NHS efficiency map case study: procurement

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In 18 months, University Hospitals of Leicester NHS Trust has turned around its procurement function, producing significant savings, better-trained staff and streamlined processes. It was highly commended in the Health Care Supplies Association national awards in 2016 and is now involved in shaping the national procurement agenda.

Financial pressures at the trust prompted the initiative. In 2015/16, the trust reported a £34m deficit – £2m better than its initial control total thanks to delivering a cost improvement plan of £43m. Procurement played a role in this – non-pay procurement savings that year were £3.8m. But with a significant underlying deficit, chief financial officer Paul Traynor believed more could be saved from the £400m it spends each year on goods and services.

 

He asked Ben Shaw, the head of procurement and supplies who was appointed in January 2015, to develop a procurement and supplies strategy to deliver these savings. A listening exercise with colleagues inside and outside the trust followed, identifying three factors critical to transforming procurement at the trust:

  • Developing the people and team
  • Creating and embedding efficient processes
  • Building strong partnerships with stakeholders inside and outside the trust.

The initial focus was on getting the procurement team right. ‘I think we have done really well. We went from saving less than £4m a year to this year [2016/17], when it will be close to £8m. To do that you have to start with the people and get the right team. You must focus on the team and then the processes – looking at partnerships and asking everyone what needs to improve. If you focus on these things the performance will start to sort itself out,’

Mr Shaw says. ‘I was fortunate in that I had a good and experienced team and my predecessor had laid good foundations, but I found some key processes were not in place to drive better performance.

Historically, perhaps the profile of the team was not a high as it could be.’ When vacancies came up following several retirements, rather than replace them like-for-like, Mr Shaw recruited more junior staff into specialist procurement roles. Others were recruited to focus on improving the trust catalogue and order processing. The team was restructured gradually, with staff assigned to manage categories of goods and also aligned to departments as account managers.

It would have been difficult to recruit staff with a purchasing background from the private sector, he says, so the trust made the decision to grow its own. The team has focused on developing these individuals, committing to their training and also to the skills of existing staff.

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