Summary Guide to Identifying Raw Materials Risks

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1 Summary Guide to Identifying Raw Materials Risks In partnership with Plymouth University, Department of Health and: Cornwall Partnership NHS Foundation Trust Royal Cornwall Hospitals NHS Trust Cornwall and Isles of Scilly Primary Care NHS Trust Peninsula Community Health Project Ref: LIFE08 ENV/UK/ MPP Task number: 3.2 With the contribution of the LIFE financial instrument of the European Community

2 In November 2008, the Environment Agency (EA) in partnership with South East England Development Agency (SEEDA) submitted an application for funding under the European Commission s LIFE+ programme for the EPOW project. In April 2011 WRAP took over SEEDA s areas of responsibility. The full title of the project is European Pathway to Zero Waste: demonstrating the route to zero waste to landfill via end of waste protocols and building a recycling society. This European demonstration project will run for three years from 1 Jan 2010 to 31 March The project will develop and build on the achievements of the Southeast of England s Pathway to Zero Waste (PTZW) programme, which is a partnership of the EA, SEEDA, and WRAP. EPOW will also work with other Member State (MS) regions to demonstrate the application in other EU regions of the lessons learnt in the project. Research date: May to December 2012 Date: March 2013 Published by: European Pathway to Zero Waste Waste & Resources Action Programme 21 Horse Fair Banbury Oxfordshire OX16 0AH Written by: Dr Jane Grose, Professor Janet Richardson, Plymouth University

3 Executive summary An uninterrupted supply of essential items for patient care is crucial for organisations that deliver health and social care in the UK. Many products critical to healthcare are derived from natural resources such as oil and cotton, supplies of which are vulnerable to climate change and increasing global demand. Initially this will impact on costs, adding a further burden to National Health Service (NHS) expenditure. Furthermore, some key resources may no longer be available, or the costs of acquiring them may become prohibitive. The aim of this exploratory pilot study was to develop and test a method to identify items of frequent use in the NHS that pose high risk in terms of future availability, and to support decision making for future planning for securing at risk items. In addition the project sought to identify products that might present immediate opportunities to change supply and end of life disposal models to act as a demonstrator for future initiatives. The objectives of the study were to: develop and test criteria to enable users to identify at risk products in their organisation; assess a number of high use healthcare items against specific risk and opportunity criteria; develop and test a method that engages healthcare managers and other private sector supply chain organisations in scenario based planning to ensure continued product availability; assess the opportunities for improving product supply and end of life management through the procurement function; and develop a methodology that has the potential to be replicated across a range of private and public sector organisations, particularly public healthcare settings. The purpose of this study was to design and test a new methodology that has the potential to be replicated across a range of private and public sector organisations as well as public healthcare trusts is to: aid decision making to inform procurement priorities specific to an organisation s unique requirements; ensure the uninterrupted supply of essential items; achieve continued product availability; and specific to the NHS, be utilised for training employees. The method developed by the project team comprising Department of Health, NHS, other health organisations in Cornwall and WRAP included all items purchased by one acute trust during the 2011 / 12 financial year (some 280,000 procurement lines) and followed specific steps that are summarised in the flow chart over the page:

4 The full description of how the method was developed and guidance for replicating within other public and private sector organisations is provided within a more detailed report 1 where alternative methods that were considered as part of the development can be found in the appendices. Benefits Replicating the methodology will provide an organisation with a clear set of priorities specific to their individual requirements. It will enable them to consider where best to deploy resources to ensure continued product availability of business critical items. Whilst the methodology was developed in a healthcare setting, it s applicability to both public and private sector organisations is evident to guarantee business continuity. The methodology can be used for informing (or updating) an organisation s procurement policy at a strategic level and importantly, provides a practical approach to delivering against a policy commitment. Applicable throughout the whole procurement cycle, the methodology brings together key stakeholders to address the procurement priorities and to identify and address critical items that pose high risk in terms of future availability, and to support decision making for future planning for securing at risk items. 1

5 Findings The method used was successful in identifying items for the pilot trust that were critical to healthcare and were potentially vulnerable to supply chain interruption. It also highlighted: the significant value of involving multidisciplinary teams throughout the whole process; key items that were deemed crucial to high quality service delivery and positive patient outcomes; that there were differences in opinions between clinical and non-clinical staff; of the 280,000 (approximate) procurement lines, by applying the methodology developed, 38 products were identified as the top items for scenario development and assessment at a scenario workshop. The two items selected for workshops were: o Scenario 1: a threat to lithium iodine batteries used in cardiac pacemakers; and o Scenario 2: a longer term threat based on potential risks to oil based products (plastics for example); and the two scenario workshops were deemed a successful method for highlighting awareness with potential for developing contingency planning in order to mitigate against service delivery interruptions. Recommendations Areas for improvement were identified, along with possible next steps. Other organisations repeating the method will have their own local priorities to address. The effects of global economics, political upheaval and climate change all have the potential to impact on the supply of goods and services: Method o the method could be refined and repeated in other areas of the UK to test its ability to adapt to local priorities, and differing sectors; or o a once only approach in the first instance could identify at risk products and develop national, regional and local responses. Scenarios o a full range of scenarios should be developed which reflect current global realities and future potential issues, these should be used to focus thinking at senior management level; and o the scenarios can be used to embed sustainability in the healthcare curriculum and used as training for procurement teams in other public and private settings. Identification of items o in addition to items selected for the workshops, some of the items identified as being important to services delivery should be investigated further; and o analysing the component parts will further enable identification of materials which could be vulnerable to supply chain interruption.

6 Membership o manufacturers research and development teams should be involved in developing possible alternatives to some of the items; and o procurement teams need to expand their membership to include for example, clinicians and finance officers, to identify areas where there can be a reduction in demand for items using scarce raw materials and to make contingency plans for future limited availability of vulnerable items. For more information The method developed was successful in identifying items that were critical to healthcare and potentially vulnerable to supply chain interruption in the NHS trust involved in the study. The method will need further development but has the potential to be replicated across a range of other public and private sector organisations to identify raw materials risks, and to support decision making for future planning for securing at risk items. The full report which describes the method and provides a guide for replicating within your organisation is available to download at Published by: European Pathway to Zero Waste Waste & Resources Action Programme 21 Horse Fair Banbury Oxfordshire OX16 0AH While we have tried to make sure this document is accurate, we cannot accept responsibility or be held legally responsible for any loss or damage arising out of or in connection with this information being inaccurate, incomplete or misleading. This material is copyrighted. You can copy it free of charge as long as the material is accurate and not used in a misleading context. You must identify the source of the material and acknowledge our copyright. You must not use material to endorse or suggest we have endorsed a commercial product or service. For more details please see our terms and conditions on our website at