1. Portfolio/Number/Name:H/C3NHS Logistics Reform |
2. Programme/Activity: Please
include a short description As part of NHSScotland's agenda for
Modernising Support Services, SEHD launched
Phase 2 of BPI (Best Procurement
Implementation) into NHSScotland at the end
of August 2003. The scope of the work has
been divided in 4 workstreams, namely: - Process & Technology -
co-ordinating the rollout of the
eProcurement Scotl@nd service to
NHSScotland (NHS boards and Special
Health Boards);
- Strategic Sourcing - targeting 11
commodities in the 1
st wave and a further 11 in
wave 2;
- Logistics - implementing best
practice supply chain management in
NHSScotland and securing the
procurement benefit opportunities
identified in Phase 1;
- Change Management and Communication
- supporting the changes driven by the
Strategic Sourcing and Process &
Technology streams with a comprehensive
communications programme and a focus on
managing the stakeholders through
supporting and championing the
Programme.
This activity relates to cash releasing
efficiency savings arising from the
Logistics workstream for which an Outline
Business Case has been approved. This
project will allow NHSScotland to gain
control over the supply chain for
consumable products covering 1.2 billion
annual expenditure allowing NHSScotland to
exert leverage on suppliers as to how goods
are procured and delivered to meet the
needs of the NHSScotland at least cost. In
addition unquantified non-cash releasing
savings will be achieved, but these are
still to be identified. |
3. Planned Savings | | 2005-06 | 2006-07 | 2007-08 |
Cash (m) | 0 | 5 | 10 |
Time Releasing (m) | 0 | 0 | 0 |
4. Accountable Officer for
delivery | Dr Kevin Woods |
5. Project Manager | Mr Ross Scott |
6. EGDG account manager | Ms Gillian Woolman |
7. Quality Impact | Describe any impact on the quality
of service delivery. Be specific and
explain if the expectation is positive,
negative or neutral. The expectation is a positive impact on
quality. Through technology and centralised
purchasing better prices will be delivered
and other benefits such as freeing up the
time of front line staff spent on ordering
and processing goods at ward level; and the
reduction of inventory (and possible waste)
within hospitals. |
8. Dependencies | Explain if your savings are
dependant on legislation or other
structural changes being achieved. Savings are not dependant on
legislation. Savings are dependent on the
acquisition and development of a (single)
NHSScotland National Distribution Centre
(NDC) located in Lanarkshire. |
9. Description of efficiency and
actions to be taken | 9.1 How will the saving be made? Be
specific about number/size of contracts, staff,
posts dates etc. Logistics is not new for the private
sector with, for example, Tesco and Asda
having distribution centres along the M8
corridor. Perhaps more relevant, is Boots
distribution centre based at Bellshill
supplying all outlets in Scotland from Wick
to Dumfries with a range of products not
dissimilar to that used by NHSScotland. The
savings will be derived from centralised
purchasing delivering better prices and
NHSScotland taking responsibility for
distribution. |
9.2 What action is critically needed to
secure delivery of this saving? Be specific,
and name the key action managers if they are
outwith your immediate management chain (e.g.
in an NDPB.) The action required is that the
facility is acquired and developed by the
project team; the project team ensures
effective delivery of practice and
procedures; and that NHS Board Chief
Executives and Heads of Procurement ensure
that procurement utilises the NDC where
appropriate. There is, therefore, a key
dependency on NHSScotland participating in
this project and taking responsibility for
implementing business change in that
environment. The Change Management and
Communication workstream of BPI is
important in this respect. All NHS Chairmen and Chief Executives
have formally signed up to the objective of
ensuring that their Board participates
actively in BPI. Furthermore, each Board
has given an Executive Director specific
responsibility for BPI. |
10. Impact on Staffing to achieve the efficiency
gain | If there are to be any changes in
staff numbers (at activity level) to
achieve the efficiency gain, please
indicate how many full time equivalents and
how far you expect savings to be achieved
by natural wastage (show additions as + and
reductions as -). |
| 2005- 06 | 2006- 07 | 2007- 08 |
+ | 6 | 6 | 6 |
- | 0 | 0 | 0 |
Net | 6 | 6 | 6 |
Explanation | This project will result in potentially
significant opportunities for staff, with
around 12 new posts being created,
redeployment and training within the new
logistics infrastructure and in other areas
within each Health Service organisation. It
is anticipated that 6 staff will be
recruited 2004-05. |
11. Benefits | In general, the benefits of the
Scottish Executive Efficiency Plan are the
enhanced outputs from the resources
Ministers have been able to allocate in
SR04. But if there is a direct connection
between this efficiency saving and the
enhancement of a particular service please
describe it here. The cash releasing efficiency savings
derived by all hospitals will be retained
by NHS Boards and used for developing
and/or delivering local patient
services. |
12. Gross/Net Cash Savings | 12.1 Please set out the gross recurring
saving and any offsetting recurring
expenditure. The gross recurring saving is approx
18m pa with gross recurring expenditure of
approx 8m. |
12.2 Against what budget does this
expenditure and saving fall? NHS Board Revenue Allocations |
12.3 Has this saving been built into your
budget? No |
12.4 If so, what is the maximum allowable
expenditure against the published budget data,
in each year, for that saving to be
delivered?N/A |
12.5 If not, how do you propose to
invest the additional cash back into public
services? Higher investment in NHS services since
the savings are retained locally within NHS
Boards. |
12.6 What plans do you have to exceed the
required saving? Explain by how much in each
year? (Answer here also if you need to do this
to live within your budget)None. |
13. Time - release savings | 13.1 Please explain any time-releasing
savings indicated at question 3.N/A |
13.2 Please describe the method you
plan to use to calculate the cash equivalent of
those time release savings.N/A |
14. Measurement and
Monitoring | 14.1 How are you proposing to measure the
expected efficiency benefits (e.g. in terms of
costs, level of output or quality of
service)? Savings delivered through NDC
procurement and delivery against existing
commodity expenditure baselines. |
14.2 What monitoring & reporting
procedures will be put in place to measure the
efficiency savings (How often will progress
towards the target be monitored? Monthly Management Accounts with
KPIs. Who will have lead responsibility
for reporting progress and what procedures
will be in place?) Logistics Project Director |
14.3 Monitoring Data: Sources, validation
and risks - What data will be used to measure
progress?
Procurement data.
- Is all the required information
quantifiable and readily available?
Yes
- If not what action will be taken to
rectify this?
N/A
- What measures will be in place to
validate the accuracy of the data?
To be determined.
- Who will take responsibility for
this?
Logistics Project Director
- Are there any issues or risks
relating to how you plan to use the data?
(e.g. accuracy, difficulties in collection)
No
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