An NHS procurement success story from Durham (part 1)

Public sector procurement on balance tends to get a poor press in the non-specialist media. And health (perhaps along with MOD) has suffered more than most. So it was really good to speak to Malcolm Preston, Associate  Director of Procurement at County Durham and Darlington NHS Foundation Trust the other day.  The Trust employs 4,700 staff, and runs three main hospitals in the North East, plus community hospitals and other services from a number of sites. (The newest hospital, the PFI funded University Hospital of North Durham, replaced the old Dryburn hospital where all four of my grandparents breathed their last).

I spoke to Preston as a client of Wax Digital (see our post here from last week) , but our conversation ranged far wider than merely an endorsement of their product, although he is very positive about the technology and the service aspects of working with them. What was fascinating was that he and his team, with the support of senior management, have introduced and got real adoption and compliance to some procurement approaches that I would suggest very few private sector firms have managed.

No Purchase Order, no payment?  Yes. (Implemented and working; not just a slogan but fact).

100% electronic procurement transactions? Yes.

Online catalogues with user friendly, Amazon-type requisitioning and ordering? Yes.

A very limited catalogue choice to drive standardisation and demand management? Yes.

“We have 168 stationery items in the catalogue. One black pen, one punch, one stapler. That’s it. If people want more, they can buy it themselves’ says Preston.  “We’ve only had one issue in 4 years – a senior consultant who uses a fountain pen wanted blotting paper. He was politely told to buy his own”.

But the rationalisation doesn’t just cover ‘office’ categories like stationery; it has been successful in areas such as medical devices – infusion pumps for example (more on that tomorrow). These achievements have needed the right technology, but support from the top has been essential, and Preston has obviously put a lot of effort into building that support, from the Chief Executive through the senior team and into key stakeholder groups such as the clinicians.

The journey to automating procurement started in 2000, with a Belmin system, and two years ago, after a tender process, Wax Digital won the contract against competition from the likes of Ariba and Oracle.   Preston is a big supporter of having an integrated technology platform, which means that information from the sourcing process can be taken directly into the P2P ordering and invoicing platform. He also wanted a managed service, and took a risk with Wax, as at the time they had limited public sector experience. But the integrated nature of the platform was enough of a benefit to win them the work, along with their willingness to engage with the Trust and look at their specific needs.

How does the integration work in practice? As an example, it means that if you place a requisition in the system, it will tell you whether you need to go through formal sourcing process, such as an OJEU advertisement and tender. That is then run through the eTender platform, and will then feed the output of that back into the P2P system for budget holder authorisation and to be set up ready for transactions against that contract.

Another attraction for Preston was the user interface. “We have many users who are busy people and aren’t procurement professionals. Our Wax Digital system has features they really appreciate, such as the ability to handle approvals via Outlook without going into the full system; and users can set up their own ’favourites’ lists within the ordering system”.

It’s an impressive story, and tomorrow we’ll look at where Preston wants to go next; further into clinical related procurement and helping to manage the overall cost base of the Trust.

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