This case was prepared by Robin Lane, Mike Sweeney and Brad Lincoln at the Cranfield School of Management, Cranfield University, Cranfield, Bedford, MK43 0AL, England, as a basis for class discussion rather than to demonstrate either effective or ineffective business administration. © Cranfield School of Management
Supply Chain Management in the NHS du
Jim frowned deeply as he strode down the corridor. He had just left a meeting with the Chief Executive of Morecambe Bay Hospitals NHS Trust about the latest Cost Improvement Programme. As manager of the Supplies Department, Jim’s target was to help save 2.5% of the nonpay expenditure budgeted for supplies in the new financial year. Whilst they had made savings close to this figure in the previous year, further savings might be much more difficult. Acute hospital trusts accounted for 80% of the expenditure on supplies by National Health Service (NHS) trusts in England and Wales. In 1994/95 medical and surgical supplies represented the largest single element of this expenditure.
Others (gas, oil, rent, etc.) 24% Drugs 16%
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Transport 6% Office supplies 9% General supplies 6%
Medical and surgical supplies 26%
Building materials 13%
Source: ‘Goods for your health’, Audit Commission, 1996
Figure 1: NHS Trust expenditure on supplies in 1994/95
The Morecambe Bay Hospitals NHS Trust covered 4 hospitals, one of which was the Royal Lancaster Infirmary. Together they included about 50 major areas such as wards,
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