QHSSP SCMIS Service Delivery Model - Services by ame19863

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Supply Chain Management Integration Strategy – Service Delivery Models




                                      Service Delivery Model
                                      Services & Engineering
                                             Products




                                   Supply Chain Management
                                      Integration Strategy




        Service Delivery Models Sub-Project


                                                21 January 2008



                                                           V0.3




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                             TABLE OF CONTENTS


1.       Background……………………………………………………..                                              4

2.       Methodology……………………………………………………. 4

3.       The Existing Models..………………………………………….. 4

4.       Criteria and Drivers for Change………………………………. 6

5.       Development of Service Delivery Models……….…………… 7


         ATTACHMENTS & APPENDICES

1.       Abbreviations and Glossary of Terms…………………………. 9

2.       Accountabilities Document…………….………………………..10




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EXECUTIVE SUMMARY
The design, development and implementation of service delivery models within specific commodity
groups has been identified as an integral component or sub-element of the Supply Chain
Management Integration Strategy (SCMIS) Project. The analysis and recommendations contained
in this report focused on those functions associated with the supply of Services and Engineering
related products.

As a significant component of service related procurement activities relate to building and facilities
maintenance, the Services product group has been amalgamated with Engineering Products and
workshopped simultaneously. Observations and recommendations relevant to services that are
discussed within this document, therefore primarily relate to engineering, maintenance and/or
facilities management (which in many Districts fits within the responsibilities of the Facilities or
Building Engineering & Maintenance Manager).

Consultation in relation to the development of this service delivery model was undertaken with key
stakeholder representatives in the form of two workshops conducted in Brisbane in December
2007. During the workshops, participants were provided with opportunities to analyse the existing
models of service delivery and provide input and ideas into the development of the future model/s.

Current service models for the purchase and supply of items identified in these product groups
appear varied throughout Queensland Health and it is acknowledged that opportunities exist for
change and improvement due to, deficiencies in terms of standardisation of process and a lack of a
strategic focus to procurement and related activities.

The preferred service delivery model for the supply of Services and Engineering related products
would feature the following design elements: -

    •    BEMS staff to continue to manage imprest stocks of engineering and maintenance products
         at the local level;
    •    Procurement of Engineering products and services to be undertaken by Supply Services
         staff and consolidated within the six (6) Supply Hubs;
    •    In consultation with BEMS/District clients establish/develop a standardised suite of Hub
         contracts & SOA’s;
    •    Consider temporary co-location of Supply Procurement Officers within BEMS Departments
         throughout the Supply Hubs, (and where applicable – specific sites/facilities);
    •    Goods Receipt function to be undertaken at the point of supply/delivery (generally within
         BEMS), and appropriate training provided to staff to facilitate this;
    •    Expand the use of CPC’s within BEMS areas specifically for low value/low risk purchases;
    •    Support be provided to the proposed centralised reconciliation of CPC’s to dedicated
         QHSSP Administrative staff;
    •    Consideration be given to reviewing and increasing the threshold for individual CPC
         transactions specifically for urgent/emergent situations. (Suggested that a ceiling of $5000
         is more realistic than the current $2000).
    •    Establish regular communication networking forums between BEMS and Supply Services
         staff

Implementation of the preferred model would be undertaken incrementally, on a site by site basis,
with timeframes and rollout schedules developed as part of transition arrangements. As key
stakeholders in this process, District staff would be consulted and involved throughout all phases of
service transitioning.




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1.           BACKGROUND

The aim of the Supply Chain Management Integration Strategy (SCMIS) is to design, develop and
implement service delivery models that support an integrated, cost effective supply chain that
meets agreed customer service levels. The creation of a single, integrated supply chain is
expected to achieve significant benefits in terms of product aggregation, transportation economies
and realignment of procurement activities as well as minimising duplication of tasks and large
transactional workloads for both Queensland Health and its suppliers.

This strategy moves towards the adoption of a single supply chain network across Queensland
Health for a pre-determined range of products including clinical consumables, dental and pathology
supplies. To achieve this objective, the warehousing and distribution function is to be performed
by three strategically situated warehouses or Distribution Centres, located in South East
Queensland, Townsville and Cairns. To support these Distribution Centres, a new model of
service delivery is required for specific commodity/product groups. This report provides an
analysis of the current models for the supply of Services and Engineering Products and outlines
the preferred options for future service models relating to the supply of these items throughout
Queensland Health.

