Gaining leverage during the buying process and being able to deliver a sustainable product are among top procurement challenges in aged care, leading providers will tell an industry conference today.

Bethanie and Goodwin Aged Care are among aged care and retirement living providers leading a discussion on the biggest challenges facing procurement in the sector at the Aged Care Procurement conference in Melbourne today.

Christopher How

Gaining leverage during the procurement process was the top challenge for many in the sector, said Christopher How, CEO of Bethanie, which delivers services across 24 locations in Perth and regional WA.

The majority of providers in Australia have one to three locations or sites, so they don’t have the buying power that the larger providers have,” Mr How told Australian Ageing Agenda ahead of the event.

“You don’t have as much muscle when you go into those contracts and negotiations to actually get the efficiency out of the procurement process.”

Improvements can be achieved by forming co-ops with other providers to get better buying power and leverage for the purposes of procurement, he said.

Goodwin Aged Care procurement and contracts manager Michael Hardgrave said being able to deliver a sustainable product topped the list of challenges for many in the sector including his organisation.

Michael Hardgrave

“We expect our suppliers to deliver what we require in our contracts, so it’s only right and fair we deliver what we say we’re going to deliver to our residents and clients,” Mr Hardgrave told AAA.

Among strategies to improve procurement outcomes, Goodwin is in the process of centralising it’s procurement processes to cover the whole ACT organisation.

“We used to have six different suppliers doing waste management at our four facilities all on different contracts and all from different providers.

“Now we have centralised it under one contract, one head agreement and have achieved massive savings,” Mr Hardgrave said.

Developing strong relationships between staff at all levels is another strategy to improve procurement processes, Mr Hardgrave and Mr How both suggested.

Take home message

Mr Hardgrave said building relationships with internal and external stakeholders was key.

“If you don’t do that and you just sit behind your desk all day, you’ll be right down the bottom of the game in procurement and contracting within the organisation.

“You’ve got to get out there, build relationships, teach people how it’s done and show them the benefits. As you grow your business, they grow their business,” Mr Hardgrave said.

Mr How said it was important to include the whole workforce in the procurement process.

“Staff don’t put a priority on procurement, so unless you bring the people on the journey, it’s going to be quite hard,” he said.

Procurement and Supply Australasia’s fourth annual aged care procurement conference takes place at Melbourne Olympic Park 18 – 19 April.

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