National Pharmaceutical Supply Chain Seminar

1
AGW / AAH PartnershipA Long term strategy
towards a partnership approach

• National Pharmaceutical Supply Chain Seminar
• 6 December 2005
• Richard Ward AGW Lead
• John McIlvaney AAH Lead

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Agenda

• Introduction
• Supply chain dynamics
• Background
• AGW Programme Structure
• Activity
• Benefit Realisation
• Next Steps

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Introduction

• What is the AGW / AAH Partnership?
• A long term, 10 year, partnership
• Clear targeted milestones
• Senior level commitment from both parties

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Programme Strategy

• To drive process improvements to provide supply
  chain efficiencies, focussing on cost and
  transactional savings
• Cost effective purchasing
• optimising product discounts
• Reduced transactional costs
• supplier product rationalisation
• Simplified Supply Chain
• not just a wholesaler

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Supply Chain Dynamics

• Recognition of importance of Supply Chain
• Increased focus on cost and not price
• Wholesaler discount potential limited
• Key cost drivers space, stockholding, activity

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Background - Process

• Long standing existing Prime wholesaler
  agreement
• Outline Business Case innovate the supply
  chain
• Detailed negotiation process
• Supply chain partner selection
• 18 month process!

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AGW Programme Structure

• SBU - Sets agenda clears blockages
• Supply Chain - Best practice procurement
• Ops - Service monitoring
• Finance - Governance

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Key Activity Phase 1

• Change management process
• Communication structure
• Consolidate wholesale purchases
• Maintain service
• Product review
• Supplier rationalisation
• Metrics and KPIs
• Baselines targets

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Benefit Realisation

• Wholesaler discount optimised
• Reduction of 1 weeks stockholding (20)
• Consolidating activity through reduction in
  supplier base
• e-commerce utilisation
• Best practice

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Next Steps

• Continue Supplier Engagement Programme
• Appoint NHS Project Manager
• Institute regular Procurement Workshops
• Implement Robotic Dispensing

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Summary Key Learnings

• Doesnt happen overnight
• Ensure focus on cost not price
• High level of commitment required
• Need for dialogue