Managing supplies to hospital departments manually and re-ordering on the basis of historic information is inefficient in both supply costs and staff time. Alan Hoskins describes how introducing technology to manage the inventory has cut the costs and brought greater efficiency.
For a number of years procurement has simply not been a focus in the NHS. However faced with increasing pressures to slash costs without compromising the quality of patient treatment or care, the value of efficient procurement and supply chain management is being recognised. The Department of Health issued guidance at the beginning of this year to improve procurement across the healthcare system, and proposed actions for NHS trusts to start tackling the key areas for improvement; further emphasising the need for change.
Costs are undoubtedly one of the biggest and most complex challenges for the healthcare sector today, and with more than £4.6 billion spent every year on supplies, there are significant savings to reap.
In terms of its adoption of technologies specifically developed to tackle this area, such as inventory management solutions, the public sector is lagging behind its commercial counterparts. It is therefore time to leverage private sector practices to the public healthcare environment.
For many hospitals, the pace of change is slow and supply chain management remains a difficult and confusing area to grasp. However there are some compelling projects in progress. Portsmouth Hospitals NHS Trust for instance has made incredible headway, and is now recognised as a leading example of effective supply chain management. It has laid the foundations for others in the NHS and is in a position to share best practice with industry colleagues.
The cost of supplies forms a significant part of the expenditure of every trust, so improving the way in which healthcare inventory is acquired, stored and managed is business-critical.
Trusts across the country are exposed to virtually identical procurement issues. The main ones being, there is always an element of wastage; supply levels may fluctuate between being overstocked and under-stocked; often there is inadequate storage space available; multiple small orders are frequently placed; and clinical staff seem to be unnecessarily involved in the ordering process. These factors contribute to a lack of data, visibility and control that many trusts also experience.
Portsmouth faced all of these challenges, and more, and yet in a relatively short space of time has addressed each and every one.
Stepping up to the challenge
The inventory management solution selected, Smart Use, is developed specifically for the healthcare environment. The team at Portsmouth was therefore reassured that it would meet the complex and unique requirements of a modern hospital. It was also felt that Smart Use was the most cost-effective option, and easy for staff to get to grips with, which given the predetermined time and budget constraints was essential.
Looking back at the Trusts procurement issues prior to the implementation of Smart Use, the picture was very different to how it is today.
Storage space was of the essence. It was a busy scene, and difficult to locate required items. The lack of storage space had a knock-on effect which meant that clinicians would often store products in their own departments. Subsequently there was a knowledge gap. The Trust was also in a situation where its clinical staff had high involvement in supply chain operations. For instance, clinicians were frequently the main point of contact with suppliers; placing orders, collecting stock, checking deliveries and so on. It was this continuous, inefficient cycle that the Trust was eager to overcome.
A further example of this was evident from the theatres stores where every day the same process would occur. The store room shelves were emptied by clinicians stocking up for the next day, while procurement staff would desperately attempt to refill.
Not only did this impact on time from the clinicians’ already demanding schedule, but also from the procurement team; time which could instead be utilised elsewhere. This reiterated the importance to the Trust of empowering its staff to fulfil their relevant job roles; clinicians should not have to be involved in administration, instead they should be undertaking crucial frontline services.
Combined, these issues highlighted the necessity to make procurement a strategic priority. Technology was the driver to transforming the Trust’s existing practices. Having awarded Smart Use the contract to implement its inventory management solution, Portsmouth began with a trial across the Trust’s 27 operating theatres and supporting areas. This proved such a success that implementation was rolled out steadily to other departments including cardiology, with renal, audiology, and ophthalmology on the horizon this financial year. The Smart Use solution has generated such impressive benefits that it is now being implemented across the entire trust.
Smarter procurement
In two years, Portsmouth Hospitals NHS Trust has transformed its practices into a showcase example. The benefits that have been realised in the theatres department alone, which is where this project began, are greater than the Trust initially envisaged.
Looking at the financials, the Smart Use solution has generated a significant return on investment. Furthermore benefits of more than £1.78 million were secured, along with consignment savings of £395,000; savings of £31,000 on space; a waste reduction of £75,000, and £108,000 in clinical time. With benefits across other departments, and trust-wide, yet to be realised, Portsmouth is confident that it will shortly be able to report equally favourable results.
As expected the Smart Use solution has also led to operational efficiencies, which has facilitated a streamlined approach to procurement and supply chain management.
Everything ordered, be it a box of tissues or a scalpel, is automatically captured and purchase orders raised for repeat items. For new or specialist items these are submitted to a procurement board made up of clinicians, finance and procurement staff to grant approval depending on whether there is a financial or clinical need for the product.
Therefore clinical staff have been able to transfer these administrative duties back to the procurement team, freeing up time to reallocate back to front line duties.
Full visibility of inventory is absolutely indispensible as it has enabled the tracking of products as well as identifying the user, the reason it was used, and the specific date and time. Today it is possible to forecast the demand for supplies as opposed to basing calculations on historical data.
In turn this has facilitated lower purchasing costs as the Smart Use solution provides the procurement team with high quality data enabling better calculation of product volumes. So the Trust also secures more competitive prices when it goes to market.
Stock is centrally located in just one, secure, organised stock room. This has removed the need for clinicians to store their own supplies.
Even working relationships have been improved. The procurement team have been empowered to provide a truly proactive service, agreeing with clinicians what is needed and ensuring supplies are delivered at point of use. Clinicians are also no longer tangled up in administration duties, so have more time to undertake the job they came into the healthcare profession to do.
Sustainable advances
Fundamentally procurement is coordinated and optimised to get the best value for money, without compromising quality of patient treatment or care. Smart Use has supported Portsmouth Hospitals NHS Trust and helped it achieve sustainable advances.
Improving procurement and supply chain practices provides an opportunity to reshape NHS organisations. There will be dramatic changes ahead, and Portsmouth Hospitals NHS Trust has set the benchmark.
Alan Hoskins is director of procurement and commercial services at Solent Supplies Team.
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