13/120 NHS BLOOD AND TRANSPLANT 28 NOVEMBER Transport Management System. Executive Summary

Transcription

1 13/120 NHS BLOOD AND TRANSPLANT 28 NOVEMBER 2013 Title Executive Summary Transport Management System The introduction of an automated Transport Management System (TMS) to facilitate improvements to the efficiency and effectiveness of the NHSBT Transport operation was initially proposed in the Strategic Plan and an Outline Business Case (OBC) was prepared during 2011 to prove the concept and seek approval to offer an invitation to tender to the market. The OBC was approved by the NHSBT Board in November 2011 and Department of Health in February An OJEU advertisement was subsequently placed using the open (open V restricted) OJEU process on 28 th May 2013 and the formal procurement process resulted in tenders being received from 3 companies; OBS Logistics, 121 Systems and Descartes. Application of an evaluation and scoring system, which forms part of the NHSBT procurement processes, resulted in OBS Logistics being selected as the preferred bidder with application of their CALIDUS Transport Management System. The benefits to NHSBT of the introduction of the system throughout the Transport function will be to reduce reliance on manual systems, improve communications, and deliver the following operational benefits:- Blood Supply o Improved responsiveness to customer requests o Improved decision making on use of couriers for ad hoc deliveries o Increased service to hospitals through improved communication and more timely deliveries Logistics o Improved vehicle utilisation o Improved driver utilisation o Reduced (external) courier costs o Reduced Transport budget operating costs The system will also serve to enable introduction of the following corporate initiatives:- New Standard use container High performance container renewal Session donation transportation container On Time in Full (OTIF) deliveries Session Logistics Planning and Control System

2 A total investment of 1.9M is required for procurement and implementation of the selected TMS system and of this total, 0.6M would be classed as capital with the remainder being revenue. Additionally, a further 0.1M of revenue would be required in years 3 / 4 for replacement of some items of equipment (e.g. hand-held terminals). All of these capital and non-recurring revenue requirements have been confirmed as available from NHSBT allocations or reserves by the Finance Director. A recurring operating cost benefit of circa 1.2M per annum will be expected from year 3 equating to a project payback of 2.37 years. Action requested from Board Strategic Priority, Regulatory Requirement or Corporate Risk that this item relates to Organisational forums where the paper (or equivalent paper) has been considered It is expected that with commencement of the introduction of the system by 1 st April 2014, completion and full operational functionality can be achieved by February The Board is asked to approve the Detailed Business Case (DBC) for the procurement of the CALIDUS Transport Management System from OBS Logistics as outlined in this paper, and for the DBC to be submitted to the DH for their approval in line with NHS/NHSBT procurement protocols and Delegations of Powers/Standing Financial Instructions. This proposal is aligned with the latest NHSBT Strategic Plan ( ) where the implementation of a transport management system to aid the tracking and management of transport movements is specified as one of the priority initiatives within the planning cycle. The DBC has been reviewed, and approved by the TMS Project Board, the Supply Chain & Logistics CPB and the Executive Team (incorporating the TPB). Consultation and Review Equality and Diversity Impact Assessment Sustainability Impact Assessment Author Full assessment not required Positive impact through reduced vehicle emissions and better utilisation. Geoff Cotter, General Manager, Transport Responsible Director NED Reviewers Mark Cox, Interim Director of Logistics Mr Roy Griffins Dr. Christine Costello 2

