Andrew Rudd

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• Andrew Rudd
• Director of Procurement Enablement
• NHS Purchasing and Supply Agency
• Email andrew.rudd_at_pasa.nhs.uk

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What we will cover in this session

• the English National Health Service NHS
• eSourcing and the Agency
• NHS Purchasing and Supply landscape
• The future

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National Health Service

• The NHS employs nearly 1.3 million staff
• The NHS provides 1 million treatments every 36
  hours
• Largest organisation in Europe
• 3rd largest employer in the world
• 33rd largest economy in the world

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Implementing eSourcing technologiesin the Agency
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Strategic drivers - efficiency targets

• the role of the Agency - modernising purchasing
  and supply
• innovation - process improvements - savings
• Gershon Report Releasing resources to the front
  line - July 2004
• efficiency gains of over 21.5 billion by 2007/8
  across the public sector
• Health target 6.46 billion - significant
  proportion from procurement

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• Implementing eTendering
• in the Agency

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The Agencys eTendering system

• the Agency has awarded a contract to
  BravoSolution for eTendering with integrated
  eAuction services.
• the system went live on 1 July 2005
• the use of the system is mandatory for Agency
  buyers
• all Agency procurements are now conducted through
  this system

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What our eTendering system does

• using web based technology to

• publish contract opportunities
• enable suppliers to register interest
• enable suppliers to provide pre-qualifying
  information
• enable buyers to shortlist suppliers
• inviting and receiving offers from suppliers
• enable on-line communications throughout the
  procurement
• undertake initial tender evaluation

• in a secure environment
• in a public sector compliant manner
• replacing paper based systems

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Our experiences to date
Since 1 July 2005..

• 203 procurements using the new system (at Oct 06)
• 3534 suppliers registered on the system
• 13,919 on-line messages
• 118,119 email alerts
• 18,488 files/ 8384 megabytes of data exchanged
  with suppliers
• we estimate this equates to a thousand trees
  saved

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Benefits for the Agency
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The Agencys use ofeAuctions
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eAuction results

• 52 events undertaken by the Agency to date
• baseline value 1.5bn
• eAuctions delivered an additional 10.7 on best
  tendered prices
• additional eAuction savings 160 million
• use of eAuction in a project established at
  Business Case stage
• Signs of tactical maturity in some markets

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When we use eAuctions

• proposed spend
• adequate spend to attract competition
• adequate competition
• sufficient pool of suppliers to stimulate
  competition
• clear specification
• clear and unambiguous can be determined with
  precision
• availability
• adequate supply availability no market
  distortions (period contracts)
• credible switching threat
• stakeholder willingness to switch supplier/brand
  etc

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Implementation - issues and barriers (1)

• buyer issues
• change management - cultural issues
• my products are complex
• my customers wont accept change
• my suppliers wont play
• damage supplier relationships
• already getting best possible value

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Implementation - issues and barriers (2)

• supplier issues
• lack of understanding about eAuctions
• buying on price alone compromise quality and
  service
• our products are special or unique
• placing essential supplies at risk
• clinical preference - patient safety risks

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• NHS-sid
• Supplier Information Database

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What is NHS-sid

• a secure web based system - funded by the Agency
  and free of charge to suppliers and NHS buyers
• enabling suppliers to publish a standard set of
  pre-qualification information on a once only
  principle
• enabling NHS buyers to view and download supplier
  information to aid supplier selection
• suppliers are responsibility to ensure their
  information is accurate and complete if they wish
  to be considered for shortlisting in NHS
  procurements
• NHS-sid is NOT a vetted or approved list of
  suppliers

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Benefits of NHS-sid

• an agreed standard set of pre-qualification
  information offers a consistent approach to
  supplier selection
• information can be viewed only by approved NHS
  buying staff
• information provided by suppliers on a
  once-only principle
• NHS buyers can download details to support
  procurement decisions
• removes paper from the procurement process
• reduces the burden on industry in doing business
  with the NHS

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• Purchasing and Supply landscape

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Structure
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Collaboration
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Process situation in NHS

• 36 million requisition lines per annum )
• at least 85,000 active requisition points )
• at least 12,000 delivery points )
• a variety of purchase order processing systems in
  the NHS
• major buying departments
• supplies department
• pharmacy
• estates
• pathology
• catering

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NHS systems environment

• 37 financial ledger systems
• 20 main purchase order systems in supplies
  departments
• functional systems in Pharmacy, Estates etc
• result.
• fragmented processes and lack of information

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Our suppliers

• many suppliers are small and local to trusts
  SMEs
• 25,000 suppliers to the NHS
• 1,428 suppliers contracted to the Agency
• degree of IT sophistication varies dramatically

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• The future

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P2P and Sourcing
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NHS Purchasing and Supply eEnablement strategy

• eEnablement group established to develop strategy
  to enable
• Spend analysis
• Demand analysis
• Reduction in process costs
• Integration across processes within and between
  organisations
• Common formats, content and structure