Authors (including presenting author) :
TONG WC, CHENG YF, CHAN HY, TSE PC, LAM SY
Affiliation :
Procurement & Materials Management Department (P&MM), Kowloon East Cluster (KEC)
Introduction :
Owing to the service expansion and the various redevelopment projects in KEC, the annual purchase requisitions (PR) amount has been increasing significantly from $1,475Mn in Year 2018/19 to $1,924Mn in Year 2019/20. Many of the PR were raised to form a peak near the end of financial year, causing backlogs which made the procurement even more difficult. Such increasing trend continued through the subsequent years and reached $2,633Mn in Year 2022/23. There was an imminent need for KEC Procurement & Materials Management Office (KECPMM) to revamp the established procurement workflow in order to cope with the rising demands from clinical and non-clinical departments.
Starting from Year 2019/20 – 2022/23, KECPMM has initiated some new measures with an aim to manage the growing demands by reviewing and redesigning the workflow in three major directions: (1) Collaborating with end users to raise PR earlier and before the PR cut-off dates in August and November of each year, to alleviate the year-end loading effect; (2) Introducing 3-year procurement plan for common medical equipment and creating more long-term contracts to minimize repetitive work and streamline ordering process; (3) Setting up Fast Track Procurement Teams at local hospitals focusing on handling straight-forward and lower-value PRs to increase work efficiency and enhance communications with users.
Objectives :
(1) To manage growing demands by streamlining workflow in raising PR and processing quotations
(2) To reduce the procurement lead time by redesigning workflow in handling minor-value purchases under $100,000 and contract items and forming of long-term contracts
(3) To improve procurement outcome by enhancing communications with users of clinical departments
Methodology :
(1) Two PR cut-off dates are set each year respectively for users to raise PRs, with the former focusing on budgeted and planned items, and the latter on ad-hoc and urgent purchase requests to avoid year end loading effect.
(2) Three-year rolling plan for commonly used medical equipment is prepared and updated each year for better procurement planning and facilitating forming of long-term contracts to minimize repetitive quotation work.
(3) Satellite offices were set up at TKOH and HHH to enhance communication flow and enable a closer working relationship with the local TKOH/HHH end users. PR-PO procurement lead time is targeted to be shortened by 7 calendar days from 28 days to 21 days for purchases below $100K and from 21 days to 14 days for purchases below $50K.
(4) PR-PO Monitoring Report is generated on monthly basis to evaluate and monitor the performance of the team
Result & Outcome :
The year-end loading effect of the PR has been significantly reduced after introducing the two PR cut-off dates and enhancement of user education. The workload in procurement is spread more evenly in the year and facilitates the procurement workflow as a whole.
The setting up of the Fast Track Procurement team reduced the procurement lead time for minor value purchases by 7 days, and significantly raised the compliance rate of procurement lead time in each category up to 50% in Year 2019/20. In Year 2022/23, over 70% of the PRs reached the performance target.
50 types of Medical and General Equipment have been included in the 3-year replacement plan for KEC hospitals since 2020/21. Contracts have been formed for contract period of 1 – 2 years. Orders can be placed with the contractors in accordance with operational need without the need to go through repetitive quotation exercise.