3 NHS BLOOD AND TRANSPLANT 28 NOVEMBER 2013 TRANSPORT MANAGEMENT SYSTEM DETAILED BUSINESS CASE EXECUTIVE SUMMARY The introduction of an automated Transport Management System (TMS) to facilitate improvements to the efficiency and effectiveness of the NHSBT Transport operation was initially proposed in the Strategic Plan and an Outline Business Case (OBC) was prepared during 2011 to prove the concept and seek approval to offer an invitation to tender to the market. The OBC was approved by the NHSBT Board in November 2011 and Department of Health in February An OJEU advertisement was subsequently placed using the open (open V restricted) OJEU process on 28 th May 2013 and the formal procurement process resulted in tenders being received from 3 companies:- OBS Logistics 121 Systems Descartes Application of an evaluation and scoring system, which forms part of the NHSBT procurement processes, resulted in OBS Logistics being selected as the preferred bidder with application of their CALIDUS Transport Management System. The benefits to NHSBT of the introduction of the system throughout the Transport function will be to reduce reliance on manual systems, improve communications, and deliver the following operational benefits:- Blood Supply Improved responsiveness to customer requests Improved decision making on use of couriers for ad hoc deliveries Increased service to hospitals through improved communication and more timely deliveries Logistics Improved vehicle utilisation Improved driver utilisation Reduced (external) courier costs Reduced Transport budget operating costs The system will also serve to enable introduction of the following corporate initiatives:- New Standard use container High performance container renewal Session donation transportation container On Time in Full (OTIF) deliveries Session Logistics Planning and Control System A total investment of 1.9M is required for procurement and implementation of the selected TMS system and of this total, 0.6M would be classed as capital with the remainder being revenue. Additionally, a further 0.1M of revenue would be required in years 3 / 4 for replacement of some items of equipment (e.g. hand-held terminals). All of these capital and non-recurring revenue requirements have been confirmed as available from NHSBT 3

4 allocations or reserves by the Finance Director. A recurring operating cost benefit of circa 1.2M per annum will be expected from year 3 equating to a project payback of 2.37 years. It is expected that with commencement of the introduction of the system by 1 st April 2014, completion and full operational functionality can be achieved by February RECOMMENDATIONS The Board is asked to approve the Detailed Business Case (DBC) for the procurement of the CALIDUS Transport Management System from OBS Logistics as outlined in this paper, and for the DBC to be submitted to the DH for their approval in line with NHS/NHSBT procurement protocols and Delegations of Powers/Standing Financial Instructions. INTRODUCTION In March 2009, a benchmarking exercise was undertaken within the NHSBT Transport operation. The results of this exercise indicated that there were a number of areas which fell below benchmark standard compared with similar activities elsewhere and a subsequent strategic review of Transport Operations identified that there was too much reliance upon outdated and largely manual scheduling and control systems. It was concluded that there was an urgent need to introduce more efficient and effective control systems, and in particular, a Transport Management System (TMS) which would enable NHSBT Transport to become more operationally efficient and cost effective. An Outline Business Case (OBC) was prepared during 2011 to examine options for improvement of the function and, having established TMS as the preferred option, provide justification for the introduction of such a system. The case was duly accepted and approved by the NHSBT Board and DH in November 2011 and February 2012 respectively. A procurement tender process for the procurement and installation of a TMS system has subsequently been undertaken and this paper seeks approval to proceed to conclude the procurement and introduce a system from the chosen supplier(s).. BACKGROUND The NHSBT Transport function (including Fleet Management and Resource Planning) extends to some 368 wtes including; 12 national managers, 27 Transport operation management grades located across the 15 main NHSBT centres, and around 300 Transport drivers (with a further 13 drivers specifically allocated to driving blood donation vehicles). The transport fleet of circa 300 vehicles travels approximately 5.5 million miles per year, whilst the non-transport fleet of vehicles travels approximately 2.5 million miles per year. NHSBT Transport annually completes approximately:- 46,000 collection runs (25% completed by couriers 1 ) 88,000 routine deliveries 48,000 ad hoc deliveries (39% completed by couriers) 3,000 emergency deliveries (NHSBT liveried and blue light equipped vehicles) 32,000 stores and inter-centre deliveries (20% completed by couriers). In 2011/12 a total of 2.5M blood and non-blood units were issued to hospitals of which 80% was delivered by NHSBT Transport. The benchmarking exercise completed in 2009 indicated NHSBT Transport is performing well or better than others in some areas but significantly worse in several areas. Areas which were shown to perform above benchmark included: 1 A formal contract is in place with TNT to support and supplement NHSBT transport when required. All TNT drivers undertaking duties on behalf of NHSBT must be GMP trained and their performance is regularly (monthly) monitored by Transport and Procurement with TNT against standards specified within the contract. 4