2.           METHODOLOGY

As a substantial component of the services procured within Queensland Health relate to facilities
maintenance and/or Building & Engineering, a decision was made to workshop both the Services
and Engineering product groups collectively. Consultation in relation to the development of an
appropriate service delivery model was undertaken with key stakeholder representatives in the
form of two workshops conducted in Brisbane in December 2007. These workshops included
representation from the following areas:-

     •       Supply and Contract Managers
     •       Procurement Officers
     •       District Building, Engineering & Maintenance Services (BEMS) staff
     •       Other District staff and clients
     •       Capital Works and Asset Management Branch (CWAMB)
     •       Health Services Purchasing & Logistics (HSPL)

During the workshops, participants were provided with opportunities to analyse the existing models
of service delivery and provide input and ideas into the development of future model/s.


3.           THE EXISTING MODELS

Currently there are a range of processes or methods of obtaining Services and Engineering related
products within Queensland Health. The following provides a summary of the five primary
processes or models presently in place: -

         •    BEMS/District staff requisition > Supply staff order > BEMS staff receipt goods or service
         •    BEMS/District staff requisition > Supply staff order > Supply staff receipt goods or service
         •    BEMS staff manage the entire process from requisition > Order > goods receipt
         •    Corporate Purchasing Card used by BEMS staff to procure lower value goods and
              services
         •    Princess Alexandra Hospital (PAH) has on-site store of Engineering supplies (inventory is
              recorded live in FAMMIS)


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In most sites where roles are shared between District/BEMS and Supply Services staff,
requisitioning and receipting functions are undertaken within BEMS, with sourcing and obtaining
quotes performed by both areas and order placement primarily within Supply Services. Variation
also exists in terms of responsibility for the other elements of the procurement/supply cycle such as
contract management. Similarly, usage of the Plant Maintenance Module of FAMMIS varies
between Districts, thus impacting on how goods and services are procured. Whilst Corporate
Purchasing Cards are used by some and costs linked back to individual work orders, others elect
to make payments via General Purpose Voucher or via confirmation purchase orders. A lack of
product knowledge on the part of Supply Services staff was identified by BEMS Managers as a
contributing factor to their preference to manage the entire process internally within their own
Departments. Goods and/or services provided by BTS are not incorporated in this analysis.

During the workshops participants were asked to undertake a SWOT (Strengths, Weaknesses,
Opportunities and Threats) Analysis of the existing service models, and then consider alternate
models which would have the capacity to effectively meet current and future service demands.
The recognised strengths of the current model/s are summarised as follows: -

    •    Outcome focussed and responsive to client/district needs
    •    Single Plant Maintenance system adopted
    •    Single point of control where entire process is managed within BEMS
    •    Expert product/commodity group knowledge
    •    Visible audit trails of Supply Services processes
    •    Good Supplier and Buyer relationships exist

It is worth noting however that the majority of these strengths apply predominantly to the models
where BEMS Departments manage the entire process from requisition to goods receipt.

Despite the obvious strengths and benefits of the current service models, the lack of a consistent
approach highlights the following weaknesses: -

     •    Inconsistent data capture and duplication
     •    Poor utilisation of system functionality particularly work order to equipment
     •    Lack of Engineering product knowledge within Supply Services
     •    Models have been tailored and/or developed around available resources and not
          necessarily reflective of best practice methodology.
     •    Variations in interpretation of policy and guidelines
     •    Varying levels of responsibility between sites (even where service models are similar)
     •    Difficulties in compliance with policy relating to competitive tendering/quotes
     •    Perceived delays by BEMS clients where Supply Services staff place orders and arrange
          quotes/tenders
     •    Costs associated with raising and processing orders where not the most appropriate
          procurement tool

Further review and analysis of the strengths and weaknesses of current supply models for
Services & Engineering products highlights opportunities that would contribute to improvements to
service delivery within a new model, those being: -

    •    Potential to standardise, streamline and simplify processes
    •    Expanded use of Corporate and/or Hub based SOA’s and/or Managed Supply/Distribution
         Arrangements.
    •    Standard approach and use of Plant Maintenance module within new Finance Business
         Solution that is rolled out.
    •    Development of and access to a centrally managed contracts database and standard task
         specifications.

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      •   Opportunities to further integrate links between Purchasing and Asset Management
      •   Expanded use of Corporate Purchasing Card for low value, low risk purchases
      •   Potential to centralise the reconciliation of Corporate Purchasing Cards
      •   Identification of unexplained elements of BEMS and Facilities Maintenance expenditure
      •   Changing organisational structures and
      •   Enhanced communication channels and forums

The primary threats identified specifically for Engineering services and products were: -

      •    Potential non-integration of Asset and Plant Maintenance modules
      •    Vendor dissatisfaction with Tender/Audit processes and guidelines
      •    Continued variation in systems used (i.e. BTS not using CMMS)
      •    Single solution/preferred model may not be achievable with current resources
      •    Administrative requirements associated with Corporate Purchasing Card reconciliation
           process (not the most appropriate use of Tradespersons’ time)

Whilst current service models are both responsive to needs and regional and remote requirements,
they have largely evolved relevant to the available resources and expertise within individual
Districts. It is therefore imperative that any future model/s build on the strengths and opportunities
identified above whilst continuing to maintain the high standard of service and client focus currently
in existence. The service model developed and discussed within this document aims to build upon
the recognised strengths and opportunities of current service delivery whilst addressing the
weaknesses and threats identified above.


