5 Year Strategic Plan for Purchasing

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5 Year Strategic Plan for Purchasing

  1. 1. PURCHASING & LOGISTICS 5 YEAR STRATEGIC PLAN
  2. 2. Reviewed: 3 August 2006 /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 2 of 19
  3. 3. DOCUMENT HISTORY AND CHANGE CONTROL Version Section Reason Author Date Number Draft All Draft document for comment Bill Stewart October 2002 Final 1 All Incorporate feedback from Bill Stewart October 2002 discussion of draft document Final 2 All Updated following review and Bill Stewart November 2003 input from SCMAG Final 3 All Updated following review and Bill Stewart February 2005 input from SCMAG & PALPAS Draft 4 All Updated to reflect new QH Bill Stewart February 2006 structure Draft 5 All General review and changes to Peter Laing March 2006 reflect PALBIT involvement and revised structure Draft 6 All Changes to map initiatives to Holly Clarke March 2006 Strategy Map Draft 7 All Changes to P&L strategy map Holly Clarke May 2006 and revised organisational structures, new workforce initiatives Draft 8 5, 6, 8 Incorporate feedback on new Holly Clarke June 2006 QH strategic directions and revise in consideration of QHSS strategic objectives Draft 9 5, 6, 7, 8 Strengthen reference to SCMIS Holly Clarke 3 August 2006 principles and rationalise strategic initiatives DOCUMENT APPROVAL SEQUENCE Status Approval Name Signature Date Progress Draft Principal Project Officer Sign Off Senior Director, Bill Stewart HSPL Final Executive Michael Sign Off Director, Kalimnios Corporate Services /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 3 of 19
  4. 4. 1. SUMMARY This strategic plan is the building block that blueprints purchasing and logistics direction for the next five years. The plan identifies key initiatives and strategies to advance supply chain1 value for money2 to support health service delivery and achieve recognised excellence in health supply chain management. It is based on the Purchasing & Logistics strategy map (see over) which aligns with the Queensland Health’s strategic intention. It is updated annually to ensure it is consistent with developments in the business and reflects the changing directions of the organisation. All new strategies are subject to appropriate business case development and approval. Priorities will be recommended by the Purchasing and Logistics Policy and Strategy (PALPAS) committee and approved by the Business Services Board or its nominated subsidiary. 2. THE PURCHASING AND LOGISTICS NETWORK The Purchasing and Logistics Network (PALN) is a critical concept embodied in this plan. While it is not a fixed organisational element, this network is the partnership of Health Services Purchasing and Logistics (HSPL) and Queensland Health Shared Services (QHSS) working together to achieve the role and vision for purchasing and logistics. 2.1. ROLE OF QUEENSLAND HEALTH SHARED SERVICES (QHSS) The role of QHSS is: • to provide supply services in accordance with established and agreed client service standards and performance levels; • to comply with Queensland Health’s Strategic FrameworkQuand • to implement Queensland Health’s Corporate Purchasing Plan, in line with Agency Purchasing Procedures. 1 Supply Chain Management encompasses the planning and management of all activities involved in procurement and logistics management. Importantly, it also includes coordination and collaboration with suppliers, third party service providers and customers. 2 Value for money concept includes price integrated with consideration of:  contribution to the advancement of Government priorities;  non-cost factors such as fitness for purpose, quality, service and support; and  broader cost related factors including whole-of-life costs and transaction costs associated with acquisition, use, holding, maintenance and disposal. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 4 of 19
  5. 5.                  2.2. PURCHASING AND LOGISTICS BUSINESS IMPROVEMENT UNIT (PLBIU) The Purchasing and Logistics Business Improvement Unit has been established within HSPL to assist in the achievement of this 5 Year Strategic Plan. The specific objectives of PALBIU are: • Coordinate the continuous review and improvement of purchasing and logistics business processes across Queensland Health; • Engage in continuous learning and research into leading edge supply chain processes and technologies, and the legal and government framework in which they operate; • Maintain the Queensland Health Agency Purchasing Procedures (APP) in accordance with the Queensland Government State Purchasing Policy (SPP) and Queensland Health policies and procedures; • Ensure the effective delivery of training and development opportunities for Queensland Health staff involved in the hospital supply chain; • Coordinate the development of available systems, technologies and data to maximise the efficiency of purchasing and logistics business processes; • Coordinate the ongoing performance measurement and benchmarking of Queensland Health’s purchasing and logistics business processes; and • Coordinate improved communication, consultation and liaison, amongst the Purchasing & Logistics Network within Queensland Health, and externally with suppliers and supply chain management professionals from the public and private sectors. 3. GOVERNANCE Management of the plan and the associated strategies review will be undertaken through the Purchasing and Logistics Policy and Strategy (PALPAS) Committee chaired by the Senior Director, Health Services Purchasing & Logistics who will report progress to the Executive Director, Corporate Services. 4. REVIEW This plan will be reviewed annually during the planning process for Purchasing & Logistics, as part of the ongoing development and planning that takes into account key considerations such as long term budget and funding allocations and Queensland Health’s business framework, policies and procedures. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 5 of 19
