James Burman (JB): How is NHS Supply Chain similar to and different from a traditional logistics business?
Chris Holmes (CH): We are here on behalf of the NHS, we are here to better the NHS. So, what we aim to do is – through an end-to-end supply chain solution – is provide the organisation with the products it requires. By having direct conversations with the NHS, asking them what products are required for effective patient care, we are able to develop the right logistics solutions to deliver those products at the right price, at the point in which they need it.
James Turpin (JT): So, I think to come in on the comparisons with traditional supply chain models, would be to put some context around the product portfolio, our routes to market and the nature of our customer, the NHS, but ultimately the end user – patients. To give you an idea of scale, we currently have somewhere between 400,000 and 500,000 product codes in our catalogue, of which we stock somewhere around 15,000 in our seven distribution centres across the country.
We have a cross docking operation. We procure products from suppliers, they come into our network and we cross dock them, we have consolidated delivery with our stock lines into the NHS. We also have a direct route for the vast majority of the products, especially for those with varying sizes; things like orthopaedics are at the moment going through a direct channel.
What I think is different, is that when you look at the profile of those products, you’ve got everything from food consumables – things like custard powder! – to unique clinical devices, such as sutures and syringes. Imagine what gets consumed in a hospital… we have that in our range.
So, where I think it is different from a traditional supply chain business, whilst people may deal in a similar scale, like in retail, I don’t think they necessarily have the breadth of product and therefore some of the regulatory compliance that we have in place; medical device regulations for example. When you start looking at the product ranges we have, I don’t think there is another supply chain in the UK at the moment that can reflect that. That drives a number of differences in how we operate.
JB: Is there extra pressure because of the sensitivity of the products you’re dealing?
CH: We would say so. I speak to a lot of logistics organisations, and they would class their product ranges as critical. Ours is truly critical. There are products in our range which if not supplied to the hospitals, then a patient can’t be treated. That is often at the forefront of people’s minds, and what I’ve seen over my many years in this organisation is the pride that people in the business take from working in such an environment. So, it is very challenging.
JB: How is technology supporting the transformation?
CH: We have is a technology estate which is built on legacy systems, it’s quite old and quite antiquated, but very, very solid. The point that we are making is that it works. What it doesn’t enable us to do is some of those more forward-thinking things, some of the things that have now become more common practice in other operations.
The year we have ahead is going to be really exciting. We’re implementing a new Oracle cloud-based warehouse management system, as well as new order management technology. This will complement the WMS, which will start to enable us to trade and operate differently with our customers. It addresses some of the ‘pain points’ that our customers talk to us about, such as ease of ordering and engaging with us. These are the new building blocks which are starting to be implemented.
JB: Aside from technology, how have your other projects developed since last year?
JT: I’d say our Bury St. Edmunds site is award winning. We have invested in existing infrastructure, so we will be compliant for the medical device regulations, meaning all of our sites will be temperature managed (active, ambient temperature control on all of our products).
JB: What logistics activities implemented by other companies have impressed you?
JT: Despite challenges around Brexit, the UK logistics industry has been very buoyant. Companies like XPO are opening a number of large sites here in the East Midlands – which look pretty impressive.
I’ve also had the privilege of speaking to colleagues in Ocado about the challenges they face with technology, how their business model operates and how consumers are changing their practice.
One of the things we have tried to do in the last 12 months, and will need to do going forward, is engage with our industry colleagues in order to keep learning. I’ve spent quite a lot of time with British Telecoms in their final mile business, looking at how they are accessing some diverse and possibly remote customer bases. I think there are too many good examples to single out an individual company, which is great for the UK logistics industry.
JB: Are there any issues around the corner for logistics businesses this year?
CH: I think if we take ourselves as an example, our biggest challenge is the scale of our ambition, we make no excuses for that, we’re very proud to be pushing our boundaries forward at pace. I think from a broader logistics perspective, when you look at consumer requirements, whoever the customer is, we always want it quicker. We always want to be able to just get it at the touch of a button.
JT: I think you’re absolutely right, to widen that point out into a more logistics sector view, customers want it faster, cheaper and quicker. But, I think this year is going to see the angle of environmental sustainability impact that desire. Just because I want something quicker, doesn’t mean it’s necessarily going to arrive in the most sustainable or environmentally friendly way.
JB: Are you supporting the wider NHS’s pledge to reduce single-use plastics?
CH: We absolutely are. I would actually say we are at the forefront of the NHS, particularly through our procurement activity, so a specific area that we can talk about is single-use plastic cutlery, which is being removed. There are already timelines in place for removal in 2020, which we are supporting the NHS with, by ensuring they have alternative products from a far more sustainable source that can actually be recycled after use. It’s very important to us.
JB: What advice would you give to potential entrants to this year’s The Logistics Awards?
CH: I’ll start off by saying thank you for the Award. It’s always an honour to receive one, and I must say we were very pleased, and quite surprised, on the night. It was really great to get the recognition for the work we are doing.
The main thing I would say to businesses to give them some advice would be to make sure you actually enter! These awards are so important. The positive impact on the team when we won the Award was huge. It was great to get the recognition for all the hard work that we’ve undertaken, which is often not otherwise seen.
Do you have a project worthy of winning an Award? Entry to the Awards is now open. Visit www.logisticsawards.co.uk to find out more about the event.
For more interviews with last year's winners, listen to The Logistics Podcast.