Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust
Procurement Transformation Plan (PTP)
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 1. Executive Summary Central Manchester University Hospitals NHS FT (CMFT) has been on a journey since the New Millennium to modernise the management of our £365m annual non-pay spend. Our ambition has been simple 'to scale the commanding heights of non-pay spend' ensuring we influence what and how we buy. We have scaled up this ambition since 2006 when we adopted Oracle technology and further since 2010 when we included all non-pay spend within our scope - contingent labour; University and NHS spend along with all services. This approach is exemplified by our GEMS terminology- Goods, Equipment, Materials and Services are all within our scope. CMFT has already achieved the majority of the targets set out by the Carter Report but this gives us a great platform from which to drive forward and create a truly sector leading Procurement Service. It is difficult at times to appreciate the size of the progress already made but a reminder is always timely: Self-service catalogue based ordering Extensive materials and inventory management NHS Standards of Procurement Level Two- the first in the country Full capture of nearly all non-pay spend through requisition; official order; invoice and receipt Dedicated professionally qualified Purchasing leads supporting Divisions Efficient in-house accounts payable function meeting both 30 days and 10 day SME targets A nationally recognised leadership team Over £20k per annum invested in staff development An average of £6m non-pay savings per annum Our ambition for the next 3 years is even more challenging: Roll out inventory management beyond traditional inventory management Unify our service with University Hospital of South Manchester NHS FT as a precursor to a South Sector Service Drive additional savings-ramping up to £7.5m by 2020/21 Drive efficiencies in our Procurement 'back office' whilst maintaining our high quality inhouse/on-site services Achieve Level 3 NHS Procurement Standards Increase our contract coverage This Procurement Transformation Plan (PTP) reflects what we have achieved but more importantly what we will achieve. The continued support of our Chairman; Board and Executive Directors combined with the dedication of our Procurement staff is the firm foundation upon which our PTP will be delivered. 2
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 2. Trust Procurement Performance (RAG rating against Carter targets1) PERFORMANCE MEASURES
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TARGET SEPT 17
£9.50M
£9.03M
£8.55M
OCTOBER
TARGET SEPT 18
COMMENTARY
1
Monthly cost of clinical and general supplies per ‘WAU’
2
Total % purchase order lines through a catalogue (target 80%)
91%
91%
91%
Target Achieved
3a
Total % of expenditure through an electronic purchase order (target 80%) up to and including PO issue
96%
96%
96%
Target Achieved
94%
94%
94%
Target Achieved
96%
96%
96%
Target Achieved
94%
94%
94%
Target Achieved
70%
80%
90%
Target - 90% of expenditure
3b
3c
3d
4
Total % of transactions through an electronic purchase order (target 80%) up to and including PO issue Total % of expenditure through an electronic purchase order (target 80%) from requisition through to and including payment Total % of transactions through an electronic purchase order (target 80%) from requisition through to and including payment % of spend on a contract (target 90%)
5a
Inventory Stock Turns-static
6.06 Days
Days
Days
5b
Inventory Stock Turns-dynamic
42.55 Days
Days
Days
6
NHS Standards Self-Assessment Score (average total score out of max 3)
2
2
2
7
Purchase Price Benchmarking Tool Performance
TBC
TBC
TBC
8
Other Trust Specific e.g. CIP
TBC
TBC
TBC
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Other Trust Specific e.g. CIP
TBC
TBC
TBC
Target - A 10% reduction
No current set target. Will depend on organisational processes, warehousing, service portfolio etc. Trusts should compare themselves with their peers and set a target for themselves. No current set target. Will depend on organisational processes, warehousing, service portfolio etc. Trusts should compare themselves with their peers and set a target for themselves. Achieved accreditation at level 2 to the NHS Standards of Procurement
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RAG Rating Definitions: Green = better than the Lord Carter or Trust target Amber = Up to 10% less than Carter target Red = More than 10% below Carter target
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust
3. Procurement Transformation Plan - Summary People & Organisation Procurement & E-Commerce Team and Resource The current procurement & E-commerce department consists of 60.92 WTE which work across the following teams:
Accounts Payable – Responsible for paying 147,500 invoices per year Materials Management – which includes covering 90 departments ordering requirements including Supply Chain and direct purchase items in critical areas Genesis – Inventory management team which is responsible for the roll out of Genesis throughout the Trust and new developments Catalogue & Compliance – which includes cataloguing, training, helpdesk and invoice holds functions Transformation – working on Trust specific projects and joint opportunities with South Manchester Information Team – responsible for all data requirements and communications Purchasing – focus on strategic purchasing projects
The pay and non-pay costs to fund the procurement team total £1,013k; these costs cover the following:
Staffing – covering all teams listed above Systems – including cataloguing and e-tendering SBS – annual payment for access to SBS contracts IT hardware, printing/stationary, staff uniforms and travel costs Training – CIPS, AAT, etc.
