1. Measuring supplier performance Howard Stokoe NHS PASA 7 June 2007

2. Outline overall aim work elements progress next steps

3. Overall aim objective measurement of supplier and supply chain performance: enable the NHS to manage its relationships with its suppliers for mutual benefit improve supply chain performance

4. Work elements – starting points Phil Aubrey questionnaire PDIG award supplier performance SCEP relationships and scoring against advertised award criteria evidence based award decisions objective measurement of supplier performance NHS PASA/NPSG supply chain project tactical options to improve performance develop and agree KPIs

5. What has happened – the chain of events KPIs developed and published bid submitted to enhance pharmacy computer systems local focus enhancements now available (trials pending) SCEP methodology developed measurement and reporting in place PMSG – other supplier service aspects need to be considered Questionnaire PMSG agrees routine survey of hospitals defined list of suppliers questions based on Phil Aubrey’s work

6. KPIs being delivered soon KPIJACAscribe Line delivered on time, in full YES Incorrect items received YES NO Incorrect quantities received YES % lines returned vs lines ordered YES NO % invoices matched first time YES NO Timeliness of payment YES NO Line orders involving manual intervention of staff YES NO % orders involving manual intervention by pharmacy staff NO YES

7. SCEP Relative Score Calculation

8. SCEP Definition Of Score ScoreDefinition 0For information only 1Short dated stock/emergency stock or limited purchases 2Unable to supply, but solution offered 3Unable to supply, but NO solution offered

9. SCEP Score Chart

10. SCEP Suppliers Ranked by Score

11. Questionnaire NHS PASA and PMSG undertook a programme of research amongst a small sample of NHS pharmacists to identify the extent to which contracted suppliers’ performance is meeting expectations On 10 January 2007, 21 pharmacists were invited to participate in the research consisting of an electronic questionnaire; 18 completed forms were returned for analysis by 21 February. The research was managed by an independent research agency, Exodus Research.

12. Areas of questioning Which suppliers: used by the trust in the last 12 months paperwork has not met requirements not have an adequate returns service do not provide accurate invoices do not charge accurately on contract prices do not issue credits accurately or promptly respond badly to off contract/clawback claims do not always deliver on time and in full have performed particularly well

13. Suppliers that have not always provided paperwork or where paperwork has not met requirements 11 of the 18 respondents felt one or more suppliers had not provided adequate paperwork 7 of the 17 respondents that used Supplier A indicated this supplier had not met requirements Key issues were unavailability of products with paperwork making no reference to these or being hard to tie up when delivered separately

14. Suppliers that have no returns service or one that is not easy to use 8 of the 18 respondents felt one or more suppliers had not provided an adequate return service 3 of the 17 respondents that used Suppliers A, M and/or V felt requirements had not been met Key issues include the time it takes to arrange collections and failure of companies to promote the service

15. Suppliers that have not provided accurate invoices or invoices that have caused problems 9 of the 18 respondents felt one or more suppliers had not provided accurate invoices 4 of the 17 respondents that had used Suppliers A and/or H felt requirements had not been met Key issues include receiving details of another organisation’s order and wrong prices being quoted

16. Suppliers that have not always charged accurately on contract prices 11 of the 18 respondents felt one or more suppliers had not charged accurately on contract prices 4 of the 17 respondents that had used Supplier H felt requirements had not been met Key issues include the wrong prices being quoted

17. Suppliers that have not always responded favourably with respect to off contract/clawback claims 11 of the 18 respondents felt one or more suppliers had not dealt with off contract / clawback claims to their satisfaction 6 of the 17 respondents that had used Supplier F felt requirements had not been met Some respondents indicated that claims had been disputed, even though the manufacturer was at fault

18. Suppliers that have not always delivered on time or in full 14 of the 18 respondents felt one or more suppliers had not delivered on time or in full 10 of the 17 respondents that had used Supplier M felt requirements had not been met A key issues is the unavailability of various product lines and the number of ‘to-follows’

19. What next? KPIs national aggregation of local system generated KPIs requires NPSG agreement national capture (a la Pharmex) Questionnaire some refinements – wholesalers – ecommerce scope to capture all suppliers twice yearly base hospitals plus random SCEP additional information

20. Acknowledgements supply chain project team lead by Sam Forrest KPI workstream – Kevan Wind Roger Miles – Pharmacy Business Technology Group system enhancement – Judie Finesilver SCEP measurement – Ian Allen (with Alison Greenwood and Rachel Willey) questionnaire development – Phil Aubrey translation into delivery – Allan Karr and PMSG formal survey - Exodus