Inventory management at Portsmouth Hospitals NHS Trust saves millions of pounds

Will Green is news editor of Supply Management
3 September 2015

An inventory management (IM) system being introduced across Portsmouth Hospitals NHS Trust has produced millions of pounds of savings.

The system involves closer monitoring of stock levels, standardisation, reducing waste, re-evaluating demand and close working with procurement.

The savings include the discovery of more than £1.78 million of stock that was “squirreled away” in desk drawers and other areas that had not been officially declared.

Some £885,000 was saved by reducing general stock levels and a further £350,000 was saved by negotiating and reducing levels of consignment stock, which are goods that have been provided by suppliers but not paid for.

Jackie Pomroy, head of supply chain at the trust, said: “People traditionally would squirrel stock away. There was this perception of: ‘I haven’t got enough’, so everybody took it upon themselves to manage their own stock areas. We had lots of clinical staff doing their own thing.”

In 2011-12, following a pilot in 2010, the new IM system started being rolled out across departments at the trust, beginning with a theatre complex and supporting locations. This process is still under way.

Where the system is in place, stock is held in official locations, barcodes have been standardised and all information is stored in software provided by Ingenica Solutions, which was selected for its partnership approach, said Pomroy.

The supply chain team, which influences £50 million of spend each year on medical consumables, works with clinical staff to order and receipt goods, assess demand and rationalise products while liaising with the procurement department on issues such as stock levels and consolidating orders.

The work has seen waste levels slashed from 15-20 per cent to 1 per cent. Spend under contract has increased to 97 per cent, up on 60-65 per cent in 2012-13. “Stuff just can’t randomly turn up,” said Pomroy.

“It’s a massive change project and it’s around changing the culture,” she said. “The system isn’t a magic wand. You’ve got to put the processes and the protocols around it.

“Putting an IM system in allows us to have real information, not perception, that we can make informed decisions on.”

Pomroy said there was not enough emphasis on the supply chain in the health service. “I think there’s not a lot of supply chain knowledge in the NHS,” she said.

“There’s a lot of procurement knowledge, but procurement is one element of a supply chain. People are constantly looking at how they can make savings and taking a penny off the pound but they’re not looking at the internal supply chain. Why are you buying it in the first place, where is it and how are we utilising it?”

LATEST
JOBS
Hounslow, Heathrow /Richmond upon Thames
Competitive salary depending on experience plus generous share award
Tails.com
Middlesex
GBP25000 - GBP35000 per annum + bonus (10%) + company flex. benefits
Bramwith Consulting
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE