The National Health Services (NHS) holds a tremendous amount of buying power, which means that effective collaboration with suppliers will ensure that relevant stakeholders can deliver high-quality care to patients across the United Kingdom.
Procurement of goods and services is a vital part of the NHS Supply Chain. On average, the NHS England spends £30 billion procuring non-medical and medical goods, equipment and services. The NHS Supply Chain sees more than 80,000 suppliers, fulfilling over 7.7 million orders annually.
Apart from this, individual Trusts, local health offices, and clinical groups will engage in procurement activities. These stakeholders spend more than £3 billion per year on various goods and services, according to the National Audit Office (NAO).
Being responsible for the procurement and delivery of millions of various goods and services to more than 16,705 locations across the United Kingdom requires an intricate supply chain that ensures efficient service delivery.
Overseeing such a sophisticated process, along with meeting the demands of various stakeholders is a complex operation. It involves developing operative partnerships with suppliers while providing an open framework for new vendors to participate in the procurement process.
Understanding NHS Supplier Relationships
In a bid to replace current inefficiencies and remove any near-term obstacles, the NHS, NHS Supply Chain and NHS organisations are working to attract more reliable commercial talent that can provide the NHS and all stakeholders with appropriate procurement procedures that place supplier collaboration at the core of improving service delivery across the entire framework.
Current efforts ensure that all vendors, including new suppliers, will form a partnership with the NHS and NHS Supply Chain. This will be accomplished through:
Contractual Obligations: Vendors are legally required to meet all quality standards outlined in their contractual agreement with the NHS. Additionally, suppliers will need to adhere to pricing agreements to ensure value for money.
Performance Management: To ensure all vendors deliver on their contractual obligations, the NHS will establish predetermined Key Performance Indicators (KPIs) to ensure that a vendor delivers within the desired times and fulfils needs effectively.
Risk Assessment: To ensure efficient service delivery throughout the supply chain, suppliers will need to consider associated risks and develop strategies to ensure effective mitigation. Additionally, collaboration will ensure that both suppliers and the NHS have clear guidance on what these risks might be and how to manage these inefficiencies. This includes existing suppliers considering social value weighting and provide further information regarding contact risk planning.
Regulatory Changes: Improvements in the regulatory framework will ensure that suppliers will continue to meet quality standards during contract duration. Updating the regulatory framework will ensure that all stakeholders can address challenges, make adjustments and achieve high standards.
Types of NHS Supplier Opportunities
For new vendors, there are several ways to become part of the NHS Supply Chain. Agreements will depend on the available opportunity, and the type of stakeholder a vendor is required to work with. These are subject to change over time, but for the most part these will include:
Direct Contracts
These are considered short-term agreements that allow the NHS to procure goods and services from an individual supplier. A direct contract will have specific requirements that suppliers will need to adhere to and will typically need to fulfil all contract obligations within a desired time frame.
Framework Agreements
For a NHS long term plan, framework agreements typically involve multiple suppliers working on delivering various goods and services to the NHS or any relevant stakeholder. A framework agreement helps to establish more effective relationships with the NHS Supply Chain.
Consortium Agreements
Another collaboration opportunity is a consortium agreement which sees multiple suppliers working to deliver one specific service or product to the NHS or any other stakeholder. These contracts may be short or long term plan and allow suppliers to collaborate with other vendors, businesses and the NHS Supply Chain throughout the contract duration.
Supplier Relationship Management
Keeping suppliers at the core of the procurement process is essential to the NHS Supply Chain and to ensure the efficient delivery of goods, services and works to patients across the country. Supplier relationship management is crucial in the long-term success of the NHS, and will further ensure:
Cost-Effective Delivery: Building strong relationships with reliable commercial partners will help the NHS to provide patients with quality care while reducing costs and budgetary expenses.
Reduce Risks: Having supplier relationship management as part of the procurement process will ensure that the NHS, NHS Supply Chain and all relevant stakeholders will be aware of potential risks and build a more resilient supply chain should challenges present themselves.
