standards

So a customer demands that you use GLN’s and GTIN’s. What next?

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In the healthcare supply chain a significant number of hospital group purchasing organizations (GPO’s) have stipulated, to varying degrees, that their suppliers begin making use of GS1 Global Location Numbers (GLN’s) in all of their trade with their member hospitals by the end of 2010 (Sunrise 2010) and GS1 Global Trade Item Numbers (GTIN’s) by the end of 2012 (Sunrise 2012).  Here are the announcements from Novation, Premier, MedAssets and Amerinet.  From the wording of their announcements it appears that you have little choice, especially if you have competitors who are planning to comply with their requirements.

Companies who supply these hospitals are faced with how to comply with those requirements.  The best advice I can give to companies that are facing these requirements is to contact the respective GPO offices and get their specific direction.  Each GPO may have a different interpretation of their own requirements.  GS1 U.S. is the second place you can go for additional information about the proper way to establish the necessary capability in your IT systems.

Here is a list of questions you may want to ask of each GPO to help you understand what you have to do to comply:

  1. Do they require the use of GLN’s in addition to HIBCC’s Health Industry Number (HIN) or instead of it?

  2. Do the GTIN requirements only cover medical devices or does it include everything a hospital purchases including pharmaceuticals and over-the-counter (OTC) products?  Does it include implants?  As I understand it, most implants currently use HIBCC product codes because they use alphanumerics which offers an expanded number of possible codes.  I’ve heard people speculate that the GPO requirements only cover medical devices, but when I read their announcements it sounds to me like they mean everything they purchase.

  3. Are the 2010 and 2012 dates the earliest time you are allowed to begin using GLN’s and GTIN’s respectively in transaction documents, or can you begin using them as soon as you are ready?  In other words, can the GPO assure you that their member hospitals are ready to accept them whenever you are ready to supply them, or do you have to wait until the actual sunrise date, or worse, selectively turn on the capability, one hospital at a time, as they become capable of receiving them?

  4. If you have every intention of making the necessary system changes to comply, but you just can’t get the resources necessary in time (remember, GLN by the end of this year), can you continue to do business with the member hospitals after the sunrise dates?  This is a test of how “hard” these deadlines really are.

  5. The point of GLN’s and GTIN’s is to allow you to remove all of the supply chain master data (SCMD) elements that are associated with these numbers from all transaction documents.  But it’s unclear if that’s what the GPO’s are really asking for.  SCMD elements for GLN’s include things like the company name, street address, phone numbers ,etc.  SCMD elements for GTIN’s include things like the product name, size, color, form, weight, temperature requirements, etc.  Do they expect you to remove all of the master data elements that are associated with your GLN’s and GTIN’s from your transaction documents (printed and electronic), or do they want to keep all of that data in your documents, but just add the GLN numbers and GTIN numbers?

  6. Do they require you to subscribe to and register your GLN’s in the GS1 U.S. GLN Registry for Healthcare, or can you just provide them with your GLN(s) and their associated supply chain master data?  If they don’t require you to use the GLN Registry, what mechanism will they accept for transmitting your supply chain master data?

  7. Similarly, do they require you to subscribe to a GS1 GDSN data pool and maintain your product’s supply chain master data there?  If not, what mechanism will they accept for conveying your product master data?  (Depending on their answer to #5 above, they may not need you to give them your SCMD, yet.)

  8. What if you are a wholesaler and the manufacturer’s of the medical devices and pharmaceuticals you supply to their member hospitals do not even have GS1 GTIN’s defined for their products but have HIBCC-based product codes instead?  (GS1 GTIN allocation rules prevent you from creating GTIN’s on behalf of the original manufacturers.)  Will the HIBC code fulfill the requirement? 

    Be aware that the GS1 U.S. GLN Registry for Healthcare will not accept HIN’s and GDSN data pools will not accept HIBC codes.  Will the GPO’s accept the use of HIBCC’s HIN System database in addition to the GS1 Registry?  Will they accept the use of HIBCC’s UPN Repository in addition to GS1’s GDSN?  Don’t get your hopes up, but these are important questions for you to ask just to get clarity on what is expected of you.

I’m told that many ERP systems are able to define a custom set of item number aliases for each of your customers.  That’s one way to force the use of GTIN’s for each SKU on your transaction documents for GPO members.  Of course, GS1 is hoping you decide to cascade the GPO requirements to all of your internal systems and then to your suppliers as a GPO-like requirement.  That approach would spread the use of GS1 identifiers throughout all of your IT systems that deal with supplier and customer addresses (GLN’s) and item information (GTIN’s).

That might be a pretty big change, but you should evaluate the pros and cons of both approaches before you decide which way is best for you.  One thing to keep in mind is that the Sunrise dates are not regulatory requirements and GS1 has no authority to place requirements on anyone.  At this writing, it’s only a requirement of some GPO’s.  On the other hand, it’s hard to imagine that the supply chain can achieve a steady state with a mixture of HIBCC and GS1 location and product identification codes once the GPO mandates are operational.  More than likely the switch from HIBCC standards to GS1 standards will accelerate until only GS1 remains.

