Ethical Procurement at
NHS Supply Chain
ETI Conference
8/12/2010
Delivering value to the NHS
AGENDA
NHS Supply Chain Company overview
NHS Supply Chain Ethical Agenda
Questions
Delivering value to the NHS
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Team structure
Martin Lee
MD Supply Chain & Transformation
Alfreton
Chester
Runcorn
Clare Macintosh
Sustainability Manager
Colin Stuart
Sustainability Analyst
Sophie Cros
Sustainable Procurement Manager
Jane Bingham
Senior HRBP & CSR Lead
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NHS Supply Chain..
Our strength is in our scale
 A 10 year contract operating as an agent for
the NHS Business Services Authority (NHSBSA),
providing long term security of supply to the NHS
 NHS Supply Chain’s commercial return is capped
ensuring 80% of savings flow back to trusts
 all NHS Supply Chain’s financial transactions are
transparent to the NHSBSA
 powered by DHL – the global leader in logistics, bringing
supply chain excellence to the NHS and reduced supply
chain costs
 targeted to deliver £1 billion savings to NHS by 2016
 providing contract coverage compliant to EU regulation
for £5 billion NHS non-pay spend, reducing legal risks to
trusts
 significant investments in infrastructure since 2006,
saving NHS from investing in non core areas.
“We are your national service”
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The NHS Supply Chain Sustainability Agenda
•
What is Sustainable Development within NHS Supply Chain?
– ‘development which meets the needs of the present without compromising the
ability of future generations to meet their own needs’
– we recognise the need to join up economic, social and environmental goals
– Aim to be a leading organisation striving for excellence in our environmental
performance
•
We have 3 key areas of activity
– Sustainable Operations
– Community and Social
– Sustainable Procurement
•
We are governed by the Sustainability Memorandum of Understanding with the
NHS BSA and also by DHL targets e.g. Go Green
•
One of NHS SC 4 Pillars (Customer proposition)
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Our Aim
NHS Supply Chain aims to reduce as far as possible,
adverse environmental and social and economic impacts
occurred during the life cycle of products procured and
ensure sustainable value for the NHS.
• Security of Supply – organisations operating outside legal limits run
the risk of closure.
• Quality of Product – Sweat shops / child labour / poor working
conditions / long working hours do not support the production of
quality products.
• Brand reputation - Part of our customer value proposition
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What is Sustainable Procurement?
Definition
A process where an organisation meets it
procurement needs whilst considering
external social, environmental and
economic factors.
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What is a social factor?
Health & Safety
Child Labour
Working Hours
Forced & Bonded Labour
Discrimination
Living Wage
Harsh Treatment
Casual Labour
Freedom of Association
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Stakeholders
Policy
Alignment
Sustainable
Procurement
Forum
Ethical
Trade
Working
Group
Code of
Conduct
Policy
MoU
DHL
Targets
DH
BSA
Monitoring
Base Code
ETi
NHSSC
BMA
Advice,
training and
resources
Public
Patients
Social
interest
Trusts
Policy
Alignment
Value Proposition
Social
interest
Portfolio
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Sustainable Procurement Policy
Flexible Framework
People
Policy,
Strategy &
Communications
Procurement Process
Engaging Suppliers
Measurements &
Results
Foundation
Embed
Practice
Enhance
Lead
Level 1
Level 2
Level 3
Level 4
Level 5
Sustainable procurement champion
identified. Key procurement staff have
All procurement staff have received basic
training in sustainable procurement
Targeted refresher training on latest
sustainable procurement principles.
Sustainable procurement included in
competencies and selection criteria.
Achievements are publicised and used to
attract procurement professionals. Internal
received basic training in sustainable
procurement principles. Sustainable
procurement is included as part of a key
employee induction programme.
principles. Key staff have received advanced
training on sustainable procurement
principles.
Performance objectives and appraisal include
sustainable procurement factors. Simple
incentive programme in place.
