Award-Winning Procurement Transformation Programme
Background & Challenge
After a challenging year where the Covid-19 pandemic impacted activities and financials, our client launched an ambitious strategic initiative focused on becoming more efficient, concentrating on growth and delivering sustainable value for consumers and doctors.
The pandemic exposed an over-reliance on a ‘single’ income source. All elective activity (e.g. joint replacements, cataracts), the primary income source, was halted overnight, but a high fixed cost base remained. As a response, Curzon Consulting was engaged to design and deliver a Procurement Transformation Programme.
Overall Approach
Over nine months, we took a pragmatic, agile and “together” approach to accelerate benefit delivery, particularly in high spend / high complex clinical spend categories
- Conducted a full review and defined a new procurement organisation aimed at maximising value to the business
- Conducted a review of the external spending and identified cost savings opportunities within complex medical categories
- Implemented a full strategic programme that delivered multi-million £ cost savings to the business
Our Solution
1 FULL PROCUREMENT ORGANISATION REVIEW
We assessed the existing procurement organisation against eight dimensions and highlighted several data-driven insights
- Quantitatively and qualitatively assessed the procurement team, conducted time analysis, salary benchmark & reviewed performance
- Business partnering and perceived value: Interviewed key business stakeholders across all divisions
- Assessed procurement influence across all spending areas
- Defined and costed new (to-be) procurement organisation
Our Results
- A complete procurement maturity assessment highlighting strengths and weaknesses of the current procurement organisation
- A new procurement organisation was designed, profiled and costed.
- A procurement organisation designed to maximise value to the business and stakeholders
2 FULL EXTERNAL EXPENDITURE OPPORTUNITY ASSESSMENT
We conducted a full opportunity assessment on Ramsay’s external expenditure to define adequate sourcing strategies and identify cost savings opportunities
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- Cleansed, categorised and analysed spend data; Providing full spend transparency.
- Conducted category deep dive for each key medical category, assessed current category management and supplier management
- Defined adequate sourcing strategy, identified opportunities and sourcing levers
- Identified and quantified savings potential via internal and external benchmarking
Our Results
- Category strategy for all key medical categories
- Multi-million cost saving opportunities identified
- Prioritised sourcing plan with saving targets by spend categories
- High level 3-year business plan
3 THE IMPLEMENTATION
We implemented procurement transformation and a cost reduction program
- Our methodology was specifically adapted to address demand-side cost optimisation levers. Whilst we addressed a range of spend categories and redesigned the PO, we delivered sizeable benefits in difficult clinical areas such as Orthopaedics.
- A key benefit in orthopaedics came from ensuring the surgeon selected the appropriate implant system (metal or ceramic) to match the patient’s profile (e.g. age, gender).
- Our analysis showed surgeons implanted costly ceramic hip systems in a high percentage of older NHS patients. With fixed NHS reimbursement every incremental switch impacted the bottom line.
- Our insights directly influenced the Orthopaedic Steering Group’s new policy which required surgeons to utilise lower-cost metal hip systems in older NHS patients.
- Fundamentally, a key part of the relationship was to ensure recommendations on cost improvements would not compromise clinical outcomes and patient satisfaction.
Our Results
- Delivered £multi-millions in incremental savings and a new procurement organisation
- Engaged with all key medical stakeholders and instilled a cost-consciousness culture
- Ramsay Health Care UK will benefit from the savings over multiple years
“Curzon helped us obtain the confidence and operational ‘can-do’ to drive incremental savings sooner than we could have expected, and then to push on to best practice performance.
Their skill was in balancing pace of change and the results imperative with the need to take the organisation with them on the journey.
A key achievement was building the necessary collaboration between the many functions that needed to act together to drive benefits in complex clinical spend categories.
Curzon’s strong analytical expertise, and ability help us to take a critical view on the “art of the possible” and bring the team along on the journey to demonstrate benefits delivery was a critical success factor.
The result was a tangible and ongoing commercial win, and a new Procurement Organisation to drive cost leadership, profitability and sustainability going forward”
Peter Allen
Chief Financial Officer
Ramsay Health Care UK
Contact our Procurement service line lead,Stephane Boroncelli, to find out more
Environmental impact reduction in Construction project delivery
Challenge
The building and construction sectors are responsible for c.40% of carbon emissions. Typically, carbon reduction efforts in construction have been focused on the materials or at component-part level.
Curzon supported the client in developing an understanding that all future innovation and digital enablement designed to lower carbon construction processes and ways of working, such as connected autonomous plant (CAP), must address all construction activity and the full project site.
