NHS Supply Chain: Supplier Research 2012

Background

NHS Supply Chain has embarked on a survey of its supplier base, objectives of which are:

  • To understand what is important to suppliers in selection of route to the NHS
  • To assess how NHS Supply Chain meets or fails the requirements of suppliers as a route to market, in comparison with other alternative routes
  • To understand how NHS Supply Chain could improve to further meet supplier requirements
  • To gain opinion on how NHS Supply Chain is working with its suppliers to deliver against the needs of the NHS
  • To test awareness of, engagement with and the perceived value of the commercial toolkit and of various initiatives available to bring benefit to supplier, NHS Supply Chain and NHS

Qualitative stage of research

15 depth telephone interviews have initially been conducted by an independent research agency. Suppliers were selected from NHS Supply Chain full databaseby the agency and were broadly representative of market sector (medical, non-medical, high clinical, capital); supply route (stock, blue diamond, edirect, direct) and size of company.

Summary of feedback from interviews

Factors influencing selection of routes to NHS

  • Growth potential / Access to new customers / Ease of introducing new products to market
  • Service provision:efficiency and quality of service /ability to offer/manage specialist logistics
  • Transparency of pricing and margin
  • Impact on own cost infrastructure
  • Impact on cash flow
  • Level of administration
  • Own ability to run required logistics
  • Own ability to operate sales/customer service, etc functions
  • Customer preference
  • Ability of route to represent suppliers’ products/service
  • Ability of route to provide direct customer feedback to supplier
  • Availability of business intelligence
  • Open working relationship/partnership / Understanding and on-going visibility of strategy of 3rd party

Strengths of NHS Supply Chain

  • An exclusive and crucial route to the UK healthcare market (‘if product is not stocked with Supply Chain, clinicians may not be interested’)
  • High-level of professionalism and efficiency across buyers and operations
  • An open and engaging working relationship
  • An important ordering source that simplifies operation and reduces costs
  • Strong ability to offer/manage specialist logistics
  • Breaking down packs
  • Specialist logistics transporting multiple pallets
  • Frequent deliveries
  • Enabling easier day to day administration for suppliers
  • Facilitating administration for suppliers with regard to the tender process

Issues reported by some

  • Lack of flexibility and open-mindedness
  • Can be uncompromising (expected to supply everything from stock, but lack of clear forecasting)
  • Reluctance to accept new products (will not consider unless proven product and demand)
  • Rigid and confusing tendering process - the need to commit to costs for long term
  • Greater transparency of business pricing/margins (perceived inconsistency in margins applied; obligation not to undersell direct,)
  • Greater transparency of business information (sometimes a need to incentivise sales staff sometimes requiring more granularity of information)
  • Mainly price driven with less focus sometimes on the quality or service elements of supplier offerings
  • Can be outperformed by local competitors in terms of service provision (e.g. ability to deliver same or next day)
  • Some lack of clarity on its business model and strategies (unclear on market direction, beyond keeping prices low)
  • A desire for greater ‘partnership’ with suppliers
  • Limited opportunity to go beyond the supplier-customer relationship and achieve value-adding mutual benefits
  • Lack of integration with suppliers on promoting products (do not understand products as well as supplier reps)
  • Lack of pro-activity in approaching suppliers with initiatives
  • Some reported incidents of disorganisation or inefficiency
  • Poor management of delivery (supplier pays extra for timed delivery and then lorries wait hours to unload)
  • Some delays in bill payment (where any minor discrepancy)
  • Lack of accuracy in customer-supplier communication (e.g. different configurations quoted or precise configuration not clearly stated to end client)

Opportunities for improvement

  • Provide greater clarity on strategic direction to enable suppliers to better understand NHS Supply Chain and thereby make appropriate proposals
  • (Particularly for suppliers who have not fully utilised NHS Supply Chain) enhance communication to make them better understand their business model and what benefits differentiate them from other routes to market
  • Increase transparency by improving clarity on how pricing works at NHS Supply Chain and provide suppliers with as much information / feedback as possible to help them maximise their business potential
  • Conduct a full evaluation of products rather than purely focusing on price
  • Be more open-minded when being offered new products
  • Partner with suppliers to achieve further mutual benefits
  • Monitor quality standards internally to ensure high levels of efficiency and accuracy

Next stage of research

To quantify the views expressed within this first stage of research and to usefully inform decisions on how NHS Supply chain could improve to further meet supplier requirements, the next stage of this project will be to seek the views of the entire supplier base.

