County Durham & Tees NHS Purchasing Consortium

The Durham & Tees Consortium is a group of 17 NHS Trusts in the North East of England who work collaboratively together to maximise their purchasing power and expertise. These Trusts provide services to acute, community and mental services to more than 1 million people. EROS has been in use since September 2000 and now processes over £120 million per year. This system is provided by County Durham & Darlington NHS Foundation Trust to the consortium who has implemented remote requisitioning to over 5,000 users. The service is based upon a resilient server configuration running Microsoft Windows Server 2000 operating system running EROS to provide 24 hour availability every day of the year.

In June 1999 we set ourselves the seemingly impossible task of acquiring an electronic purchase order system – a single system that would hold information separately for each organisation when processing transactions, but would be able to be amalgamated by the Central Supplies function for strategic purchasing information, and which would provide outputs that would be able to interface with two different financial ledger systems. Three years later, we have completed this project, and are now looking to extend it over additional organisations. The original benefits looked for have been achieved and the introduction of remote requisitioning has taken Durham into the forefront of E-commerce.

A functional specification was devised, adverts were placed and the initial replies were evaluated until we settled on a short list of four systems. The Consortium was fairly prescriptive as to the format of our presentations; we wanted a demonstration on a site where the system was being used in the NHS, with the opportunity to talk to current users of the system without the sales reps being present.

Out of the four systems on offer, only one complied exactly with those demands, it was the preferred option of both Supplies and Finance. A review against the functional specification showed that it appeared to match everything that was required and offered the benefit of remote requisitioning which we quickly realised was the key area to achieving real efficiencies within the purchase to pay cycle. A decision had been reached. We would go with EROS a system developed by Belmin Group Ltd.

The project team moved into the implementation, meeting every two weeks. We were enthusiastic and confident of a relatively easy implementation as the system appeared to be relatively straightforward to use.

With any eProcurement system the catalogues are at the heart of everything, and the accuracy of these affects everything else from matching of invoices, to the accuracy of accrual information, so the work in Supplies was focussed on creating these. Suppliers were contacted for electronic versions, which could be uploaded. These were then subdivided and analysed into the Consortium’s own catalogues which would aggregate all Stationery into one area, all IT equipment into another, drugs would be a third etc. this would be a means of restricting the items ordered by Requistioners. Staff would only be able to access those products for which they had authorisation. All departments were allocated a code, which would then relate to a specific cost centre, each type of product was allocated an NSV code, which was in turn mapped to a subjective code. The Suppliers used by all Trusts were scrutinised to eliminate duplication. In order to get the benefits out of an implementation of this scale, the time allocated to iron out these set up issues should not be underestimated. We discovered that most areas fit comfortably into the above process, but the areas, which don’t provide the biggest challenges. Centralised budgets can prove difficult with all departments needing to order from them. The authorisation levels need to be looked at carefully to allow the required level of control to be exercised. Lateral thinking and a change in procedure is sometimes necessary to achieve the desired result.

Once the system was operating the roll out of remote requisitioning was begun. Initially IT provided a pilot site. This had the benefit that they would be computer literate, they had been in on the project all along and understood the system, and should therefore be able to identify the majority of the issues before we extended the programme.

Once again, this process was accomplished with relative ease, with departments clamouring to be the next department to go online. The roll out would be achieved by departments accessing a requisitioning screen from the Trust’s intranet. The requisitioning process then becomes the familiar Internet shopping style, with a search facility to find the products required. The easiest way to search is by product code, so we make sure that all Catalogue descriptions include the product code. The user then adds the number of products required to their shopping basket.

Where departments such as Catering are requisitioning remotely, we have templates set up which lists all the products they are likely to use, and they simply select the number of each item they use. This process required a development of the original templates, as initially users needed to insert a zero for each line not required, this was extremely time consuming if templates were 99 lines long and only 3 items were required.

The biggest problem we have encountered in the implementation has been ensuring the IT links are robust enough. If the old purchasing system was unavailable then it was not a big crisis. If the e-Procurement system is unavailable, then the whole county grinds to a halt. More reliance on electronic methods of working increases peoples expectations, and confidence in the system can soon be eroded by constant down time. The Trusts have worked closer together since the implementation and have provided an in-house disaster recovery solution wherever possible.

The Trusts using EROS cover all specialties, and all types of service provision. We have put every department onto the catalogues including notoriously difficult ones like Catering, Pathology and Estates, to discover that by far the largest single user is the Estates department.

The future is electronic, transparent processing with more emphasis on quality control than actually processing each individual transaction. The setting of procedures will be the key area, as will system maintenance, ensuring nobody can bypass the controls set in place. A major benefit will be having staff who understand the whole system from requisition to payment, and who have the necessary skills to be able to identify where the problems are, and to be able to know how to resolve them.

There have been several upgrades and many service improvements since the system was introduced. These include integration with the national Finance system, development and implementation of supplier digital product images currently standing at 40,000. Remote requisitioning rolled out to 85% of users allowing them instant access to electronic catalogues which negates any intervention from Supplies and the order goes immediately to the supplier electronically. Requisitions are turned into orders and are despatched the same day which allows for less stock to be held on wards / departments. The savings achieved from this electronic process is fed back into other areas of patient care. No hard paper orders have been processed since going live with EROS.

There has been a 30% reduction in staffing within Supplies, mainly due to processing activities. Some of these savings have been ploughed back into Supplies in order to recruit more “focused buying professionals”.

During 2005/2006 the Consortium transmitted through EROS 330,000 electronic requisitions and 180,000 electronic orders to the value of in excess of £160 million.

There are currently over 4000 Consortium remote requisitioners. The Consortium integrated EROS with Global Healthcare Exchange. This allowed the Consortium to receive electronic catalogue updates from leading healthcare suppliers and despatch orders directly into the suppliers systems through XML.

Durham is currently the first adopter of Belmin’s new ARIES service (automated reconciliation & invoicing efficiency savings).