4.        CRITERIA AND DRIVERS FOR CHANGE

4.1       Reason for Change
Whilst acknowledged as being client focussed and responsive to needs, the current Supply
function has recognised opportunities for change and improvement. These include:

      •   The Supply function in Queensland Health is fragmented, (operating in excess of 34
          separate supply facilities)
      •   Lack of standardisation of processes
      •   Lack of strategic focus to procurement
      •   Limited support mechanisms, particularly in regional and remote locations
      •   Unnecessary added costs in terms of
          1. Duplication of functions
          2. Freight Costs
          3. Costs to vendors of multiple customers and Purchase order transactions
          4. Volumes of Non-Stock
      •   Wider acceptance of Corporate Purchasing Card

4.2       Drivers of Change
The development of alternate and innovative service delivery models provides Queensland Health
with the opportunity to configure and implement a procurement model around the physical
distribution model, whilst meeting the objectives of Shared Services and the needs of customers.
Options for consideration include but are not limited to the following: -

      •   Centralised purchasing and Inventory Management of stock in three Distribution Centres.
      •   Non-stock purchasing at Hub or spoke level.



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      •   Expanded use of Standing Offer Arrangements (Recognised widely as an opportunity to
          develop in terms of additional SOA’s for specific commodity groups).
      •   Opportunities to better utilise technology (eg Shopping Card, e-procurement, CMMS –
          Plant Maintenance Module, increased use of barcode functionality and implementation of
          the new woG Finance Business Solution (FAMMIS replacement) which will assist in
          delivering workflow efficiencies).
      •   Expanded use of Corporate Purchasing Card for low value/low risk purchases.

The expected benefits for Queensland Health Shared Services Partner and Health Service
Districts and, thus, the key drivers for change are: -

      •   Improved service delivery
      •   Consistency and standardisation of processes and documentation
      •   Reduced duplication of tasks
      •   Improved compliance with Corporate policy and guidelines
      •   Reduced price of products (eg opportunities for bulk purchasing)
      •   Wider access to a network of supply specialists (particularly in areas where high staff
          turnover rates are identified as a problem)
      •   Offer of expanded services
      •   Appropriate stakeholder participation and involvement in decision making

Since the introduction of the Shared Services Initiative within Queensland Health, significant
improvements in the delivery of Supply related services have been implemented. A matrix of roles
and accountabilities associated with all elements of the Supply function (for all relevant
stakeholders) has been developed and agreement from the Corporate Purchaser obtained in
relation to these roles and accountabilities. (A copy of this matrix is included as Appendix 1).

5.        DEVELOPMENT OF SERVICE DELIVERY MODELS

5.1       Analysis of Models
Currently, procurement of engineering supplies and services is managed and/or undertaken either
by SSP Procurement Officers or by District/Agency Building, Engineering & Maintenance (BEMS)
staff. As summarised previously, the existing models vary throughout Queensland Health with
requisitioning, sourcing, obtaining quotes, order placement and subsequent goods receipt roles
distributed between District and/or BEMS staff and Supply Services staff.

Essentially three alternate models were proposed and discussed, those being:-

      •   Centralised to a single site supporting the whole of State
      •   Consolidation of the supply role to BEMS; and
      •   Integrated and collaborative approach by both BEMS and Supply Services

It was acknowledged that centralising the procurement of engineering products and services
across the whole of state will address a range of concerns; including minimising duplication of
functions, whilst addressing standardisation in processes and documentation. However, concern
was expressed that centralisation will result in a loss of client focus, a lack of local knowledge,
increases in incorrect ordering and a decline in the overall level of product knowledge for staff
performing the function.

Whilst consolidation of the procurement function within BEMS Departments currently occurs at
sites such as RBWH and Toowoomba, many facilities and Districts do not have the resources and
expertise to provide this comprehensive service and this is particularly evident in more regional
and remote areas. Apart from the resource implications associated with this model, clarification on
the roles associated with all elements of the supply function relevant to Engineering Products and
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Services would be required (both SSP and District), to ensure a consistent approach is adopted
across the organisation.

Many BEMS Managers commented that, in their view, Supply staff did not have a sufficient level of
expertise and understanding relevant to engineering and maintenance issues to undertake
Procurement of Engineering products and services. Appropriate training and allocation of
dedicated Procurement Officers for engineering products and services, may however address this
issue and assist in facilitating process improvements and service standardisation.

