2012 is the year of the GTIN in the U.S. healthcare supply chains as christened by the largest hospital group purchasing organizations (GPOs) in their so-called “Sunrise 2012” program. They have asked all of their suppliers to switch from proprietary product codes to GS1’s Global Trade Item Number (GTIN) standard in catalogs, B2B communications and shipment labeling by the end of this year. They did the same thing with GS1’s Global Location Number (GLN) back in 2010 (“Sunrise 2010”) but so far it appears to have had only a small (but still growing) impact.
The GTIN can be a mysterious concept. I received an email recently from a sales person who wanted to know what this “G-ten” thing was that her customer kept claiming was so important to her future business with them. I’ve also sometimes had difficulty convincing people that GTIN adoption is important. “We don’t need another product identifier. We already have the NDC!”
I hope to pull back the veil just a little bit and explain not only the anatomy of the GTIN but also why it is so important to all supply chains in all regions of the world.
WHAT EXACTLY IS A GTIN?
“As the name implies, the GTIN helps automate the trading process – basically buying and selling. GTINs are therefore assigned to any item (product or service) that may be priced, or ordered, or invoiced at any point in any supply chain. The GTIN is then used to retrieve pre-defined information about the item. The key benefit is that information about the item can be retrieved about the product from the GTIN whether it is read in a GS1 BarCodes symbol, exchanged via a GS1 eCom message or accessed from the Global Data Synchronisation Network.”
Hmmm…Let me try. First, a “Trade Item” is any product or service that may be manufactured, priced, advertised, bought, sold, traded, invoiced, returned or consumed within a commercial supply chain. GTIN (Global Trade Item Number) is a GS1 standard that defines the structure and usage rules for a numeric identifier that can be assigned to a very specific, idealized description of a “trade item” and which can then be used in any part of the world to refer to instances of trade items that conform to that description.
For another attempt at a definition, see the one on Wikipedia here.
In everyday usage “a GTIN” is the number that is encoded into the product barcodes found on pretty much every product you can find in any store. In the U.S. you know it as the UPC, or Universal Product Code, a 12-digit number (and technically known as a GTIN-12). In the E.U. you know it as the EAN, or European Article Number, a 13-digit number (and technically known as a GTIN-13). The GTIN-12 and GTIN-13 are “retail” GTINs. That is, these are the GTINs placed on products that are typically sold through a retail Point of Sale (POS) station (a store checkout counter). This includes most over the counter (OTC), non-prescription drugs.
Today, nearly all OTC drugs and many prescription drugs in the U.S. supply chain are marked with a National Drug Code (NDC) or a Universal Product Code (U.P.C.) that is encoded in a GTIN-12 data structure and rendered on the package in a UPC-A barcode. Non-retail products like those that are typically sold only B2B (business to business) (GS1 refers to these as “Trade Items Intended for General Distribution Scanning Only”)—including prescription pharmaceuticals—should be assigned a 14-digit GTIN (technically known as a GTIN-14).
You may yawn, but this is powerful stuff if you can get everyone on the bandwagon. The GPOs in the U.S. and GS1 plan to do just that.
The most important aspect of the GTIN standard is that when one is properly assigned to a given product or service it is globally unique. That means that no other product or service anywhere in the world can ever be assigned that same GTIN so that number can be used anywhere and everywhere to refer to that specific type of product or service. This eliminates product code ambiguity globally.
Another important feature is that the GTIN standard is applied in the same way regardless of product type, service type or supply chain. The same rules apply to all GTIN identifiers. These rules are defined in GS1’s General Specification—the specification of “The GS1 System”, of which GTIN is just one part. See also “GS1 GTIN Allocation Rules for Healthcare” for some of these rules in a healthcare context. (For a great non-technical explanation of “The GS1 System” of standards, check out this great PDF: “The Value and Benefits of the GS1 System of Standards”.)