CMFT has a professional and highly motivated procurement & E-Commerce team consisting of: A Strategic purchasing function that deals with complex purchasing projects AP function that pays 147,500 invoices of which 97% of invoices are paid within 30 days on a 3-way match. Compliance team that ensures end users shop from the current supplier at the correct price. Materials Management are an integrally part of the team that cover both stock and non-stock purchases for critical areas and often integrate and lead on smaller purchasing project. Genesis Inventory Management system working closely with Theatre areas on producing patient level costing information to the divisions.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Team development & training From the team, the following Whole Time Equivalents (WTE) are either full members or working towards full membership of the Chartered Institute of Purchasing & Supply (MCIPS): Team
Number of Staff
%
6
Staff studying of qualified for professional qualification 6
Senior Management 8a or above Purchasing Materials Management Transformation Genesis Accounts Payable Information Catalogue & Compliance
9 18
9 3
100 17
1 1 16 3 8
1 1 7 2 2
100 100 44 67 25
100
CMFT prides itself in ensuring that all staff has equal opportunities for studying for professional qualifications. This has allowed career progression between the different sections and promotion to other Trusts within the NHS. As well supporting staff through their professional qualifications, we also have personal development plans for each individual member of staff that is reviewed at appraisals where further opportunities for courses and training are identified. Overall Procurement strategy CMFT has a Procurement strategy in place that has been agreed by the Executive Director of Finance which sets out a number of objectives and initiatives for the Procurement team to deliver in line with the overall Trust strategy. Please see Appendix one for the strategy
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Delivering the standards The Lord Carter Metrics as set out in his report February 2016 in order to drive up standards and improve performance of procurement for acute Trusts, below sets out where the Trust is against these standards: Areas of focus are: a)
developing PTP plans at a local level with each Trust board nominating a Director to work with their procurement lead to implement the changes identified, overseen by NHS Improvement and in collaboration with professional colleagues locally, regionally and nationally;
CMFT position CMFT is a member of the Shelford Group which comprises of 10 leading NHS multi-speciality academic healthcare organisations. The group benchmarks and shares best practice in the key service areas across the membership through working groups, and constructively engage with Government, Parliament and industry to represent the interests of large tertiary centres and the wider National Health service. An agreed proposal to create a unified South & Central Manchester Procurement service serving both Trusts is now in place. Planning, joint working and consultation will take place in 2016/17 prior to an anticipated formal unification from 2017/18. CMFT Procurement also works in collaboration with other Trusts where appropriate and freely shares its Procurement information.
b)
NHS Improvement providing a national spend analysis and benchmarking solution from high quality trust spend data to be fully operational by April 2017. This will include a purchasing price index starting with an initial basket of 100 products with immediate effect. NHS Improvement will hold trusts boards to account in performance against the index from October 2016.
CMFT Position
The Procurement Department has access to comprehensive spend data provided by the information team. CMFT can supply detailed spend data and tailored information for performance metrics whenever required.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust c)
All Trusts to prioritise the role of procurement on ensuring effective system control and compliance, building supply chain capability in terms of both inventory management systems and people, and build contract management capability to engage with industry in a more effective way. Trusts to aim to work in collaboration both with national procurement strategies and other trusts to explore common systems adoption e.g. efficient electronic catalogues using retail system standards, enhancing current purchase to pay systems, adopting (GS1) and Pan European Public Procurement Online (PEPPOL) standards detailed in the e-Procurement Strategy, and to align with NHSSC on category initiatives;
CMFT Position CMFT currently uses the Oracle Procurement system provided by NEP which is contracted until March 2018. The Trust uses EU-Supply for e-tendering as part of the SBS contract. CMFT are currently implementing the GENESIS inventory management systems, this has been integrated into RMCH Theatres and has achieved a £80k saving to date. The programme is currently being developed in to our Surgery Division where we cover 16 theatre areas. Genesis provides the Trust with a lot of the functionality in the strategy, including inventory management, GS1 scanning, patient association and patient level costing. The Trust has also allocated Global location numbers to each department. GHX is an accredited PEPPOL provider which is used for the exchange functions.