Considerable discussion centred on expanding the use of the CPC for low value and low risk
purchases, specifically for urgent repairs and maintenance products and services (which would
compliment any future model implemented). It was noted that, despite improvements in the
guidelines associated with the use of the CPC, the acceptance and usage of this procurement tool
for low value and low risk purchases was not optimal. Comments from workshop participants
indicate that the reconciliation process associated with the use of the CPC is largely administrative
and not ideally what BEMS Managers feel appropriate use of Trades staff time.

5.2       Preferred Option

The third service delivery model proposed suggests a more integrated and collaborative
relationship between Supply Services and BEMS/District staff across the Hub structure in place
within SSP (which currently operates at sites such as Gold Coast, Fraser Coast, Rockhampton and
Sunshine Coast). In this model, a comprehensive range of contracts and SOA’s would be
established, both corporately, (if suitable) and/or across Hubs. (This is consistent with the
recommendations of the Contract Management Service Model that has been endorsed for
implementation). Routine/urgent products and services would be obtained by BEMS staff using the
CPC. Current transaction limits may need review, as it was noted that $2000 is rarely sufficient to
cover costs associated with urgent plant/equipment repairs. BEMS staff would then utilise on-line
requisitions for the other planned maintenance and purchasing activity, with Supply staff managing
the procurement process. Issues and concerns relating to timely processing of orders and
product/service knowledge and expertise could be addressed by co-locating the Procurement
officers within BEMS Departments within the Hubs for a period of time (where QHSSP Supply staff
are not currently undertaking the procurement function) to enable procurement staff to gain
improved product/service knowledge. This approach would also facilitate information sharing
(particularly in relation to policy, standards and associated guidelines) between both BEMS and
Supply Services and may thus prove valuable in terms of training and development of staff in both
areas.

Temporarily collocating Supply Procurement Officers within BEMS Departments will improve the
skills and knowledge required of staff as well as providing a better understanding of client
expectations and requirements within this specialised area. This model also provides opportunities
to realise other benefits to the organisation in terms of: -

      •   Compliance with Government and Department Policy and Guidelines (State Purchasing
          Policy and Queensland Health Purchasing Policy & Procedures),
      •   Standardisation of processes and documentation,
      •   Segregation of duties,
      •   Improved networking and communication channels,
      •   Expanded range of contracts and improved data capture relevant to facilities management.

To assist in expanding the use of the CPC (as discussed above), reconciliation of cards allocated
within BEMS/Hub areas could be centrally managed by QHSSP staff. This approach has been
adopted successfully within the private sector and whilst streamlining the procurement process for
Trades staff, aligns the reconciliation process more appropriately to administrative staff. Similar
examples of centralised reconciliation of accounts are evidenced by Cabcharge and Fuel Cards.

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Expanded use of the CPC has the added benefit of the ability to allocate costs to individual work
orders and would therefore require close collaboration between the card holder and the person
undertaking the monthly reconciliation. It is understood that this option is subject to further
investigation within QHSSP Finance. Some review of individual transaction limits associated with
the CPC may be required to accommodate genuine urgency, but this could be undertaken on a
case by case basis.

Imprest stocks of engineering supplies would be maintained within BEMS areas, however it is not
considered viable to warehouse inventory specific to this product group within the three Distribution
Centres. The variety of products used and specialist requirements throughout the organisation
support the continuation of maintaining local imprest management or just in time replenishment (as
is utilised in some sites).

As indicated in previous service model documents relating to other key product groups, current
arrangements that differ in specific sites would remain in place and appropriate transitioning of
these services would occur as the model is developed and implemented within each client area.
As key stakeholders in this process, District/BEMS staff will be consulted and involved throughout
all phases of service transitioning.

5.3       Recommendations

The following recommendations are made in relation to the supply of Engineering products
and services: -

      •   BEMS staff to continue to manage imprest stocks of engineering and maintenance
          products at the local level;
      •   Procurement of Engineering products and services to be undertaken by Supply
          Services staff and consolidated within the six (6) Supply Hubs;
      •   In consultation with BEMS/District clients establish/develop a standardised suite of
          Hub contracts & SOA’s;
      •   Consider temporary co-location of Supply Procurement Officers within BEMS
          Departments throughout the Supply Hubs, (and where applicable – specific
          sites/facilities);
      •   Goods Receipt function to be undertaken at the point of supply/delivery (generally
          within BEMS), and appropriate training provided to staff to facilitate this;
      •   Expand the use of CPC’s within BEMS areas specifically for low value/low risk
          purchases;
      •   Support be provided to the proposed centralised reconciliation of CPC’s to
          dedicated QHSSP Administrative staff;
      •   Consideration be given to reviewing and increasing the threshold for individual CPC
          transactions specifically for urgent/emergent situations. (Suggested that a ceiling of
          $5000 is more realistic than the current $2000).
      •   Establish regular communication networking forums between BEMS and Supply
          Services staff




