3
Hospital Authority Structure and Organization
38 HospitalGoverning
Committees
HospitalAuthority
Board
40 Hospitals47 Specialist
Outpatient Clinics74 General
Outpatient Clinics
3 RegionalAdvisory
Committees
ExecutiveManagement
AuditCommittee
FinanceCommittee
HumanResourcesCommittee
MedicalServices
DevelopmentCommittee
PublicComplaintsCommittee
MainTenderBoard
SupportingServices
DevelopmentCommittee
PlanningCommittee
StaffCommittee
StaffAppeals
Committee
4
Mr Shane SolomonChief Executive
Cluster Services Division
Dr W L CheungDirector (Cluster Services)
Cluster Performance
Integrated Care Programs
Business Support
Services (BSS)
Allied Health Grade
Chief Pharm Office
Service Transformation
IHC
China OfficeMedical Grade Nursing Grade
Hospital Clusters
Other Divisions in HA Head Office
Executive Management Structure and Organization
5
Business Support Services Department (BSSD)
• BSSD is a corporate multi-skilled team under the Cluster Services Division of the Hospital Authority.
• BSS encompass a wide range of non-clinical support activities and operational systems development for the provision of :– hospital support services (e.g. food service, linen
& laundry, transportation, domestic service, security.)
– procurement and materials management services– biomedical engineering services and medical
equipment maintenance– medical equipment planning and management
6
Support Services
Management at Clusters
Procurement & Materials
Management
Biomedical Engineering Service &
Medical Equipment Maintenance
Medical Equipment Planning &
Management
Support Services Development
BSS Systems Development
Organization of BSSD
7
Mr. Raymond WongChief Manager
(Business Support Services)
ProcurementTeam A
Non-medical & Information Technology
Supplies
ProcurementTeam B
Nursing Care & Operation
Theatre Supplies
ProcurementTeam C
SupportServices & Laboratory Supplies
ProcurementTeam D
Medical Devices
& Supplies
ProcurementTeam E
PharmaceuticalSupplies
Development of Commodity Group Purchase
8
Mr. Raymond WongChief Manager
(Business Support Services)
ProcurementTeam A
Non-medical & Information Technology Supplies
ProcurementTeam B
Nursing Care & Operation Theatre Supplies
ProcurementTeam C
Support Services & Laboratory Supplies
ProcurementTeam D
Medical Devices& Supplies
ProcurementTeam E
PharmaceuticalSupplies
Procurement & Supplies Management Section
Ms. May Yip
Chief Supplies Officer (PTA)
Mr. Stephen Siu
Senior Nursing Officer (PTB)
Ms. Cindy Chu
Senior Supplies Officer (PTC)
Mr. Dennis Chan
Manager (PTD)
Mr. Stephen Lee
Chief Supplies Officer (PTE)
Roadmap of HA Procurement and Materials Management
VisionTo establish VFMand seamless supplychain operation withmaximal riskmanagement
Our Strategies – Five Elements of Success
HospitalsRelationshipsManagement
Partnershipwith
Stakeholders
BusinessTransformation
ChangeManagement
Staff Trainingand Education
Sharing of information with vendors
Establishing partnership with vendors
Enhancingcommunication
Market Researchand ProductStandardization
Warehousinglower inventory; lower operational cost; near-zero wastage; just-in-time delivery; high product safety
Procurementsaving in price; saving in operational cost; user interface & satisfaction; reduction in lead time
Our Target / Key Results Areas
Objectives1. To explore and implement improvements to
procurement services by raising the skills and competency of staff, pursuing service excellence and industry best practices, and achieving best value for money.
2. To provide the best value-added products and services to end-users and patients through the supply chains in healthcare.
