Price matching savings made visible by state of the art indexing tool
With cost cutting being a constant challenge, any viable
opportunity to save money in the National Health Service is most welcome.
At present, the NHS is spending around £6billion on goods with just 500 suppliers. However, this could be about to change under the development of the Purchase Price Index and Benchmark (PPIB). This new initiative has made visible current NHS Trusts spending trends and highlighted potential areas for saving.
Using couch rolls, the paper towels used to cover examination tables, which currently cost £7million per annum, Ian White, procurement lead for Carter Procurement at NHS Improvement suggests a possible saving of 16% using the PPIB.
On further analysis of figures compiled from 200 trusts buying through the NHS Supply Chain, NHS Improvement suggest there could be a potential to save £120million across the NHS using price matching alone.
There is also a movement within the NHS Supply Chain to create a more centralised procurement plan. Reducing the number of suppliers in catalogues to drive spending cuts through efficient purchasing. Whilst these savings will no doubt have a positive effect on spending reductions, how will these changes affect the NHS Supply Chain and the businesses that operate within it?
Changes could lead to an increase in competition to become one of the lead suppliers through centralised procurement- leading to the necessity for equally competitive bidding from businesses looking to become part of NHS Supply Chain.
In turn, this could have a significant effect on the number of smaller businesses supplying NHS Trusts. Will a further squeeze on costs price these smaller suppliers out of the market? Or will their flexibility prove a unique advantage to buyers looking to vastly improve on the current forms of NHS procurement?
(All figures sourced from the Chartered Institute of Procurement and Supply)