5 Fleet Management Good systems and processes in place to manage the diverse fleet, using KPIs to monitor effectiveness Outsourced repairs and maintenance provides good reporting and enables good fleet availability and control of fleet costs through whole life cost management Generally meets best practice in terms of environmental considerations Collections and delivery reliability Higher customer preference for service provided by dedicated transport operations drivers Vehicle fill and time utilisation The in-house vehicles are matching best practice in terms of vehicle fill and time utilisation when the vehicles are being used, indicating the transport operations managers are managing to combine collections with deliveries wherever possible. Areas which were performing under or significantly below benchmark however, included: Cost Effectiveness o 17% of vehicles are not used over a weekly period resulting in low overall vehicle utilisation which increases costs o High than average driver sickness, differences in pay structures and some challenges with driver utilisation (variations by centre and the challenge of determining accurate effectiveness) creates inconsistent costs between centres. Specific areas under the control of non-transport fleet (i.e. Blood Collection, Marketing and Tissue Services) and drivers fall below benchmark including o High accident rates for non-transport drivers (Blood Donations and Warehousing) o Poor compliance for legal requirements (e.g. driver licence checks / notification of new drivers, safety checks) o Poor compliance for non-legal requirements (e.g. driver training, vehicle washing) Performance Metrics o No system is used to manage drivers and vehicles, provide planned routes, track that the blood products have been delivered to the right destination (or collected from the blood donation session) on time o Lack of consolidated information (in-house Transport Operations capture all activities but not actual on-time collections and deliveries) reduces visibility and hinders management decisions, especially on vehicles and driver requirements o Due to the lack of visibility, the majority of Transport Operations KPIs are not currently measured and maintained The principal objectives of this project were therefore defined as improving customer service, and increasing operational and cost efficiency, within the NHSBT Transport operation. It was concluded that these objectives could and would be delivered by means of the provision of a Transport Management System to support improved decision making on how best to fulfil the movement of NHSBT blood and non-blood products. At the time the OBC was prepared, these objectives fell within the Efficiency & Effectiveness strategic theme outlined in the NHSBT Strategic Plan and they remain aligned with the latest NHSBT Strategic Plan ( ) where the implementation of a transport management system to aid the tracking and management of transport movements 2 is specified as one of the priority initiatives within the planning cycle. 2 NHS Blood and Transplant Strategic Plan , section 5, page 19. 5

6 TENDER AND EVALUATION PROCESS NHSBT procurement protocols, incorporating all statutory, DH and NHS requirements and obligations have been adopted for the procurement of the Transport Management System and a Procurement Strategy has been formulated accordingly. An OJEU advertisement was placed using the open (open V restricted) OJEU process on 28 th May 2013 and was published on 31 st May This resulted in a total of 33 companies registering an interest and, of this cohort, 11 companies passed the pre-qualification questionnaire evaluation which was held at Manchester on 4 th July. Nine of these companies then attended a supplier meeting which was held on 24 th July. The supplier meeting generated a number of questions/points for clarification which NHSBT responded to before formal tender offers were invited. The closing date for tender returns was set as 26 th August Formal submissions were subsequently received from 3 of the 9 companies who attended the supplier meeting:- OBS Logistics 121 Systems Descartes As part of the selection process, all three companies were invited to make a formal presentation to the Project Board on 30 th September in London and these presentations have been supplemented by visits to suppliers premises and a selection of customers of those suppliers. An evaluation and scoring system (part of formal NHSBT procurement processes) has been adopted to select the preferred bidder. A summary of the resulting scores is as follows:- 121 Systems Descartes OBS Logistics Total Score PREFERRED BIDDER/SELECTED SYSTEM Thus, the evaluation process resulted in selection of OBS Logistics as the preferred bidder with implementation of their CALIDUS Transport Management System. The capabilities and configuration of the system is as follows:- The OBS Solution The OBS Logistics CALIDUS TMS solution is intended to support and contribute to the established working practices and current systems that will remain in scope and part of the NHSBT IT landscape going forwards. OBS Logistics propose to supply an end to end solution that will provide a potential step change improvement across the NHSBT logistics operation and can also be easily adaptable to meet future requirements of the organisation i.e. interfacing with a potential new ERP systems post go live. The solution is based on the CALIDUS TMS transport management application which will act as the core to the solution. CALIDUS TMS will be integrated with PULSE, and OBS will provide an interface to Business Objects for data analysis and reporting purposes. The OBS solution will have the option of utilising automated transport optimisation software provided under subcontract by their existing partners DPS. DPS provide an industry leading package, Logix, for transport optimisation and strategic planning and network modelling. OBS Logistics plans to support NHSBT s Telematics requirements by deploying products of their partner TomTom, these solutions are fully integrated with CALIDUS TMS, providing the Track and Trace and Telematics. Drivers will be issued with Hand Held terminals (HHT s) or smartphones which they will carry with them when they make collections and deliveries. CALIDUS epod (Electronic Proof of Delivery) will provide the software platform for the Hand Held Terminal devices HHT or smartphones. 6

