NHS Scotland targets £10m delivery savings

11 May 2005
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12 May 2005 | Joy Persaud

NHS Scotland (NHSS) is to streamline and centralise its logistics in an attempt to make them more efficient and save £10 million a year.

Sandy Agnew, NHSS logistics project implementation director, said there was a "mixed picture" on logistics across Scotland.

"The results of a review last year indicated there were opportunities for improvement in both how we were handling logistics in the NHS and in the way suppliers and distributors were moving products."

NHSS spends about £1.2 billion on goods and services a year, half of which is for products.

Agnew said he wanted a better breakdown of logistics spend, which accounts for 10-30 per cent of product costs.

He said most of NHSS's logistics work was carried out by in-house teams. But because there was no overarching strategy, there were no economies of scale and no co-ordinated supply chain.

"We found that we are incurring significant extra costs and service is not as good as it should be," he said.

"There is scope to improve things by bringing in a national view, to look at best practice in the public and private sectors."

Plans include a national distribution centre (NDC) for deliveries. Construction is due to start later this year, although a site has not been chosen.

NHSS will call on some existing local deals for its transport needs.

In addition, some NHS trusts will act as supply centres for their counterparts based furthest away from the NDC.

Agnew stressed that the project was not intended solely to cut costs but also to improve services so that 98 per cent of products were delivered on time - "an achievable target".

He would not say how many deliveries arrived on time now, except that they were "not at the desired levels".

Since August, NHS Logistics, which serves trusts in England, has also been reviewing its services to decide on what remains outsourced and what might be brought or kept in-house (see News, 5 August 2004).



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