Spend Analytics & BenchmarkingDavid Coley | Heart of England NHS Foundation TrustPavel Ollitervo-Murphy & Scott Pryde | BravoSolution

David Coley - Introduction

Procurement Director at Heart of England NHS Foundation Trust for 13 years.

Expert in implementation of eProcurement and analysis solutions as well as strategic change management in NHS trusts.

Track record in driving strategic approach to NHS procurement, reducing a transactional focus and upskilling the function to manage supplier relationships.

Pavel Ollitervo-Murphy - Introduction

Principal Consultant with 9 years experience in Procurement.

Previously at GSK as a Sourcing Manager managing Marketing Services.

Before this Pavel worked at GSK eSourcing Department as Sourcing Manager providing expertise and consulting to various parts of the business to optimise their sourcing.

Scott Pryde - Introduction

Procurement & supply chain success in multiple industries from electronics to healthcare

Several of the UK’s largest and most innovative spend analytics initiatives.

Healthcare supply chain, medtech market and technology innovation expertise

Performance & Motivation

Target

Measure

Analyse

Compare

Collaborate

Improve

Case StudySpend Analytics & Benchmarking

David Coley | Heart of England Foundation Trust

HEALTHCARE TRENDS

Ageing population & lifestyle

Restructuring

Primary care commissioning

Tariff based reimbursement

£20Bn savings & QIPP

Capacity constraints & restructuring

Innovation

The Challenges to the NHS

HOSPITAL SECTOR

Demand and capacity

Responsiveness

Reimbursement

Budgets

Service efficiency & productivity

Patient safety & outcomes

Innovation

£6m deficit 13/14 – first deficit posted since becoming a Foundation Trust

£24m CIP target for 14/15 with only £13m of plans

4th Year of a £5.5m non-pay savings challenge

A&E 4 hour wait being scrutinised by Monitor

18 weeks and Cancer targets under considerable pressure

Planning for Winter

Reducing length of stay and delayed discharges

Centre-led action network (CLAN) model across estates and pharmacy

Procure and deploy GS1 compliant trust wide point of use stock system

Collaboration with multiple aggregation partners

Procurement Challenges at Heart of England

Progress Expected on Policy Based Actions

Standards• Leadership• Process• Partnerships• People

Scorecard• Doing it well• Doing it efficiently• Doing it right

Systems• GS1• eProcurement• Analytics• Benchmarking

Stakeholders• Special interest

groups• e.g. Orthopaedic

Surgeons

Procurement Intelligence Essential

EnhancedSpend Analysis

Benchmarking &

Focus Groups

Share Market Intelligence ,

Context,Experience

Multilevel Collaboration ,

Integration &

Professional Networking

Solution

TraditionalAnalysis

NOW

IMPACT

Enabling Technologies ?

Challenge

10% Savings, All Categories

Category Spend (£) Initiative Savings Target(£)

TOTAL 21,543,991,902 9.84% 2,119,057,063

CLINICAL

Medical & Surgical Equipment 4,234,448,282 10.00% 423,444,828Pharmaceuticals Blood Products & Medical Gases (Secondary Care Only) 3,520,038,443 8.00% 281,603,075Staff & Patient Consulting Services & Expenses (Clinical) 3,067,569,723 10.00% 306,756,972Chemicals & Reagents 506,116,402 8.00% 40,489,312Laboratory Equipment & Services 488,970,451 8.00% 39,117,636Purchased Healthcare 480,274,463 8.00% 38,421,957Diagnostic Imaging & Radiotherapy Equipment & Services 370,183,111 8.00% 29,614,649Digital Health (Secondary Care Only) 205,364,836 15.00% 30,804,725Patients Appliances 201,386,791 8.00% 16,110,943Bedding Linen & Textiles 57,883,628 15.00% 8,682,544Dressings 54,353,176 9.00% 4,891,786Dental & Optical Equipment 52,531,924 10.00% 5,253,192

NON-CLINICAL

Staff & Patient Consulting Services & Expenses (Non Clinical) 2,055,942,064 12.00% 246,713,048Building & Engineering Products & Services 2,036,673,424 12.00% 244,400,811Hotel Services Equipment Materials & Services 1,514,742,817 10.00% 151,474,282Provisions 809,509,382 8.00% 64,760,751Fuel Light Power Water 686,305,556 10.00% 68,630,556Office Equipment Telecomms Computers & Stationery 673,386,704 10.00% 67,338,670Transportation 289,985,231 8.00% 23,198,818Furniture Fittings 158,710,128 10.00% 15,871,013Staff Clothing 45,895,952 15.00% 6,884,393Patients Clothing & Footwear 15,956,562 15.00% 2,393,484Hardware Crockery 8,466,629 15.00% 1,269,994Gardening & Farming 7,395,384 10.00% 739,538Recreational Equipment & Souvenirs 1,900,841 10.00% 190,084

The most profitable industries

are most often the most

inefficient supply chains

They are also the most

technically complex

And have the greatest

procurement :stakeholder

relationship challenges

Supply Chain Inefficiency

Variety, Variability, Volatility

Safety, Outcomes and Quality

Unified & Aligned Relationships

Interactive Session

Analytics Overview

Core

Wider spend capture

Avoidance of leakage

Improved Stakeholder Alignment

Stronger Cost Control

Auditable Savings Delivery

Challenge 1

10% NHS Savings Essential – Where to start ?

Benchmarking

Benchmarking

Deeper category & supply chain knowledge

Improved Clinical Product Governance

Alternative proven stakeholder practice

Clinical equivalence

Enhanced credibility, closer relationships, increased leverage

Higher savings & efficiency impact

Challenge 2

Orthopaedic Hip Prosthesis Benchmarking

• Share Evidence, Expertise & Experience across the system

• Expand reach with same skills & resources

• Collaborate Locally & Nationally

• Make best use of national initiatives

• Reduce supply chain tender & contract management burden

• Increase aggregation leverage where appropriate

Collaboration

#3 Information and knowledge sharing alongside analytics

Collaboration - Example

Group Discussion

• How do you use spend analytics & business intelligence in your organisation?

• What knowledge, information and data challenges does your organisation face?

• How will procurement intelligence change in the future ?

Group Discussions

• What are the challenges that you face in reducing sources of inefficiency: variety, variability, volatility ?

• How do you benchmark across you organisation ?

• What other information is required alongside raw data and statistics in order to make better judgements ?

• What technologies have had the biggest impact on procurement performance in your organisation & why ?

• How are new technologies e.g. social media and online market places changing how you manage your supply chain ?

Measure performance, get connected, get motivated !

Q&A

Thank You!