7 epod is fully integrated with CALIDUS TMS and will provide transport manifest upload, assignment of manifest and tasks to driver and vehicle, vehicle checks, routing and navigation, confirmation of loading, collection and delivery of transport units by driver input or barcode scanning of asset or consignment label, signature capture, exceptions and reason codes and photographs. All this debrief information is updated in real time to CALIDUS TMS execution and debrief modules. CALIDUS TMS will provide a standard interface to allow transport orders (which can take the form of either a collection or delivery) to be raised via EDI from the NHSBT PULSE system. CALIDUS provides various methods of raising transport orders including manually screen entry supported by templates, CSV file format uploads, portal order capture, and fully automated and validated EDI uploads using a standard integration schema and API. OBS Logistics will assist NHSBT IT department by mapping their interface (XML Schema) to the NHSBT PULSE system outputs. In addition, outputs from CALIDUS TMS and epod and from TomTom will be made available to provide input to NHSBT s Business Objects Reporting and Analysis tool. HOSTING THE SYSTEM At the time of consideration and approval of the OBC, the DH expressed a preference for NHSBT to consider an externally hosted option, this being consistent with wider DH/NHS IM&T strategy. The tender offer was therefore, issued with a request for respondents to include their options for such an arrangement. OBS Logistics have fully complied with this requirement and have indicated how they propose such an arrangement would operate and the security and resilience they would provide in order to ensure NHSBT operations do not become compromised. A high availability solution has been offered with the software hosted on IBM AIX, using the Power HA solution for replicating data from site to site (OBS manages two data centres located in Runcorn and Liverpool approximately 10 miles apart which are maintained by their own technical services team and they are linked by 2 x 100Mb EEs lines, enabling fast data transfer). In the event of a failure on the primary server, service will automatically switch to the secondary server with no loss of data. To ensure maximum levels of monitoring are available to the database, Oracle Enterprise Edition has been included in their proposal. This configuration has been proposed to match the levels of service we require and as set out in the Non Functional Requirement in attachment 9 of the ITT. The robustness of this configuration will ensure that we are able to offer the best service to our customers within the NHS. 7

8 BENEFITS Procurement and Implementation of a Transport Management System covering all NHSBT sites will reduce reliance on manual systems, improve communications, and deliver the following benefits:- Blood Supply Improved responsiveness to customer requests Improved decision making on use of couriers for ad hoc deliveries Increased service to hospitals through improved communication and more timely deliveries Logistics Improved vehicle utilisation Improved driver utilisation Reduced (external) courier costs Reduced Transport budget operating costs The system will also serve to enable introduction of the following corporate initiatives:- New Standard use container High performance container renewal Session donation transportation container On Time in Full (OTIF) deliveries Session Logistics Planning and Control System FINANCE A total investment of 1.7M is required for procurement and implementation of the selected TMS system. Of this total 0.6M would be classed as capital with the remainder being revenue. Additionally, a further 0.1M of revenue would be required in years 3 / 4 for replacement of some items of equipment (e.g. hand-held terminals). All of these capital and non-recurring revenue requirements have been confirmed as available from NHSBT allocations or reserves by the Finance Director. A recurring operating cost benefit of circa 1.2M per annum will be expected from year 3 equating to a project payback of 2.37 years. The cash flow summary is shown in the following table:- 8

