Thinking outside the box
Coming up with new ways to drive savings is the best part of the job, says Robyn Cusick, who answers our questions on aged care procurement.
How many facilities, services, residents, clients, and staff are within your procurement remit?
ACH Group is a full service aged-care provider offering retirement living, residential care and home care including community care, lifestyle, and social programs. I am responsible for the procurement of goods and services for more than 2,000 staff and 8,000 residents and customers across 15 locations within South Australia.
What are the main goods and services you procure?
Our procurement portfolio covers four key categories:
- residential services consisting of food and catering, medical consumables and equipment
- property and assets covering refurbishments, general trades, furniture and facility maintenance
- home care and community enabling customer choice in personal care, domestic assistance, home modifications and allied health.
- corporate services including energy, IT infrastructure, fleet vehicles and waste management.
What procurement channels and management technology do you use?
As a not-for-profit organisation who has been servicing South Australia for more than 70 years, we have developed long standing and close partnerships with many of our direct and indirect suppliers. We are also a member of a large not-for-profit aggregator who provides group contracts across key consumables to drive efficiencies.
You can never understate the value of old-fashioned contract negotiation
In addition, we are undertaking a structured digital transformation program that includes procurement. Within the next 12 months, we expect to have a centralised data management system and procure-to-pay workflows and tools operational.
What roles do environmental, social, and corporate governance (ESG) and care recipients play in your organisation’s procurement process?
ACH Group is committed to not only being a good corporate citizen but a good environmental and social citizen as well. We have opted for 100 per cent green energy across our portfolio, have a trial waste diversion and education program in place to divert more waste away from landfill and all new fleet car purchases will be hybrids. Our social license to operate sees us prioritise local and diverse suppliers and we have a fair payments policy. The ACH Group Modern Slavery clauses are embedded in our contracts and market documents, with supply chains assessed regularly.
Where and how do you achieve cost and other efficiencies?
This is my favourite part of procurement – thinking outside the box to drive both hard and soft savings for the benefit of our workforce and customers. One of the key areas where cost savings have been identified has involved us looking inward. Working within the business to align ourselves across invoice timing and servicing provisions has made a significant impact in discovering cost efficiencies. One of our big success stories has been chronic disease management referrals for allied health, generating significant organisational savings.
While thinking outside the box is important, you can never understate the value of old-fashioned contract negotiation. We recently worked with our salary packaging partner to deliver each member of our workforce more than $100 a year in savings from a reduction in fees.
Where are your supply chain bottlenecks and how do you navigate them?
The only real supply chain squeeze we experience is with our commercial fleet and this is softening. Internally a key bottleneck has been managing a decentralised procurement system that has a range of organisational leaders able to buy goods and services. Our team has done a huge amount of work meeting with our internal buyers to provide education about best-practice procurement, particularly around developing relationships with regular providers. Doing this work has certainly stretched us but it has created an environment where leaders are able to make purchases with flexibility and convenience while also being informed about their requirements.
What other procurement challenges is your organisation facing and how are you addressing them?
Like many, the rising cost of business across labour, energy and fuel to name a few are providing a challenge. To manage this, we have a rolling 18-month forward procurement plan that ensures we are constantly testing the market, maintaining regular KPI meetings to manage our costs and are open to discussions with our contractors and providers. This forward planning has allowed us to build trust with our providers and to be proactive in our conversations about competitive terms.
What advice do you have for your counterparts?
The ACH Group purpose is to support good lives for older people. Older Australians face increasing cost-of-living pressures and ACH Group recognises the importance of maintaining lean, efficient and effective procurement practices.
Procurement also plays a pivotal role in ensuring the financial stability of our organisation, enabling us to allocate more resources to enhancing our services, supporting our people, and meeting the needs of customers and residents while reducing the need for price fluctuations.
In navigating procurement challenges, my key piece of advice is to be clear about what you want to achieve. It is more effective to focus on steady progress than striving for perfection. This approach has strengthened ACH Group’s operational resilience and aligns with our commitment to sustainable growth as well as continual improvement.
Robyn Cusick is head of procurement at ACH Group
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