We worked with 7 ICBs and 15 Acute Trusts in the South West to develop a collaborative regional procurement approach
Objective
ICBs are having to meet challenging savings targets. They wanted to identify opportunities to maximise quality and value for money in their supply chain by leveraging economies of scale.
What we did
Co-developed a procurement ‘spend cube’ to integrate expenditure datasets for analysis to identify savings opportunities.
We worked with 7 ICBs and 15 Acute Trusts in the South West to develop a collaborative regional procurement approach. This procurement 'spend cube', the first of its kind, integrated expenditure datasets (Purchase Order and Accounts Payable) from all 15 Trusts.
Through analysis of this data, we identified three categories of spend to target – estates and facilities, medical and surgical equipment, and transport – based on their likelihood to deliver benefits in the short term.
These benefits were estimated at £5m-£15m in savings and cost avoidance. As well as financial benefits, the programme identified clinical, operational, and environmental benefits which encouraged broad stakeholder support for the programme and commitment to delivery.
We worked with 7 ICBs and 15 Acute Trusts in the South West to develop a collaborative regional procurement approach. This procurement 'spend cube', the first of its kind, integrated expenditure datasets (Purchase Order and Accounts Payable) from all 15 Trusts.
Through analysis of this data, we identified three categories of spend to target – estates and facilities, medical and surgical equipment, and transport – based on their likelihood to deliver benefits in the short term.
These benefits were estimated at £5m-£15m in savings and cost avoidance. As well as financial benefits, the programme identified clinical, operational, and environmental benefits which encouraged broad stakeholder support for the programme and commitment to delivery.
Activity
Procurement
Co-developed a procurement “spend cube”, the first of its kind, that integrated expenditure datasets (Purchase Order and Accounts Payable)
Finance analytics and financial goveranance
A significant cost containment opportunity emerged through aggregating regional demand
Programme management
The benefits identified by the programme encouraged broad stakeholder support for the programme and commitment to delivery.
Analytics and business intelligence
The model provided a snapshot of demand and capacity highlighting risks and mitigations
Outcome
Significant savings potentials were identified through aggregating regional demand.
- In the first three spend categories explored, a savings potential of £5m-£15m was identified, and total pipeline savings will continue to evolve as the programme progresses and opportunities mature.
- In the area of energy and utilities, a significant cost containment opportunity emerged through aggregating regional demand. Following this success, a water/utilities pathfinder project is currently being scoped, to be closely followed by a region-wide energy project.
- Within the medical/surgical workstream, the purchase and use of remanufactured devices at a regional scale will present c. £1m savings and 50% fewer CO2 emissions, aligning with the national Green Plan priorities.
- Driving down costs through aggregation and elimination of inter-trust competition helping shift the balance of power between Trusts and suppliers allowing more balanced conversations that improve supply-chain resilience.
- Creation of a shared vision across procurement, finance, and clinical teams enabling strong links between clinical delivery and procurement practice, which creates broader support for aggregation/rationalisation initiatives.
- Simplifying the supply chain model, creating clear lines of accountability and less duplication of effort (procure once for the whole system/region, freeing up more procurement capacity available for Trust-specific initiatives). Supporting Trusts to manage their internal work plans as they struggle to recruit to vacancies.
- Improved overall commercial capability through sharing of best practice which reinforces the value of system working.
- Reduced overall supply chain risks through more effective management of key suppliers helping break down barriers to competition and encouraging new entrants to key markets in support of longer-term sustainability.
- Allowing focused targeting of the supply chain to deliver regional social value and environmental sustainability objectives.
- Individual Trusts are able to undertake more complex procurement where external advice or support might have been required but was not available giving the ability to explore more savings opportunities than would otherwise be possible.
