Working with Suppliers 10th June 2014
Introduction to healthAlliance — where we are now
We exist to provide:
• efficient and effective delivery of transactional activities
• lower costs
• improved quality and sustainability of service
• elimination of inefficiencies
• integrated and seamless processes
• centres of excellence, expertise and staff development
• regional alignment and standardisation of activities within customer DHBs, resulting in the release of funding for frontline services.
• Over 600 employees support our partner DHBs provide health services to 36% of New Zealanders from Pukekohe to Kaitaia.
• Jointly owned by four northern region district health boards: Northland, Waitemata, Auckland, Counties Manukau Health, and the national shared services agency Health Benefits Ltd.
• healthAlliance is working with HBL as a key partner to provide a range of shared services with all 20 DHBs in the areas of finance, procurement and supply chain. It also involves working with PHARMAC and the Ministry of Business, Innovation and Employment (MBIE).
• This will bring significant growth to healthAlliance, resulting in an increase in size to over 1000 employees, based all around New Zealand.
• The programme is expected to deliver benefits of more than $500 million over 10 years.
Introduction to healthAlliance — a phase of growth
Service Objectives of National Procurement
• healthAlliance is currently developing a procurement service transformation programme to implement a national integrated operating model.
• This operating model was created and agreed in consultation with all 20 DHBs
• On July 1st 2014, this service will be available to all DHBs with three clear service objectives:
Delivering a strong customer
experience supported by
strong relationships and
processes.
Managing procurement risk
through policy, probity and best
practice procurement;
Delivering financial benefit to the 20 DHB’s from collective procurement of
goods and services
• July 1 is the start of the national procurement community. The service model will mature over time.
• Our people will be based across multiple centres, delivering to local needs.
• healthAlliance will be the agent working on behalf of the DHB’s contract.
• Your relationships with DHB’s continue in a different capacity.
• Contact the category manager in the first instance.
• Price changes & procurement activity are centralised through hA.
What will change for suppliers from July 1?
healthAlliance’s role in delivering Procurement Services
MBIE healthAlliance
PHARMAC DHB
DELINEATION OF SERVICES
HBL HEADLINE CATEGORIES
• Non-Clinical
• Labs
• Imaging
• Wards
• Ambulatory
• Medical
• Surgical
Sourcing strategy development
Internal client relations Strategic, proactive role of Procurement
Partnership with clinical community n planning, demand control, standardisation & specification management
Total cost modelling & reference costing as management decision tools
Partnership with DHB
Supplier management
Processes & best practices Alignment of internal end-to-end processes per
category across suppliers and across DHB’(via process manuals)
Establishment of consistent processes to ensure compliance and savings delivery
Harmonisation of supplier facing processes
Consistent eCommerce approach (eSourcing, B2B supplier integration)
KPI & reporting standards/ processes
Performance monitoring/ tracking
Scope of Procurement Activities
Procurement Team Vision
A professional procurement function delivering value to NZ
health sector
Implementation in first half 2015 Implementation in second half 2015
Processes in place by end FY 2014 Processes in place by end FY 2016
National market research and category insight development
Thorough category segmentation Clearly defined material category strategies Deep understanding of supplier economics and
strategies Single/multiple vendor roadmaps In-sourcing/ outsourcing strategies Drive commoditisation or balanced sourcing
strategy Push for innovation
Clear differentiation of supplier relationships (segmentation)
Leverage of supplier capabilities
Supplier assessment and selection standards
Supplier performance and quality management
National contract management
healthAlliance Procurement— Operating Model
Design Principles of the National Procurement model
A series of design principles guided the development of the National Procurement service delivery model:
1. Procurement must ensure clinical/patient outcomes under-pin all decisions.
2. Total cost (price, scope, quality, patient/clinical outcomes, time) need to be factored.
3. Engagement with DHB key stakeholders, such as CFO and the clinical community is
essential to ensure right outcomes are achieved.
4. National Procurement does not suppose an end to local procurement.
5. Transparency and accountability between hA and DHB is essential.
6. National procurement based on 20 DHBs, four regions and one country.
7. A structured approach to clinical engagement in order to standardise and consolidate
spend.
8. DHB (finance and clinical) to be central to all procurement initiatives/decisions.
National Procurement Service Delivery
• National Procurement service delivery starts within the DHB.
• The DHB engagement model is fundamental to how procurement services will delivered.
• The business process that supports National Procurement cuts across hA procurement, Supply Chain and Finance and must be co-ordinated end to end.
