LPP ShareSave eRFQ saves King's £200k
LPP’s Sharesave eRFQ simplifies procurement of small and off-contract spend, saving King’s £200,000 pa
Opening all spend to competition and effective procurement procedure, no matter how small, can save trusts significant sums – £200,000 a year in the case of King’s College Hospital NHS Trust – as long as the process is quick, easy and managed with minimal administration.
That’s how LPP’s ShareSave works for members, and as Kam Bagri, Procurement Services Officer at King’s says, ShareSave is “The single most useful tool for our team that has not only improved the savings we make but also saves valuable time trying to source suppliers, obscure products and quotes”.
It was in 2011 that NHS London Procurement Partnership (LPP) commissioned ADB Multiquote to provide a single electronic request for quote (eRFQ) system for its members. The result, the LPP “ShareSave” system, enables participating members to open all spend to competition, and produce measureable savings on relatively untouched areas quickly and efficiently, making instant and significant cash releasing savings.
The majority of LPP members now use ‘purchase to pay’ systems, with electronic catalogues containing contracted products and services. However, not all items purchased are available under formal contracts and a degree of intervention is required by local purchasing teams. Different procedures apply depending upon the value of the purchase, but because of resource limitations the temptation is to buy low value purchases from familiar suppliers, or source them from a single supplier without any real research or competition, leading to higher pricing or savings not being tracked.
Additionally, procurement teams, whilst making huge efficiencies in process flow and improving contract coverage, often rely heavily on short term pricing agreements which are difficult to manage, and by their nature run for just short periods.
LPP ShareSave tackles these issues and more, providing buyers with a tool to quickly send out requirements to multiple suppliers and receive competitive pricing within their timescales. Oladipo Olabisi, Procurement Services Manager at King’s comments that “Above all, it does what it says – it saves you money”.
How King’s College Hospital NHS FT Trust uses ShareSave
At King’s, LPP ShareSave has been an integral part of the Procurement Services team’s processes for a number of years. Having seen a return on investment in just 12 days, and consistently making cash releasing savings in excess of £200,000 a year, the system is a real success story within King’s. Yvonne Briscoe, Procurement Services Officer (PSO) says ShareSave “takes the effort out of obtaining quotes and also helps to prioritise my workload”.
A heavy emphasis is placed upon systems and data within the department. The Trust implemented the ‘Sprinter’ eProcurement system trust-wide in 2005 and has been actively building an internal eCatalogue over seven years. The catalogue is critical operationally as all items included in the Trust’s Materials Management and Omnicell cabinets must be catalogued, and all catalogued items must be under a formal pricing agreement or contract.
The PSO team is responsible for the sourcing and processing of all non-catalogue requisitions, expediting orders, liaising with suppliers, customer service, and enriching the catalogue with sub-OJEU or short-term pricing agreements. Initially, the team was resistant to a system that was perceived as an added complication in an already overloaded process, but LPP ShareSave has now been enthusiastically embraced by the team which uses it almost daily.
The team uses ShareSave in a variety of ways:
1. Simple RFQ for low value requisitions and individual line items – in its simplest form, eRFQ is used for non-catalogue, single line item requisitions where the PSO team can search the product database in categories and sub-categories and then go out to market to ensure the best possible price is achieved. This ensures that all non-catalogue lines of significant value are subject to competition and adhere to the correct procurement procedure.
2. Complex RFQ for unfamiliar products – although the team processes hundreds of requisitions every month, requests for unfamiliar items arrive regularly and often without relevant data (such as supplier information). In these cases, the team can enter what information they do have and include suppliers relevant to the category. The quote will then go out and multiple companies may respond with lower cost options or more appropriate items.
3. High value RFQs - another area where Sharesave comes into its own is when the PSO receives requisitions to process line items exceeding £1,000 in value. In many cases the team discusses the request with Sourcing to ensure there is no agreement or project already in place that may be relevant to the purchase. However, once approval has been given to proceed, trust SFIs clearly state that any purchase of this value or higher must be subject to local terms and conditions. LPP ShareSave makes this quick and simple, allowing the PSO to attach relevant documentation to the quote, making the requisition instantly compliant and saving the team a considerable amount of time compared with the old, cumbersome paper process.
4. Supplier ranges of products – the ideal scenario is that fewer and fewer requisitions pass through the PSO team as the internal catalogue is continually enriched and expanded. The team regularly reviews reports detailing which off-contract suppliers and items are being requested. They then run usage reports to aid negotiation or identify full ranges and send the RFQ to the specific supplier for a pricing agreement. This is then loaded onto the catalogue for future use by Trust staff, reducing the team’s burden.
5. Sourcing team short term pricing agreements – At King’s, it is not just the PSO team that makes use of the tool. The Sourcing team, although spending the bulk of its time creating and managing OJEU contracts, will also need to put in place formal pricing agreements for new ranges of products that fall outside a contract or until the full award is made. Values across the period will not exceed £30,000 and are usually between £3,000-5,000, making ShareSave an ideal interim procurement platform.
LPP ShareSave provides buyers with the tools to quickly send out requirements to multiple suppliers in minutes and receive competitive pricing within their timescales. Oladipo Olabisi, Procurement Services Manager at King’s says that “Above all, it does what it says – it saves you money”.
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