Simplified purchasing

Citation

(2005), "Simplified purchasing", International Journal of Productivity and Performance Management, Vol. 54 No. 1. https://doi.org/10.1108/ijppm.2005.07954aaf.004

Simplified purchasing

The UK National Health Service purchasing and supply agency (PASA) is an enthusiastic supporter of the government procurement card. It says the spend via purchase cards in the NHS, was approximately £20,000,000 in the financial year 2003-2004, accounting for approximately 150,000 transactions per annum. At an independently calculated average saving of £28 per transaction, the NHS will save approximately £4.2million over this financial year. There are now around 100 trusts using the card and 4,500 cards have been issued.

Chief executive Duncan Eaton says:

• •

  The card can be used in any area of high transaction or with established standing orders – negating indents. Comprehensive management information is supplied on expenditure and usage, so giving management control. The major benefits are seen as control of low value orders and significant process savings. The streamlined process replaces a time-consuming, paper-driven operation, with a simplified, efficient method providing major opportunities for trusts to cut costs.

He believes there are no staffing implications from the introduction of the cards, saying: “Purchase cards have been introduced to produce more accurate management information and control, not to produce savings through reductions in staffing levels.”

He points out that the government procurement card (GPC) agreement enables all NHS bodies to join other UK public sector organisations, including central government, local government, NHS, education, emergency services, and charities to benefit from a pre-negotiated contract that has been fully tendered through the OJEC process. With a core service of no card fees, no transaction fees and a competitive environment whereby all the contracted VISA-issuing banks actively compete for each NHS body.

The GPC is also well supported by OGC buying solutions through a dedicated helpdesk, GPC managers, user groups, 1-2-1s and a wide range of other supporting activities for GPC users. Eaton believes that becoming a GPC user organisation opens the door to unrivalled support through the dedicated resources of OGC buying solutions, VISA and the seven GPC issuing banks and also enables the sharing of best practice with all the various sectors mentioned above.

NHS PASA does not apply carrots or sticks to encourage NHS trusts to use the card, instead relying on the quality of the agreement, though marketing plans are in place to ensure that trusts are aware of the benefits of using the card. The service providers all provide assistance in implementing individual trusts’ schemes.

An independent MORI poll found that around 73 per cent of card users said that use of the card had shortened ordering time and 96 per cent wanted to continue using the card. OGC buying solutions and NHS PASA are also planning several events to promote the GPC to the NHS. These events are planned for later this year.

OGC buying solutions has tried to make it easier for customers to start a programme by creating an Implementation Guide and a draft Business Case. The most important element is the fact customers do not have to go through a lengthy tender process. The NHS is continuing to progress the usage of purchase cards through moving to the Government Procurement Card Contract (GPC II), giving more choice and flexibility to future card users. Although there is no timetable of introduction to the whole of the NHS, usage continues to increase year on year.

South Devon Healthcare NHS Trust is one trust that believes it has been able to improve control of low value orders and achieve significant process cost savings through using the card.

“We previously spent a lot of time processing low value orders but, thanks to the purchasing card, we have been able to divert these resources into providing a non-stock ordering service for the theatres and wards, which is something the nurses had to do previously”, says Malcolm Senior, the trust’s head of procurement and projects. “Using the purchasing card has meant that nursing staff have to spend less time ordering”.

Senior calculates that using purchasing cards in the office has saved 0.5 buyer days per week. He feels that his unit could now offer a “more rounded service for clinicians in the hospital.” For example, the purchase of dental products was previously a lengthy process and the cards have significantly reduced the timescales from order being placed to payment being received. Senior comments: “We are now able to concentrate on the core clinical areas instead of spending time on low value ordering.”