• Suppliers are a key part of model. Serv
ice
De
live
ry M
od
el
DHBs
healthAlliance
Suppliers
An Overview of National Procurement Organisation
National Procurement
Category
Category Management
Category Managers
Procurement Professionals
Local
Four regional hubs
Relationship Managers
Enablers
Supplier Relationship Management
Business Performance Management
Strategy
Legal Support
Change
Capability Build
Service Delivery >>
Procurement Pillars >>
Capability >>
Key Roles >>
Working at a local, regional and national level
1 National Opportunities
Where 11 or more DHB’s have a common opportunity, based on
20 Annual Operating Plans
4 Regional Opportunities
Where 2 or more DHB’s have a common opportunity, based on
20 Annual Operating Plans
20 DHB Annual Operating Plans
Created locally using various inputs such as Contracts, DAP’s,
Capital Plans and New Opportunities U
nd
er
10
0k
(Ca
pit
al O
nly
)
Imag
ing
(Car
dio
logy
an
d R
adio
logy
)
Lab
ora
tori
es
Surg
ical
Me
dic
al
War
ds
and
Ge
ne
ral A
mb
ula
tory
No
n C
linic
al S
erv
ice
s
Foo
d /
Lin
en
/ L
aun
dry
(N
ort
her
n R
egio
n o
nly
)
Info
rmat
ion
Se
rvic
es
(No
rth
ern
Reg
ion
on
ly)
In Scope Categories
Agg
rega
ted
Op
po
rtu
nit
ies
Off Catalogue Procurement: Scenario 1
Through the annual planning process, an aggregated need has identified that more than 11 DHBs have the
same procurement need. Therefore National Procurement have identified the aggregated need and a
National Procurement led initiative is underway
Identified needs aggregated to a National Procurement led
initiative
Initiative
• Key Stakeholders identified • Assembled into a National/ Regional/
Local Procurement Council • Purpose is to provide governance &
decision making
Decision Gate 1
Proceed?
Need?
Assess?
• Project Team assembled Clinical Engineering Clinicians Clinical Product Co-ords Procurement (Supply Chain)
• Requirements defined (Considering Patient Care) Features Technical Scope Quality Volume Support
Sourcing Activity
Decision Gate 2
Decision?
Recommendation?
Options?
Recommended Solution
Conclude commercials and handover to Implementation teams (incl. Supply Chain)
Requirements Ratified
Off Catalogue Procurement: Scenario 2
Throughout the year, a procurement need has been identified within the DHB through the natural course
of patient care delivery. This is a new need that has not been previously identified in the annual planning
process. Therefore National Procurement have been engaged to facilitate a locally identified initiative
Identified new need in the delivery of patient care
Initiative
• Project team identified • Requirements defined
(Considering Patient Care) Features Technical Scope Quality Volume Support
Advise National Procurement team
• Key Stakeholders identified • Assembled into a National/ Regional/
Local Procurement Council • Purpose is to provide governance &
decision making
Decision Gate 1
Proceed?
Need?
Assess?
Sourcing Activity
Recommended Solution
Decision Gate 2
Decision?
Recommendation?
Options?
Recommendation Ratified
Requirements and activity Ratified
Conclude commercials and handover to Implementation teams (incl. Supply Chain)
Off Catalogue Procurement: Scenario 3
Throughout the year, a procurement need has been identified within the DHB through the natural course
of patient care delivery. This is a new need for Operational Spend that is less than $100,000. This need
falls within local DHB procurement delivery. National Procurement have been engaged to support a locally
led initiative
Identified new need in the delivery of patient care
Initiative
• Key Stakeholders identified • Requirements defined
(Considering Patient Care) Features Technical Scope Quality Volume Support
Advise National Procurement team
• Activity undertaken
locally • National Procurement
provide support throughout the Procurement process
Sourcing Activity
Recommended Solution
Decision Gate 1
Decision?
Recommendation?
Options?
Recommendation Ratified Locally
Conclude commercials and handover to local Implementation teams (incl. Supply Chain)
How to connect into the National Procurement Service
• Contact the healthAlliance Managed Service Centre (MSC): Telephone 0800 426 727
Email - [email protected] If you receive an email from the above email address, ensure the conversation ID is included in your reply. • In time, you will develop a direct relationship with the relevant category manager .
• Continue to manage your local operational relationship with the DHB.
• Check our supplier portal on the healthAlliance website www.healthAlliance.co.nz for
information on the national procurement plan, forms , in scope products and FAQs.
Q&A