Materials supply and management efficiency emerges as newly-identified contributor to NHS trusts’ ability to meet savings targets without compromising on care
A study has revealed that NHS trusts across the UK could meet efficiency targets and make significant savings each year by re-engineering their repair and maintenance (R&M) materials purchasing and management.
Undertaken by MindMetre and commissioned by Travis Perkins Managed Services, the study highlights that R&M currently costs NHS trusts £4.4billion every year and so is a key area to target for significant cost savings that won’t compromise on quality of care.
The study, entitled Healthy Savings? , disproves the widely-accepted notion that NHS trusts outsource all R&M activity, finding that 78% of trusts have an internal R&M department, while 8% have mixed in-house and outsourced R&M. Only 14% outsource their R&M responsibility completely.
With NHS trusts under continued pressure to achieve significant cost savings, the smallest inefficiency can have a serious impact
Within the 78% of NHS trusts that have kept R&M responsibilities in-house, there is significant inefficiency in purchasing, supplying and stocking materials. Targeting these inefficiencies leads to significant cost and time savings.
The authors of the study expect overall financial benefit in NHS trusts to match that in other public services. Therefore, trusts that look to address R&M inefficiency, through initiatives such as appointing an outside agency to assume responsibility for purchasing and stocking materials, can be expected to see costs savings of 10%.
The study profiled a Derbyshire NHS trust that had identified weaknesses in its buildings maintenance supply chain and addressed this by forming a shared services initiative with two local councils and a housing association. Through this initiative, the trust saw tangible results, such as reduced number of supplies, major savings through better-negotiated prices, released cash flow through just-in-time stock levels, stock management and accurate record keeping implemented, and improved productivity of maintenance staff and first-time fix.
James Clack, sales director at Travis Perkins Managed Services, said: “With NHS trusts under continued pressure to achieve significant cost savings, the smallest inefficiency can have a serious impact. Identifying the purchasing and management of R&M materials as a starting point, however, means NHS trusts can begin to address the issue.
“Partnering with a business that improves and shortens the supply chain presents a viable way for organisations like the NHS trusts to better meet budgets and reduce inefficiency.
Even greater cost savings could be achieved by improving R&M within NHS trusts and thus helping to reduce the incidents of unavailable facilities
“Bringing purchasing costs closer to the original supplier not only reduces costs, it also brings the benefit of product standardisation, which leads to high product quality and lower long-term costs.
“Cost savings for the NHS look set to match those achieved in other industries when partnering with an organisation for R&M materials, but one thing the report doesn’t take into account is the fact that non-availability of facilities, and resulting interruptions to clinical and care procedures, have a major consequential cost.
“These consequential costs have not been analysed in the current study, and so even greater cost savings could be achieved by improving R&M within NHS trusts and thus helping to reduce the incidents of unavailable facilities.”