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ABBREVIATIONS AND GLOSSARY OF TERMS
Attachment 1

               Term                                                      Definition
     QHSSP                           Queensland Health Shared Services Partner

     HSPL                            Health Services Purchasing & Logistics

     BEMS                            Building, Engineering & Maintenance Services

     CPC                             Corporate Purchasing Card

     SOA’s                           Standing Offer Arrangements

     HUB                             A HUB in the context of the provision of supply services to QHSSP, is
                                     a centre of skill that provides a range of specialised supply support to
                                     an allocated dependency either in direct support of a District or
                                     through one or more Spokes. Functions to be performed at a Supply
                                     Services Hub could include, among others, warehousing &
                                     distribution, procurement, invoice verification, contracts management
                                     and the provision of high level policy advice to Districts.

     Spoke                           In the context of the provision of supply services to QHSSP, this is a
                                     supply section that provides local operational support to one or more
                                     Districts. Functions to be performed by a Supply Services Spoke
                                     could include, among others, support to requisitioning functions, local
                                     purchasing, maintenance of barcode processes, scanning, receipting,
                                     internal distribution, restocking of imprest areas, local advice on
                                     supply process, etc.

     SCMIS                           Supply Chain Management Integration Strategy

     Supply                          Supply/Supply Chain Management encompasses the planning and
                                     management of all activities involved in procurement and logistics
                                     management. Importantly, it also includes coordination and
                                     collaboration with suppliers, third party service providers and
                                     customers.

     Procurement                     Procurement is defined as the entire process associated with the
                                     acquisition goods and services required by an organisation; including,
                                     the functions of planning, specification development, supplier
                                     selection, contract administration, disposal and other related
                                     functions.

     Logistics                       Logistic/Logistics Management encompasses the planning,
                                     implementation and control of the forward and reverse flow and
                                     storage of goods and services between point of origin and point of
                                     consumption. Typically includes inbound and outbound transportation
                                     management, warehousing, order fillment, inventory management,
                                     supply/demand planning and management of third party logistics.
                                     Logistics management is a large and integral part of supply chain
                                     management.



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Supply Chain Management Integration Strategy – Service Delivery Models                                                                                  Appendix 1

                                                                 QHSSP SUPPLY ROLE ACCOUNTABILITY SNAPSHOT
                                                  (Excludes Supply processes for Pharmaceuticals, Dental Stores, QHPSS, BTS)

    Supply                                                        Area Health
                                Corporate                                                      District                                QHSSP (Supply)
   Function                                                         Service
 Policy and          •   Manage and strategic                •     Develop and    •   Plan and manage District          •   Manage and operational planning of the
 Planning                planning of the entire                    analyse key        interfaces with the Supply            QHSSP Supply function.
                         Supply function.                          Supply             function.                         •   Input to the development of the strategic Supply
                     •   Develop the QH Corporate                  performance    •   Plan and manage internal              function.
                         Procurement Plan.                         indicators.        demand for goods and              •   Develop internal operational Supply procedures
                     •   Develop QH Agency                                            services.                             and work instructions.
                         Purchasing Procedures.                                   •   Plan and manage District          •   Develop customer Supply procedures and work
                     •   Coordinate Supply systems                                    equipment and asset                   instructions.
                         planning and                                                 replacement programs,             •   Analyse the local market servicing Supply and
                         implementations.                                             including identification and          its customers.
                     •   Analyse the market                                           access to appropriate funding.    •   Analyse QHSSP positioning within and impact
                         servicing the health care                                •   Input to the development of           on the local market
                         industry.                                                    customer Supply procedures        •   Develop and analyse key performance
                     •   Analyse QH positioning                                       and work instructions.                indicators.
                         within and impact on the                                 •   Monitor key performance           •   Manage Procurement Delegations for QHSSP
                         market                                                       indicators.                           staff.
                     •   Develop and analyse key                                  •   Manage Procurement                •   Policy interpretation and advice to Districts on
                         performance indicators.                                      Delegations for District staff.       policies and practices impacting the Supply
                     •   Maintain the QH Schedule                                 •   Advice of the impact of the           function.
                         of Procurement                                               Supply function on District       •   Manager Purchasing Cards allocated to Supply
                         Delegations.                                                 practices.                            staff; including appointment of Area Card
                     •   Policy interpretation and                                •   Manager Purchasing Cards              Administrator.
                         advice to QH staff on                                        allocated to District staff;      •   Develop and implement strategies to ensure
                         policies and procedures                                      including appointment of Area         probity within procurement processes.
                         impacting the Supply                                         Card Administrator.
                         function.                                                •   Implementation of processes
                     •   Plan and manager                                             that ensure probity within
                         Corporate Purchasing Card                                    procurement processes.
                         policy and processes;
                         including appointment of
                         the Corporate Card
                         Coordinator
                     •   Develop and implement
                         strategies to ensure probity
                         within procurement
                         processes.