Sustainable procurement is included as part
of employee induction programme.
and external awards are received for
achievements. Focus is on benefits achieved.
Good practice shared with other
organisations.
Agree overarching sustainability objectives.
Simple sustainable procurement policy in
place endorsed by CEO. Communicate to
staff and key suppliers.
Review and enhance sustainable
procurement policy, in particular consider
supplier engagement. Ensure it is part of a
wider Sustainable Development strategy.
Communicate to staff, suppliers and key
stakeholders.
Augment the sustainable procurement policy
into a strategy covering risk, process
integration, marketing, supplier engagement,
measurement and a review process. Strategy
endorsed by CEO.
Review and enhance the sustainable
procurement strategy, in particular
recognising the potential of new technologies.
Try to link strategy to EMS and include in
overall corporate strategy.
Strategy is: reviewed regularly, externally
scrutinised and directly linked to
organisations’ EMS. The Sustainable
Procurement strategy recognised by political
leaders, is communicated widely. A detailed
review is undertaken to determine future
priorities and a new strategy is produced
beyond this framework.
Expenditure analysis undertaken and key
sustainability impacts identified. Key
contracts start to include general
Detailed expenditure analysis undertaken,
key sustainability risks assessed and used for
prioritisation. Sustainability is considered at
All contracts are assessed for general
sustainability risks and management actions
identified. Risks managed throughout all
Detailed sustainability risks assessed for high
impact contracts. Project/contract
sustainability governance is in place. A life-
Life-cycle analysis has been undertaken for
key commodity areas. Sustainability Key
Performance Indicators agreed with key
sustainability criteria. Contracts awarded on
the basis of value-for-money, not lowest
price. Procurers adopt Quick Wins.
an early stage in the procurement process of
most contracts. Whole-life-cost analysis
adopted.
stages of the procurement process. Targets
to improve sustainability are agreed with key
suppliers
cycle approach to cost/impact assessment is
applied.
suppliers. Progress is rewarded or penalised
based on performance. Barriers to
sustainable procurement have been removed.
Best practice shared with other organisations.
Key supplier spend analysis undertaken
and high sustainability impact suppliers
identified. Key suppliers targeted for
engagement and views on procurement
policy sought.
Detailed supplier spend analysis undertaken.
General programme of supplier engagement
initiated, with senior manager involvement.
Targeted supplier engagement programme in
place, promoting continual sustainability
improvement. Two way communication
between procurer and supplier exists with
incentives. Supply chains for key spend areas
have been mapped.
Key suppliers targeted for intensive
development. Sustainability audits and supply
chain improvement programmes in place.
Achievements are formally recorded. CEO
involved in the supplier engagement
programme.
Suppliers recognised as essential to delivery
of organisations’ sustainable procurement
strategy. CEO engages with suppliers. Best
practice shared with other/peer organisations.
Suppliers recognise they must continually
improve their sustainability profile to keep the
clients business.
Key sustainability impacts of procurement
activity have been identified.
Detailed appraisal of the sustainability
impacts of the procurement activity has been
undertaken. Measures implemented to
manage the identified high risk impact areas
Sustainability measures refined from general
departmental measures to include individual
procurers and are linked to development
objectives.
Measures are integrated into a balanced
score card approach reflecting both input and
output. Comparison is made with peer
organisations. Benefit statements have been
Measures used to drive organisational
sustainable development strategy direction.
Progress formally benchmarked with peer
organisations. Benefits from sustainable
produced.
procurement are clearly evidenced.
Independent audit reports available in the
public domain.
NHS Supply Chain
Sustainable Procurement Policy
September 2007
1. Introduction
The adoption of a Sustainable Procurement policy can assist to reduce costs,
manage risk, sustain resource and secure supply, and ensure compliance with
relevant legislation. NHS Supply Chain is committed to reducing, as far as possible,
any adverse environmental and social impacts occurring during the life-cycle of
products and services procured, and ensuring sustainable value for the NHS.