d)
Trusts focusing on the measurement of key procurement metrics and being responsible for driving compliance to the following targets by September 2017: 80% addressable spend transaction volume on catalogue, 90% addressable spend transaction volume with a purchase order, 90% addressable spend by value under contract; CMFT Position CMFT have over 95% of all expenditure on Purchase order including all the Non-traditional areas such as NHS, Utilities, PFI and Legal services. Currently 57% of the total non-pay expenditure is covered by catalogue, the remaining % Would not be covered by catalogue due to the nature of the service. Looking at the exception from the KPI, CMTF are at over 90% catalogue coverage exceeding the 80% target.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust e)
Trusts accelerating collaboration with other trusts to develop aggregated sourcing work plans to reduce variety (including with NHS Supply Chain for their categories) for 2016-17 and 2017-18, including contributing to clinically driven product testing and evaluation, and adopting the outcome of these processes, switching products where appropriate, unless a clinically agreed exception exists; and, CMFT Position
CMFT are in the process of working with UHSM to create an aggregated sourcing work plan. This will result in standardisation of products thus resulting and generate cost savings. The Trust also collaborates fully with members of the Shelford Group to identify opportunities.
f)
Trusts embracing the adoption and promotion of the NHS Standards of Procurement with the support of the new Skills Development Networks, with those that have already achieved Level 1 achieving Level 2 of the standards by October 2018; and those Trusts that are yet to attain Level 1 achieving that level by October 2017. All trusts to produce a self-improvement plan to meet their target standard by March 2017.
CMFT Position
CMFT have achieved accreditation at level 2 to the NHS Standards of Procurement making CMFT the First Trust in the country to achieve this. The department will be working towards achieving Level 3 by the end of 2017.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Partnerships A proposal for the merger of the Procurement departments of CMFT and University Hospitals of South Manchester has been submitted. It is anticipated this will go ahead in the summer of 2017. The development of this merger aligns itself to the Lord Carter recommendations around shared services. Work is currently in progress, looking at
Centralised catalogue solution Improved P2P processes Aligning Purchasing contracts to increase economies of scale Standardisation projects across both Trusts
CMFT is also a member of the Shelford Group of Trusts that work collaboratively on Purchasing and P2P projects. This ensures we can obtain the best value for money for the NHS.
A joint structure has been submitted which allows the teams to work across all sites; this has now been broken down in the following way to enable us to deliver a comprehensive service and meet the financial challenges of both Trusts.
Team Strategic Purchasing
Scope of Team Over £50k tender limit
Based CMFT & UHSM
Trust(s) wide projects/changes OJEU Commodity/category delivery Divisional support
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Operational Purchasing
Under £50k tender limit
CMFT & UHSM
Local Purchasing Agreements (LPA’s) Centralised maintenance contracts Capital
Purchase to Pay
Help Desk Services
CMFT & UHSM
NHSSC & Oracle system training Mat man across both Trusts Genesis Project Systems Management and Developments Payment of Invoices Logistics The proposed structure has been agreed by the Executive Directors of Finance for both CMFT and UHSM
4. Milestones, Review and Timeline for delivery See Appendix Two
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust CENTRAL MANCHESTER UNIVERSITY HOSPITALS NHS FOUNDATION TRUST Report of:
Adrian Roberts, Executive Director of Finance
Paper prepared by:
Simon Walsh, Head of Procurement and E-Commerce
Date of paper:
August 2013
Subject:
Trust Procurement Strategy 2013-17
Purpose of Report:
Indicate which by Support
Consideration of Risk against Key Priorities
To outline the Trust’s strategy for the procurement of nonpay goods and services 2013-17 and seek board adoption/support
Recommendations
To support the recommendation
1. Introduction
CMFT has a total operating budget of £890m (2013/14) of which £310m relates to non-pay goods/services. In 2007 the Board approved a Procurement Strategy and since then has received Annual Updates supported by scrutiny at both Executive Director of Finance and Divisional level. This Document sets out the overarching direction for the next 4 years and seeks to build upon the progress already achieved. 2. Progress over the past 10 years It is difficult now to imagine the non-pay management arrangements in place before 2003 where individual Departments were making purchasing decisions in isolation supported by a small central processing resource and with no capture of information. The migration to the Oracle Finance/Procurement System in 2006 combined with the extension of a full materials management service have been critical decisions. The Procurement Department has grown in both capacity and capability through the creation of professional cataloguing and purchasing functions joining existing material management and accounts payable teams. The result is a function which deals with all aspects of Purchase to Pay from ‘I want’ through to ‘Received and paid for.’ 11