Using an independent agency, NHS Supply Chain is proposing to issue 2 electronic questionnaires:

1. To be completed by the strategic decision maker within the supplier covering:

  • usage and overall satisfaction with us versus other procurement and /or supply routes to the NHS
  • ranking of what’s important to them in selecting procurement and /or supply routes to the NHS (selection from drop down list)
  • Growth potential
  • Market reach
  • New product introduction to market
  • Legally compliant procurement route (public procurement and competition laws)
  • Ease of getting business through route
  • Cost of getting business through route
  • Acceptable terms of business
  • Stability of your business
  • Ease of doing business
  • Ease of moving product though channel (physical delivery and use of systems)
  • Ability to service customer at purchase stage
  • Ability to service customer post purchase
  • Open working relationship
  • Services which improve your business performance
  • Customer preference
  • comparison of performance of NHSSC v alternative routes to NHS against their top 5 items
  • awareness, usage and satisfaction with specific services
  • Break bulk (i.e. containers from overseas delivered directly into the Bridgewater depot)
  • Commitment purchases
  • ales increase plans
  • Advertising /promotional opportunities
  • Supply chain optimisation services
  • Service improvement plans
  • Packaging development services
  • Early prompt payments
  • Demand forecasts
  • Weekly Trust sales reports
  • Innovation scorecard
  • how likely they are to recommend NHSSC as route to NHS (net promoter score which would give you an overall benchmark figure)
  • several questions aimed at testing attitude to NHSSC and perception of value we bring
  • what improvements they would like to see us make

2. To be completed by the main interface of NHS Supply Chain buyers – typically National Account Manager or same within suppliers. This will form a fuller satisfaction type survey.

  • usage and overall satisfaction with us versus other procurement and /or supply routes to the NHS
  • satisfaction with specific NHSSC supply routes (stocked, edirect, etc)
  • awareness, usage and satisfaction with specific services
  • Break bulk (i.e. containers from overseas delivered directly into the Bridgewater depot)
  • Commitment purchases
  • Sales increase plans
  • Advertising /promotional opportunities
  • Supply chain optimisation services
  • Service improvement plans
  • Packaging development services
  • Early prompt payments
  • Demand forecasts
  • Weekly Trust sales reports
  • Innovation scorecard
  • satisfaction with :
  • growth potential
  • Market reach
  • Access to new customers
  • Facilitate the introduction of new products into the NHS
  • Advertising opportunities
  • tender process
  • Visibility of opportunities
  • Ease of tender process
  • Cost of tender process
  • Tender documentation
  • Notification of outcome / feedback
  • Expertise of in-house staff
  • Helpfulness of in-house staff
  • Ease of use of electronic tender system
  • Legal compliance (public procurement and competition laws)
  • ease of doing business with
  • Provision of demand forecasts
  • Order processing & systems
  • Delivery to NHS Supply Chain sites
  • Payment
  • Ts & Cs
  • Product data management
  • Making changes to product range
  • Provision of sales information
  • Joint business reviews
  • Access to NHS Supply Chain staff
  • making it easy for customers to buy from us
  • NHS Supply Chain Catalogue (online/hard copy)
  • Sales force able to represent product/services
  • Customer relationships
  • Ease of ordering
  • Customer services
  • Technical support
  • Implementation/conversion support
  • delivery and after sales service
  • Dependable and timely delivery service
  • Ability to offer specialist logistics
  • Customer service
  • how likely they are to recommend NHSSC as route to NHS (net promoter score which would give you an overall benchmark figure)
  • what improvements they would like to see us make

We realise that in case of SMEs the questionnaire will likely be answered by same person so we will reference this in our communications. Part of the reason for developing a separate questionnaire for the strategic decision maker within the suppliers is to hopefully result in more completions as it will be shorter and also that they may be less able to respond to the more detailed questions relating to areas of satisfaction/improvement.

Action requested of members:

Please review the above and should you feel there are areas which the next stage of research does not cover but should, please send by 20th November your suggestions for consideration to .