Any Hospitals NHS Trust
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Proposed Agenda
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Savings
£150m Cash Releasing
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Savings –
£150m Cash Releasing
Flat Revenue
(excludes Volume
Growth Strategy)
Indicative only
Point to Point
10% Cheaper
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Potential Savings –
Breakdown by Lever
2014 Savings Numbers
£54,242,289
Initiative
TOTAL
Compare and Save
Channel Development
Band Switching
Bulk Deals
2014
Strategic
Plan
2015
Strategic
Plan
BAU + Strategic
Plans - to end
2015
£17,636,000
£79,630,000
£151,508,289
Total
£8,789,672
£9,150,000
£14,500,000
£32,439,672
£353,125
£2,000,000
£3,200,000
£5,553,125
£1,698,700
£1,698,700
£484,000
£484,000
Commitment Discounts
£8,481,561
Commitment Discounts Aggregated
£2,220,846
Commitment Discounts Direct
£7,063,550
Working Capital Investment
£3,770,000
Direct Pricing / Product Matching
£1,668,342
£1,668,342
Mini Competitions
£2,333,412
£2,333,412
Price reductions
£7,145,332
Value Chain Mapping
£8,481,561
£900,000
£900,000
£4,020,846
£7,063,550
£5,586,000
£5,350,000
£4,000,000
£322,000
£14,706,000
£11,145,332
£322,000
Prompt Settlement Discount
£6,400,000
£6,400,000
Investment in lower prices
£3,511,750
£3,511,750
Contracts not frameworks
£51,680,000
£51,680,000
Please note, this proposal is based on NHS Supply Chain’s strategic category plans, which require support from the DoH and NHS to implement, and may be
subject to change as NHS Supply Chain implements category management
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Proposed Category Lever Launch Dates
Category Action Plan
Surgical Gloves
Exam Gloves
Orthopaedics
Levers
Compare and Save
Q3 2014
Compare and Save
Q2 2104
DH Consumables Fund
Q3 2104
Surgical Sutures
Custom Procedure Packs Standardisation of packs
Q3 2014
Office Solutions
E-auction stocked lines
Q1 2014
Hearing Aids & Batteries DH Consumables Fund
Q3 2014
Paper Hygiene
Price Reductions
Q3 2014
Polymer
Mini Competition by lot
Q3 2014
Advanced wound care
Compare and Save
Q3 2014
General Wound care
Compare and Save
Q3 2014
Cardiology
Demand shaping
Q4 2014
Mini Competition
Q4 2014
Mini Competition
Q3 2014
Stock replenishment
Q4 2104
Compare and Save
Q3 2014
Sole award ink toners & cart
Q2 2014
Collaborative Commitment
Q3 2014
Framework Strategy
Q3 2015
Contracting strategy
Q1 2015
Mini Competition
Q4 2014
Mini Competition
Q4 2014
Contract
Q3 2015
Contract
Q3 2015
Product standardisation
Q1 2015
Q4 2015
Core range
Q4 2014
Tertiary Brands
Sole award (batteries)
Q4 2014
Q4 2014
Tertiary Brand
Q3 2015
Value range development
Q3 2014
Please note, this proposal is based on NHS Supply Chain’s strategic category plans, which require support from the DoH and NHS to implement, and may be subject to change
as NHS Supply Chain implements category management
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Potential Savings –
Breakdown by Category (Top 10)
Contract
BAU 2014
Plan
Category
Action Plan
2014
Category
Action Plan
2015
Totals
General Woundcare CMP
£2,339,745
£3,000,000
£15,000,000
£20,339,745
£15,000,000
£15,893,400
Advanced Wound Care Including Pressure Therapy Products AMP
£893,400
Examination Gloves
£3,294,996
£2,450,000
£10,000,000
£15,744,996
Hearing Aids
£4,483,999
£3,450,000
£5,330,000
£13,263,999
Orthopaedic Joint Replacement (Associated Products)
£3,758,606
£4,600,000
£4,600,000
£12,958,606
£11,500,000
£11,673,035
£6,250,000
£11,091,483
Surgical Sutures
£173,035
