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“An incredible responsibility”: Procurement and sustainability at Procurex Scotland 2019

One month on from Procurex Scotland 2019 and the 15th Annual Scottish Government National Procurement Conference, held this year on 29 October at the SEC Glasgow, we look back at some of the major themes of the day. The event saw some of the key current and future trends for procurement discussed in depth, and among the most prevalent themes was environmental impact.

Climate change and environmental impact are issues that are increasingly being addressed in many aspects of business as well as people’s everyday lives. Given the increasing focus on social value in procurement, and the awareness that how organisations choose to spend their money can have major impacts, it is perhaps not surprising that the role procurement can play in combating climate change has increasingly come to the fore.

Managing resources

Kate Forbes MSP

Kate Forbes MSP

Kate Forbes MSP, Minister for Public Finance and Digital Economy, began the Scottish Government National Procurement Conference with a keynote address focusing on “the power of procurement.” Introduced by the day’s chair, Scotland Tonight’s Rona Dougall, as “having long been a champion of the environment,” Ms Forbes stressed that “we have a collective responsibility to our social and economic wellbeing.”

Her ministerial address emphasised two key message that were to be repeated throughout the day: that the purchasing decisions procurement leaders make have a real power to influence change; and that contributing to local economies, addressing global issues like climate change and long-term business growth are not contradictory aims. Ms Forbes pointed to ideas such as challenging the “need to buy” – as reduction in resource consumption contributes to both environmental and economic sustainability.

Malcolm Harrison, Chief Executive Officer at the Chartered Institute of Procurement and Supply (CIPS), also discussed sustainability and environmental issues in his speech on some of the most pressing issues for supply chain management. “We as procurement professionals have an incredible responsibility to look at how we use limited resources,” Mr Harrison said, once again emphasising the power that procurement professionals have to influence change. However, Mr Harrison also urged attendees not to “get caught up in the plastics debate.” While not attempting to downplay the environmental impact of plastics, particularly for oceans, Mr Harrison was keen to suggest that there are areas where plastics are in fact essential. He cited transport of time-sensitive medical products as an example of “a good use of plastics,” suggesting that the aim should not be to remove plastics altogether from supply chains, but to be critical and reflective of how they are used – reducing rather than eliminating their use. Mr Harrison concluded that, in light of environmental concerns as well as other ethical issues facing procurement, “this is a challenging environment for the profession – but it’s an exciting time.”

To address sustainability concerns, and understand how scarce or impact-heavy resources are used throughout their supply chains, it is important that public sector buyers have greater visibility of their entire supply chains. Supporting buying organisations to manage every stage of the tendering process and supply chain in a single solution, Delta eSourcing allows for greater end-to-end visibility of supply chains, giving greater transparency. Learn more about Delta here.

Showcasing success

Reiterating Kate Forbes’ earlier address, Caroline Colliston, Chair of the Business Leadership Group of the Scottish Business Pledge, made clear in her talk at the Scottish Government National Procurement Conference that “sustainability and long-term business growth are not competing objectives.” Ms Colliston used the image of a ripple becoming a wave, noting that small changes can add up to wider trends. Her talk pointed out that business decisions with an environmental impact do not only include large purchasing decisions, but also choices such as which hotels are booked for business travel – if travel is necessary.

Kersti Berge

Kersti Berge at the National Procurement Conference

Rounding off the main talks at the Scottish Government National Procurement Conference was a presentation from Kersti Berge, Director of Energy and Climate Change at the Scottish Government. Ms Berge began her talk by “going back to the science,” showing several graphs that illustrated the scale, speed and severity of climate change and “proving conclusively that human activity is a big factor.” Ms Berge also emphasised that climate change is not a remote issue for procurement, with the widespread wildfires in California in 2018, and Australia in 2019, causing billions of dollars’ worth of damage. Ms Berge pointed out that, for example, insurance costs will rise dramatically for businesses with the increasing likelihood of extreme weather events.

Although Scotland is already world-leading in terms of taking steps to tackle climate change, thanks to Scottish Government legislation, Ms Berge said that, for the sake of business as well as the wider world, “we all have a role to play.” She pointed out that annual procurement spend in Scotland adds up to £11bn, and so can have a huge influence on the wider agenda. Inviting organisations to “mainstream” their successes, Ms Berge suggested procurement leaders “start early and think strategically to reach people who can influence,” to help cascade change throughout supply chains. She pointed out that there are many ways that small strategic changes can have a wider influence – for example, reducing the number of deliveries through reduced demand for goods or services means fewer vehicles on the roads and, in turn, reduced emissions. Although Ms Berge ended with a stark warning about the dangers of climate change for potential future generations, she also encouraged organisations to realise the scale of influence they can have – inviting them to “showcase your success.”