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    Supply                                                       Area Health
                                Corporate                                                     District                                    QHSSP (Supply)
   Function                                                        Service

 Systems             •   Manage and strategic                                   •   Maintain FAMMIS access for            •   Input to the development of Supply systems.
 Management              planning of Corporate                                      appropriate cost centre staff.        •   Provide reports for customers that are
                         systems supporting the                                 •   Access basic Supply reports               reasonably beyond the capability of the District
                         Supply function.                                           and data (eg backorder reports,           to run (eg local catalogue, downloads of urgent
                     •   Manage the enhancement                                     barcode scanning reports,                 requests etc)
                         of Supply applications.                                    pricing, blocked materials etc        •   Establish and maintain Plant catalogues.
                     •   Plan and implement
                         replacement of hardware
                         supporting Supply
                         processes (eg barcode
                         scanners)
                     •   Plan and implement
                         replacement of Supply
                         applications.
                     •   Establish and maintain
                         Supply catalogues.

 Requisitioning                                                                 •   Raise electronic purchase             •   Provide advice of catalogue and material
                                                                                    requisitions.                             changes.
                                                                                •   Raise manual requisitions.            •   Produce a stock catalogue.
                                                                                •   Raise “Urgent” requisitions.          •   Print and replace barcode labels.
                                                                                •   Release electronic requisitions.      •   Undertake barcode scanning.
                                                                                •   Ensure appropriate Authorised
                                                                                    Expenditure Approval Officer          (Scanning and label replacement may be
                                                                                    delegations are exercised for         undertaken by District staff.)
                                                                                    manual requisitions.
                                                                                •   Access catalogue data.
                                                                                •   Specify the requirement.
                                                                                •   Identification of potential
                                                                                    supplier(s) and supplier’s part
                                                                                    number when requisitioning
                                                                                    non-catalogued products.
                                                                                •   Identification of indicative costs.
                                                                                •   Identification of product
                                                                                    sponsors to provide advice on
                                                                                    consumables and equipment to
                                                                                    be used within the District.
                                                                                •   Maintain staff skills in electronic


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Supply Chain Management Integration Strategy – Service Delivery Models                                                                                 Appendix 1

    Supply                                                       Area Health
                                Corporate                                                    District                                 QHSSP (Supply)
   Function                                                        Service
                                                                                    requisitioning processes.
                                                                                •   Requisition products on SOA or
                                                                                    seek appropriate exemption.
                                                                                •   Identification of alternative
                                                                                    products to meet specific
                                                                                    needs.

 Purchasing                                                                     •   Purchase by petty cash.           •   Purchase a designated range of stock and non-
                                                                                •   Purchase by Corporate                 stock products (including assets and
                                                                                    Purchasing Card.                      equipment) for an allocated dependency.
                                                                                •   Provide input to the evaluation   •   Determine the purchasing method to be used
                                                                                    of goods and services.                (Quotations, Purchasing Card, sole supplier,
                                                                                                                          tender etc).
                                                                                                                      •   Determine sources of Supply.
                                                                                                                      •   Obtain quotations.
                                                                                                                      •   Evaluate vendors’ bids with appropriate District
                                                                                                                          input.
                                                                                                                      •   Negotiate with vendors where necessary.
                                                                                                                      •   Obtain any necessary customer signoff.
                                                                                                                      •   Exercise the Procurement Delegation.
                                                                                                                      •   Prepare and issue the purchase order.
                                                                                                                      •   Expedite deliveries.
                                                                                                                      •   Archive and safe custody of purchasing
                                                                                                                          documentation in accordance with statutory
                                                                                                                          requirements.

 Inventory           Establish MSDA arrangements,                               •   Negotiate service levels          •   Maintain Plant material master data and
 Management          as required, for Districts without                             required.                             information records.
                     a Warehouse facility                                       •   Provide feedback on quality/fit   •   Provide advice on catalogue and material
                                                                                    for purpose of inventory lines.       changes.
                                                                                •   Advise SOA items to be used in    •   Plan materials requirements.
                                                                                    the District.                     •   Determine materials to be held in stock
                                                                                •   Return goods for credit in            (Stocking parameters include criticality, cost
                                                                                    accordance with agreed                and lead-time)
                                                                                    guidelines.                       •   Undertake forecasting.
                                                                                •   Manage extended storage           •   Set inventory levels in main store (Max, min
                                                                                    locations (i.e. stock held,           and reorder points)
                                                                                    replenishment, write-offs,        •   Coordinate return of goods in accordance with
                                                                                    stocktakes etc)                       agreed guidelines.