GS1 U.S. RESOURCES

GS1 U.S. has prepared a number of documents to help GPO suppliers meet the Sunrise requirements.  Most of them can be found in the GS1 U.S. Healthcare Document Library.  I’ve already provided hyperlinks to some of these resources above but here are a few more that you will find helpful:

SO YOUR SUPPLIER HAS ANNOUNCED THAT THEY ENDORSE GS1 STANDARDS, WHAT DOES THAT MEAN TO YOU?

At least one medical products wholesaler has recently stated that they endorse GS1 standards, specifically GLN and GTIN.  See a copy of their statement on page 3 of this report.  It appears that they are not requiring their suppliers or customers to support these standards, but if you are from a company who buys medical supplies from a company who has made an announcement like this and you prefer to continue using HIN for location codes and HIBC product codes, make sure you read their statement yourself and decide what it means to you.  If you have any questions you should contact them directly.

WHY ARE COMPANIES MAKING THESE ANNOUNCEMENTS ANYWAY?

There are two primary goals that underlie the movement to GS1 identifiers in the healthcare supply chains:  Patient Safety and Efficiency.  In my observation, companies who have decided to throw their weight behind the GS1 sunrise dates are doing it to remove as much ambiguity as possible from supply chain transactions.  Ambiguity is the enemy.  Ambiguity causes inefficiencies and it can harm patients, or worse.  And we have tolerated way too much ambiguity in the supply chain for too long.

Most of the ambiguity in the healthcare supply chains today occurs when companies use different master data than their trading partners are using for the same product or location.  That is, each company is maintaining their own local master data (MD) for each product code and each customer and supplier location.  They are using MD when they should be using Supply Chain Master Data (SCMD).  SCMD removes ambiguity because there is a single version of the truth across the entire supply chain for each product and location.  With SCMD, there is only one company responsible for maintaining the master data for each identifier on behalf of the entire supply chain, and that company is the owner of the data.  That is, each manufacturer is responsible for maintaining the SCMD for the products they manufacturer, and all of the other companies in the supply chain are provided that data, along with each update as soon as it occurs.  The same for each location in the supply chain.

GS1’s standard for the synchronization of supply chain master data (SCMD) is Global Data Synchronization Network (GDSN).  So why are we hearing about requirements for the adoption GLN and GTIN and not for GDSN?   The reason is simple.  The adoption of GS1’s GDSN standard for the synchronization of supply chain master data (SCMD) can only occur when there is a surge of trading partners who agree to implement it all at once, and who then put pressure on their other trading partners to adopt it at the same time.

It’s a very high threshold that must be overcome before GDSN can provide benefits to the supply chain.  So the first thing you have to do is get your supply chain to use the same standards for product and location identifiers.  That’s a prerequisite to GDSN.  GLN and GTIN are the only identifier standards that work with GDSN so that’s why we have Sunrise 2010 and 2012.  I will be very surprised if we don’t eventually see a Sunrise date issued for the adoption of GDSN by the same GPO’s once the supply chain is using only GLN’s and GTIN’s.  Use of a single standard for SCMD is the least complex way to remove ambiguity, which will finally elevate patient safety and supply chain efficiency, the ultimate goals.

HOW DOES HIBCC FIT INTO THE GLN, GTIN AND GDSN WORLD?

Short answer:  it doesn’t.  As I pointed out in my previous essay, the success GS1 has had in capturing the attention and support of the GPO’s is the biggest blow to HIBCC’s future.  GS1’s standards are currently designed to work only with GS1 identifiers, and that’s unlikely to ever change.  Part of the removal of ambiguity is narrowing the supply chain to a single set of standards and GS1 has the upper hand right now.  The fact that the block that is driving toward GS1 standards is composed of hospitals is significant.  Hospitals are large consumers of medical devices that have traditionally been identified with HIBC codes, more so than pharmaceuticals anyway.  Once that domino falls, it’s hard to imagine where HIBCC’s support will come from.

This is not my last word on the war between GS1 and HIBCC but I’m not sure if I will have time to complete the subject before the FDA releases their Serialized Numeric Identifier (SNI) guidance, which is due by the end of this month.  I hope to post my thoughts on SNI shortly after they publish.  Watch for it.

Dirk.

For more RxTrace essays related to this topic see:

2 thoughts on “So a customer demands that you use GLN’s and GTIN’s. What next?”

  2. This is a personal comment and not a comment representing the views of my clients nor any of the trade associations with which I am engaged.
    This blog appears not to have dealt with several important factors:
    1)the differeces in cost between GS-1 and HIBCC licenses, 2) advantages of an alpha-numeric system, 3)the advantages of maintaining certain legacy systems built around HIBCC standards 4) FDA’s neutrality toward the carrier so long as it is a recognized standard, 5) similar GHTF neutrality, 6) DoD desire for interoperability, 7) the disadvantages of effectively granting GS-1 a monopoly, 8) the fact that technology has progressed since the UPC was introduced in retail. Smart imagers and information processing can well accomodate a limited number of standards, 9)certain needs of the medical community are already well addressed using HIBCC standards, 10)the impact of the proposed monopoly on small enterprises and alternate site healthcare.
    Full disclosure: I am a HIBCC BoD Member.

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