Attendees at Procurex Scotland 2019

Procurex Scotland brought together around 1500 buyers and suppliers

Early engagement – beginning conversations ahead of the formal tendering process – can help organisations share their successes and establish a position as a thought leader, even potentially influencing the factors that buyers consider in specifications. These kind of broader discussions than might be possible during the tendering process are made easier through Ingenium, the public sector data community containing every UK public sector leader, organised by job function and sector. Click here to learn more about how you can begin conversations to share your organisation’s values and showcase your success with the public sector.

As the major political parties campaign for the UK General Election on 12 December, climate change, sustainability and energy efficiency are high on the agenda for all parties, with several making commitments as to the year by which the UK should be carbon neutral. To find out more about the parties’ election manifesto pledges, and what they mean for business with the public sector, download the latest edition of our new report, ‘The Public Sector Market in 2020 and Beyond: Opportunities for Smart Suppliers.’

Further reports on other key themes and trends discussed at Procurex Scotland 2019 and the Scottish Government 15th National Procurement Conference will be coming soon on the BiP Solutions site.

UPDATED: New Report: Opportunities for Smart Suppliers in 2020

Please note that BiP Solutions will be posting an update at the start of the week of 16 December in light of the result of the General Election.

Latest updates (28.11.19) include details of manifestos of all major UK parties.

As the situation around Brexit continues to be redefined, and political parties’ campaigns for the UK General Election develop, it may seem that there are many areas of flux to consider for businesses seeking to work with the public sector. As we approach 2020, political, social, economic and technological factors look set to play a major role in defining public sector supply chain opportunities over the coming months and years.

Yet against the backdrop of apparent uncertainty, there are significant opportunities in many areas for suppliers to engage with, with the investment to match. All the major political parties have pledged a renewed focus on public spending in various areas in their election manifestos, meaning new sources of business opportunity for suppliers that seek to work with them.

Drawing on the latest intelligence and our unique insights into the shape of the public procurement market, our latest report, ‘The Public Sector Market in 2020 and Beyond: Opportunities for Smart Suppliers to Get Ahead’, outlines the ways in which suppliers can maximise their opportunities throughout the public sector supply chain, focusing on key areas of opportunity, methods for gaining a competitive edge, and the solutions to enable this. The latest edition of the report has been updated to reflect the latest political developments.

The report includes:

  • Analysis of how the major political parties’ election manifesto pledges, with a focus on public spending, will affect supply chain opportunities
  • Detailed breakdown of how pre- and post-election periods can affect the number of public sector contracts awarded, with comparisons of figures from 2015 to date
  • What suppliers need to know about the major themes driving public procurement, and how they can work best to maximise their opportunities in these areas.

Download your complimentary copy of the updated report here.

As the political situation continues to develop over the coming weeks in the period before and immediately after the General Election, this post and this report will be regularly updated to reflect the latest insight and intelligence.

Scottish Budget 2018

Against the backdrop of uncertainty caused by the UK’s impending exit from the European Union, Finance Secretary Derek Mackay MSP has delivered the 2018 Scottish Budget (December 12th).

Describing it as a “fair and progressive budget” Derek Mackay presented a business-friendly package, while placing the protection of public services at the heart of this Budget Statement.

Below you can find a breakdown of key Scottish Budget 2018 figures in addition to which public sector opportunities await your industry.

SME

A £50 million ‘Town Centre Fund’ will provide much needed support for Scotland’s high streets. There will also be a cap put on business rates below inflation, providing a tax cut for small businesses, which Mackay described as “the most generous system anywhere in the UK”. The partnership between the private sector and the Scottish Government has played an important role in recent years, which was championed by the Cabinet Minister for Business, Fair Work and Skills Jamie Hepburn MSP at Procurex Scotland, in which he encouraged businesses to consider the welfare of local communities and the environment, calling on suppliers to “not be risk averse”.

Housing

An investment of £825 million -as part of an overall fund of £3 billion- will help deliver 50,000 affordable homes over the course of this parliament, which has been the cornerstone of Housing Minister Kevin Stewart’s construction agenda.

Education

Describing education as the Scottish Government’s “defining mission”, the Finance Secretary set out bold new proposals for Scottish schools. £180m will be used to close the attainment gap, including £120m, which will be directed towards headteacher budgets through ‘Pupil Equity Funding’. £600m will also be given to colleges and £1 billion has been secured for Scotland’s world-class universities. £214m has been set aside for apprenticeships and skills; providing a gateway in to employment for many of Scotland’s young people.

Healthcare

An increase of £730m will be provided to NHS Scotland, which is the equivalent to hiring 19,000 nurses, as Derek Mackay confirmed “health is a top priority for the government”, which accounts for almost half of the Scottish Government’s overall spending.

Local Government

The Scottish Government will provide “a real terms increase in the total local government settlement of over £210m” Mackay said, taking the local government budget to £11.1 billion. This will be welcome news for Fife Council executive director Keith Winter, who was a keynote speaker at Procurex Scotland, where he championed “social justice” as he encouraged councillors to adopt a global strategy moving forward.

