Measuring supplier performance

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

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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 Aubreys work

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KPIs being delivered soon
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SCEP Relative Score Calculation
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SCEP Definition Of Score
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SCEP Score Chart
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SCEP Suppliers Ranked by Score
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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.

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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

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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

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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

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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
  organisations order and wrong prices being quoted

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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

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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

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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

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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

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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