  6. 6. The annual review will be conducted in consultation with key representatives and stakeholders from the following areas: • PALPAS Committee, including: o Health Services Purchasing and Logistics Branch; o Queensland Health Shared Services, including Procurement Functional Managers; o Health and Community Care Program; o Statewide Health and Community Services; o Pharmaceutical Advisory Services; o Area Health Services, including Directors of Corporate Services; and o Queensland Purchasing. •   • • CorpTech • Queensland Health Pathology & Scientific Services  Chief Information Officer Division • This plan and details from the annual review will be published on the Queensland Health Electronic Publishing Service (QHEPS). 5. STRATEGY MAP – QH PURCHASING AND LOGISTICS NETWORK The strategy map provides a visual representation of our strategic objectives and how they align with Queensland Health’s eight strategic directions (draft): • Promoting a problem solving approach to reform of Qld Health; • Building the next generation of health workers, ideas and health services; • Working together; • Responding justly and fairly to need; • Working with communities to improve health; • Creating a patient focused health system; • Making Queensland Health a good place to work; and • Better manage performance of people, systems, assets and information. The objectives are spread across the four balanced scorecard perspectives, as customised by Queensland Health: • Consumer • Paying for health • Internal processes • Shaping our workforce. The Queensland Health Purchasing and Logistics Network Strategy Map appears on the following page. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 6 of 19
  7. 7. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 7 of 19
  8. 8. 6. DEFINITIONS OF STRATEGIC OBJECTIVES Consumer Perspective C1. Supply the right product/service to the client (Right product) Our clients want us to supply the products/services that meet their specifications. C2. Supply the client’s requirements in a timely manner (Right time) Our clients want access to requested products/services at the stated or implied time they are required. Delivery of products/services either too early or too late may result in adverse clinical outcomes, not to mention client inconvenience and increased process costs. C3. Supply the client’s requirements at the location of service delivery (Right place) Our clients expect that the products they need to support the provision of services will be right there at the ward, theatre, ex- hospital or administrative setting at the time they are needed. Clients wish to minimise the time they spend in performing supply activities. C4. Maximise the client’s value for money Our clients expect us to help them deliver required services within their allocated budgets, by minimising the unit price and cost of supply, without compromising product/service quality or continuity of supply. They expect true value for money, which may not necessarily be the lowest-priced product. C5. Supply products/services that meet the client’s business need Our clients expect us to value-add to their business by assisting them to source products/services that meet their business needs. We must maintain a good understanding of the nature of their business, including changes driven by innovations in health service delivery and corporate and support services. Products/services supplied should support clinical, corporate and support services quality improvement initiatives. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 8 of 19
  9. 9. Paying for Health Perspective P1. Achieve a balanced budget We must deliver and manage our services within our allocated budgets. P2. Maximise the return on total project cost and recurrent expenditure We must use our allocated funding in the most effective way, in the delivery of those initiatives that realise maximum benefits for our clients. We must ensure that the benefits promised in return for project funding are realised. P3. Develop flexible pricing arrangements for supply services Under the Shared Service Initiative, we will develop and implement a new approach to costing and pricing that will see supply services delivered on a fee-for-service basis. Internal Processes Perspective IP1. Improve supplier management We must promote a process of two-way communication with suppliers in order to continuously improve products, services and processes to derive maximum advantage (lowest unit price and