2. Aim
Flexible Framework
NHS Supply Chain recognises the importance of good corporate citizenship and of
promoting and maintaining high standards of social, ethical and environmental
conduct. We are also committed to ensuring that our suppliers and contractors
adopt a similar responsible approach. NHS Supply Chain, through its parent
company, Deutsche Post World Net (DPWN), is a signatory to the Global Compact, a
widely adopted United Nations standard for responsible business, covering human
rights, labour rights, the environment and anti-corruption. As a globally recognised
and universally applicable set of standards, the Ten Principles of the Global
Compact form the basis of our Supplier Code of Conduct. The 10 principles are
detailed in Appendix 1.
Supplier Code of
Conduct
Business Case
DPWN have also produced its own ‘Code of conduct main principles for suppliers’
which it expects all companies who do business with any company within DPWN,
including NHS Supply Chain to adhere to. This document is detailed in appendix 2.
The flow chart below il ustrates the source documents and outputs of the
Sustainable Procurement Policy.
NHS Supply Chain
Sustainable Procurement Policy
September 2007
1.
Introduction
The adoption of a Sustainable Procurement policy can assist to reduce costs,
manage risk, sustain resource and secure supply, and ensure compliance with
relevant legislation. NHS Supply Chain is committed to reducing, as far as possible,
any adverse environmental and social impacts occurring during the life-cycle of
products and services procured, and ensuring sustainable value for the NHS.
NHS Supply Chain
Sustainable Procurement Policy
September 2007
1.
2.
2.
1.
Introduction
The adoption of a Sustainable Procurement policy can assist to reduce costs,
manage risk, sustain resource and secure supply, and ensure compliance with
relevant legislation. NHS Supply Chain is committed to reducing, as far as possible,
any adverse environmental and social impacts occurring during the life-cycle of
products and services procured, and ensuring sustainable value for the NHS.
Aim
Aim
NHS Supply Chain recognises the importance of good corporate citizenship and of
promoting and maintaining high standards of social, ethical and environmental
conduct. We are also committed to ensuring that our suppliers and contractors
adopt a similar responsible approach. NHS Supply Chain, through its parent
company, Deutsche Post World Net (DPWN), is a signatory to the Global Compact, a
widely adopted United Nations standard for responsible business, covering human
rights, labour rights, the environment and anti-corruption. As a globally recognised
and universally applicable set of standards, the Ten Principles of the Global
Compact form the basis of our Supplier Code of Conduct. The 10 principles are
detailed in Appendix 1.
DPWN have also produced its own ‘Code of conduct main principles for suppliers’
which it expects all companies who do business with any company within DPWN,
including NHS Supply Chain to adhere to. This document is detailed in appendix 2.
The flow chart below illustrates the source documents and outputs of the
Sustainable Procurement Policy.
Memorandum of
Understanding
NHS Supply Chain
Sustainable Procurement Policy
September 2007
Introduction
The adoption of a Sustainable Procurement policy can assist to reduce costs,
manage risk, sustain resource and secure supply, and ensure compliance with
relevant legislation. NHS Supply Chain is committed to reducing, as far as possible,
any adverse environmental and social impacts occurring during the life-cycle of
products and services procured, and ensuring sustainable value for the NHS.
Sustainable
Development
Strategy
2.
NHS Supply Chain recognises the importance of good corporate citizenship and of
promoting and maintaining high standards of social, ethical and environmental
conduct. We are also committed to ensuring that our suppliers and contractors
adopt a similar responsible approach. NHS Supply Chain, through its parent
company, Deutsche Post World Net (DPWN), is a signatory to the Global Compact, a
widely adopted United Nations standard for responsible business, covering human
rights, labour rights, the environment and anti-corruption. As a globally recognised
and universally applicable set of standards, the Ten Principles of the Global
Compact form the basis of our Supplier Code of Conduct. The 10 principles are
detailed in Appendix 1.