Sterile Surgical Gloves
£1,141,483
£3,700,000
Cardiology Products
£1,720,000
£4,000,000
£5,720,000
Stationery Computer Consumables and Miscellaneous Office
Equipment and Services AMP
£4,073,021
£1,500,000
£5,573,021
Syringes Needles and Associated Products
£4,430,000
£4,430,000
Please note, this proposal is based on NHS Supply Chain’s strategic category plans, which require support from the DoH and NHS to implement, and may be subject to change as NHS
Supply Chain implements category management
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12 Category Action Plans –
DH & Cabinet Office Challenge
Category Action Plan
Advanced wound care
Cardiology
Final % savings
27%
5%
Custom Procedure Packs
33%
Exam Gloves
38%
General Wound care
44%
Hearing Aids & Batteries
16%
Office Solutions
5%
Orthopaedics
23%
Paper Hygiene
10%
Polymer
14%
Surgical Gloves
45%
Surgical Sutures
25%
Please note, this proposal is based on NHS Supply Chain’s strategic category plans, which require support from the DoH and
NHS to implement, and may be subject to change as NHS Supply Chain implements category management
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Action Plan – Examination Gloves
Market Share
11%
DAVIS SCHOTTLANDER &
DAVIS LTD
FANNIN UK LTD
1% 13%
9%
11%
KIMBERLY-CLARK
HEALTHCARE
MEDICARE PRODUCTS LTD
Option 1 – Compare and Save Saving range £4.1m (10.5%)
Option 2 – Mini Competition within existing framework sole award basis
£10m (25%)
Option 3 - Retender based on commitment £10m (25%) + possible
additional 10% efficiency benefits
MEDLINE INDUSTRIES LTD
11%
42%
PH MEDISAVERS LTD
2%
SHERMOND(DIV BUNZL RET
SUP)
NHS Supply Chain 6 Newton nitrile gloves is £39M per annum. 9
Newton nitrile glove is £5M
•
•
•
•
•
•
•
•
Framework has 6 suppliers
Contract expires 30th September 2015
The market is dominated by 1 supplier with approx. 42%
Other suppliers on the framework have similar market share
There is no clinical preference - price is a key driver
Due to the price being the key driver there is very little scope for the
supplier to provide rebates to commit over a period of time
Alternative supplier capacity to meet increased demand unclear
Assurity of supply must be maintained
Key Requirements
•
•
•
Volume committed to 6 Newton glove & CAS offering
Management of unsuccessful suppliers and support for strategy
Capacity planning – use of Working Capital Investment fund for
commitment & possible plant in UK
Barriers and Risks
•
•
CAS low risk – PH Medisavers £4.1M
Preferred supplier status high risk £10M
www.supplychain.nhs.uk
NHS Supply Chain Action Plan
SEMPERIT
Step 1
Ongoing
Step 2
Q2 2014
Step 3
Q3 2015
• Compare and Save opportunity change in buying behaviour to purchase
lower cost product from existing supplier Including moving remaining trusts
from 9 Newton to 6 Newton glove
• Commitment of volume under the existing framework – hold mini competition,
committing volume to one preferred supplier. Would have ranked second
place supplier to ensure continuity of supply
• Retender based on commitment – committing volume to rationalise supply
base and drive savings, with additional efficiency/usage benefits
Price
6.4
6.2
6
5.8
5.6
5.4
5.2
5
4.8
DAVIS
SCHOTTLANDER &
DAVIS LTD
FANNIN UK LTD
KIMBERLY-CLARK
HEALTHCARE
MEDICARE
PRODUCTS LTD
MEDLINE
INDUSTRIES LTD
PH MEDISAVERS
LTD
Please note, this proposal is based on NHS Supply Chain’s strategic category plans, which require support from the DoH and
NHS to implement, and may be subject to change as NHS Supply Chain implements category management
SEMPERIT
SHERMOND(DIV