10
Delineation of Roles and Responsibilities
Clusters/Hospitals
Systems
Development
Systems
Development Risk ManagementRisk Management
- Product Standardization
- Bulk Contracting
- Tendering Support
- Suppliers Partnership
- Product Standardization
- Bulk Contracting
- Tendering Support
- Suppliers Partnership
Policies and
Guidelines
Formulation
And Setting
Standard
Policies and
Guidelines
Formulation
And Setting
Standard
Vendor
Performance
Monitoring
Vendor
Performance
Monitoring
Inventory
Control/
Logistics
Support
Inventory
Control/
Logistics
Support
Tendering/
Purchasing
Support
Tendering/
Purchasing
Support
Order Cycle
Planning
Order Cycle
Planning
HA Head Office
Procurement Planning
Product Standardization
PerformanceMonitoring andReview
Risk andInformationManagement
HA Head Office
Clusters / Hospitals
11
Patient Care
Patient Care
Healthcare Delivery
People Skills
Equipment Supplies
Systems Structure
Procedures Processes
Supply Management
Value-based supply selection & standardization
Managing Inventory
Vendor collaboration
Purchasing controls & efficiency
(e-procurement)
Strategic view of supply chain management
Organizational View of Supply Chain Management
12
Performance Review on Procurement & Supply Chain Management in HA against a Maturity Model (2001 - 2007)
Dimension / Critical Success Factors
Stage 1
Stage 2Stage
3Stage
4
1Customer Service Management
2Strategic Supply & Sourcing Planning
3
Materials & Service Requirements Planning Process for all Hospital Supply Activity
4Forecasting & Demand Planning for Hospital Activity
5Relationships with Suppliers & Service Providers
6Information & IT Capabilities, including Electronic Commerce
7KPI Management & Measurement
(With ERP)
(With ERP)
(Total Solution) (PPP)
13
Performance Review on Procurement & Supply Chain Management in HA against a Maturity Model (2001 - 2007)
Dimension / Critical Success Factors
Stage 1
Stage 2
Stage 3
Stage 4
8Workplace Culture & Leadership
9Organizational Structure & Supply Positioning
10Improvement Focus within Business
11 Staff Competence
12Process Management (e.g. procurement process, inventory management)
13Supply Infrasturcture (e.g. warehouse, office location)
(With ERP)
(With ERP)
14
Critical Milestones :Take-over of procurement from Government Logistics
Department– Non-drug (July 2003)– Drug (April 2006)
• Centralized procurement • Strategic outsourcing
– Total solution contract on general consumables– PPP Project on food service– Bulk contracts on medical equipment maintenance,
domestic services, security, landscaping, pest control etc.
Areas of Continuous Enhancement :• Inventory management (since 1998)• Vendor Managed Inventory/Consignment Stock (since 2002)• Internal/external partnership (since 2002)• ISO9001(QMS) accreditation (since Nov 2003)• Professional services – legal, auditing, advertising,
telecommunications (since 2006)• Green procurement (2007)
Procurement & Materials Management
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Sourcing
Procurement
MaterialsManagement
Logistics
Payment
PROCURE
PAY
Supply ChainComponent
CostManagement Collaboration Standardization
• Significant savings achieved through “Bulk Purchase” - $163M $113M (non-drugs) p.a. $50M (drugs) p.a.
• PPP for Food Service• Total Solution Contract for general items• Outsourced equipment maintenance services
• Bulk contract coverage ( for non-drugs ) increased from 26% to 44% from Year 2002 to Year 2006• > 90% for drugs
• 1,304 Bulk Contracts - 925 for drugs - 379 for non-drugs
• Clinical Interface• Drug Selection Committee
• Specification of Equipment & Consumables
• Stock turnover rate increased from 3 to 6• SKU reduction by 5%
• VMI and Consignment stock for critical items
• Common supplies items 100% standardized
• Cluster Warehousing • Auto-refill at Point of Care• Central monitoring of Personal Protection Equipment (PPE)
• Electronic transmission for all internal supply chain processes
• E-Invoice• E-Payment
• Centralized Payment
Strategic Milestones in Procure to Pay Process
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Non-drug Stock Management and Supply Chain Initiatives
Commodity Group Supply Chain Model
Procurement & Materials
Management Strategy
Cleansing materials, office supplies, stationery and linen
Distributor – Ward/Department
Outsourcing logistic and inventory management
General medical and non-medical consumables
Vendor – HA Bulk Store
In-house inventory management supported by VMI
Specific surgical consumables (e.g. OT, Pathology and X-ray
Vendor – Department Store
In-house inventory management
PTCA and O&T consumables
Consignment
Zero inventory supported by Product Tracking and Tracing
Low value and low risk consumables
Vendor – Ward/Department
Direct non-stock purchase
18
ERPS Implementation PlanPhase I/II – 1st April, 2008
Clinical
Patient Billing
Asset Management
(Phase I/II – Non-drug items only)
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Procure-to-Pay Process
Develop & Implement
Procurement Strategy
Maintain & Evaluate Suppliers
Identify Need Develop Specs & Solicit Bids/
Proposal
Manage Contracts
Create & Maintain Purchase
Requisitions & Orders
Order Goods & Services
Manage Disposition of Inbound
Goods
Receive, Inspect &
Accept Goods & Services
Procure to Pay
Manage Accounts Payable
Enable Payments
20
Adoption of ERPS Better Practices Through Business Process Re-
engineeringSub-Process Area Best Practice
Product Codificationand Classification
• Standardized nomenclature and classification to facilitate procurement planning, inventory control and data analysis.
