Case studies
Supply Chain Continuity and Synergy Analysis
SECTOR
Healthcare
SPECIALISM
Mergers & Acquisitions
FOCUS
Seamless Supply for Uninterrupted Patient Healthcare
OVERVIEW
A leading UK provider of private healthcare, which was continuing to grow via acquisition, needed to integrate an additional hospital into its portfolio. Due to the criticality of maintaining seamless patient care and surgical procedures, the supply chains (Directs and Indirects) had to be migrated, managed, and maintained with zero disruption.
We were appointed to lead the project including setting out deliverables and key milestones, planning and activity tracking, managing the Procurement department, and reporting progress to the Integration Programme team.
Our scope of services was later extended to include a detailed evaluation of synergy savings opportunities across external expenditures.
VISIBILTY
Business-critical Procurement Categories and suppliers were already well known to the client and included :
Pharmaceuticals
Medical consumables
Surgical prostheses
Medical gases
Equipment testing and calibration
Energy
Water
Laundry
Catering
Cleaning services and supplies
Laboratory and medical equipment
Outsourced pathology testing services
Training services
Patient data and communications systems
For the second stage of our services, synergy savings evaluation, we created a bespoke spend cube and populated it with Purchase Order transactions data across £7.5M annual spend. This formed the key tool for spend analysis and identifying opportunities for cost reduction.
VALUE
All supply arrangements and services were fully migrated and/or integrated (as relevant) in time for the official legal transfer of ownership of the acquired hospital and ‘Day One’. No patient operations were affected.
Analysis of the Spend Cube identified £500K synergy cost reduction opportunities.
Zero
Disruption to patient care
£500K
Annual synergy cost reductions identified
21:1
Return On Investment
EFFECTIVENESS
The integration of an additional hospital into the portfolio placed additional pressure on the Procurement team beyond its business-as-usual activities which included the ongoing challenge of resolving extended post-Covid global disruptions and their effect on the availability of sufficient goods and services for the existing portfolio hospitals.
We managed the Procurement team and established lead and backup roles for each spend category.
Beyond Procurement we liaised with other departments and key stakeholders including Inventory Management, IT, and Pharmacy, to create a clear understanding of internal logistics and to develop contingency plans if/where necessary.
We created project management documentation to clearly track and report progress updates, set out next steps, and identify and resolve risks and dependencies. Project updates were presented to the Integration Programme team twice-weekly.
A wide range of data in the Spend Cube including suppliers, General Ledger Codes, Procurement categorisation codes, Line Item descriptions, part numbers, and unit prices were mapped between the client's exisiting portfolio and the acquired hospital.
Identifying purchase price variations between the client portfolio and the acquired hospital, combined with opportunities to change the source of supply, formed the primary means of identying synergy savings opportunities.