Case study – Procurement Cost Reduction in the NHS
Client
- An NHS Trust employing 5,000 staff providing a range of acute and community based services to 380,000 people.
- Under financial pressure to improve financial position, commenced an ambitious initiative to drive a £3m reduction in non-pay expenditure
Approach
- £55m targeted from a possible £70m of non-pay expenditure
- Initial Spend Analysis & Opportunity Assessment identified and planned a 12 month programme to deliver £3m savings
- More than 114 individual sourcing projects across 25 categories – clinical, non-clinical, estates & facilities and IT
- Variety of sourcing and procurement strategies used – from national frameworks, mini-comps to large scale OJEU tenders
Results
Total saving of £3.3m delivered
| Highlights | Saving |
| Orthopaedics | 26% |
| Examination gloves | 27% |
| Waste | 29% |
| Beds & Mattresses | 67% |
| Security | 28% |
| Cannulas & Catheters | 21% |
- Managed supplier interaction through a dedicated Product Change Programme brought supplier-led product innovation delivering cost reduction and improved patient outcomes.
- Transformed procurement from an administrative, compliance focussed, back-office unit to an efficient operation, involved in all non-pay and capital expenditure decisions. HSJ Award Finalist