9 Year /14 Year /15 Year /16 Year /17 Year /18 Year /19 TOTAL CASH FLOW Investment Case Severance Revenue Investment Costs Capital Investment Costs Project Management New Non-recurring Costs New Costs Drivers New Costs Staff New Costs Overtime New Costs Fleet New Costs Fuel New Costs Couriers New Costs TMS System New Costs Consumables NewCapital Charges TOTAL CASH FLOW DIFFERENTIAL Cumulative Base Case As Is Existing Costs Drivers Existing Costs Staff Existing Costs Overtime Existing Costs Fleet Existing Costs Fuel Existing Costs Couriers TOTAL SENSITIVITY ANALYSIS The project Investment Analysis has been subject to a number of differing operational scenarios to test the sensitivity to change and thus, the viability of the investment in the event that the planning assumptions prove to be inaccurate. Calculations were performed against:a 15% increase in non-recurring costs A 10% increase in running costs A 15% shortfall in anticipated driver cost savings The results are as follows:scenario Pay Back (Years) NPV Cumulative Cash Flow ( m) Base (Investment) Case ) 15% increase in non-recurring costs 2) 10% increase in running costs 3) 15% shortfall in anticipated driver cost savings 4) All above scenarios NOTE: Figures exclude Capital Charges These figures suggest that the project has a medium to low exposure risk to change against the base assumptions and that in a worst case scenario, the project will still provide a payback against the investment within a 3 year period. 9

10 PROJECT PLAN Key elements of the project timetable are:- NHSBT Board Approval of Detailed Business Case 28 November 2013 DH Approval of Detailed Business Case 31 January 2014 Project Initiation Phase 01 April 2014 Requirements and Technical Design Phase April 2014 May 2014 Development and Implementation Phase May 2014 September 2014 Go-Live Phases October 2014 January 2015 Hand-Over to Live Running November 2014 February 2015 IMPLEMENTATION AND TRAINING OBS Logistics will provide full training to the required number of NHSBT super users who will then roll out the training to operational staff across NHSBT centres. The ITT specifies that two groups of 6 people each will be trained. Training will be provided on NHSBT premises or at OBS Logistics premises as required. The nature of the training given will be comprehensive trainer training as befits the need of the individuals who will be training other NHSBT personnel. Assistance will be given in preparing training materials and guides for example quick look up facilities that may be of use during the early stages of operational use. OBS Logistics will provide local support on the go live date at each NHSBT centre as it goes live. This on site presence will assist the NHSBT super users in ensuring a smooth handover to local staff at each centre as it rolls out and goes live. This naturally would imply that centres roll out progressively rather than in a single day. The number of NHSBT super users to be trained would suggest that a phased roll out is the most practical proposition. From this point OBS Logistics implementation personnel will perform a phased handover to the OBS Logistics Help and Support desk. A fault reporting and help request protocol will be agreed with NHSBT. OBS Logistics personnel will be tasked with applying this in any instances where contact from NHSBT staff falls outside the policy set by NHSBT and to be carried out by OBS Logistics. For example if an NHSBT employee contacts OBS Logistics directly when the policy could be that they first go via the NHSBT IT team then it would fall to OBS Logistics to re-direct them in line with NHSBT policy. COMMUNICATIONS A communications plan will be developed which will ensure all stakeholders impacted or with an interest in this project are kept informed and involved as appropriate. The Group Services Committee and Staff Partnership Committee are being closely consulted in order to ensure that the driving staff and other Transport personnel are kept fully informed and up to date with the progress of the project and implications for them collectively and as individuals. The communications plans will include briefings to union representatives, Department of Health, staff, customers, suppliers and media, as appropriate. Mark Cox Interim Director of Logistics November