Efficiency, quality & sustainability through PPI
Gaynor Whyles, JERA Consulting
DIGITAL INNOVATION FOR REGIONAL GROWTH
Thessaloniki
April 2014
gaynor.whyles@jeraconsulting.com
What do we mean by innovation?
 Innovation is often confused with research
 They are in fact very different processes
 Research is a way of turning money
into knowledge
 Innovation turns knowledge into money
 Research is about doing things for the first
time
 Innovation is about using known things for a new
purpose
gaynor.whyles@jeraconsulting.com
What do we mean by innovation?
 You don’t know the results of research in advance
 Innovation is always targeted on known outcomes
 A key success factor for innovation is an accurate
understanding of the unmet need it is targeting
• Innovation is the process of translating technology and
knowledge into new, usable products and services
gaynor.whyles@jeraconsulting.com

Innovation procurement?
– Buying goods and services in a way that stimulates
the supply chain to invest in developing better and
more innovative goods and services to meet the
unmet needs of an organisation
gaynor.whyles@jeraconsulting.com
The procurers view of innovation
 Sensible procurers worry when they hear the word “new”
 New products and services have risks. They might…..
– not work as expected
– not be delivered on time
– cost more ….. and anyway, have no track record
 We try to avoid innovation because it is risky
 But in some cases (more than we admit) we have no choice – the
old solutions don’t fit anymore
 Many existing products and services cannot deliver what we need.
 If we keep buying them we will fail.
 How can we buy new goods and services sensibly?
gaynor.whyles@jeraconsulting.com
The suppliers view of innovation
 Developing new products incurs technical risk
and requires investments of time and money
 Rational suppliers develop new products only
if they have to e.g.
– to protect margins
– to win business
– to retain business
 Technical and resource risks are under
the control of the supplier and can be
managed
 The risk that the supplier can’t control is:
– Having developed the product will
someone buy it?
– Is there a genuine and credible
demand?
gaynor.whyles@jeraconsulting.com
Forward Commitment Procurement (FCP)
A practical innovation procurement (PPI)
methodology
Identification
Market
Engagement
Procurement
“It is the lack of credible articulated demand that is at
the root of the relative failure of innovation in the
environmental goods and services sector”.
Dr Jack Frost, OBE
gaynor.whyles@jeraconsulting.com
Why innovation procurement - the role of demand side
measures - the suppliers perspective



more
It is all about investment risk - not investment costs for a supplier
Many products and companies fail at the demonstration and scale up stage
The gap between development and commercial sales is often referred to as the ‘valley
of death’ - in fact it is more a mountain of risk………….
Risk to company
Government grant support
Decreases as
the product
approaches
market and risks
increase
Risk is at its
highest when a
supplier needs to
commercialise the risk is high
because demand
is not visible
Revenues
Information that a
real market exists
reduces the risk
and enables a
supplier to invest in
anticipation of
future revenues
less
Development
Demonstration
Scale up
Commercial sales
Stages in bringing a product to market
gaynor.whyles@jeraconsulting.com
EIAG 2006, developed by Whyles,
van Meerveld, Nauta 2014
 FCP thinking drawn from innovation
policy, procurement professionals, UK
Office of Government Commerce, and
critically, suppliers
 FCP mirrors the active approach to
supply chain management taken
by the private sector
– Clearly identify and articulate
future needs
– Search out and engage with
potential suppliers
– Provide a credible promise of
future sales
– Provide demand side information
and support delivery
– (while maintaining competition)
– (compliant with the legal
framework)
gaynor.whyles@jeraconsulting.com
The Forward Commitment Procurement
Methodology
1. Identification
Recognise
problems, unmet
needs &
2. Market Engagement
3. Procurement
Market Sounding
Develop a proinnovation
procurement strategy
Consult with
stakeholders and
set up team
Market sounding review
& analysis
Feedback to the
supply chain and
stakeholders
Define an outcome
based requirement
Supply chain feedback
opportunities
Prepare a FCP
project
outline/business
case
Project
approval/sign off
Market consultation
Market consultation
report
gaynor.whyles@jeraconsulting.com
Implement
procurement strategy
Negotiate
Procurement
Contract
• PPI and PCP in action: Peer Learning Workshop
Birmingham, UK, Summer 2013
- Birmingham City Council
- JERA
- Technology Strategy Board
- Contact: gaynor.whyles@jeraconsulting.com
(Free)
gaynor.whyles@jeraconsulting.com
MINISTRY OF JUSTICE
Zero Waste Prison Mattress
The problem?
