Developing a modern, effective and efficient NHS procurement function

In August 2013, we published Better Procurement Better Value Better Care, which established a new Procurement Development Programme to help NHS trusts stabilise their non-pay spending so that they spend no more than they currently do by the end of 2015-16, thereby realising £1.5bn of procurement efficiencies.

To ensure that these new efficiencies are sustained and further improved upon, we have developed an NHS eProcurement strategy, which will establish the global GS1 coding and PEPPOL messaging standards throughout the healthcare sector and its supporting supply chains. Compliance with these standards will enable trusts to control and manage their non-pay spending, by:

• utilising master procurement data;

• automating the exchange of procurement data;

• benchmarking their procurement expenditure data against other trusts and healthcare providers.

Previous efforts to improve eProcurement in the NHS have been patchy due to a lack of central direction. We have now mandated the use of the GS1 and PEPPOL standards by amending the NHS Standard Contract to require compliance with the NHS eProcurement strategy. We have also required suppliers to place their product data in a GS1 certified datapool through an amendment to the NHS Terms and Conditions for the Supply of Goods and the Provision of Services.

To embed these standards across the NHS, we will procure the critical national infrastructure to support the strategy, which will be interoperable with existing and future local eProcurement systems so that trusts can locally select their preferred technology partners.

The national infrastructure will encompass a GS1 certified NHS datapool, which will become a single national repository of master product data. Suppliers will place their master product data into any of the GS1 certified source datapools around the world, with the data required by the NHS being brought into the NHS datapool using the GS1 Global Data Synchronisation Network. The NHS datapool will feed master product data to individual NHS trust systems via a single national Product Information Management system, or PIM. The PIM will enable trusts to pull the master product data they require from the NHS datapool into their local systems. These local systems will link to PEPPOL ‘access points’, which will transfer purchase order and invoice messages between NHS trusts and their suppliers using the PEPPOL messaging standard, enabling interoperability between systems without manual intervention, thereby automating the exchange of procurement data.

The strategy also drives patient safety benefits. Providers of NHS-funded healthcare, including the independent sector, must be able to electronically track and trace individual medicines and medical devices to a specific patient. Barcodes based on the GS1 standards can be read at any point in the healthcare supply chain so that a product subject to a safety alert to be quickly located and recalled.

To help trusts to further improve their non-pay spending, we will procure a single, national spend analysis and price benchmarking service. This service will provide high quality expenditure data so that trusts can identify opportunities to continuously improve their procurement performance.

Our strategy draws from experience in the global healthcare sector and from the banking, manufacturing and retailing sectors. Importantly, there is nothing in the strategy that hasn’t already been done in part somewhere, either in the NHS, in another sector or in another country. What is new, however, is bringing all these elements together in one cohesive strategy to improve supply chain efficiency and patient care through a modern, effective and efficient NHS procurement function.

This strategy is an important element of a wide ranging programme of work to deliver £1.5 to £2 billion of savings by the end of 2015/16 to keep a balanced NHS budget and to continue to provide a quality service for patients by protecting the front-line. It will also support business to innovate, and help to make the NHS a more transparent and better place in which to do business.

Steve Graham, eProcurement Lead, Department of Health