Procurement Development Programme Day1

1. Procurement Development Programme Day1 Kevan Wind Procurement Specialist Pharmacist London & East of England

2. Procurement Development Programme Day1 • Why This Course? • Spoonful of Sugar • 18 out of 107 Pharmacy Procurement Staff have any formal training in procurement • Confederations & now Procurement Hubs • Turn Round Teams • Management Consultants • NHS Logistics • Scrutiny of Procurement by NHS • Just to do our jobs better! Has been agreed that one person from each trust should be doing or have done this course or higher level training (e.g. CIPS)

3. Procurement Development Programme Day1 • Course consists of three core days, provided as part of the London Education & Training Programme. • These days are supplemented by other courses, either in house or externally provided. • Reading list of essential texts. • Candidate’s progress can be recorded on a recording form. • The candidate should be attached to a tutor, either one of the lecturers or a suitable local individual.

4. Procurement Development Programme Day1 • By the end of the study day the course participant should be able to:- • Define the terms procurement and procurement cycle, and describe the different levels of procurement. • List the objectives for a procurement process. • List ten participants in the pharmacy supply chain, their role and importance. • Provide a basic explanation of the licensing process for pharmaceuticals and parallel imports. • Provide a basic explanation of the marketing of pharmaceuticals by manufacturers and how to obtain the maximal benefit for their organisation from the relationships they can develop with industry.

5. Procurement Development Programme Day1 Follow Up Specials Study Day (East of England Region) CMU Course Supplier Management CMU Course Contract Management Reading Lysons Chapter 1 & 2

6. Procurement Development Programme Day1 What is Procurement? Definitions Buying “Obtaining equipment, materials, components supplies and services required by an undertaking” Lyson. Purchasing “The function responsible for obtaining (purchase, lease or other legal means) equipment, materials, components supplies and services required by an undertaking”. Lyson. Procurement A wider term than purchasing including activities around organisational strategy, marketing, and any other activity an organisation undertakes that might impinge on purchasing. Supply Chain “The interconnected set of business procedures and business partners that manage the flow of goods and information from point of design to the delivery of the product or service to the end customer”. Most supply chains are in fact networks. Lyson

7. Medicines Supply Chain Homecare delivery service R&D Manufacturer Original patent holder EMEA MHRA Production unit Ward DISTRIBUTOR WHOLESALER Specials Manufacturer Production unit Hospital pharmacy & Patient Community pharmacy Generic Supplier MEDICINES MANAGEMENT Production unit EMEA MHRA Dispensing doctor PI Supplier Procurement Development Programme Day1 The Pharmacy Supply Chain

8. Procurement Development Programme Day1 Supplier “The process of building a relationship with a customers Development suppliers such that their development can be influenced to the benefit of the customer” Supply Chain “The management of upstream and downstream Management relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole” Martin Christopher Logistics & Supply Chain Management.

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10. Procurement Development Programme Day1 A focus on total cost not price An involvement of procurement in design and strategic direction. Environmental and ethical issues, Globalisation IT developments ( e-commerce) Quality initiatives like TQM and JIT. Need for new ways to deliver competitiveness. Group 1 exercise from handout

11. Procurement Development Programme Day1 “I am amazed that actual buying decisions are made so low down in British companies when you bear in mind that buying decisions usually affect the largest single expenditure of the company………..on it totally depends the success and viability of the company” Sir John Harvey Jones. One £ saved in purchase costs is equivalent to £5.00 in increased sales. Best practice guidelines are being developed for pharmacy (PaSA supply chain review), but procurement is highly developed in the retail sector (e.g. supermarket chains).

12. Procurement Development Programme Day1 Jones Model of Procurement Group Exercise 2 from handout

13. Procurement Development Programme Day1 Advantages of Centralised service Development of expertise and specialisation. Economies of scale. Coordination & control easier Disadvantages of Centralised service Conflict between departments Bureaucracy Inflexible Diseconomies of scale

14. Procurement Development Programme Day1 Procurement Objectives Like any strategic function, procurement should have both a mission statement and objectives. A mission statement contains the vision and strategic intent of an organisation. It is a top line statement that explains the deeply held purpose of the organisation. Used properly it is the emotional driver for the organisation, a reference point for tough decisions and a control mechanism.

15. Procurement Development Programme Day1 GSK “Our mission is to improve the quality of human life by enabling people to do more, feel better and live longer” Pfizer “Our Mission We will become the worlds most valued company to patients. Customers, colleagues, investors, business partners, and the communities where we work and live. Our Purpose We dedicate ourselves to humanity’s quest for longer, healthier, happier lives through innovation in pharmaceuticals, consumer and animal health products”. West London Procurement Consortium “To achieve consistently, the best total cost for a selected number of high cost items by combining the purchasing power of our members with the commitment of our clinicians, by therapeutic rationalization.. Defining and monitoring standards of purchasing and stock control, to ensure value-for-money supports this”.

16. Procurement Development Programme Day1 Objectives are derived from the values in a mission statement. They should contain the following Who is responsible for the objective What is going to be achieved When will it be achieved How will the achievement be measured. They are a target to aim for, a monitor of progress achieved, and act as influences in strategic decision making.

17. Procurement Development Programme Day1 Corporate objectives Relate to grand, long term, general and ongoing objectives, would be at trust level. Business objectives More specific, medium term and changeable, may be directorate level. Operational objectives Specific, short term and easily measurable would be departmental level.

18. Procurement Development Programme Day1 • Best Practice Purchasing • The Five Rights • To obtain materials of the right quality in the right quantity from the right source delivered to the right place at the right time at the right price. Lyson • b) To provide procurement input into the organisation’s strategic purpose and direction. • To create and maintain a good relationship with suppliers and customers (upstream and downstream supply chain partners). To aim for customer delight rather than just satisfaction. (They are so happy with the product/ service they actively promote your organisation for you). Customer Delight!

19. Procurement Development Programme Day1 • d) To provide and maintain an information rich database. • e) To monitor develop and manage suppliers. • f) To manage the supply chains relating to their organisation. • g) To advise customers of supply chain issues. • h) To contribute to new product development. • i) To contribute to cost down/ quality up exercises. • j) To seek out new innovations in the marketplace.

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