Pharmaceutical & healthcare

Supply chain improvements and savings for the UK National Health Service

The UK National Health Service (NHS) spends over £18 billion a year on purchased items. It is the job of the Commercial Directorate of the Department of Health to ensure best commercial practices in order to improve patient care and value for the money.

Challenge
The Commercial Directorate of the Department of Health asked A.T. Kearney to review the NHS supply chain and identify potential areas for improving performance.

Approach
The team focused on an in-depth assessment of the opportunities in the supply chain, including:

Reviewing all categories of spend at both national and local levels
Comparing current procurement practices, capabilities, and organization, against private sector best practices to identify areas of improvement
Evaluating the role technology can play in capturing value in the supply chain, such as eSourcing and eProcurement
Developing a design for a new national procurement organization, including a model for collaborative purchasing between hospitals and a model for integrated supply chain management across the NHS

Throughout the process we were careful to ensure maximum use of private sector approaches while still complying with European laws on public sector procurement.

Result
As a result of this work, the team identified over £500 million of savings in the NHS supply chain, which can then be redeployed into further improvements to enhance effective patient care.

In addition to the assessment, A.T. Kearney supported the implementation of the first wave of changes that address over £1 billion of annual spend and redesign the procurement organization. To date savings of more than 13% have been achieved across multiple categories.