ANATOMY OF A GTIN-14
I mentioned above that a GTIN can take form in 12, 13 or 14 digits (it can also take the form of an 8-digit value but that’s very rare in healthcare), but since my focus is primarily in the B2B healthcare supply chains I’m only going to concentrate on the 14-digit form in this essay. This is the only form that will fit into barcodes that make use of GS1 Application Identifiers (AI) (like GS1-128 linear barcodes and GS1 DataMatrix 2D barcodes) although the other forms can always be converted into the 14-digit form (by padding with zero[s] on the left). Note that OTC drugs at the unit-level cannot make use of the GTIN-14 structure, AIs or the barcodes that carry them because they need to be scanned at POS.
There are four components that make up a GTIN-14 and they appear in this order:
- Indicator Digit
This digit only appears in the GTIN-14 and is primarily used to indicate standard groupings (inner pack, case, pallet, etc.) of packages of the same GTIN using values 1 through 9. A zero indicates that the GTIN is representing a single unit. For products where the actual units sold can be a variable measure (weight, size, volume, etc.) the indicator digit should be set to 9. Indicator values 1 through 8 have no specific standard meaning other than that they indicate a grouping. That is, there are no standard groupings that values 1 through 8 may indicate so you can’t assume any particular value means an inner pack, a case, a pallet or anything else. Each company is free to choose any of these values to indicate any grouping they wish.
- GS1 Company Prefix (GCP)
This is the variable length number that is assigned by the local GS1 Member Organization (MO) to the company that manufactures, packages or repackages the product that the GTIN represents. This is the number that those companies must apply to GS1 for assignment. In the U.S. the GCP ranges in length between 6 and 10 digits and the length partially determines its cost. Shorter company prefixes cost more than longer ones (see Item Reference below for why this is so).
Pharmaceutical companies who already possess an FDA Labeler Code (see my previous essay, “Anatomy Of The National Drug Code” for more on this) just need to register that code with GS1 US (the local GS1 MO in the United States) to obtain a license to use that same code as the basis for their GCP within the context of GS1’s copyrighted barcode, RFID, EDI, pedigree and track & trace standards.
The GS1 Company Prefix is itself composed of a 1 to 3 digit GS1 Prefix which is assigned by the GS1 Global Office to each GS1 MO to ensure global uniqueness of all GCP-based GS1 keys (GS1 keys include GTIN, GLN, SSCC, GRAI, any EPC, GSRN, GIAI, GDTI, GSIN, etc.). This prefix is sometimes incorrectly referred to as a “country code” although because MOs are fairly country-specific this is not too far off. The remainder of the GCP—known as a Company Number—is assigned by the Local MO. See the GS1 General Specification for more details.
When a company is assigned a GCP by GS1 they are granted exclusive rights to use that prefix to construct any of the GS1 keys (see the list in the paragraph above) and use them in any way they see fit as long as it is within the rules established in the GS1 General Specification. GS1 keys generated by the owner of the GCP do not need to be authorized, approved or registered with GS1. There is no additional cost to generate new GS1 keys once a company obtains a GCP.
GCPs are a company asset that should be addressed in any merger or divestiture strategy (see this topic in the GS1 General Specification). GCP usage within a given company should ideally be controlled at a single point within an organization. This generally isn’t an issue for smaller companies but multinational corporations should ensure that they have a strategy for centrally assigning and distributing GCP-based GS1 keys to their operations to ensure uniqueness and to ensure that the GCP resource is used to its maximum potential.
Companies may obtain multiple GCPs from their local GS1 MO if they use up the available reference values in one or more GS1 keys. They may also obtain additional GCPs (partly “used”) as the result of a merger with another company.
Neither GS1 nor the MOs police adherence to any of their standards, but they carefully control the assignment of GCPs to always maintain global uniqueness. As long as the GCP assignments are all globally unique, all of the keys generated by the owners of all GCPs will also be globally unique. This is a very important design feature of the entire GS1 System.
- Item Reference
The Item Reference is a variable length number that must be chosen by the owner of the GS1 Company Prefix and assigned to the specific description of a single product class. This specific description must remain unchanged for the life of the GTIN (see the GS1 General Specifications for details and exceptions). The combination of the owner’s GCP and the Item Reference must be exactly equal to 12 digits. Since the length of the GCP is determined when it is obtained from the local MO, the length of the Item Reference must take up the remainder of the 12 digit space.
