The U.K.'s Committee of Public Accounts recently called on the nation's Department of Health to revisit its agreement with a business partner, as the supply chain utilized to purchase pieces of equipment is full of inefficiency and wasted spending.
As the agreement between the health department and the National Health Service Supply Chain stands, there is no incentive for the latter to present the former with cost saving measures when it purchases large and vital equipment, such as MRI machines. It boils down to widespread waste that is eventually passed to taxpayers, according to the report.
"High value equipment in the NHS, like MRI and CT scanners, is worth around [$1.6 billion], but the way this equipment is bought and used is not providing value for money to the taxpayer," PAC chairwoman Margaret Hodge said.
In many cases, these machines are either purchased when they are not needed or go underused by individual hospitals. For example, NHS trust hospitals have spent an average of $80 million during the past several years on such equipment.
However, the number of uses for individual machines ranged from 7,800 to 22,000 per year, according to the report. Availability of machines ranged from 40 to more than 100 hours per week.
The PAC concluded that the health department and NHS Supply Chain should work out an agreement that will better fill the needs of individual hospitals. That has already happened in some instances, but must become more common, the PAC said.
"Already, the NHS has saved up to 15 percent on scanners by working with NHS Supply Chain to coordinate large orders over time with other trusts," health minister Simon Burns said. "This is the NHS working smarter, but full savings will not be seen until all trusts make use of this system."
Healthcare in the U.K. isn't the only sector that could benefit from better supply chain management practices. Experts encourage all companies to take a close look at their relationships with business partners and their supply chain processes. The chances are that some room for improvement exists.
With a supply chain community management program, companies enhance their communication with partners in order to gather insight on the manufacturing process. Experts say such information can then be used to spot and rectify issues much quicker.