(21 May 2020) The less polluted air at the moment is a blessing and has led to record solar power output though it does exacerbate the unusual heat. This week I should have been on holiday, my last one in Europe while we were still friends. Instead- today I fume at the papers (or rather their content).
My outrage commences at the government charging our key healthcare workers, who come from abroad (from October) £624 pa to use the NHS they prop up. They, also, do not pay them enough to be allowed to come here in the first place once we are cast adrift from Europe. This is just obviously wrong and is a manifestation of the severe cognitive dissonance exhibited by leading figures in the government (though I fear they do not suffer inner pain).
However today’s reflection is about warehousing.
We have all read about “The private firm contracted to run the government’s stockpile of personal protective equipment (PPE) was beset by “chaos” at its warehouse that may have resulted in delays in deploying vital supplies to healthcare workers…, The full story is here
What puzzles my simple mind is why a facility as vital as the nation’s (i.e. our) supply of vital equipment is looked after by a private company- a subsidiary of an American company.
The contact is reported to be worth £10.5 million a year. Assuming it is for five years that is a cost of £52.5 million. This was awarded to OM Moviantio, OM being Owens and Minor the American owner of the subsidiary.
OM’s annual report for 2019 stares that their gross margin on revenue is 12.25%
So, assuming nothing special they would expect to get a gross margin (basically profit) of nearly six and a half million pounds over the contract (£6,431,250 to be precise) and in a year would expect £1,286,250.
There is nothing necessarily wrong with profit, I had a nice ice cream yesterday and don’t mind if the maker gets a few pennies from me- I need not eat ice cream. However, if I am in hospital the people treating me have to wear PPE, I need them to wear it and do have an issue with the warehouse company (Logistics to use posh name) making money- even more so if it goes overseas rather than being spent in this country.
The story of the warehouse failure seemed to indicate not employing enough staff (who cost money) and not organising the warehouse correctly- which is not competent.
It is here that the perils of letting private interests run national facilities becomes apparent.
In essence the workers do the work and are managed by the managers. Even if they are paid the “going rate” they have to operate with less resources (as money is taken out for profit). So even if “public” sector was slightly less efficient, for some reason, I fail to see that it could be over 12% worse. “An Efficient business” in the private sector essentially means paying workers the minimum they can get away with.
The most telling quote in the story, from the company was
the company had “executed the agreed plan” to mobilise the stockpile without any delay and in accordance with its contractual obligations.
So, there is no suggestion that the company did anything wrong -demonstrating “The Rule for Private interests taking over Public Functions”
The best and most talented people who work for them are the sales team who are very good at their jobs.
The other team of talents are the contract lawyers and contact managers who tie up the public sector in knots when anything out of the ordinary occurs.
The workers are the ones paid as little as the company can get away with.
Logistics is not quantum computing; it is complex and needs structures and processes; however, there are plenty of people who can do it and there is a whole wealth of a profession behind it.
There is an institute of Supply Chain Management https://www.ioscm.com/about/why-ioscm/
One can do a masters in this https://london.ac.uk/courses/supply-chain-management
One can become a chartered member of a professional body https://ciltuk.org.uk/About-Us
And so on.
My actual point is that there must be plenty of trained and capable people in the UK who could run this service as part of the public sector without filching a million or so a year for shareholders to spend on guns and burgers.
I also note that this facility of ours is being sold to a private French company EHDH where they will doubtless spend the million (paid from our taxes) or so on organic free-range snails and fine wines.
I assume the company is run by a very nice man- you can read an interview with him here,
My sad conclusion is total despair that our rulers are so ideologically biased against so many things that are public sector that they put their trust in global companies rather than the British people- I am not even suggesting corruption (which at least would make sense) it is just dogged ideology.
To cheer me up here is a picture at an early attempt at weaponising kittens-note the early death ray on its back.