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust The integration of accounts payable within Procurement since 2007 has enabled us to consistently meet 30 days payments targets and in the case of Small Medium Enterprises (SMEs) over 80% are paid within 10 days, thus contributing towards local economic regeneration. The Trust has achieved a level of integration of procurement activity that has been nationally recognised as an example of best practice for the NHS. This has been further confirmed by Hospitals in France; Saudi Arabia and the USA seeking to learn from our achievements. The magnitude of this progress is evidenced in the following 6 key areas: 1. The Trust has paperless ordering systems including a self-service electronic catalogue. 2. Extensive materials management services (including within theatres) relieve clinical staff of the majority of operational procurement responsibilities. 3. Budget holders have access to professionally qualified purchasing staff working on a dedicated Divisional basis to facilitate non-pay Trading Gap delivery opportunities. 4. The Trust deals with its suppliers in a professional and integrated way with contracting; cataloguing; ordering and payment fully unified. Clear Guidance is published to enable and support suppliers working with the Trust. 5. Zero-inflation strategies have delivered over £5m of benefit over the past three years and been recognised by the Department of Health as the most advanced in the NHS. 6. We have collectively achieved over £16m of cash releasing savings excluding inflation since 2007.
The Trust now has an opportunity to continue its commitment to and investment in procurement enabling us to consolidate progress moving towards a strong ‘best in class position’. This progress will support the Trust as it continues to develop.
3. Procurement Strategy 2013-2017 The following 10 key themes comprise the Procurement Strategy. This number reflects both the breadth of the procurement agenda and also the range of challenges that the Trust faces in delivering sustained non-pay performance and improvement:
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust No. 1 2 3 4 5 6
Area / Topic 2013 2014 2015 2016 2017 Corporate and Divisional ownership E-Commerce Reporting Integrated supply chain Purchasing and Contract coverage Product selection & range management 7 Supplier management 8 Risk management and compliance 9 Resources and competencies 10 Sustainable procurement. Key: Amber = continuing development towards full delivery across all elements; Green = full delivery 1. Corporate and Divisional Ownership The Trust needs to refresh its governance arrangements by: Building upon the recognised non-pay service and Trading Gap reporting at Divisional level by improving dashboard arrangements Continuing to develop the role of the Trust wide Procurement Evaluation and Theatres Procurement Groups Offering budget holder access to high quality benchmarking information Continue to benefit from Non-Executive input and experience sharing 2. E-Commerce The Trust needs to recalibrate its procurement processes and in particular: Maximise electronic invoicing by suppliers direct into the Oracle system. Achieve the optimum level of Catalogue coverage and continue to reduce NonCatalogue requests. Adopt GS1 product bar coding technology for the majority of consumables and equipment. 3. Reporting The Trust will adopt: National Key Performance Indicators National Procurement Standards In addition to continuing to develop local reporting for: Divisional dashboards Trading Gap performance Payments performance Divisions will receive improved tracking of non-pay spend and Trading Gap performance with the emphasis on more real time information rather than the current retrospective analysis. 4. Integrated Supply Chain 13
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust The Trust will continue to improve the integration of its supply chain by: continue to build upon its successful relationship with NHS Supply Chain Utilise its E-Commerce and Purchasing capability to work with other distributors and supply chain providers to sustain competitive tension Further reduce the divide between stock and non-stock products to create a seamless catalogue that ensures that at all times users have access to the appropriate lowest cost products. Stock management systems will be developed to link into patient costing/service line reporting ensuring that non-pay elements of procedures are more visible along with any inventory held within the Trust. Work with our Sodexo partners to better co-ordinate goods deliveries at ward level and reduce the number of individual daily deliveries
5. Purchasing and Contract coverage The Trust will continue its ambition that the provision of all non-pay goods and services is professionally managed by Continuing to increase the level of Contract coverage from the current 70% to 80%. Ensuring that all key categories of spend have an appropriate sourcing strategy agreed with stakeholders. Ensuring that maximised Contract coverage drives increased Catalogue coverage and therefore delivers improved Compliance. This has been and will remain the core driver of our procurement strategy as delivery reduces risk and maximises savings opportunities.
