FAQ: Information for Suppliers

Key points:  

  • HSV is undertaking a staged implementation of our supply chain operations.  
  • In stage one, suppliers will continue to receive orders mostly for the former Melbourne Health Logistics’ Tullamarine distribution centre, in addition to receiving some orders for HSV’s new Derrimut Distribution Centre (DC).  
  • In stage two, HSV’s Derrimut DC will replace the Tullamarine DC and suppliers will receive orders from the Derrimut site. 
  • As the transition from stage one to stage two will happen progressively, suppliers may receive orders from both the Derrimut DC and Tullamarine DC.  

Will product usage data be available per health service site?

HealthShare Victoria (HSV) will look at options to provide information on product usage by health service to assist suppliers in targeting product support services. 


Can HSV report where stock has been distributed so suppliers can provide appropriate support?

Initially, HSV plans to provide monthly reports to suppliers on the distribution of stock to health services. This is in line with current arrangements at the former Melbourne Health Logistics (MHL’s) Tullamarine distribution centre.

As HSV operations mature and the enhanced Oracle FMIS system is established, HSV will look to provide more frequent information on health service stock distribution to assist supplier operations. HSV will advise stakeholders when more frequent updates will be available.

What stock-keeping units (SKUs) is HSV now sourcing?

Initially, suppliers will continue to receive most orders for the former Melbourne Health Logistics’ Tullamarine distribution centre in addition to receiving some orders for HSV’s new Derrimut DC.

HSV is maintaining operations at the MHL Tullamarine distribution centre for an initial period. This means that MHL will continue to procure approximately 80,000 stock and non-stock SKUs.

HSV has completed the first round of orders of bulk stock – approximately 1,800 medical consumable SKUs – at the Derrimut DC.

Once fully stocked, orders for the Derrimut DC will pause until it takes over from the Tullamarine DC as HSV’s primary distribution centre.

In the meantime, suppliers will continue to receive orders for the former MHL Tullamarine distribution centre operations, as well as some orders for the Derrimut DC.

Will suppliers have to set up HSV as a new account?

Yes, all suppliers will need to set up a separate account for orders from HSV.

HSV DC orders will be separate to MHL orders.

Will suppliers receive orders from HSV rather than MHL? If so, will catalogued products be transferred to HSV’s Oracle system?

Suppliers will receive orders from both HSV and MHL.

It’s important to note that suppliers will receive purchase requisitions from MHL for delivery to Sperry Drive, Tullamarine and also from HSV for delivery to the Foxley Court, Derrimut DC.

Suppliers should ensure that drivers check the delivery address if unsure.

Will Melbourne Health Logistics continue to process their own orders?

While now part of HSV, Melbourne Health Logistics (MHL) will continue to place orders with suppliers. This means that MHL will continue to procure approximately 80,000 stock and non-stock SKUs.

HSV’s DC in Derrimut will ultimately take over from Tullamarine as HSV’s primary distribution centre. After that occurs, MHL will only order those SKUs not being procured and distributed through the Derrimut DC – which are mostly expected to be non-stock items.

However, MH may request that these purchases be delivered to HSV’s Derrimut DC so that they can be consolidated and coordinated for ‘last mile’ delivery.

Will health services still place orders directly with suppliers?

HSV’s collective agreements are available for all mandated health services in Victoria.

Initially, HSV is procuring only a small proportion of products on those collective agreements for Melbourne Health precinct partner health services.

Suppliers should expect to continue to meet orders for all other health services. It’s important to note this model is different to the State Supply Chain (SSC), where all health services are required to order essential COVID-19 personal protective equipment (PPE) items through the SSC.

Should suppliers engage with health services or HSV or both?

Suppliers should engage with both health services and HSV – depending on the product and whether it is ordered by HSV or the health service/s directly from suppliers.

HSV expects most health services will initially have a mix of supplies and that suppliers will maintain their existing relationships.

How does the move to HSV affect the CH2 logistics arrangement?

The move to HSV’s supply chain operations is not expected to affect arrangements in place with CH2 Logistics.

Is stock substitution allowed?

The ability for stock to be substituted will depend on the product or service. Any substitution would require prior agreement with HSV and the relevant health services.

Does HSV require alcohol or scheduled drug permits?

No, HSV does not at this stage require permits for alcohol or drug products. There are no pharmaceuticals stored at HSV’s Derrimut DC.

Will HSV be able to manage different pricing for the same item, depending on which hospital is purchasing it?

For HSV-contracted items, pricing is uniform across all health services.

For non-HSV-contracted items, the HSV catalogue will be able to manage variable pricing for the same item while HSV transitions non-contracted items to our collective agreements.

Will service level agreements (SLAs) between HSV and health services be outlined or documented so that suppliers can understand the service requirements and turnarounds health services will expect?

Yes, HSV is working to establish SLAs with health services. SLA terms are not expected to be very different to those that health services previously had in place with MHL.

Will HSV cover any costs to suppliers related to adopting EDI (electronic data interchange)?

HSV recognises both the benefits and costs of EDI use. HSV is presently reviewing our EDI arrangements and will consult with suppliers on changes being considered.

Will there be any associated back order or late delivery fees?

For HSV-contracted items, contract terms and conditions will continue to apply. For non-contracted items, both MHL and HSV purchase order terms and conditions will apply until HSV’s Derrimut DC replaces MHL Tullamarine as HSV’s primary distribution centre.

Will deliveries be ‘free into store’ (FIS) into HSV?

For HSV-contracted items, the contract terms and conditions will apply. For non-contracted items, both MHL and HSV purchase order terms and conditions will apply until HSV’s Derrimut DC replaces the Tullamarine facility as HSV’s primary distribution centre.

Does HSV need to complete a deed of guarantee and indemnity form?

HSV is an independent public authority and contracts on behalf of the State by law. HSV does not have the same guarantee and indemnity requirements as a private business.

In line with government policy, HSV does not provide guarantees and indemnities other than in the cases provided by that policy.

What are the credit arrangements?

Existing MHL customer credit limits will remain the same. For suppliers yet to establish a customer credit limit, please contact the HSV Helpdesk on (03) 9947 3900.

What are your payment terms?

The Victorian Premier has directed government entities – including HSV – to implement payment terms that aim to achieve settlement of supplier invoices within 10 business days.

This direction aligns with HSV’s payment terms which provide payment terms of 10 days from receipt of a correctly rendered invoice for small businesses as required by the Australian Supplier Payment Code.

See https://www.premier.vic.gov.au/economic-survival-package-support-businesses-and-jobs.

How is HSV communicating to suppliers?

HSV is communicating with primary contacts from supplier organisations who have registered in the procurement portal on HSV’s website. It’s important to make sure these contact details are up to date.

As HSV is a new organisation and has a new email address, please be sure to check your spam email folders for communications.