Procurement Transformation Plan (PTP)

1 Procurement Transformation plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 1 Procurement Transformation plan (PTP) Procurement Transformation plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 2 1. Executive Summary Central Manchester University Hospitals NHS FT (CMFT) has been on a journey since the New Millennium to modernise the management of our 365m annual non-pay spend. Our ambition has been simple 'to scale the commanding heights of non-pay spend' ensuring we influence what and how we buy.

2 We have scaled up this ambition since 2006 when we adopted Oracle technology and further since 2010 when we included all non-pay spend within our scope - contingent labour; University and NHS spend along with all services. This approach is exemplified by our GEMS terminology- Goods, Equipment, Materials and Services are all within our scope. CMFT has already achieved the majority of the targets set out by the carter Report but this gives us a great platform from which to drive forward and create a truly sector leading Procurement Service. It is difficult at times to appreciate the size of the progress already made but a reminder is always timely: Self-service catalogue based ordering Extensive materials and inventory management NHS Standards of Procurement Level Two- the first in the country Full capture of nearly all non-pay spend through requisition; official order.

3 Invoice and receipt Dedicated professionally qualified Purchasing leads supporting Divisions Efficient in-house accounts payable function meeting both 30 days and 10 day SME targets A nationally recognised leadership team Over 20k per annum invested in staff development An average of 6m non-pay savings per annum Our ambition for the next 3 years is even more challenging: Roll out inventory management beyond traditional inventory management Unify our service with University Hospital of South Manchester NHS FT as a precursor to a South Sector Service Drive additional savings-ramping up to by 2020/21 Drive efficiencies in our Procurement 'back office' whilst maintaining our high quality in-house/on-site services Achieve Level 3 NHS Procurement Standards Increase our contract coverage This Procurement Transformation plan (PTP) reflects what we have achieved but more importantly what we will achieve.

4 The continued support of our Chairman; Board and Executive Directors combined with the dedication of our Procurement staff is the firm foundation upon which our PTP will be delivered. Procurement Transformation plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 3 2. Trust Procurement performance (RAG rating against carter targets1) 1 RAG Rating Definitions: Green = better than the Lord carter or Trust target Amber = Up to 10% less than carter target Red = More than 10% below carter target MEASURES performance COMMENTARY OCTOBER 16 TARGETSEPT 17 TARGET SEPT 18 1 Monthly cost of clinical and general supplies per WAU Target - A 10% reduction 2 Total % purchase order lines through a catalogue (target 80%) 91% 91% 91% Target Achieved 3a Total % of expenditure through an electronic purchase order (target 80%)

5 Up to and including PO issue 96% 96% 96% Target Achieved 3b Total % of transactions through an electronic purchase order (target 80%) up to and including PO issue 94% 94% 94% Target Achieved 3c Total % of expenditure through an electronic purchase order (target 80%) from requisition through to and including payment 96% 96% 96% Target Achieved 3d Total % of transactions through an electronic purchase order (target 80%) from requisition through to and including payment 94% 94% 94% Target Achieved 4 % of spend on a contract (target 90%) 70% 80% 90% Target - 90% of expenditure 5a Inventory Stock Turns-static Days Days Days No current set target.

6 Will depend on organisational processes, warehousing, service portfolio etc. Trusts should compare themselves with their peers and set a target for themselves. 5b Inventory Stock Turns-dynamic Days Days Days No current set target. Will depend on organisational processes, warehousing, service portfolio etc. Trusts should compare themselves with their peers and set a target for themselves. 6 NHS Standards Self-Assessment Score (average total score out of max 3) 2 2 2 Achieved accreditation at level 2 to the NHS Standards of Procurement 7 Purchase Price Benchmarking Tool performance TBC TBC TBC 8 Other Trust Specific CIP TBC TBC TBC 9 Other Trust Specific CIP TBC TBC TBC Procurement Transformation plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 4 3.

7 Procurement Transformation plan - Summary People & Organisation Procurement & E-Commerce Team and Resource The current Procurement & E-commerce department consists of WTE which work across the following teams: Accounts Payable Responsible for paying 147,500 invoices per year Materials Management which includes covering 90 departments ordering requirements including Supply Chain and direct purchase items in critical areas Genesis Inventory management team which is responsible for the roll out of Genesis throughout the Trust and new developments Catalogue & Compliance which includes cataloguing, training.

8 Helpdesk and invoice holds functions Transformation working on Trust specific projects and joint opportunities with South Manchester Information Team responsible for all data requirements and communications Purchasing focus on strategic purchasing projects The pay and non-pay costs to fund the Procurement team total 1,013k; these costs cover the following: Staffing covering all teams listed above Systems including cataloguing and e-tendering SBS annual payment for access to SBS contracts IT hardware, printing/stationary, staff uniforms and travel costs Training CIPS, AAT, etc.

9 CMFT has a professional and highly motivated Procurement & E-Commerce team consisting of:- A Strategic purchasing function that deals with complex purchasing projects AP function that pays 147,500 invoices of which 97% of invoices are paid within 30 days on a 3-way match. Compliance team that ensures end users shop from the current supplier at the correct price. Materials Management are an integrally part of the team that cover both stock and non-stock purchases for critical areas and often integrate and lead on smaller purchasing project. Genesis Inventory Management system working closely with Theatre areas on producing patient level costing information to the divisions.

10 Procurement Transformation plan (PTP) for Central Manchester University Hospitals NHS Foundation Trust 5 Team development & training From the team, the following Whole Time Equivalents (WTE) are either full members or working towards full membership of the Chartered Institute of Purchasing & Supply (MCIPS): Team Number of Staff Staff studying of qualified for professional qualification % Senior Management 8a or above 6 6 100 Purchasing 9 9 100 Materials Management 18 3 17 Transformation 1 1 100 Genesis 1 1 100 Accounts Payable 16 7 44 Information 3 2 67 Catalogue & Compliance 8 2 25 CMFT prides itself in ensuring that all staff has equal opportunities for studying for professional qualifications.