenance, Cleaning Strategic approach competitive tendering, standardise, sustainable procurement by reduced transport costs Routine Non Critical Floor Stocks, Business as usual Characterised by many suppliers and many products with alternatives. Transactions are low value and high volume. Strategic Large spend typically capital spend. We are important to the supplier and the supplier is important to us. Requirements are complex, hard to define Categories of Spend:- IT systems Major Building Contracts (also known as commissioned works) Consultancy Leasing Strategic approach Give priority to supplier relationships, look for opportunities for the supplier to add value eg through innovation. Invest procurement activity to maximise return. Sustainable procurement through big impact projects. Bottleneck/High Dependency We are not important to the supplier, but the supplier is important to us. Categories of Spend:- Stationery Cleaning Materials F&E Consumables Medical Consumables Strategic approach minimise transaction cost, implement stock, utilise existing delivery routes, standardise, rationalise number of suppliers, sustainable procurement through reduced transport costs Practice Main Hospitals/ Residential Units/Community Teams NHS Supply Chain Practice Outlying Teams Local good value supplier Categories of Spend:- Reactive Maintenance Clinical Supervision or Clinical Services Internal Transport Rented Premises Specialist Furniture Printing Training Strategic approach Develop the supplier relationship, consolidate spend to increase importance to supplier. Establish contracts with suppliers to ensure performance is managed. Low Market Complexity/Risk High

8 *Exceptions to this is fresh food ie bakery, meat, fruit & veg and milk as prices can be seasonal or respond to market changes very quickly The practical outworking of this strategy impacts primarily on the Procurement Team and Facilities and Estates as work needs to be focused on the bottom half of the grid. Specifically to look at the data gleaned so far and consolidate spend with suppliers and standardise products; introduce stock and streamline procurement processes. 3.4 How does the strategy fit with the Dept of Health Guidance NHS Procurement Raising our Game The guidance referred to in section 2.2, identifies that we should attend to the following:- Guidance Collaborate How this is being implemented via the strategy We are seeking joint contracts with other NHS Trusts when opportunities arise from our contract work plan. I am meeting with the Heads of Procurement West Midlands Group, this is across all categories of Trusts. Adherence to a common coding system (GS1) Publish tenders over 10k, in Contracts Finder Work with suppliers, benefit from their creativity This is built into the eprocurement catalogue Our SFI s require spend over 50k to be tendered. Going forward we will seek to utilise contract finder where appropriate. This should be accommodated through the strategic purchases quadrant Standardisation This features in the routine non-critical and the leverage value for money quadrants. This has already taken place for examination gloves and printers. Invest in electronic catalogue systems Greater use of procurement partners (eg NHS Supply Chain) The Trust s eprocurement system is an electronic catalogue, visible by anyone who needs access This features in the routine non-critical and the leverage value for money quadrants. In conjunction with framework agreements provided by GPS, NHS Supply Chain and H T E Bench mark against peers in the NHS I have initiated the process of bench marking with other Mental Health Trusts. Data found is being reported to the Finance and Performance Subcommittee

9 Procurement Strategy/F/RED/i/v NHS Standards of Procurement Leadership Put in place a procurement strategy Put in place a procurement policy (this will be supported by practical guidance documentation) Identify risks, mitigate against them People Share information with staff throughout the organisation. A slot on the Trust s induction programme (currently being sought). Regular use of epod Input to strategic decisions (via Directorate Management Meetings) Process Partnership A common system for a purchases current goal Seeking collaboration opportunities Working with UHNS Heads of Procurement (West Midlands and H T E forums) Benchmarking with other Mental Health Trusts H T E (Healthcare Trust Europe Procurement Hub) GPS (Government Procurement Service) NHS Supply Chain - 9 -