• Adoption of UMDN / GMDN for medical devices in compliance with the MDACS program.
Sourcing Strategies• Rationalization in overall numbers of suppliers and concentrated spending to leverage purchasing power.
• Single integrated procurement system to enable quick and easy sharing of data and definitions across HA
• Maintenance of central database of spend information.
Regulatory Compliance
Procurement FunctionManagement
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Adoption of ERPS Better Practices Through Business Process Re-
engineeringSub-Process Area Best Practice
Requisition &Purchase OrderProcessing
• Routing and approval verification automated through workflow.
On-line GoodsReceipt
• Embedded bar code information used to record receipts in purchase orders.
Payment • Three-way / Four-way matching with automated delegation to speed up payment.
Vendor Master • Centralized vendor master file maintenance
across HA.• Contracts for high value and strategic purchases centrally negotiated and monitored.
Supplier Selectionand Negotiation
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Market Interface & Supplier Engagement
Moving Towards E- Commerce
• Electronic exchange and transaction of supply chain data which include purchase orders, delivery notes, invoices and inventory information using standard protocols, i.e. EDI, XML, Fax, email, etc.
• Use of comprehensive universal data standards such as UNSPSC, and E-Healthcare data standards such as EAN and HIBC.
• Extension of business / supply chain models to enhance information sharing e.g. Vendor Managed Inventory (VMI )
Use of Technology
Collaboration with Suppliers
23
Product Codification & Classification
• Item Classification – United Nation Standard Product and Services Code (UNSPSC)
• Item Description Nomenclature –Drugs : International Non-proprietary Name (INN)
–Medical Device : Primary - Universal Medical Device Nomenclature (UMDN)Secondary - Global Medical Device Nomenclature (GMDN)
–Non-Medical Device : AUSLANG
• Product Identification Standard – EAN / HIBC
24
Vendor Master Maintenance
• Central vendor creation and maintenance by Procurement and Materials Management Section in Head Office with effective 1 September, 2007
• Designated multiple currency bank account to receive remittance from HA
• Vendors to provide update information, if any before October, 2007
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ERPS Rollout Plan• 1st Rollout (1st April, 2008)
– Kowloon East Cluster – Hong Kong East Cluster– Hospital Authority Head Office
• 2nd Rollout (1st July, 2008)
• 3rd Rollout (1st October, 2008)
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Payment Documentation Requirement
effective 1st April, 2008• Suppliers to send invoices direct to Head
Office/Cluster Finance OfficesPO number must be specifiedName of the staff, name of his/her
department, and hospital (for direct invoices without PO) be provided
• Payment will be settled in the specified currency in the PO (local and foreign currencies)
• For purchase with Trade-in, suppliers to split invoice lines intoGross amount for the new purchase
equipmentTrade-in amount for the old equipment
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Medical Device Administrative Control (MDACS)
• Regulatory compliance with the MDACS requirement on purchase of medical device
• Requirement to register with Department of Health under consideration in HA