                                                                                                                                                       Page 13 of 17
                                                                          Commercial in Confidence
Supply Chain Management Integration Strategy – Service Delivery Models                                                                                  Appendix 1

    Supply                                                       Area Health
                                Corporate                                                     District                                QHSSP (Supply)
   Function                                                        Service
                                                                                                                      •   Undertake progressive or annual stocktakes.
                                                                                                                      •   Report end FY stock holdings.
                                                                                                                      •   Prepare write-offs for District Manager’s
                                                                                                                          approval.
                                                                                                                      •   Assist in the establishment and ongoing
                                                                                                                          operation of MSDA arrangements with Prime
                                                                                                                          Vendors
                                                                                                                      •   Fund the Inventory Account.
                                                                                                                      •   Fund initial stockholding for new lines.
                                                                                                                      •   Approve write-off of inventory.

                                                                                                                      (These accountabilities currently sit with the
                                                                                                                      District.)

 Warehousing                                                                                                          •   Receive and inspect stock and non-stock.
                                                                                                                      •   Hold and pick stock.
                                                                                                                      •   Arrange acceptance and electrical testing as
                                                                                                                          necessary.
                                                                                                                      •   Undertake stock rotation.
                                                                                                                      •   Maintain integrity of the stock held.
                                                                                                                      •   Appropriately package goods for distribution.
                                                                                                                      •   Coordinate physical return of goods to vendors.
                                                                                                                      •   Ensure optimum use of warehouse facilities.

 Distribution                                                                   •   Inspect and sign for receipt of   •   Distribute stock and non-stock consumables to
                                                                                    goods for direct delivery of          designated delivery points in accordance with
                                                                                    items.                                agreed schedules.
                                                                                •   Coordinate internal District      •   Collect returns from cost centres for
                                                                                    deliveries outside the Supply         processing.
                                                                                    function (i.e. mail, Xrays etc)

 Asset                                                                          •   Inspect and sign for receipt of   •   Create Asset Shells.
 Management                                                                         equipment                         •   Coordinate internal delivery of equipment.
                                                                                •   Arrange disposal of obsolete or   •   Arrange acceptance and electrical testing.
                                                                                    surplus equipment.                •   Coordinate BTS checks.
                                                                                                                      •   Allocate SAID numbers and barcode labels for
                                                                                                                          assets.

                                                                                                                      (Asset Shells may be created by the District or


                                                                                                                                                         Page 14 of 17
                                                                          Commercial in Confidence
Supply Chain Management Integration Strategy – Service Delivery Models                                                                                    Appendix 1

    Supply                                                       Area Health
                                Corporate                                                     District                                   QHSSP (Supply)
   Function                                                        Service
                                                                                                                          QHSSP Finance Sections.)

 Contracts           •   Plan and manage tendering                              •   Develop business case for             •   Plan and manage tendering processes for
 Management              processes for strategically                                significant purchases.                    goods and services not covered by Corporate
                         significant and woH goods                              •   Development of specifications.            or Statewide Services.
                         and services.                                          •   Identification of indicative costs.   •   Advice on contracts administration practices
                     •   Establish woH SOAs.                                    •   Obtain necessary financial                and processes.
                     •   Coordinate PSAC                                            approvals for the purchase to         •   Determine the procurement process (eg RFI,
                         processes.                                                 proceed.                                  RFQ, staged confinement etc)
                                                                                •   Coordinate and oversee                •   Establish local or multi-District SOAs.
                                                                                    equipment replacement                 •   Maintain a register of specifications.
                                                                                    programs (eg District Asset           •   Input to the commercial aspects of the
                                                                                    replacement programs, HTER,               specification.
                                                                                    Foundation purchases).                •   Review specifications prior to the tendering
                                                                                •   Identification of key                     process.
                                                                                    stakeholders.                         •   Identify and manage risk as it relates to the
                                                                                •   Identification of technical               commercial and process aspects to the tender.
                                                                                    sponsors.                             •   Develop offer documentation.
                                                                                •   Identification of potential           •   Identification of potential suppliers.
                                                                                    suppliers.                            •   Advertise the offer.
                                                                                •   Identify and manage risk as it        •   Facilitate the offer evaluation process.
                                                                                    relates to the technical aspects      •   Coordinate offer negotiations.
                                                                                    of the tendering process.             •   Coordinate debriefing of unsuccessful offerers.
                                                                                •   Coordinate testing and trialling.     •   Raise purchase orders for equipment procured
                                                                                •   Respond to technical queries in           following a Supply tender process and for
                                                                                    relation to the offer.                    District equipment approved for purchased
                                                                                •   Input to offer negotiation                against the HSP&L bulk tender arrangement.
                                                                                    processes.                            •   Exercise the procurement delegation for the
                                                                                •   Input to the offer evaluation             purchase.
                                                                                    process.                              •   Develop contract management plan.
                                                                                •   Input to debriefing of                •   Manage and monitor vendor performance.
                                                                                    unsuccessful offerers.                •   Maintain the Contract’s register.
                                                                                •   Input to the development of a         •   Archive and safe custody of offer
                                                                                    contract management plan.                 documentation in accordance with statutory
                                                                                •   Manage and monitor vendor                 requirements.
                                                                                    performance and provide               •   Provide updates on status of contracts and
                                                                                    feedback to QHSSP contracts               equipment purchases to District coordinators.
                                                                                    staff Input to PSAC decision-
                                                                                    making processes as


