Ensuring continuity of supply in healthcare whilst the UK exits from the EU has brought the supply chain into new focus for many providers across the NHS. Progress made following the Carter report and Scan4Safety initiatives is to be lauded and has guided development in the healthcare supply chain. However, there are a number of opportunities which can be unlocked through the application of further supply chain concepts.
Within the NHS, nursing capacity, capital availability and patient flow challenges are rightly seen amongst the highest priorities. However, functions that can be grouped under the definition of Clinical Support Services typically account for 45% of an NHS Acute Trust budget. There is no reason why any ‘supply chain’ within the system, including Pharmacy, Pathology and Sterile Services, cannot be better planned, integrated and controlled to deliver financial and operational efficiencies, improved service and reduced risks.
The aim of this article is to highlight further concepts which can be applied in healthcare with reference to progress made to date as a result of the Carter report and Scan4Safety initiative.
Defining a Supply Chain beyond Materials
The term ‘supply chain’ in UK healthcare is synonymous with materials management and stock items. There is no doubt that these are important functions but thinking of supply chain using this narrow definition limits the opportunity to truly improve ways of working and flows within the hospital environment. In no other large organisation would supply chain be a sub-function of procurement; indeed, in most industries and sectors the reverse is true and the supply chain encompasses multiple functions: manufacturing, planning, logistics & distribution and procurement.
The simplest definition of supply chain is the flow of material, knowledge, information, and finances through a mechanism of systems, organisations, and mechanisms. The key disciplines of supply and demand planning and fulfilment can be applied across all clinical support functions in healthcare.
Forecasting techniques and associated planning can be applied to sterile services, pathology, and medical equipment management. Moreover, advanced fulfilment techniques such as kitting can be applied to a range of scenarios including theatres and other areas of critical care.
Best Practices will Deliver Efficiencies, but Enable so Much More
Carter highlighted the potential for savings by improving the supply chain model used by the NHS and a great deal of progress has been made in three core areas:
- Boosting efficiency – Considerable efficiency gains have been achieved by rationalising the number of products purchased, redesigning processes, and eliminating wastage: “product variety is the root cause of hospital supply chain waste such as high inventories, expiration and obsolescence, and low-value orders and delivery charges”.[1]
- Adoption of digital purchasing technology – In 2016, purchase order compliance was far below the minimum required (by 30%), due in large part to the lack of a cohesive digital ‘procure to pay’ approach: “In 2016 it is simply not acceptable that the NHS has not embraced digital technology in this area”.[2] In 2019, eProcurement and Procure to Pay systems are now significantly more mature, resulting from the development of new digital solutions capable of automatically handling the procurement process from the point of order to payment. reducing errors and freeing up valuable staff time for higher-level functions.
- Collaboration – Improving levels of collaboration at national, regional, and local levels has been a major focus since the Carter report. These were viewed as a primary mechanism to deliver efficiencies leveraging not just collective buying power, but also capability.
Scan4Safety Demonstrator Sites have highlighted the Clinical Potential
Scan4Safety, which started life as “the e-procurement” strategy, has now taken the principles of common standards and traceability deeper into NHS organisations, direct to the point of care in order to ensure greater patient safety.
It is these improvements in the traceability of resources and mitigation of risk throughout the patient journey where real value lies. Patient-level tracking using barcodes or other identifiers from admission to discharge must become the norm. . From medications, surgical supplies, beds, and medical equipment, usage is scanned and thereby linked back to the patient who required them, and furthermore, faulty products can be recalled in almost real time.
The Scan4Safety Demonstrator programme, which concluded last year, has demonstrated the case by providing the direct benefits predicted and validating the produced business cases for these solutions. An investment of £12m was injected across six pilot providers in which £24m of tangible savings and efficiencies were delivered.
More widely, and in practical supply chain terms, this equates to more accurate demand, fewer clinical hours wasted in looking for resources and even finding patients. Hospitals have a real-time view of the resources required for patient care and therefore variation in demand can be better managed, and decisions can be based on underlying facts. Other benefits include a building record of every aspect of care, for example, if implants are found to have a fault, it is possible to trace all patients who had a particular model or batch implanted. Indeed, new Medical Device regulations will come into effect from 2020, with Class III devices from 26 May 2021, which will begin to enable this level of traceability. We expect that healthcare providers in the UK will be expected to support these requirements, irrespective of the UK’s plan to exit the EU.
Three Supply Chain Concepts
Although not new concepts, both Carter and Scan4Safety encourage standardisation, traceability and adoption of applicable technology. For those who have adopted some or all of the initiatives set out by Carter and Scan4Safety, the possibilities are extensive.
The following three supply chain concepts can be applied far beyond the traditional healthcare definition with the right fundamentals in place:
- Segmentation: Not all demand should be treated equally, but differentiated based on factors such as resource availability, supply risk and value. Differing processes lead to variations in service levels and costs and as such, the more predictable processes executed in a standardised way will allow more capacity to focus on the variation or outliers. This already happens within pathology networks where hot and cold testing have been segmented in terms of turnaround times and test locations to optimise the overall performance. Similar principles can be applied to Pharmacy, Sterile Services and other clinical support services.
- Demand Planning: By leveraging technology being implemented across the NHS, such as electronic health records, barcoded medicines administration and inventory management, improved resourced planning can be achieved using real time data. This may include improving the availability of medical equipment, laboratory or pharmacy capacity to deal with peaks and troughs or the need for additional devices and implants in theatres. There is also significant potential in aggregating demand, which typically smooths out the volatility in demand profiles reducing the need for costly reactive intervention.
- Kitting: In many areas of an acute hospital a repeatable set of consumables, devices and equipment are required to complete each procedure even allowing for warranted variation. Theatres is the most obvious area, but this is also true in other treatment zones as well. Once identified, this repeatable activity can be segmented (see 1.) and planned (see 2.) in order to minimise risk, release clinical time and deliver efficiencies.
Our Supply Chain Approach
Akeso & Co specialises in working with health and care organisations to meet their efficiency goals beyond the traditional supply chain definition. We work with many vanguard organisations, individually and collaboratively, to formulate the case, design, and support which they need in order to implement transformations across their clinical support services.
We have supported Trusts with Carter efficiency delivery and Scan4Safety adoption as well as the ‘beyond best practice’ concepts. Our approach has been refined through many implementations and by measuring results, to ensure the best possible outcomes, including:
- Improved clinical outcomes
- Improved operational efficiency
- Reduced costs
- Release capacity of clinical resources to frontline care
- Release working capital
- Reduced risk
Best practice operational processes and innovative technology are both reaping vast benefits for NHS trusts across the UK. We are able to provide a high level of confidence from the outset that your goals will be met. Experience is essential to achieving success, and we have shown that our approach drives efficiency and quality benefits for our clients.
For more information, please call Scott Healy on 020 3011 1381 or email scott.healy@akesoco.com.
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