Product Differentiation: Something to consider is the wide variety of products and services procured by the NHS. Having access to high-quality goods, products and works ensures that the NHS can deliver on its promise of providing patients with safe, efficient and high-quality care.
Innovation: Having collaborated with several vendors provides much-needed innovations for the NHS and NHS Supply Chain. These efforts help contribute to new ideas and existing expertise, further improving supply chain systems and vendor frameworks.
Quality: Delivering quality healthcare services to patients is a core responsibility of the NHS and NHS Trusts. Suppliers play an important role in helping to deliver a high standard of quality for all patients by supplying goods and services that meet regulatory standards and have passed through quality control assessments.
NHS Contract Opportunities for New Suppliers
There are plenty of new opportunities available with the NHS and NHS Supply Chain. By allowing new suppliers to enter the market, the NHS can effectively diversify its supply chain and find reliable vendors that can fulfil contractual agreements.
NHS Business Services Authority: The NHSBSA is a government-affiliated body that oversees a consortium of business functions related to the NHS. The NHSBSA aims to ensure the delivery of impartial assurance for health and care providers, provide support for necessary business functions, and facilitate effective delivery and management of primary care services.
NHS Trust Engagement: Suppliers can seek contracts with individual NHS Trusts. This will not only minimise potential competition but ensure that can directly inquire about current and forward-looking contract opportunities. NHS Trust will follow different guidelines compared to the NHS Supply Chain. Suppliers will need to ensure that they qualify to form part of the accredited supplier framework.
NHS Supply and Procurement Hub: Digital innovation hubs can help to connect NHS stakeholders with vendors. These digital hubs can become valuable resources for vendors looking to establish relationships with the NHS and any stakeholders. Contract or tender opportunities are regularly updated on a procurement hub.
NHS Supplier Frequently Asked Questions
What is the NHS Supply Chain?
The NHS Supply Chain oversees and manages the procurement of medical and non-medical goods, services and other works for the NHS and NHS Trusts across the United Kingdom.
How many suppliers does the NHS Supply Chain work with?
The number of suppliers is constantly changing, however, the NHS Supply Chain works with more than 80,000 different suppliers across multiple sectors of the economy to buy services to ensure sufficient processes for UK health tendering.
What are NHS procurement frameworks?
A procurement framework allows the NHS to enter an agreement with one or more suppliers to procure goods and services. This allows for more effective service delivery while improving supply chain efficiencies.
How do suppliers influence the NHS?
Suppliers can help provide much-needed innovation, skills and expertise for the NHS and NHS Trusts. Suppliers play an important role in improving inefficiencies and delivering high-quality goods and services to all stakeholders.
Who does NHS procurement?
The NHS procurement framework involves multiple stakeholders, including NHS Supply Chain and Clinical Commissioning Groups (CCGs), among others. CCGs will purchase services for specific areas or locations, while the NHS Supply Chain oversees the procurement of other goods for the wider network of NHS Trusts.
Who is responsible for the NHS Supply Chain?
To ensure continuous efficiencies, the Department of Health and Social Care (DHSC) has established the Supply Chain Coordination Limited (SSCL) to manage the function of NHS Supply Chain and all legal undertakings completed by the NHS Supply Chain procurement services.
What is the budget of the NHS Supply Chain?
For the current financial year, the NHS Supply Chain has an annual budget of £240 million for 2023-24.
Final Thoughts
The NHS procurement network is a sophisticated web of partnerships with thousands of vendors and various stakeholders. By establishing relationships with vendors, the NHS can effectively deliver high-quality service, care and goods to all patients across the country.
More than this, allowing new opportunities to present themselves to vendors will help drive innovation within the NHS Supply Chain and provide expertise and skills for the procurement network.
As demand changes over time, the NHS will continue to look at ways in which it can foster new supplier relationships, while allowing vendors to participate in new opportunities that seek to uphold quality care, value for money and present workable solutions for the NHS.