6. Product selection and range management The Trust will create a Formulary for all key goods and services similar to that achieved for drugs by: Proper planning and effective evaluation pre-purchase Business planning to identify equipment replacement Standardisation of all commonly used items across the Trust Implementing and upholding more controlled arrangements for supplier access to both the site and to Trust staff 7. Supplier management The Trust will continue to implement supplier management strategies that: Improve relationships with suppliers through mutually agreed Supplier Plans with key providers Seek to control the continual increase in the supplier base. The Trust is a dynamic organisation and inevitably new suppliers will be required but with the introduction of a Formulary will be maximised to reduce the existing supplier base. Develop our Supplier Database during 2013-2015 to ensure it provides a comprehensive perspective on all key issues relating to our suppliers. 14
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust The Trust already has a supplier base of over 2,700 and therefore should not continue to expand as it makes the challenge of effective supplier management even more difficult. 8. Risk management and compliance The Trust must achieve compliance to European Procurement Law (as enshrined in UK Statute) along with upholding its own Standing Orders & Financial Instructions. The Trust will Risk rate all significant projects Ensure that purchasing staff are fully trained in the requirements of procurement law and able to advise Trust staff on compliance/risks. Maintain our strong record on product safety and regulatory compliance 9. Resources and competencies The Trust will need to ensure that the capacity and capability of its Procurement function is both maintained and developed despite the challenging workload pressures and Trading Gap targets. This will be achieved by: Maintaining the cost of the function at c.0.15% of Trust turnover - -this is in the lower quartile for similar Trusts. Continuing to invest 1.5% of the Departmental budget in training and development activities equating to c£500 per wte per year. Achieving 75% Membership of the Chartered Institute of Purchasing and Supply for staff undertaking purchasing/materials management roles. Take a lead role in North West Procurement Development Office initiatives to better equip Trust purchasing staff for the future skills required as well as developing effective succession planning. Seek to recruit the best candidates for roles within the Department by promoting our recognised status and emphasising the unique range of opportunities that CMFT offers. 10. Sustainable procurement The Trust’s Governors Corporate Citizenship Group has lead the way in encouraging the use of the Trust’s purchasing power to benefit locally based suppliers and SMEs in particular. This will be developed further during the 2013-17 period by Adopting the Government’s target that 25% of spend should be with SMEs (in 2012/13 it was 12%). Increasing the share of spend with Greater Manchester/North West based suppliers to 30% (in 2012/13 it was 22%). Reducing the procurement generated carbon usage by 10% given that it is estimated that around 60% of a Trust’s carbon demand will be procurement related. Formalising our links with Manchester University/Manchester Metropolitan University and Manchester City Council through a Manchester Corridor Procurement Group with a £1bn non-pay spend. The Department of Health have recently issued a national direction of travel document for NHS Procurement – this is attached as an Appendix. 15
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust CMFT will continue to work with external partners on both a national and regional basis to deliver the Trust agenda whilst supporting wider initiatives. The 10 key themes whilst enhancing the operational effectiveness of the procurement service will also ensure that Divisions are better supported in achieving further nonpay savings of £20m over the 4 year life of this Procurement Strategy. This will enable the Trust to protect over 500 posts over the 4 year period.
