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Public Hospital Saves a Full Work Week Per Year with Procurement System

During random checks, discrepancies were discovered in Helse Midt-Norge between the agreed prices and the prices actually paid for ordered goods. It became clear that they needed a better system to verify that the invoices they received actually matched the agreements made. Therefore, it was decided that Namsos Hospital and Ålesund Hospital would pilot the procurement system Millum, which automatically checks invoices against contracts and can lock purchases to agreed prices. This led not only to significant economic savings, but also to valuable time savings for the hospital.

By: Una Tingvik Haave 20.11.2023 10:05

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Estimates Significant Annual Savings with Procurement System

By gaining a full overview of invoices and price deviations, in addition to access to pre-negotiated prices, the hospitals saw a significant improvement in their financial situation. The savings were so substantial that the kitchen at Namsos Hospital estimated they could reduce their annual costs by several hundred thousand kroner by using this technology.

 

Saves Time in Several Phases of the Procurement Process

The hospitals experienced not only economic savings. During the pilot project with Millum, the staff saved a lot of time in several phases of the procurement process.

Efficient Ordering of Goods

The procurement of food and beverages for the large-scale kitchen was significantly streamlined with the implementation of Millum. Unlike previous practices where hospitals had to log into each supplier's online store, navigate through various product catalogs, and perform a number of steps to try to identify and then order goods in line with existing supplier agreements, they could simply log in one place. This gave them immediate access to all product catalogs with available goods through agreements with selected suppliers. This ensured ordering the right item at the agreed price – delivered on time.

Ordering routines have been significantly simplified. We have measured time in goods ordering within today's practice at Namsos Hospital. Saved time is 46 minutes per week, equivalent to 5 working days a year for just ordering of goods.

Bjørn Sandnesmo

Section Leader at the kitchen at Namsos Hospital

Automatic Control of Invoices Against Supplier Agreements

The hospitals also saved considerable time on post-contractual control; the process of comparing invoices against entered supplier agreements to ensure correct billing. With Millum's automatic control functions, they no longer had to perform these time-consuming tasks manually.

During the pilot period, we have gained an overview of all invoices and deviations from the agreement - with reduced time usage. Such a total overview is not possible in today's practice without significantly increasing resource use for manual review of all invoices against agreements.

Bjørn Sandnesmo

Streamlined Deviation Management and Improved Supplier Management

As the system automatically identified any deviations, this process also became significantly more efficient. In addition, improved supplier management meant that hospitals could address and solve potential challenges more easily.

You can get a simple overview of deviations per supplier over a given period. This is highly practical and simplifies communication with suppliers in case of recurring errors.

Bjørn Sandnesmo

 

The Key to Streamlining Public Procurement?

In addition to the money and time saved by using the procurement system, the hospitals gained something they never had before, namely the experience of having control.

For a large kitchen, it is very satisfying to know that we have an overview and control, and that you are confident that the invoice you pay is correct.

Bjørn Sandnesmo

The pilot in HEMIT has been ongoing for over two years and has yielded a number of interesting findings that will also be valuable for the rest of the public sector. Institutions such as kindergartens, schools, and prisons, which often face similar challenges, will benefit similarly from a procurement system like Millum.

Furthermore, Millum has developed a range of innovative solutions, including a CO2 calculator, a tool for calculating food waste, and menu planning, all of which contribute to addressing the biggest challenge facing the public sector today – the need for more sustainable operations.