transaction cost, highest product quality and service levels) for Queensland Health. IP 2. Advance sector-wide supply chain management improvement with Qld Govt stakeholders We must ensure that we take an active role in planning and implementing supply chain management improvement initiatives, commensurate with Qld Health’s position as the largest purchaser in the Qld Govt. We should act as catalysts for change, particularly in areas where Qld Health has demonstrated comparative strength and/or good practice. Areas of potential improvement across the Qld public sector include supply chain management practices, processes and systems. IP3. Develop and maintain relationships with supply professionals in other jurisdictions and private sector /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 9 of 19
  10. 10. We recognise that by developing relationships with supply professionals in both the public and private sectors, we will keep abreast of supply chain management trends and identify opportunities for learning from others. Such relationships may also facilitate opportunities for joint projects of mutual benefit. IP4. Promote partnerships between staff involved in the QH supply chain Staff involved in the QH supply chain include clinicians, corporate and support services staff and Supply Services staff. By promoting increased communication and consultation between QH staff, we will help staff to: • Understand each other’s business needs and resource limitations; • Identify and implement opportunities for improvement; • Advocate and standardise good practices; and • Develop support networks to cope with a changing organisational environment. IP5. Align purchasing and logistics activities with Qld Govt key priorities and community outcomes We need to ensure that Queensland Health’s purchasing and logistics activities support the Qld Govt’s key priorities of: • Growing a diverse economy and creating jobs; • Realising the Smart State through education, skills and innovation; • Managing urban growth and building Queensland’s regions; • Improving health care and strengthening services to the community; • Protecting our children and enhancing community safety; and • Protecting the environment for a sustainable future. Progress against these priorities will contribute towards the key Queensland community outcomes of: • Building Queensland’s economy; • Strengthening Queensland’s communities; and • Protecting Queensland’s environment. IP6. Align purchasing and logistics activities with relevant Commonwealth Govt priority outcomes We need to ensure that Queensland Health’s purchasing and logistics activities support relevant Commonwealth Govt priority outcomes such as those being led by the National E-Health Transition Authority and the National Health Supply Chain Reform Taskforce. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 10 of 19
  11. 11. IP7. Efficient and effective processes for purchasing strategic commodities We seek to improve the efficiency and effectiveness of purchasing processes to drive lower process costs, lower prices, high client service levels, and high quality and safe health outcomes. We recognise that focusing our efforts on our strategic commodities will derive the most benefits for QH. IP8. Efficient and effective processes for supply chain management across QH We seek to improve overall supply chain effectiveness through a streamlined network of distribution centres, strategies to lower freight costs and standardise freight processes (both inbound to QH warehouses and outbound to QH facilities), and the consolidation of purchasing processes. IP9. Improve information management and performance measurement of supply chain processes To determine our success in achieving our outcomes and to drive improvements, we need efficient and continuous processes for managing information and measuring performance. IP10. Reduce the environmental impact of QH purchasing processes We acknowledge our responsibility as an organisation to minimise our impact on the environment. To this end, we will work together within Queensland Health and with our suppliers to implement environmentally-friendly policy and processes, and source environmentally-friendly products. Shaping our Workforce Perspective WF1. Develop an appropriately skilled and qualified workforce We will work with our staff to develop appropriate skills and expertise, and improve access to professional development opportunities, to meet client, individual, service and organisational needs. WF2. Provide a supportive work environment that recognises and rewards achievements /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 11 of 19
  12. 12. We want to enable our staff to perform at their best by using employment frameworks that allow innovation in supply chain management, and encouraging and rewarding process innovation and achievement of our goals. WF3. Implement effective and supportive change management strategies We will openly and honestly communicate and consult with our staff to develop and implement changes to supply chain service delivery and provide them with skills to manage the change process. WF4. Develop a values-based organisation, focusing on highest service and ethical standards We will encourage staff commitment to the organisational values of professionalism, performance accountability, teamwork, and quality and recognition. We will focus on delivering the best possible service to our clients to support the delivery of health services. We will be honest and impartial in the conduct of official business, use public funds responsibly to achieve best value for money, and ensure that the interest of patients remain paramount at all times. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 12 of 19
