Welsh Health Supplies Incontinence Products eAuction

Posted on Jul 29, 2004

In its second reverse eAuction, Welsh Health Supplies (WHS) has saved 18% on the annual value of incontinence products for Carmarthen NHS Trust and Bro Morgannwg NHS Trust. This builds on the considerable savings made in WHS’s first eAuction for blood collection units and is part of an ongoing programme of eAuction activity now planned by the organisation. After identifying incontinence products as a suitable area for eAuction, WHS harnessed UKprocure Systems reverse auction technology in a collective tender on behalf of the two Trusts. The cost savings made from this auction will be ploughed back into front-line service delivery and will enable the two Trusts to treat more patients within budgets.

The original OJEU notice had indicated that an eAuction would be part of the tender process. Prior to the auction, WHS worked with the two Trusts and UKprocure Systems to select suitable bidders, based on the quality of the product and service. With qualitative issues satisfied at the outset, WHS was then able to make its ultimate decision based on the outcome of the auction. It took UKprocure Systems just two weeks after the planning phase was completed, to set up the eAuction.

In the reverse auction, five suppliers submitted a total of forty bids, outlining their best prices for incontinence products. Existing tendered prices and indicative market costing, were used to set the benchmark starting price for the auction, which was initially scheduled to last for an hour. Because of the high level of bidding activity however, the auction was extended by a further thirty-five minutes. The reverse auction enabled suppliers to transparently view competitor offerings, whilst protecting anonymity, which delivered a highly competitive process and guaranteed the best value for the two Trusts.

Mark Roscrow, Director of WHS said: “With increased patient flows putting a strain on NHS budgets, there is a massive impetus for us to deliver quality products at better prices. E Auctions are a significant weapon in the public sector’s procurement armoury. We are using them strategically in areas where they will deliver most benefit. This method was particularly appropriate for incontinence products because it is a very competitive market, the contracts were up for renewal and there was an easily definable product specification.”

Talking about the benefits of the eAuction, Mark Roscrow added: “In our second eAuction, UKprocure Systems has again helped us meet and exceed our expectations. We expected to generate annual savings of 10%, but we actually achieved savings of 18%. We’ve also managed to rationalise our supplier base, so that the two Trusts have just one supplier. This collaborative approach has enabled us to generate bigger savings and will also deliver management benefits to both Trusts.”

The reverse auction was hosted by UKprocure Systems and ran on UKprocure Systems reverse auction software. Based on the success of its first eAuction, WHS has purchased a perpetual license for UKprocure Systems reverse auction software, which is based on Oracle’s Exchange and Sourcing modules, from the Oracle E-Business Suite. UKprocure Systems is also working with WHS on a skills transfer programme, to enable the organisation to become self-sufficient in the management of its future eAuction programme.

Shish Lal, CEO, UKprocure Systems said: “Reverse eAuctions, managed well, are delivering striking results in the NHS and the broader public sector. They have come of age as an important part of the overall procurement toolkit and the use of eAuctions is now being promoted by a number of central bodies, including the NHS Purchasing and Supply Agency and the Office of Government Commerce. WHS has already delivered significant benefits to the Welsh NHS through the use of eAuctions and is working with UKprocure Systems to identify the most appropriate areas for future eAuctions. UKprocure Systems public sector expertise, combined with our industry-leading technology and in-depth knowledge of the supplier community, is assisting our public sector clients to achieve their procurement objectives.”

WHS is now working with UKprocure Systems to roll-out a programme of reverse auctions. Two reverse auctions, one for medical products and one for pharmaceutical products, are currently being planned.

About Welsh Health Supplies
WHS is part of the National Health Service within Wales and part of the Bro Morgannwg NHS Trust and is a public sector not for profit making procurement organisation. Its basic function is to provide a cost effective contracting service to NHS Wales through the establishment of value for money contracts for a range of commonly used products and services within NHS Wales. WHS are also working in partnership with Welsh Assembly Government on a range of modernisation and procurement initiatives ranging from the Informing Healthcare Strategy to modernisation of audiology services.

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About UK Procure

UKprocure Systems (www.ukprocure.com) is the leading supplier of end-to-end procurement solutions to the UK public sector, with an emphasis on healthcare, local government and education. UKprocure Systems provides managed services and hosted solutions that support the full procurement process, from sourcing and managing to ordering and invoicing. Its industry-leading eSourcing and eMarketplace solutions, which are based on the robust Oracle platform, are reinforced by UKprocure Systems consultancy services and unrivalled knowledge of the public sector supplier base and business processes. UKprocure Systems enables its customers to achieve dramatic cost savings through the transformation of the procurement process, savings that can be re-deployed to improve front line service delivery. At the same time, UKprocure Systems innovative solutions help public sector organisations meet Government targets for Modernisation, Best Value and Collaboration.

For more information please contact:
Tara Williams
UKprocure Systems
T: 020 7936 9489
M: 07976 906673
E: tara.williams@ukprocure.com

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