Royal Hospital for Neuro-Disability | Procurement

The Challenge

The Royal Hospital for Neuro-disability (RHN) is a national medical charity helping people affected by brain injury and offers an extensive range of rehabilitation, long-term care and research services. In 2012, RHN recognised that a thorough review of its costs was required in order to drive out cost base reductions and / or achieve service level improvements which would enable them to continue operating as a successful hospital. RHN decided to deploy Category Management expertise to achieve these efficiencies and engaged Procure4 to scope and deliver cost base reduction in a number of indirect spend categories including consumables and facilities services.

The Approach

The total spend in scope was c£2m and included seven categories so Procure4 needed to work efficiently in order to maximise savings on this relatively low level of spend. In order to achieve this we carried out a benchmarking exercise to determine where savings opportunities existed, developed a Cost Base Reduction (‘CBR’) plan and created category strategies outlining our proposed approach. We identified and then engaged key stakeholders to ensure alignment and gain their support for the delivery of the category strategies. Using our knowledge and experience to optimise delivery we implemented savings quickly and efficiently so that RHN could start benefitting from CBR rapidly without the need for extensive resource investment.

The Results

By combining our market intelligence and leveraging our knowledge of the supply base, Procure4 was able to deliver in excess of 15% savings within four months.

One key area of opportunity was the linen and laundry contract where we quickly identified that the existing supplier pricing was not competitive against the prevailing market. We were then able to rapidly reduce RHN’s costs by 17% through negotiation with the existing supplier and through process changes that reduced stock and improved service levels. Another key spend area was medical consumables where we delivered 20% cost base reduction through a competitive tender process and selection of alternative products via a structured trial process. Overall RHN was delighted with the results achieved in such a short timeframe, as summarised in the testimonial below:

Key Facts

15% CBR Delivered

£2,000,000 Spend Addressed

4 Months Worked to Delivery

Testimonial from Royal Hospital for Neuro-disability

The Royal Hospital for Neuro-disability is a specialist medical charity. We are mindful of our costs and work hard to keep our management overheads down. The consequence of this is that whilst the hospital runs efficient day to day operations we have limited resource to apply to wider initiatives. We approached Procure4 to work in partnership with us to review our procurement processes and supplier arrangements. I cannot speak highly enough of their approach and importantly what they have delivered for us. They worked hand in glove with our head of facilities and purchasing manager. All staff felt supported and became fully engaged in all activities. Procure4 operate with a high level of transparency. The review process, with timescales, was clear and they delivered to this with regular reporting and face to face review meetings. The gains have been remarkable. We have made a 17% saving off our baseline. This would not have been possible, even if we had had the time. Procure4 are real experts and their extensive relationship with suppliers gives them a ‘buying power’ beyond that which the hospital could have exercised. It has been a commercially beneficial experience and Procure4 have been a real pleasure to work with.

Lynn Cunningham, Director of Corporate Services

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