Importance to SANBS in delivering value

• The environment that we operate in is challenging due to poor economic growth, high unemployment, constrained healthcare budgets in both the private and public sector and increasing operating costs
• As a self-funded, not-for-profit organisation and the largest provider of blood products and services in South Africa, strong governance, leadership, business continuity, stakeholder management and financial stability are key to ensuring stability and long-term sustainability
• SANBS operates on a cost recovery basis and needs to be financially sustainable to ensure that we continue to provide products and services to patients

Risks to value creation

• Inability to collect outstanding debt
• Increasing cost of doing business in the current economic climate
• Delays in external supply chain
• Reputational risk – brand erosion
• Inability to meet full demand for blood products
• Perceptions of high costs of blood products and services
• Tedious/bureaucratic internal processes leading to inefficiencies

Opportunities and strategic response to create value

• Appropriate strategy execution, planning, systems and controls must be in place to ensure that we can generate and collect revenue and make surpluses to ensure sustainability
• Initiatives to strengthen financial resilience include:
  • An Inventory Optimisation project is underway to ensure inventory visibility throughout the value chain
  • Business process improvements in the procure-to-pay and order-to-collect processes – includes improvement in billing accuracy, efficiency and debt management
  • Ensure future fit skills and competencies
  • Bad debt management in consultation with the Department of Health and medical aids, hospitals and RAF
  • Refined budget process and disciplined expenditure
  • Improved procurement contracting and contract management processes
  • Efficient delivery of blood products to reduce cost
  • Focused efforts to grow alternative revenue streams

Outlook for the year ahead

• Ongoing efforts on increasing debt collections and engagements with medical aids to collect long outstanding claims
• Continue to improve on procurement and contract management processes
• New Corporate Services Executive appointed and procurement committee established
• Implement the stakeholder engagement framework to ensure structure and direction in a coordinated approach to engage with customers to ensure timely payment for services
• Develop stronger relationships with medical aids, government and other institutions to ensure optimal functioning of billing/collection processes
• Keep tariffs at or below inflation for next two years
• Manage costs to within inflation
• Strengthen order to collect processes
• Improve internal systems to be more agile in responding to customer queries