Savings of 9% possible as part of 10-year framework agreement
London-based NHS trusts can now access a new Floorstock Wholesaler Services Contract with Office Depot for the supply (in the first instance) of 1,700 products in common use across the NHS.
Mario Varela, managing director of the London Procurement Partnership (LPP), said the new service with Office Depot has been designed to provide a catalogue, pricing, ordering and delivery service which offers significant savings of around 9% for trusts. As an example, prices are fixed for an agreed period, and price banding is removed.
This collaboration and sharing of good practice is designed to bring about long-term value from the contract and to ensure that the contract reflects the ongoing needs of trusts
“This ensures pricing transparency for trusts using this service to buy essential products,” said Varela. “The supply process, including next-day delivery, will also enable ‘lean’ stockholding, an important consideration for trusts facing current budgetary constraints.”
The framework agreement is for a period of 10 years and is subject to a two-year proof of concept. To ensure a smooth implementation, trust access to the Office Depot service will be in stages and will be managed by an Implementation Project Board (IPB). The IPB, made up of representatives from Barking, Havering & Redbridge University Hospitals NHS Trust, Barts Health NHS Trust, Imperial College Healthcare NHS Trust and Office Depot, will ensure the contract is on track to deliver those targetted savings. The three IPB trusts are early adopters of the contract, and their first-hand experience will pave the way for trusts joining the contract at a later stage.
John Nicholson, LPP’s supply chain workstream lead, said: “Accessing the contract takes each trust about three months. It is a pro-active process, not simply a question of passively adopting just another supplier. Trusts need to provide the resource to work with buyers across their organisations and integrate their current supply chain IT processes with those of Office Depot. This is not difficult to do as existing technology will work with the Office Depot system, but the time is needed to ensure all buying teams are familiar with the changes.”
Steering board member and head of procurement at Barking, Havering & Redbridge University Hospitals NHS Trust, Linda Kruse , added: “The ‘onboarding’ is not a difficult process. Of course it needs careful management as the current supply chain route is so well embedded within our organisations and indeed our culture, but the savings to be had make the need to change well worth the investment.”
The contract consists of three parts: the Framework Agreement, the Access Agreement and the Call-off Contract. This call-off allows for local variation to include the sites for delivery and the range of goods to be supplied.
The commercial model provided by Office Depot should deliver immediate savings for trusts switching to the service
This work will be overseen on LPP’s behalf by a procurement council consisting of trust and Office Depot representatives. All trusts entering into the call-off contract will become members of the Operational Council of the Procurement Council that will review products in use, make recommendations on the content of future catalogues and drive the sourcing plan from Office Depot.
Varela said: “This collaboration and sharing of good practice is designed to bring about long-term value from the contract and to ensure that the contract reflects the ongoing needs of trusts. The commercial model provided by Office Depot should deliver immediate savings for trusts switching to the service.
“Ongoing savings through this contract are expected to be achieved through product standardisation and volume commitment. Trusts nationwide are taking an interest in seeing how this model develops, and as the proof of concept shows results we are confident that we are developing a model for improved supply chain competition across the country.”