Strategic Sourcing Workshop
Jonathan Kaye
Head of Strategic Sourcing
Robin Drummond-Hay
Supply Chain Re-engineering Manager
Miranda Gordon
Strategic Sourcing Manager
Steve Rooke
Packaging Manager
Supplier Partnership Workshop
24 September 2013
www.supplychain.nhs.uk
Agenda
►Ice
breaker
►Core
activities
►Case
studies
►Workshop
►Questionnaire
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Ice breaker – Pallet stacking
► Split
into three groups
► As a group you must move 30 boxes onto the pallet in the quickest time
► One minute to organise yourselves
Rules
►
►
►
►
►
Hot Tip
Stack 30 boxes in the quickest time
All boxes must fit within the pallet
All boxes must be safely stacked and free standing
The pallet must be a maximum height of 1.4 metres indicated by
the mark on the wall
These are heavy boxes; move one at a time
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Key Cost Components
Cost to acquire
Purchase
costs
Cost to process
Raw
materials
Strategic
sourcing
Cash flow
payment terms
Packaging
Back office
costs
Transportation costs
Tendering
Tendering
Warehousing /
inventory
Sales and
marketing
Research and
development
Cost of capital
Labour
www.supplychain.nhs.uk
Our Core Activities
Reducing
vehicles
Reducing
handling
Reducing
materials
Reducing
freight
Trailer fill increase
Euro pallet
acceptance
Packaging
minimisation
Direct inbound
deliveries
Pallet height
optimisation
Pack quantity
optimisation
Packaging
optimisation
Bulk container
acceptance
Pallet fill increase
www.supplychain.nhs.uk
Reducing Vehicles
Optimising deliveries through more efficient ordering and trailer fill
Saving on transportation costs and CO2 impact on the environment.
Trailer fill increase
Identify optimal ordering quantities to ensure maximum use of
inbound trailer deliveries.
Pallet height optimisation
Understand your preferred height for a pallet build.
Pallet fill increase
Using optimal ordering quantities will remove product layer
separation.
www.supplychain.nhs.uk
Case Studies
Trailer fill Increase – Intersurgical Ltd
Through collaborative ordering, fully optimised load plans from 33 up to 66
Euro pallets per trailer delivery
► Reduction of inbound deliveries by 51%
► Reduction in transportation costs and operational efficiencies for all parties.
►
Pallet height optimisation – Attends Healthcare
All regional distributions centres accept 2.4m height pallets
which are ‘skimmed down’
► Inbound trailers fully optimised
► Removal of 38 deliveries (45%) per year.
►
Pallet fill increase – Nice-pak International (PDI)
►
Significant savings achieved by removing ullage
and pallet load increase resulted in:
45.6% average pallet load increase
1,135 reduction in pallet loads per year.
www.supplychain.nhs.uk
Reducing Handling
Review the handling of products at Suppliers Distribution Centres and NHS Supply Chain’s
Distribution Centres, to identify more efficient handling in-order to take cost out.
Euro pallet acceptance
►
Will consider Euro pallets in place of UK standard
pallets if supplier is incurring costs through double
handling.
Pack quantity optimisation
►
Review of the Unit of Issue (UOI) quantity and/or
the Unit of Purchase (UOP) quantity could
increase the quantity of product on a pallet.
Slip Sheeting
►
Trials underway to identify if this would be provide
benefits.
www.supplychain.nhs.uk
Case Studies
Euro pallet acceptance – Molnlycke Healthcare
►
Collaborative working with Molnlycke Health Care
identified significant resource requirements to
deliver UK Pallets to NHS Supply Chain
►
NHS Supply Chain DCs storage locations were
reconfigured; resulting in 211 days per annum
labour saving
Pack quantity optimisation – PDI (Nice-Pak)
►
Changing the quantity within the shipping case
from 10 to 12. The benefits were:
9% increase in units per pallet
Reduced packaging cost per unit
Reduced transport cost per unit
www.supplychain.nhs.uk
Reducing Materials
Thinking innovatively to reduce packaging materials whilst retaining customer
expectations for products not being damaged in transit.
Packaging minimisation
►
Elimination of packaging or reducing
packaging size and specification to deliver
material and transport savings.
Packaging optimisation
►
Changing the orientation of the primary,
secondary and tertiary packaging to
optimise the pallet load, reducing
transport costs.
www.supplychain.nhs.uk
Case Studies
Packaging minimisation – Daniels Healthcare Ltd
►
Collaboration with the NHS Supply Chain Packaging Technicians resulted in the
conversion of their range of clinical waste containers from cases to bulk pallets;
eliminating the need for outer packaging:
63% reduction in packaging and transport costs
938 less pallets per annum (18 full loads).
Packaging optimisation
Reducing packaging cost whilst maintaining ‘fit for
purpose’ functionality
► Methodology: eliminate, reduce, reuse and recycle
► 10-40% ullage across supply base
► Average 30% pallet fill increase post optimisation.
►
www.supplychain.nhs.uk
Reducing Freight Costs
NHS Supply Chain can leverage the benefits of being part of DHL to ensure that
the logistics arrangements represents best value with the most efficient solution.
Direct inbound deliveries
►
Reduce supply chain costs from outside the European
Union by supplying directly into NHS Supply Chain
regional distribution centres on preferable incoterms.
Bulk containers
►
Loose loaded in 20ft and 40ft ISO Containers for
de-stuffing by NHS Supply Chain at the regional
distribution centres.
www.supplychain.nhs.uk
Case Study
Direct inbound deliveries and bulk containers – Kimberly Clark Professional
NHS Supply Chain now accept full loose loaded containers directly from Kimberly
Clark’s overseas manufacturing locations
► NHS Supply Chain de-stuff containers and re-palletise prior to storing of product
► This has delivered the following benefits:
Supply chain efficiencies through reduced freight costs
Removal of intermediary warehousing costs
Improved operational efficiencies.
►
www.supplychain.nhs.uk
Overcoming challenges and sharing ideas
Split into three groups
You have 20 minutes to explore and discuss:
Challenges and how
these might be overcome
Other suggestions and
ideas that will support cost out
1. Document all challenges and ideas on post it notes
2. Document one key challenge and one key idea on the
coloured card
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Thank you
Visit us online:
www.supplychain.nhs.uk/strategicsourcing
Email us:
[email protected]
Twitter:
#supplierworkshop
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