BUNZL RET SUP)
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National, Regional, Local
- Contracting Strategies
Local
e.g. Ortho
Increasing
Clinical Choice
National
e.g. Exam Gloves
Increasing Supplier Leverage
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Trust Specific Savings
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Trust Detail
• Go to trust website and add details of what you can find
out about the trust etc
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Existing Workplan
• Add in details of what’s currently being worked on /
contracts already looked at / potential for new business
opps etc
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2014/15 Potential Savings Opportunities
Potential Savings Opportunities
2014 / 2015 Savings Potential: £410,734
4.25% on 2013/14 spend of £9,668,593
Price Down Initiatives
£85,212
Potential Compare & Save
Commitment Discounts - to
be validated
Work Plan
Savings Potential
£450,000
£317,880 £400,000
£350,000
£7,743 £300,000
£0
£410,834
£250,000
£200,000
Saving
Opportunity Reduction
2013/14 Spend
£9,668,593
£410,834
4.25%
2014 Key Stats
Active Delivery
48 Locations
Active Requisition
730 Points
98.75% SLA
Different Products
3,996 Supplied
255,305 Lines Requested
£150,000
£100,000
£50,000
£0
Price Down
Initiatives
Potential
Compare &
Save
Commitment
Discounts - to
be validated
Work Plan
Savings
Potential
252,119 Lines Supplied
* Alternatives identified by NHS Supply Chain framework suppliers which highlight contract price differentials. Alternatives identified do not take into account technical and
specialist clinical product attributes and works on the premises that all products are equal. Sizes may differ.
Savings opportunities may be impacted by local pricing. Maximum savings opportunities are based on the lowest available product price across the framework
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Price Down Initiatives
Summary
Contract
Audiological Implantable Devices
Exam Gloves
General Wound Care
Hearing Aids
Paper Hygiene
Polymer
£5,476
£11,584
£3,147
£35,780
£1,274
£22,847
Respiratory Therapy
£1,502
Sterile Surgical Gloves
£3,601
Total
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Total
£85,212
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New Savings Opportunities –
Current Spend Profile
Additional Savings Opportunities – Compare & Save
Savings Potential through Compare & Save: £317,880
£350,000
£300,000
£250,000
£200,000
£150,000
£100,000
£50,000
£0
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New Savings Opportunities –
Detail by Contract
Additional Savings Opportunities – Compare & Save
Savings by NHS Supply Chain Framework
Contract
Savings
Contract
Savings
Contract
Savings
Disposable Incontinence £32,899.00
Blood Collection Systems
£46,908.00
Baby Feeding Products
£7,673.00
Examination Gloves
Bowel and Faecal Management
£1,261.00
Dry Cell Batteries
£408.00
Intravenous Cannulae
And Associated Products £13,341.00
Clinical Waste Containers
£8,701.00
Hearing Aid Batteries
£9,049.00
Tissue Adhesives
Disposable Wipes, Cleaning Cloths
And Associated Products
£22,636.00
Pressure Infusors And
Associated Products
£40.00
£75,456.00
£2,813.00
Enteral Feeding Devices & Systems £9,789.00
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Haemostats
£32,585.00
Single Use Tourniquet
£28,590.00
Suction Consumables
£25,731.00
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Commitment Discounts - Overview
Commitment Discounts
What are Commitment Discounts:
•
Supplier Funded Retrospective Discounts