4. Conclusion The Trust already has a level of non-pay performance that most of the NHS would envy. The Procurement Strategy 2013-17 lays the foundations to push even further and sets the direction to deliver this enhanced opportunity. 5. Recommendation Board approval is sought for this strategy.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust
Appendix To brief the Board on the recently released Department of Health Document- Better Procurement, Better Value, Better Care: A Procurement Development Programme for the NHS On 5 August 2013, the Department of Health and NHS England published Better Procurement, Better Value, Better Care: A Procurement Development Programme for the NHS. This paper sets out how the NHS is to radically improve procurement capability in order to reduce costs, ensure value for money, and improve patient outcomes. As the title suggests, the key element of the paper is the launch of a NHS Procurement Development Programme to guide and support NHS organisations to make the changes needed. The programme contains four integrated initiatives designed to embed world class procurement across the NHS: 1. delivering immediate efficiency and productive gains; 2. improving data, information and transparency; 3. improving patient outcomes at lower costs through effective clinical input; 4. the creation of a new ‘centre for procurement development’ to improve leadership and
The NHS Procurement Development Oversight Board will be created to oversee the programme. This will be a high profile organisation chaired by the Parliamentary UnderSecretary of State for Health. It is also planned that a "Procurement Champion" will be appointed to drive the changes required to ensure the modernisation and accountability envisaged by the programme. This person will chair a new NHS Procurement Delivery Board, which will steer and deliver the programme. This Delivery Board will ensure all organisations are working to a common strategy for NHS procurement, drawing in private sector expertise and best practice. For more detail, Better Procurement, Better Value, Better Care: A Procurement Development Programme for the NHS is available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/226443/Procuri ng_for_growth_and_value_Accessible.pdf
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Programme Implementation and actions Over the next 12 months, we will put in place the following actions to ensure the NHS is able to deliver and meet the challenge. The NHS Procurement Development Programme Establish the Procurement Development Oversight Board Appoint a private-sector Procurement Champion Set-up the Procurement Development Delivery Board Delivering immediate efficiency and productivity gains Implement initiatives to support the NHS in combating inflation Develop Key Supplier engagement with suppliers who do the most business with the NHS Identify immediate opportunities through NHS Supply Chain to leverage NHS purchasing power Focus on establishment costs and learn from central government initiatives Establish quarterly price comparison on a rolling basket of 15 products Improve Data, Information and Transparency Launch a NHS Procurement Dashboard Require all trusts to publish all procurement data, including opportunities, expenditure and contracts on their websites Develop the specification for a single NHS spend analysis and price benchmarking service Publish an E-Procurement strategy Launch NHS GS1 data pool Improving outcomes at reduced costs through Clinical Procurement Review Partnerships Establish new multi-disciplinary Clinical Procurement Review Partnerships (CPRPs) Combine commercial and clinical outcome data to engage Clinicians and inform change Implement the clinically led approach to procurement in one region. Improve Leadership and Capability Provide a package of support for non-executive directors and finance directors Work with Royal Colleges to develop clinical leaders’ awareness of procurement Work with the Chartered Institute of Purchasing and Supply and the Health Care Supply Association Establish Procurement Development networks at regional/trust group level Launch NHS Centre for Procurement Development including the Academy of Procurement Excellence. Contribution to Economic Growth Implement recommendations from Lord Young to support SMEs win public sector business Launch a new set of NHS Standard terms and conditions for the supply of goods and services Work with AHSNs to develop practical actions to help the NHS adopt innovation Establish a series of reverse procurement fairs to stimulate innovation from SMEs
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Carter Recommenda tion
5a. Every trust should have a local PTP in place
Link to NHS Standards of Procurement
Strategy & Organisation 1.2
Strategic Procurement 3.1
5b. Spend analysis and benchmarking solution
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Objective
Current Position
PTP should cover plans to meet the model hospital benchmarks, collaborate with other trusts and the national solutions such as NHS Supply Chain.
Current departmental workplan covers some of this, PTP provides focus and detail on areas required
Lord Carter recommends a board director should be nominated to work with the trust procurement department to ensure PTPs are fully embedded in the trust performance improvement plans.
The Procurement Department is working closely with Matthew Swanborough (Director of Resilience) and Adrian Roberts (Executive Director of Finance) to implement the PTP Plan. Purchases over £500k need to be authorised by the Chairman of the Board. Orders over £50k are reported to the audit committee board. 70% of suppliers are on a contract or framework with 54% of orders on ecatalogue.
Lord Carter makes it clear that addressing the variety of products and manufacturers supplying the NHS is a key strand of the national PTP. At a local level trusts must begin to address the proliferation of suppliers and products used within their organisations aiding reduction in spend and clinical variation.
Utilising the PPIB Tool for benchmarking against other Trusts and identifying savings and rationalisation opportunities. Materials Management in 85 wards and departments.
Actions Required
Milestone/ Review Dates
Ensure delivery against actions Quarterly within P2P review
Continue to work with NHS Supply Chain and Shelford Group to standardise on products wherever appropriate
Ongoing
Virtual Stock as a new system to replace the current solution and this will help to help improve the quality and analysis of the catalogues for both CMFT and UHSM
Mar-17
Routine clinical consumables (£30m per annum) are supplied via NHS Supply Chain who provide dedicated order consolidation and supply services to the NHS.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Standardisation in place on a number of items across product areas in both Trusts and managed by the Materials Management teams.
