eCom helps local authorities in Sweden
by Måns Widman  

The county council in Kronoberg with its offices in the Swedish province of Småland has always been at the leading edge when using IT. This meant that an e-commerce project could be implemented very quickly, be finished well within the allotted timeframe and under budget. No external consultants were needed since all necessary competence was available within the project group. 

"The great benefit with e-commerce is that it frees up a lot of time since much of the administration can be done automatically", says project leader Thomas Öhling, "but we also save a lot of money on the frame agreements which underlie e-commerce". 

Previously the county council had an electronic order system which was used by some departments for laundry, central store and sterile products. When the old terminals started to wear out and the ordering system showed its age, the council’s procurement section decided to evaluate the effects of introducing modern e-commerce. 

Savings is the goal

"The idea was that practically all departments should start to use e-commerce", says project administrator Tord Rosenvang. "The starting point was that we should make financial and time savings". 

After a successful pilot project at three clinics the procurement department decided to extend the system to the whole of the county council. The project was finished at year-end 2006. The e-commerce system is called Marakanda and is based on GS1’s standard for the business process call-off against frame agreement, ESAP 6. The system now has some 1400 active users in 320 departments and 15 of the council’s largest suppliers. The clinics’ goods receipt locations are identified with GS1 global location numbers (GLN). 

Location numbers key to communication

"By using GLNs we have globally unique codes which we can use in communication with all our suppliers", says Tord Rosenvang. "If, for example, we should change a laundry supplier, there is no chance that our numbers will collide with those used by another council". 

Users were trained at their own workplaces, which gave pedagogic advantages and saved time. 

Once the user has logged in to the e-commerce system, he or she only needs to fill in the quantity to be ordered in pre-configured templates. If the number of order lines is large, say between 20 and 30, a user in the central store can read the barcodes on the products with a hand-held computer and then key in the quantity. 

The call-off goes directly into the supplier’s business system which approves it if certain criteria are satisfied. Everything happens electronically. The requested items are picked, packed and delivered to the council. The delivery is checked against the packing list and receipt confirmed in the e-commerce system. 

Enormous time savings

The county council receives some 90,000 supplier invoices every year. Currently some 25,000 of these are processed in the e-commerce system. 35,000 call-offs are made using the system each year. (There is no data on the total number of call-offs.) A study carried out by an independent analyst shows that the council saves on average 15 minutes work for each invoice handled electronically. The saving is 50 minutes for each order made with a handheld computer, and 20 minutes for each order made using a template. 

A big advantage with the system is that it increases price and cost consciousness among users, which leads to thrift both when ordering and in use. The council is therefore able to make big savings through the agreements that the e-commerce system supports. 

Smart purchasing saves millions

"Users ordering, for example, office supplies can see in the system if these are part of the base or supplementary range", says Thomas Öhling. "Prices are considerably lower for the base range than for the supplementary. The council saves up to 1.5 million Swedish kroner (€ 160k) per year on office supplies alone by choosing the basic range”. 

"One example of employee cost consciousness is that they now use paper to mop up water on the floor instead of towels", says Tord Rosenvang. "Since the introduction of the e-commerce system laundry orders have quickly fallen by five to ten percent". 

Simplified cooperation between county councils

The county councils in Kronoberg and Blekinge share a central store. They also have shared agreements with some suppliers which save time and reduce costs since prices are lower with larger ordering volumes. 

"Previously many internal requisitions arrived at the central store and the two sterile centres in Växjö and Ljungby by telephone or fax", says Thomas Öhling. "Today they use Marakanda. The orders go straight in to their stock keeping and order system, which means that the personnel save a vast amount of time". 

Approved products ensured

The e-commerce system has also raised patient safety. 

"When the user rang the supplier directly, they could more or less order whatever they wanted", says Tord Rosenvang. "In the e-commerce system it is only possible to call off those items which are on the current price list. The products used in the care process are therefore certain to be approved." 

The procurement section has created a special follow-up unit to check how call-offs are working in the departments. 

"By doing these follow-ups we can identify call-offs that are being made outside the e-commerce system", says purchasing coordinator Helene Blomqvist. "We also identify product areas where there is demand but no frame agreement. So we can contact suppliers and get one". 

Pharmaceutical products, which are purchased by municipalities but paid for by the county council, will be added to the e-commerce system to improve oversight.

For those orders which are not made in Marakanda, the council has a routine for scanning paper invoices into the system which provides a good complement to e-commerce. 

"The next step is to implement the new version of Marakanda, MI4, across the board. This will give us big possibilities to develop and tune our processes", says Tord Rosenvang.