•
Based on value / volume / % market share
•
Customer signs up for 1- 4 years
2013/2014 NHS Financial year
Rebates received during Financial year 2013/2014
Opportunity to achieve savings through:
•
Aggregated Programme– delivering higher savings by
aggregating Trust volume
•
Trust only commitment discount savings`
Individual Commitment Trust Savings
Aggregation Group Commitment Trust Savings
Comments
Comments
£19,374.14
£ 437.21
2014/15, 2015/16 NHS Financial Year
Rebates received Financial YTD (this to be
populated at a later date when we are further into
this Fin Year)
Rebates expected Financial YTG 2014/2015*
Rebates expected Financial YTG 2015/2016**
£
0.00
£
0.00
£ 0.00
£ 0.00
N/A
£20,633.08
Additional Rebates (Need signing up for) Savings maybe accrued during 2014/15 however may not be paid until 2015/16
Additional rebates available
£ 7,742.78
Additional Rebates Available Total
£ 0.00
Details will be issued when next
Opportunities report is due
£ 0.00
*Value for 2014/15 only. Estimated rebates accrued through 14/15 (Apr-Mar), which will be credited before July 2015
**Value for 2015/16 only. Estimated rebates accrued through 14/15 (Apr-Mar), which will be credited before July 2016
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Commitment Discounts - Paid 2013/14
Total Amount of
Discount Paid Back
DOH Name
As Part of
Scheme Title
Aggregation Group
ANY Any Hospitals NHS Trust
Trust Only
Hearing Aid Batteries
ANY Any Hospitals NHS Trust
Trust Only
Intravenous Cannulae and
Associated Products
ANY Any Hospitals NHS Trust
Trust Only
Surgical Sutures
£2,683.82
ANY Any Hospitals NHS Trust
Trust Only
Syringes Needles And
Associated Products
£1,143.84
ANY Any Hospitals NHS Trust
Trust Only
Tissue Adhesives
£1,350.36
Trust Only
Wound Drainage and Post
Operative Autologous
Blood Systems
£8,162.38
ANY Any Hospitals NHS Trust
£5,711.76
£321.98
£19,374.14
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Commitment Discounts – rebates expected
Financial Year to go 2014/15 individual
commitment trust savings
For full detail of aggregation group commitment trust savings to be expected in
2014/15 & 2015/16, Account Manager please refer to trust specific ROI data
provided by the Customer Partnership team
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Commitment Discounts –
Not Currently Signed Up For 2014/15
Amount of
potential
rebate
DOH
Name
Scheme title
ANY
Any Hospitals NHS Trust
Clinical Waste Containers
£2,422.57
ANY
Any Hospitals NHS Trust
Electrodes (Ecg and Neuro) Gels and
Defibrillation Consumables
£2,017.29
ANY
Any Hospitals NHS Trust
Sterile Surgical Gloves
£3,302.92
£7,742.78
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Capital Equipment & Maintenance
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Capital Equipment – Captured Spend
Capital Sales & Savings
NHS Supply Chain – Capital Equipment
•
•
•
•
•
•
•
•
Framework agreements covering all major
categories of capital equipment:
Imaging/Radiology
Radiotherapy
Medical Devices eg ECG, Defibrillators,
Anaesthesia, Patient Monitoring
Endoscopy
Decontamination
Dental Equipment
Clinical & Technology Solutions
Equipment Sales 2013
Number of
Units
Total Value
Defibs
1
£5,367.00
Flexible Endoscopy
2
Microscopes
MRI
2
£1,959,365.53
Patient Monitors
4
£25,262.96
Rigid Endoscopy
42
£180,356.90
Ultrasound
3
£109,016.14
Total
55
£2,332,434.01
NHS Supply Chain – Solutions
Solutions 2013
• Framework for Leasing
• Capital planning service to support yearly equipment
replacement
• Project management and strategic asset planning.
