10 things NHS buyers can learn from retail

Nicola Hall
30 July 2019

At the forefront of the NHS supply chain are the buyers that have worked with suppliers to contract and ensure delivery of vital medicines and products, part of the silent army that keeps the NHS running.

To date, purchasing for the NHS has been at a local trust level, akin to each branch of a supermarket separately purchasing their own ranges. This drives variation and doesn’t achieve pricing that is consummate with the purchasing power of one of the largest organisations in the world.

In more recent years we have seen the likes of procurement hubs and the expansion of NHS Supply Chain ranges to try and secure better national pricing, but it is fair to say that these haven’t been as successful in achieving these aims as planned. So far the jury is out on whether the new revised privately-run NHS Supply Chain organisation will make the difference required. 

Whether purchasing is centralised or not, the NHS need to achieve the benefits of collective purchasing.

However the goods are purchased or by whom, they need to be at the right place at the right time, ready for when needed by a patient. In retail, products need to be available to sell as the consumer needs them. We know that factors including the weather will influence what people go out and buy and retail buyers factor these into what is on the shelf and when. There is a huge amount of work in retail around data analysis to predict consumer usage.

In parallel we see the well-known winter pressures that the NHS suffers and seasonally associated illness. The difference we have in the NHS is that there is currently a lack of standardised data that could be used for analysis, and therefore it still relies on local clinicians anticipating needs. Whilst this is changing inch by inch, they are not taking advantage of data to predict trends.

The 10 things NHS buyers can learn from retail are:

1. Understand negotiations on price is not the only dimension to relationships with suppliers.

2. Harness the power of the NHS brand to achieve best pricing.

3. Active supplier management gets really engaged with the supplier, understanding their capability and how their products and prices are constructed.

4. Understand the supplier’s supply chain and vulnerabilities, that may affect yours.

5. Product DNA – understand where the products are manufactured, sourced and how they come in to NHS supply chain, thus eliminating counterfeit products through the supply chain.

6. Support data standards across your supply chain, so that you can enable full management reporting. Don’t reply on suppliers to provide you with information. Have your own and make sure it links to SMART principles.

7. Use data analysis to really enable prediction of product trends and requirements, eg winter pressures, trends in health and the impacts of new treatments on new products. It should not all be about gloves.

8. Look at whether it is possible to predict demand and link product usage to planned activity in the organisation.

9. Look at managing the internal supply chain in your organisation and create efficiencies ­– products need to be moved to the point of care efficiently.

10. Manage wastage – zero wastage should be the aim. Wastage is a significant cost to the NHS.

☛ Nicola Hall is founder and COO at Ingenica Solutions

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