Collaboration in Healthcare Supply Chains: P4H

Jim Miller NHSNHS National Services Scotland is a national NHS board which provides help and support to NHS Scotland. Jim Miller, NHS National Services Scotland’s Interim Director Procurement, Commissioning and Facilities, will be at the keynote arena at the P4H 2016 conference in Birmingham on 13 July to delivering an unmissable speech. Ahead of the event, BiP Solutions journalist Domhnall Macinnes caught up with Mr Miller to hear about collaborative procurement and the future of UK healthcare procurement.

Background

Jim Miller has a wide variety of procurement experience across both the public and private sectors. He worked in sectors ranging from aviation to construction to public administration prior to joining NHS Scotland in 2006 as Director of Strategic Sourcing. In September 2015 he became Interim Director of Procurement, Commissioning and Facilities at NHS National Services Scotland.

Mr Miller said: “I lead a strategic business unit which encompasses the national collaborative procurement organisation, which provides contract and supply chain solutions across all 22 Scottish health organisations. Additionally, the organisation provides specialist commissioning and population screening services, and is the centre of expertise for facilities, engineering and environmental management.”

A piece of collaborative advice

Mr Miller discussed collaborative procurement and its importance, and had some advice for buyers considering it. Collaborative procurement is aimed at aiding the Scottish public sector to form partnerships between buying organisations, the Centres of Expertise (CoE) and suppliers, creating real value for money.

He counselled: “Don’t be afraid! There are lots of examples where this has worked really well. Equally, the venture is only as good as the weakest link.

“We have recently developed a new type of collaborative arrangement in Scotland where the strength lies with the members, who effectively self-regulate the system. We will not achieve further productivity gains, embrace innovation or truly support the health service if we work in isolation.”

Work together

Mr Miller also had advice for suppliers thinking of selling to collaborative procurement ventures. It is his firm view that buyers and suppliers must work together.

He commented: “Work with them. Understand that they (the buyers) may be trying to gauge the benefit of collaboration as well. Identify how the collaboration can be of mutual benefit by, for example, reducing the ‘cost to serve’ and identify how this can translate to commercial advantage.

“Also be aware of the cost of change; it will be more complex to implement across multiple sites than a single site, for example, but it also provides opportunities to standardise and support single systems of care.”

A problem and a solution

Mr Miller says that increasing demand and decreasing budgets is the primary challenge facing UK healthcare today. He argues that a move to a preventative healthcare system is vital, and procurement needs to be taking this on board in order to be prepared.

Thankfully, however, as he notes, NHS National Services Scotland is already taking steps to prepare for these challenges.

He explained: “We are the largest shared service organisation in Scotland. We currently provide a range of services including procurement and supply chain but also, for example, central legal services, payment services to primary care, counter-fraud services and health information services, amongst others. The ability to provide a complete range of services allows Health Boards to concentrate on the delivery of patient care and preventative healthcare.”

The future

Concluding, Mr Miller looked to the near future of UK healthcare procurement and the changes that he foresees occurring. He discussed three primary areas he feels should most be focused on. He touched again on collaboration and preventative healthcare, but said he hopes to see collaborative relationships evolving into something more.

Mr Miller said: “I would concentrate on three areas. Firstly, collaboration maturing into true partnering, which includes the market and providers as well as the health service. The phrase is used a lot but there is a long way to go.

“Secondly, the move towards a preventative healthcare culture and increased patient decision-making will require very different commercial and delivery models.

“Thirdly, to reference Simon Syneck, start with the why. In other words, it’s very easy to concentrate on savings, delivery performance, product and service availability and so on. We are all here to serve the patient and improve the health of the population. Plugging this into the procurement DNA will, I believe, continue to motivate the healthcare procurement community.”

On P4H

The good news for delegates attending this year’s P4H conference at the NEC, Birmingham is that Mr Miller will be in attendance for the entire event and is offering one-on-one sessions on the day or with prior notice.

With regard to the event itself, Mr Miller touched on P4H’s value in promoting best procurement practice.

He said: “The health landscape is changing dramatically and procurement has a significant part to play in making the changes successful and sustainable. Sharing and learning from colleagues within health and, just as importantly, the market is key. P4H provides this opportunity in one place.

“The whole event looks very interesting. For me one of the primary benefits is to interact with colleagues working in other parts of the health system across the UK.”

How P4H can help you

This year’s P4H event is set to offer a prime occasion for collaboration, with the PH4 Collaboration Zones providing delegates the chance to learn about both buyer and supplier opportunities.

Delegates will be offered the chance to network with buyers in the Buyer Engagement Village, boosting your peer contact list.

Delegates will also have the unique opportunity to meet with representatives of the NHS and furthermore hear advice from industry experts in the same prime location.

Don’t miss your chance to attend.

Register for P4H today

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