Leasing
www.supplychain.nhs.uk
£14,892.80
2013 / 2014
1 Savings Potential:
£38,172.68
£467,300
Uptake
Capital Planning
Restricted
Capital Equipment Procured 2013
Capital equipment procured through NHS Supply Chain
2013 / 2014
Savings Potential:
£467,300
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Capital Fund
Unlocking greater savings through the DH Fund
£300m capital equipment fund
80 deals secured
29 suppliers incorporated
124 different modalities introduced
204 trusts purchased from commitment deals
Sales value of £213m achieved
1,993 units sold
Total NHS incremental savings of £23.5m delivered
Average incremental savings to the NHS of more than 13.6%
•
•
•
•
•
•
•
•
•
2013 / 2014
Savings Potential:
£467,300
Trust Additional savings achieved through NHS Supply Chain DH Fund – 2013
Total incremental savings of £98,205.00 delivered through aggregation via the DH Fund on aggregate spend of
£1,959,365.53
•
Modality
MRI
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Saving £98,205.00
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Maintenance
Maintenance Sales
Maintenance Sales 2013: Contracts invoiced to the value of £2,296,823.13 and annual savings
generated of £114,218.20
Utilisation of NHS Supply Chain maintenance framework contracts and the discounts that2013
they/ 2014
offer
Savings Potential:
£467,300
NHS Supply Chain – Maintenance
Maintenance Sales 2013
• Maintenance contracts covering:
Endoscopy
• 120 equipment areas.
Imaging
• 113 suppliers.
• Managing over 50,000 pieces of
Endoscopes
equipment
for 560
NHS NHS
sites.Supply Chain DH Fund – NHS Financial year 2013/2014
Additional savings
achieved
through
• Range of discounts including:
• Framework Agreement discount.
• Multi Year discounts.
• Early Invoice Payment discount.
www.supplychain.nhs.uk
Total Value
£144,497.93
£2,019,542.78
£97,922.79
General Theatre
£13,640.45
Patient Assessment & Monitoring
£5,977.88
Microscopes
£9,777.41
Ophthalmology
£573.30
Pathology
£3,796.20
Microbiology & Serology
£1,094.40
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NHS Supply Chain Maintenance
Contracts Utilised 2013
Utilisation of NHS Supply Chain maintenance framework contracts and the discounts that they offer
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Maintenance
Late renewals carry high risks and lead to missed savings
Proportion of contracts renewed late and on time in 2013
•
75.1% - Proportion of contracts
renewed after the contract end
date.
•
£1,836,375.60- Value of
contracts renewed after their end
date.
•
Late renewal leads to high risk
of expensive repair and call
out charges
Radiology – Supplier Renewal
Incentives
•
£65,082.30 – Value of missed
savings achievable through on
time renewal incentives offered
by suppliers in 2012 and 2013..
Data: 2013
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Multi-year contracts deliver additional savings
Annual versus multi–year maintenance
contracts
Conversion of single year commitments to
longer term:
If converted all existing contracts to a MY
contract, the potential annual savings for
the assets that NHS Supply Chain have on
contract in 2013 would have been
£56,488.51
This equates to a saving of £282,442.55
over 5 years for assets currently on
contract
Annual or
Multi-year
(2013)
Annual
contract
Multi-year
contract
www.supplychain.nhs.uk
Number of
contracts via
NHS Supply
Chain
Percentage of
contracts via
NHS Supply
Chain
291
99.3%
2
0.7%
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Majority of maintenance contracts procured at a premium price
through comprehensive cover levels
Cover Level
Number of
contracts via NHS
Supply Chain
Percentage of
contracts via
NHS Supply
Chain
Comprehensive
50
67.6%
Inspection &
Preventative
Maintenance
13
17.6%
Repair Only
11
14.9%
Parts and
Labour
0
0.0%
Premium paid for
greater maintenance
coverage
The above provides details on contracts procured through the latest NHS Supply Chain Framework Agreement since it commenced.
Legacy contracts from the previous framework are not included as they have not been aligned with the standard cover levels.
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Summary
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Any Hospitals NHS Trust
Summary
Price Down Initiatives
£85,212
Potential Compare & Save
£317,880
Commitment Discounts - to be validated
£7,743
Work Plan
£0
Savings Potential
£410,834
2013/14 Spend
Saving Opportunity
£9,668,593
£410,834
Reduction
4.25%
Alternatives identified by NHS Supply Chain framework suppliers which highlight contract price differentials.
Alternatives identified do not take into account technical and specialist clinical product attributes and works on the
premises that all products are equal. Sizes may differ.
Savings opportunities may be impacted by local pricing.
Maximum savings opportunities are based on the lowest available product price across the framework.
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