Ten leading acute trusts in England have adopted an electronic procurement system, which it is claimed has the potential to save the NHS millions of pounds.
The trusts — all members of the Shelford Group — are the first NHS organisations to adopt ‘The Edge’ system, which in the future will have the capacity to include pharmacy orders.
The Edge, developed by the British technology company Virtual Stock, provides trusts with an electronic catalogue management service, covering the entire purchase-to-pay process, and is based on a system designed and used by national high street chains, such as Tesco and Argos.
The system gained recognition in February 2016 when it was highlighted as an example of best practice in the report of the NHS efficiency review
, led by Lord Carter of Coles.
Guy’s and St Thomas’ NHS Foundation Trust in London was the first NHS organisation to use the system in 2015. David Lawson, its chief procurement officer, comments: “We wanted to embed best practice by replicating the best in retail.”
He says the system enables the trust to control its spend more efficiently as suppliers provide photographs of products and additional information that is invaluable in terms of confirming the right product has been purchased.
“The benefits of having a good catalogue management system is that our system and the supplier’s system are matched all the time — that reduces price queries and it ensures that product information is detailed enough so that people are ordering the right product,” he explains.
Lawson predicts that similar advantages will apply to medicines procurement once it is added to the system. “At this stage pharmacy [departments] place orders on a separate ordering system. However, going forward the system has the scope to expand into pharmacy and the same benefits, such as reducing risk of price errors, would apply.”
Guy’s and St Thomas’ NHS Foundation Trust is now in the process of introducing a ‘track and trace’ system on orders, similar to the one used by online retail giant Amazon. “The next step [is] to be able to have a purchase-to-pay system and be able to trail and track an order — that Amazon experience which doesn’t exist in the NHS at the moment,” he says.
The Carter review estimated that the NHS lost £5bn each year through waste and unwarranted variation across acute trusts and suggested that between £700m and £1bn could be saved each year by 2020 if procurement systems were improved.
The report revealed an “astonishing variety” in the numbers of products and suppliers used across the NHS — a sample of 22 trusts used 30,000 suppliers, 20,000 different branded products and more than 400,000 product codes. It also pointed out that more than 7,000 people employed by these 22 trusts had the authority to place orders.
The review also said there was a lack of understanding about the hidden costs and efficiencies caused by “weak compliance to purchase-to-pay systems” and poor investment in inventory control and little focus on cost containment. It added that the NHS failed to capitalise on its national purchasing power across the board.
Details of the contract reached with the ten Shelford Group trusts were announced on 24 October 2016.
Virtual Stock also signed contracts with five additional acute trusts in October 2016 and says its ambition is to roll out its procurement system across all NHS trusts throughout England.
 Lord Carter of Coles. Operational productivity and performance in English NHS acute hospitals: Unwarranted variations. An independent report for the Department of Health by Lord Carter of Coles. February 2016. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499229/Operational_productivity_A.pdf (accessed November 2016)