  13. 13. 7. STRATEGIC INITIATIVES No. Initiative Details Responsibility Timeframe 1. woG Standard Facilitate the implementation of the woG Standard Offering (new FAMMIS) and HSPL 2006-2008 Offering (new development of other tools/functionality to enable: QH Finance Solution FAMMIS) o Workflow; Implementation o Evaluated Receipt Settlement; Project o Wireless technology; CorpTech o Web-based front end for user requisitioning; o Electronic document exchange; o Hosted catalogues; o Forecasting; o Barcoding; o Reporting; o Sales and Distribution. 2. Business Process o Review of current business processes; PALN 2006 Review o Standardisation of processes across QHSS, including the use of the Qld Govt PALN 2006-2007 Corporate Purchasing Card; o Establish a continuous improvement program that researches, trials and PALN 2006-Ongoing implements innovative business processes. 3. Supply Chain Key elements: SCMIS Project Team 2006-2008 Management o Rationalisation of warehousing through the establishment of 3 Logistics Integration Strategy Support Centres (Distribution Centres) in SEQ, Townsville and Cairns; o Improved inbound and outbound freight processes, including reduction in costs, through the Freight Management Initiative; o Centralisation of purchasing operations. 4. Product o Extend current processes and product advisory committee networks across Area Health Services 2006-Ongoing Standardisation Districts and Area Health Services to review product usage and to encourage, and PALN endorse and adopt standardised products. o Establish a product evaluation database and provide general access to Functional Procurement 2006-2007 clinicians / product advisory committees. Manager - Area 2 Catalogue & Contract Project 5. Contract Extend contract management processes to: 2006–2007 Management o Provide greater focus on performance assessment HSPL Improvement Project o Extend the use of existing contracts/SOAs, including the use of contracted Functional Procurement and catalogued materials Managers /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 4 of 19
  14. 14. No. Initiative Details Responsibility Timeframe o Expand the number of contracts/SOAs HSPL o Increase the reliability and availability of usage data to maximise the return HSPL on investment through rebate schemes based on contract utilisation 6. Policy Reform Review the Agency Purchasing Procedures to: HSPL 2006-Ongoing o achieve an improved balance of flexible and responsive purchasing while maintaining appropriate corporate governance and risk management o better reflect the intent of the State Purchasing Policy, especially regarding purchase planning and sourcing o incorporate and drive the strategic purchasing and logistics initiatives o revise purchasing and contract signing delegations to drive the policy reform, encourage a consistent adoption of practice and integrate with shared services o strengthen purchasing and supply performance management Establish processes for ongoing review and monitoring of the Corporate Purchasing Plan to: o ensure it is aligned to revised policy o ensure information-based analysis is a major determinant of corporate purchasing strategies 7. Data Cleansing Review and cleanse purchasing and logistics master data, including materials and HSPL & CorpTech 2006-2007 Project vendor related data, to support woG Standard Offering implementation and ongoing quality processes and reporting. 8. Performance o Develop, implement and refine a balanced scorecard approach to management PALN 2006-2007 Measurement and of purchasing and logistics services and strategies; Reporting Project o Initiate external and extend internal benchmarking of purchasing and logistics PALN 2006-2007 processes; o Develop specific improvement plans and performance targets using PALN 2007-2008 benchmarks; PALN 2006-2007 o Develop a framework and system to regularly report and review performance against targets; HSPL & CorpTech 2006-2007 o Continue development of MM-DSS to underpin analysis for contract management, corporate catalogue, benchmarking and performance measurement. 9. PALN Develop and implement a comprehensive communications strategy to achieve: PALN 2006-Ongoing Communications o understanding of client needs; Strategy o awareness of purchasing and logistics strategy, services and initiatives; and /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 5 of 19