Aim
NHS Supply Chain recognises the importance of good corporate citizenship and of
promoting and maintaining high standards of social, ethical and environmental
conduct. We are also committed to ensuring that our suppliers and contractors
adopt a similar responsible approach. NHS Supply Chain, through its parent
company, Deutsche Post World Net (DPWN), is a signatory to the Global Compact, a
widely adopted United Nations standard for responsible business, covering human
rights, labour rights, the environment and anti-corruption. As a globally recognised
and universally applicable set of standards, the Ten Principles of the Global
Compact form the basis of our Supplier Code of Conduct. The 10 principles are
detailed in Appendix 1.
DPWN have also produced its own ‘Code of conduct main principles for suppliers’
which it expects all companies who do business with any company within DPWN,
including NHS Supply Chain to adhere to. This document is detailed in appendix 2.
The flow chart below illustrates the source documents and outputs of the
Sustainable Procurement Policy.
DPWN have also produced its own ‘Code of conduct main principles for suppliers’
which it expects all companies who do business with any company within DPWN,
including NHS Supply Chain to adhere to. This document is detailed in appendix 2.
The flow chart below illustrates the source documents and outputs of the
Sustainable Procurement Policy.
Sustainable
Procurement
Policy
Baseline
Assessment
SPROUT
NHSSC SD
Annual Report
NHS Supply Chain
Sustainable Procurement Policy
September 2007
1.
Introduction
The adoption of a Sustainable Procurement policy can assist to reduce costs,
manage risk, sustain resource and secure supply, and ensure compliance with
relevant legislation. NHS Supply Chain is committed to reducing, as far as possible,
any adverse environmental and social impacts occurring during the life-cycle of
products and services procured, and ensuring sustainable value for the NHS.
2.
Aim
NHS Supply Chain recognises the importance of good corporate citizenship and of
promoting and maintaining high standards of social, ethical and environmental
conduct. We are also committed to ensuring that our suppliers and contractors
adopt a similar responsible approach. NHS Supply Chain, through its parent
company, Deutsche Post World Net (DPWN), is a signatory to the Global Compact, a
widely adopted United Nations standard for responsible business, covering human
rights, labour rights, the environment and anti-corruption. As a globally recognised
and universally applicable set of standards, the Ten Principles of the Global
Compact form the basis of our Supplier Code of Conduct. The 10 principles are
detailed in Appendix 1.
DPWN have also produced its own ‘Code of conduct main principles for suppliers’
which it expects all companies who do business with any company within DPWN,
including NHS Supply Chain to adhere to. This document is detailed in appendix 2.
The flow chart below illustrates the source documents and outputs of the
Sustainable Procurement Policy.
T&C’s
Govt Minimum
Standards
Contract Award
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SPROUT
Questions included:
- Are there concerns over labour standards
within the supply chain
- Are there concerns over broader ethical
issues (e.g. bribary, human right, etc)
within the supply chain
Risk scoring per contract
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Supplier Code of Conduct
 Laws and Ethical Standards

Health & Safety
 Child Labour
 Forced Labour
 Compensation and Working Hours
 Discrimination

Business Continuity Planning

Improper Payments/Bribery

Environment

Business Partner Dialogue
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Baseline Questionnaire
 Confirmation of receipt of Supplier
Code of Conduct
 Confirmation of compliance
 Ethical Policy Questions
 Environmental Policy Questions
 Manufacturing Locations
 Assessment of Supply Base
 Supplier Action Plan
– Improvement Action Plan
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Fairly traded product ranges
• 1st Fairtrade garment to the NHS
introduced in May 2010 & coming soon:
doctor coats, nurse tunic, nurse dress…
• Faitrade coffees
• FSC paper
•
Importance of making it visible to our customer with
our flag for “ethically sourced product”
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Thank You for your attention
Keep in touch
Sophie Cros
Sustainable Procurement Manager
Sophie.cros@supplychain.nhs.uk
Tel: 01244 582839
General
Sustainability@Supplychain.nhs.uk
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