Curzon's approach
Curzon defined ‘The Digital Site’, to provide the enabling infrastructure with an ecosystem of software and hardware technology solutions to function. This will facilitate the most accurate GPS-based automated gearboxes, connected and autonomous plant and more.
Digital site standards are being deliberately designed to enable CAP. The most demanding use-case (electric and autonomous vehicles), can be applied to ensure that any new definition and standard(s) for digital site infrastructure meets the requirements of both the near and potential future for carbon Net-Zero ways of working.
Impact
The Digital Site will be a game-changer:
- All CAP is powered by hybrid or electric technology
- Hydrogen fuel-cell powered vehicles have been trialled, with plans for hydrogen fuel-cell powered excavators by 2023
- Reduced emissions – CO2 (98%) CO, NOx
- Reduced noise emissions
- Many networking solutions offer long-term benefits to local residents
- Lower risk of fuel spills
Contact our Sustainability service line lead,Andrew Wilson, to find out more
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Digital acceleration of CN0 planning in Transport Infrastructure
Challenge
The Infrastructure and Transport sectors play a critical role in the UK’s overall Net-Zero ambitions. The infrastructure industry controls 13% of the UK’s total carbon emissions and influences a further 37%.
55% of the UK’s carbon emissions comes from the usage of transport infrastructure. Transport is the UK’s worst-performing sector for carbon reduction, and the only sector where greenhouse gas emissions are increasing.
Our client intends to reduce its carbon emissions and support the government’s ambition to achieve Net Zero carbon emissions by 2050. However, it’s investment strategy for the coming years is currently incompatible with its legal obligation to reduce its carbon. With the siloed nature of current Initiatives on capturing, measuring & reporting not being effectively geared towards carbon reduction, the introduction of some accelerators was necessary.
Curzon's approach
Curzon understands that Innovation, Digital capability and Data will play a critical role in carbon reduction. Our focus was on accelerating to Net Zero through Digital.
As part of this approach, we sought to ground future Net-Zero plans in reality. One of the most prominent challenges faced by our client’s business (and the wider industry) is efficiency across the asset management lifecycle. We took a deeper look into the digital enablement of productivity.
There is an entire spectrum of on-site productivity management capability areas that can be enhanced through the new or improved application of digital tools. Prioritisation and deployment decisions are driven by functional capability assessments and a multi-dimensional review of each tool’s benefits, use in increasing on-site productivity, deliverability and scalability. Moving forwards, tools can be identified/developed/assessed and their prioritisation should be influenced by what they offer from a carbon reduction perspective.
Impact
We identified a select number of productivity enabling digital tools that can be scaled to offer substantial heavy-duty vehicle performance, load management and fuel efficiency benefits that will have a significant carbon reduction impact.
Contact our Sustainability service line lead,Andrew Wilson, to find out more
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Cost-carbon reduction in Utilities and Property Development
Challenge
Successfully delivering infrastructure associated with water supply and property development growth are two of the most critical features of the UK’s socio-economic landscape. Our client serves the fastest growing area of the country in terms of home building; one in five new homes built in the UK are connected to its network and over 200,000 new homes will be connected in the next 5 years. This will require water infrastructure costing c.£350m.
The business identified recurring sub optimal performance in service delivery to developers and capital expenditure efficiency. Against a backdrop of historic performance failures the ambition was set for the business to be recognised as a true enabler of environmentally sustainable property development growth.
Curzon's approach
Through helping to build a digital business case, sharpen the project strategy and support the organisation in effecting new ways of working, Curzon guided the business in creating a bespoke system.
The system fully digitises the planning and asset delivery processes whilst providing advanced geospatial capabilities. This enables the identification of site cluster for the most efficient, collaborative approach to infrastructure delivery as well as optimum timing on the phasing of infrastructure build activity to align with developer phasing plans.
Curzon identified a number of No Build Solutions (avoiding need to build with early developer engagement) and Low Build Solutions (influencing developer design with early engagement).
In addition, we evaluated commercially and technically innovative alternative water partnership opportunities.
Impact
The client now has the capability to take a strategic approach to asset planning across the entirety of a water resource zone and recycling catchment area, reducing emissions from construction and reducing design costs by identifying site clusters and efficient solution. Better site visibility provides greater insight on the needs of property developers, enabling sustainability initiatives such as water reuse to be encouraged and cutting the cost of late changes.
This transformation has placed the business on track to deliver c£32m or 9.2% in capital delivery savings over the next five years and 15% in operational efficiency.