  15. 15. No. Initiative Details Responsibility Timeframe o support for purchasing and logistics initiatives; across the broad range of staff and clients including; o purchasing and logistics clients; o Shared Services staff; o product advisory committees and clinical networks; and o Area Health Service and Health Service District management. 10. Supplier o Establish partnerships with key suppliers to identify and implement improved HSPL and CorpTech 2006-2009 Collaboration processes, incorporating (but not limited to) the following reforms and initiatives: Strategy o Volume discounts/rebates; o Electronic invoicing; o Evaluated receipt settlement; o E-procurement; o Synchronisation of catalogue and transactional data to support operational efficiencies, collaborative planning, forecasting and replenishment. HSPL (with Qld 2006-Ongoing o Develop and implement strategies to encourage and support SMEs and to Purchasing) emphasise local industry development. 11. NEHTA Reform Contribute to the development and then adoption of National Health supply chain HSPL 2006-2008 Process reform strategies. 12. Staff Development Develop and implement a Staff Development and Training Plan for staff involved in PALN 2006-Ongoing and Training Plan the Qld Health supply chain, including: o Core Skills Register; o Skills Sharing Processes; o Succession Planning; o Staff Exchange Programs; o “Excellence in Purchasing” Awards Framework; o “Ethics in Purchasing” Training Package; o Appropriate Training Delivery Methods, including the use of CBT and virtual classroom technologies; o Change Management frameworks – research, analysis and promotion. 13. Energy Performance o Develop, implement and manage energy performance contracts for a reduction HSPL 2006-2009 Contracting in energy and water use and costs at Qld Health facilities. o Introduction of Energy Conservation Measures for energy and water use, and carbon dioxide emissions. /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 6 of 19
  16. 16. 8. STRATEGIC INITIATIVES MAPPED TO STRATEGY MAP OBJECTIVES Perspective Objectives Strategic Initiatives PALN Communication Strategy Staff Training & Development Plan Contract Mgt Improvement Project ReportingPerformance Measurement & Supply Chain Mgt Integration Strategy Data Cleansing Project Supplier Collaboration Strategy NEHTA Reform Process Business Process Review Energy Performance Contracting Product Standardisation WoG Standard Offering Policy Reform Consumer Supply the right product/service to the client Supply the client’s requirements in a timely manner Supply the client’s requirements at the location of health service delivery Maximise the client’s value for money Supply the products/services that meet the client’s business need Paying for Achieve a balanced budget health Maximise the return on total project cost and recurrent expenditure Develop flexible pricing arrangements for supply services /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 7 of 19
  17. 17. Perspective Objectives Strategic Initiatives ReportingPerformance Measurement & Supply Chain Mgt Integration Strategy PALN Communication Strategy NEHTA Reform Process Staff Training & Development Plan Product Standardisation Contract Mgt Improvement Project WoG Standard Offering Policy Reform Data Cleansing Project Supplier Collaboration Strategy Business Process Review Energy Performance Contracting Consumer Supply the right product/service to the client Supply the client’s requirements in a timely manner Supply the client’s requirements at the location of health service delivery Maximise the client’s value for money Supply the products/services that meet the client’s business need Internal Improve supplier management processes Advance sector-wide SCM improvement with Qld Govt stakeholders Develop and maintain relationships with supply professionals in other jurisdictions and private sector Promote partnerships between staff involved in the QH supply chain Align purchasing and logistics activities with Qld Govt key priorities and community outcomes Align purchasing and logistics activities with relevant Commonwealth Govt priority outcomes Efficient and effective processes for purchasing strategic commodities Efficient and effective processes for supply chain management across QH Improve info mgt and performance measurement of supply chain processes Reduce the environmental impact of QH purchasing processes /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 8 of 19
  18. 18. Perspective Objectives Strategic Initiatives ReportingPerformance Measurement & Supply Chain Mgt Integration Strategy PALN Communication Strategy NEHTA Reform Process Staff Training & Development Plan Product Standardisation Contract Mgt Improvement Project WoG Standard Offering Policy Reform Data Cleansing Project Supplier Collaboration Strategy Business Process Review Energy Performance Contracting Consumer Supply the right product/service to the client Supply the client’s requirements in a timely manner Supply the client’s requirements at the location of health service delivery Maximise the client’s value for money Supply the products/services that meet the client’s business need Shaping our Develop an appropriately skilled and qualified workforce workforce Provide a supportive work environment that recognises and rewards achievements Implement effective and supportive change management strategies Develop a values-based organisation, focusing on highest service and ethical standards /home/pptfactory/temp/20100524114742/5-year-strategic-plan-for-purchasing1697.doc Page 9 of 19

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