Data, Systems and Performance Management 5.2, 5.5
Lord Carter identified a need for increase in transparency and a reduction of at least 10% in non-pay costs is delivered across the NHS by April 2018
Difficulty in utilising the PPIB tool accurately due to rebate information being excluded / hard to incorporate.
Reduce number of rebates coming into the trust to increase transparency of costs
Strategic Procurement 3.6
Lord Carter identified the need for a national price benchmarking service. This has culminated in the launch of the national PPIB in August 2016 from AdviseInc. All trusts are expected to submit their data monthly for upload into the tool, allowing continuous benchmarking and highlighting areas for non-pay cost reduction.
As CMFT is a Carter Cohort trust, we have been involved in meetings, training and in providing feedback regarding the PPIB tool.
CMFT is already submitting Purchase Order (PO) data on a monthly basis.
Monthly confirmatio n of data submission
AdviseInc have now received the last 6 months PO data from the 136 acute trusts in the country. This information has been submitted and uploaded into the tool and staff have been trained on the system
Review and feedback on 6 months data information in updated tool.
Sept-16
Longer term – utilise tool to identify quick-win savings opportunities whilst also working with the national Carter group (other collaborative groups e.g. GM) on larger collaborative opportunities.
On-going
Utilising the PPIB Tool for benchmarking against other Trusts and identifying savings opportunities. Detailed PO and NHSSC data is submitted monthly.
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Data, Systems and Performance Management 5.4
5c. Prioritise the role of procurement ensuring effective system control and compliance, building supply chain capability in terms of both inventory management systems and people
The Lord Carter review identified big variation in Purchase to Pay (P2P) system maturity and compliance. Enhancing P2P systems must be seen as a priority for trusts that do not have well developed systems and compliance. Trusts are also encouraged to work in partnership with organisations within local health economies and with partner organisations as well as the national PTP to ensure opportunities to adopt common systems are maximised.
Supply Chain 4.1
Data, Systems and Performance Management 5.7
Lord Carter identified a general under investment in inventory control. Building on the DH eProcurement Strategy the Lord Carter report urges trust procurement departments to build supply chain capability on inventory management systems. Building on the DH eProcurement Strategy the Lord Carter report urges trust procurement departments to align themselves to the GS1/PEPPOL DH work stream and develop and execute plans as part of trust wide approach to GS1/PEPPOL adoption.
CMFT use NEP Oracle system to generate purchase orders and pay invoices. The procurement team have catalogue management systems in place through GHX Nexus which interface with NEP Oracle which provides robust and detailed contract pricing and information on the goods/services the Trust purchases.
CMFT have identified Virtual Stock as a new catalogue management system as part of a Shelford Group Project. UHSM will be part of this project and one catalogue system will cover both Trusts
The Accounts Payables function sits within the Procurement team and processed 148,443 invoices. The BPPC figures for 2015/16 were 96%/93% for volume/value
Oracle provides the Trust with the full Purchase to Pay function required. Genesis Inventory Management introduced in RMCH and MRI Theatres. Creating over £79K of savings to date. Enables Business Analytics to be accessed by Consultants and is GS1 compliable.
The Trust has a GS1 plan in place as well as the appropriate governance arrangements where the plan is managed via the GS1 Strategy/Delivery Boards. The Procurement Director is the GS1 lead.
To continue with the Genesis roll out as well as other high cost areas such as Critical Care, Women’s, Neonates & Radiology. Assess opportunities across other areas of the Trust and UHSM Oct-16 Manage the GS1 plan via the appropriate boards ensuring the key leads across the Trust remain engaged UHSM to appoint a PEPPOL partner 21
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Supply Chain 4.1
Lord Carter identified a general under investment in inventory control. Building on the DH eProcurement Strategy the Lord Carter report urges trust procurement departments to build supply chain capability on inventory management systems.
People & Skills 2.1 & 2.3
Lord Carter urges trusts to prioritise on capability through better recruitment, enhanced skill sets and appropriate remuneration to attract the right people.
CMFT are working with NEP to appoint a PEPPOL partner
63 Staff in Procurement Dept.
UHSM to achieve level 1 Standards of Procurement
£17.5k training budget 10 members of staff are fully MCIPS qualified with 10 currently studying CIPS CMFT achieved Level 2 NHS Standards of Procurement, first Trust in the country to achieve this standard. UHSM working towards level 1 standards PSD & HCSA training opportunities are circulated and taken up throughout the team with any other specific training requirements identified on an individual basis (at the least via annual PDR).