                                                                                                                                                           Page 15 of 17
                                                                          Commercial in Confidence
Supply Chain Management Integration Strategy – Service Delivery Models                                                                                  Appendix 1

    Supply                                                       Area Health
                                Corporate                                                     District                                 QHSSP (Supply)
   Function                                                        Service
                                                                                    determined by HSP&L.
                                                                                •   Management of SMO
                                                                                    Agreements


 Imprest                                                                        •   Manage the cost centre imprest      •   Housekeeping within the imprest store.
 Management                                                                         stores.                             •   Run backorder report prior to undertaking a
                                                                                •   Determine products to be held.          barcode scan.
                                                                                •   Establish appropriate maximum       •   Scanning to replenish stock to approved levels.
                                                                                    imprest levels for products held.   •   Place stock away.
                                                                                •   Coordinate end FY imprest           •   Raise requests for replacement/ new barcode
                                                                                    stock counts (if necessary).            labels.
                                                                                •   Maintain open communication         •   Identify surplus products for redistribution,
                                                                                    with Supply staff to identify and       return for credit or disposal.
                                                                                    meet the needs of the imprest       •   Identify obsolete products requiring write off.
                                                                                    store.                              •   Assist with end FY stock counts.
                                                                                                                        •   Maintain open communication with cost centre
                                                                                                                            staff to identify and meet the needs of the
                                                                                                                            imprest store.

                                                                                                                        (The functions identified as being performed by
                                                                                                                        QHSSP may be performed by the District.)

 Invoice                                                                        •   Inspect and sign delivery           •   Invoice verification for all purchase orders
 Verification                                                                       documentation/invoices for              raised by Supply.
                                                                                    goods delivery direct to cost       •   Process and clear GR/IR for QHSSP Supply
                                                                                    centres.                                transactions.
                                                                                •   Process General Purpose             •   Monitor and follow-up outstanding accounts.
                                                                                    Vouchers through Financial          •   Monitor and manage PO credits.
                                                                                    Services (Accounts Payable          •   Archiving and safe custody of invoices and
                                                                                    Section).                               verification reports.

                                                                                                                        Note:
                                                                                                                        (Oversight and coordination of the GR/IR for the
                                                                                                                        District BA is undertaken by QHSSP Supply and/or
                                                                                                                        Finance staff.)
                                                                                                                        (The functions identified as being performed by
                                                                                                                        Supply are also performed by QHSSP Finance
                                                                                                                        staff).


                                                                                                                                                         Page 16 of 17
                                                                           Commercial in Confidence
Supply Chain Management Integration Strategy – Service Delivery Models                                                                                   Appendix 1

    Supply                                                       Area Health
                                Corporate                                                       District                                QHSSP (Supply)
   Function                                                        Service

 Customer            •   Foster cooperation and              •    Foster          •   Foster cooperation and open       •   Advice and support to customers in relation to
 Support                 open communication                       cooperation         communication between                 local Supply operational practices and
                         between customers and                    and open            customers and Supply staff.           arrangements.
                         Corporate Office staff.                  communication   •   Provide a point of contact for    •   Limited advice and support in relation to Supply
                     •   Provision of Corporate                   between AHS         product queries (eg Clinical          applications.
                         Purchasing Card related                  and Supply          Products Coordinator).            •   Higher level management advice on Supply
                         training.                                staff.          •   OJT training and backfilling of       processes and practices.
                     •   Provision of MM DSS                                          District staff supporting the     •   Survey customer’s needs and their views on
                         training                                                     Supply function.                      how to meet the need.
                                                                                                                        •   Train staff in barcode scanning.
                                                                                                                        •   Provide avenues for training and development
                                                                                                                            of QHSSP Supply staff.
                                                                                                                        •   Provide training in Supply applications and
                                                                                                                            processes to District staff to supplement that
                                                                                                                            provided by CorpTech and OJT.
                                                                                                                        •   Foster cooperation and open communication
                                                                                                                            between customers and Supply staff.
                                                                                                                        •   Represent Supply on various District
                                                                                                                            committees.




                                                                                                                                                         Page 17 of 17

								
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