• 40,000 + mattresses to landfill / year
• High and increasing cost of disposal
• Sustainability targets not met
• Time consuming for staff
Unmet need?
• Zero waste mattresses – no cost increase
Outcome FCP?
• No mattresses to landfill
• Cost saving €5 million
Innovation in fabric, changing recycling process,
‘cradle to grave’ managed gaynor.whyles@jeraconsulting.com
service
ROTHERHAM NHS FOUNDATION TRUST
Future Ward Solution
The opportunity?
• Ward refurbishment over 8 years
• Vision of CEO – hospital of the future
Unmet need?
• A ‘step change in the patient
experience’
• Ultra efficient lighting, future ready,
progressive improvements
• Cost effective based on whole life costs
gaynor.whyles@jeraconsulting.com
IMI - Typical ward versus the IMI ward
gaynor.whyles@jeraconsulting.com
ROTHERHAM NHS FOUNDATION TRUST
Future Ward Solution
Outcome FCP?
• New off-site built solution
• Future ready for LED / OLED
• Same cost as traditional refurbishment
• Lower operational cost
Innovation?
• New product on the market
• Lighting technology: LED, and OLED
Lighting design
• Off-site build
• And……new SME formed
gaynor.whyles@jeraconsulting.com
RAWICZ HOSPITAL
Low Carbon Uniforms
The need and opportunity?
• Budget to replace uniforms
• Uniforms heavy and costly to
launder
• User consultation showed
uncomfortable, poor quality, not fit
for purpose
Unmet need?
• Functional, attractive,and user
friendly, easy to clean, durable,
cost effective and environmentally
sustainable.
gaynor.whyles@jeraconsulting.com
RAWICZ HOSPITAL
Low Carbon Uniforms
Outcome FCP?
• New uniforms with lower whole life
costs (-20%)
• Comfortable nursing staff
• Carbon reduction
• More sustainable
Innovation?
• Eucalyptus fibre
• Biomaterials
• Eco-textile
• and….a local company!
gaynor.whyles@jeraconsulting.com
ERASMUS UNIVERSITY MEDICAL
CENTRE
Sustainable bed washing facility
The need and opportunity?
• New hospital being built
• Old bed washer end of life and
resource intensive
• No longer produced
Unmet need?
• Clean beds – 70,000 / year
• Resource efficiency
• Carbon reduction
• Cost effective
Supplier consultation day at Erasmus MC
gaynor.whyles@jeraconsulting.com
ERASMUS UNIVERSITY MEDICAL CENTRE
Sustainable bed washing facility
Outcome?
• Auditable bed cleaning
• Resource efficiency
• Carbon reduction (- 63%)
• Lower Total Cost of Ownership (35%)
Innovation?
• Robotic bed washing solution
• Steam jets patented
• Cross fertilization across supply
chains
• and….an SME, can be applied to
other cleaning needs gaynor.whyles@jeraconsulting.com
gaynor.whyles@jeraconsulting.com
gaynor.whyles@jeraconsulting.com
gaynor.whyles@jeraconsulting.com
Innovation procurement v green procurement?
 Green/sustainable
procurement
An energy
efficient bed
bed lamp
 Innovation procurement
Efficiency
Quality AND
Sustainability
gaynor.whyles@jeraconsulting.com
(future ready
for Organic
LEDS)
More information……
EcoQUIP Associates
Programme
gaynor.whyles@jeraconsulting.com
Summary
 Innovation is needed to enable society to adapt, overcome societal
challenges and prepare for the future.
– There is a wealth of untapped potential and creativity in the
supply chain
– Many new and better products that deserve a market
 The way we buy things can release or inhibit an innovative
response
 Procurement as usual will not deliver what is needed.
 FCP has proved to be a valuable framework to create new
options and manage the risk of innovation.
 BUT it means thinking differently and changing the way we
approach procurement
gaynor.whyles@jeraconsulting.com
INNOVATION PROCUREMENT
Making the world a better place one procurement at time
gaynor.whyles@jeraconsulting.com