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Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Data, Systems and Performance Management 5.3, 5.4 5d. Procurement Metrics
Policies & Procedures 6.2
Strategy & Organisation 1.5
5e. Collaboration - with other trusts and NHS Supply Chain with immediate effect
Lord Carter suggests progress against key metrics should be made by Sept-17. The main metrics being: 80% Catalogue Usage 90% PO Coverage 90% Contract Coverage
CMFT has actively contributed to the development of the Carter Procurement Metrics and will continue to input as required into the national agenda. Information provided by data team to purchasing/catalogue team on a monthly basis and reviewed.
UHSM currently implementing “No PO, No Pay” policy, in support of the metric of transactions via a purchase order to ensure message it continually communicated to internal customers and suppliers.
No PO, No Pay policy in place so all transactions go via Oracle system at CMFT.
Creation of an Operational Purchasing team to increase contract coverage between both Trusts
As a guideline Lord Carter recommends that trusts collaborate with at least five other trusts to share data and resources to modernise their procurement function.
CMFT and UHSM are actively engaged in the GM “cluster” work stream to group trust procurement departments. Work is currently underway to appoint a GM project manager who will coordinate this.
Continue to input and influence the GM work stream.
Lord Carter also challenges trusts to improve their relationships with procurement partner organisations.
CMFT are in the process of collaboratively working with UHSM to create an aggregated sourcing workplan. This will result in standardisation of products and generate cost savings. CMFT also collaborates fully with members of the Shelford Group to identify opportunities. The Shelford Group comprises ten leading NHS multi-specialty academic healthcare organisations. The group benchmarks and shares best practice in key service areas across the membership through
On-going
On-going
Apr-17 Agree potential structures with CMFT/UHSM Executive leads and work towards creating a joint function.
On-going Continue to liaise with 23
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust
Strategic Procurement 3.5 & 3.7
Lord Carter requests trusts take the following actions on national sourcing initiatives: 1) Aggregate sourcing by working with NHSSC in particular 2) Accept and adopt clinically driven product testing wherever possible, in particular with reference the NHS Clinical Reference Board and Clinical Evaluation Team and any work streams with the BSA/NHSSC 3) Collaborate to take committed volume to market 4) Reduce variation and proliferation of choice 5) Lord Carter states: “We do not expect to see hubs competing with or undermining the national solutions, so we recommend trusts take this into account in developing their PTP plans”.
working groups, and constructively engage with Government, Parliament and industry to represent the interests of large tertiary centres and the wider National Health Service. Routine clinical consumables (£30m per annum) are supplied via NHS Supply who provide dedicated order consolidation and supply services to the NHS. Collaborate with Shelford Group Trusts and South Manchester. Utilising the PPIB Tool for benchmarking against other Trusts and identifying savings opportunities.
national colleagues and support GM colleagues with the implementation of the metrics as well as ‘cluster’ work. Continue to work alongside national solutions, implementing where appropriate. Joint work plans and development of strategy with NHSSC and Shelford supported by account managers.
On-going
Jan-17
70% of suppliers are on a contract or framework with 54% of orders on ecatalogue. Cooperate with national solutions CMFT works in collaboration with other Trusts where appropriate and freely share their Procurement information. The Procurement department has access to comprehensive data and can supply detailed spend data and tailored information for analysis or benchmarking whenever required. 24
Procurement Transformation Plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust Accounts, policies and procedures are published on the Trust’s website. FOI requests are answered in a timely and accurate manner. All
5f. Adoption and promotion of the NHS Standards of Procurement
Policies & Procedures 6.2, 6.5 Strategic Procurement 3.3
Lord Carter requests that trusts embrace the adoption and promotion of the NHS Standards of Procurement with the support of the new Skills Development Networks. Those who have already achieved Level 1 achieving Level 2 of the standards by October 2018; and those trusts that are yet to attain Level 1 achieving that level by October 2017.
All of the above objectives where linked to the NHS Standards of Procurement, CMFT have reached level 2 accreditation and UHSM are working towards the submission of level 1 accreditation.
If successful put plans in place to work towards L3 over the next 1-2 years for CMFT.
Oct-16
Level 1 Standards of Procurement to be achieved by UHSM
Mar-17
All trusts to produce a self-improvement plan to meet their target standard by March 2017.
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