For example, if company A obtains a 6-digit GCP, the Item Reference field within their GTIN-14’s must be 6 digits long (12 – 6 = 6). If company B obtains a 10-digit GCP, their GTIN-14 Item References must be only 2 digits long (12 – 10 = 2). From these two examples you can see that company A can identify up to 1,000,000 unique products or services but company B can only identify 100.
There is a comparable limitation in the other GS1 keys. Shorter GCPs result in more digit space available in the reference portion of the key which results in vastly more usable unique numbers (each extra digit represents an order of magnitude more unique values the owner can assign). This is why GS1 charges more for the shorter GCPs than they do for longer ones and this provides a measure of affordability to smaller companies who will likely never need more than a small number of unique GTINs or other keys.
- Check Digit
The Check Digit is a single digit that is mathematically calculated based on the contents of all of the other digits in the GTIN-14. The purpose of the Check Digit is to help barcode readers and applications detect data entry errors. See Section 7.10 of the GS1 General Specification for the algorithm.
Here is an example of a GTIN-14 that I found on an inner-pack of Epinephrine injectors.
An “inner-pack” is a grouping of trade items and so we see the Indicator Digit is set to “1”, a valid value for a grouping. We can’t tell by looking at this example exactly how long the GCP is because it could be anywhere from 6 digits to 10 digits long. Fortunately GS1 provides a service they call Global Electronic Party Information Registry, or GEPIR. If we select “Search by GTIN”, enter ‘10304094921348’ and click “Search”, we are told that this GTIN contains a 6-digit GCP of ‘030409’ and it is registered to Hospira, Inc. in Lake Forest, Illinois. Now we know that the Item Reference that Hospira happened to choose for this GTIN must be ‘492134’. The Check Digit is calculated based on all of the previous digits as “8”.
This particular inner-pack contained about 10 or 12 unit-level packages that were shrink-wrapped together and labeled with the GTIN-14 above. Each of the units contained a barcode with the unit-level GTIN-14 encoded in it. It was exactly the same GTIN as the inner-pack except for the Indicator Digit, which was correctly set to zero, and the check digit which changed because of the change in the Indicator Digit. These were unit dose injectors. There are probably about 4 inner-packs per casepack but I didn’t note that information. The case GTIN would be exactly the same as the inner-pack and units except for the Indicator Digit which would have been been a value in the range of 2 to 8 to reflect that it is a standard grouping that is different than the inner-pack.
Normally we don’t need to deconstruct GTINs like this. In fact the whole point of a GTIN is to use it as a single whole identifier and not to break it down into its constituent parts like we have done here but I wanted to show you how this one was intelligently constructed by Hospira, the owner of this particular GCP.
BENEFITS OF THE GTIN
The benefits of GTIN adoption by a supply chain are different between manufacturers and non-manufacturers (distributors, pharmacies and retailers).
Manufacturers gain because they can potentially use the same standard product/service identifier in multiple markets/countries. Well, as long as the packaging doesn’t vary (same language, etc.) and there aren’t any regulatory reasons for using a different identifier (national numbering like the U.S FDA NDC, different units for the unit of measure, etc.). Even when a different identifier is necessary for different markets/countries the manufacturer benefits from the use of a standardized identifier because modern Manufacturing Execution Systems (MES), Warehouse Management Systems (WMS), Electronic Data Interchange (EDI) systems and Enterprise Resource Planning (ERP) systems should come with full GS1 System support built in (admittedly not all do yet). This includes enforcement of many of the GS1 rules for dealing with GTINs and the other pertinent GCP-based identifiers.
Like manufacturers, non-manufacturers in the supply chain make use of WMS, EDI and ERP systems in addition to pharmacy management systems and Hospital Materials Management Inventory Systems (HMMIS) that ought to have standardized GS1 System support built in. These companies also benefit because they can trust that GTINs are globally unique and all product identifiers used by all of their suppliers refer to the same product or service and those identifiers are constructed using the same format. This allows them to eliminate their own internal product codes for each manufacturer’s products and services, simplifying inventory management, sales, purchasing, order fulfillment, shipping, receiving and dispensing and thus reducing errors that generate waste and in the healthcare supply chain can cause injury or even death. This is why the GPOs are so hot to make 2012 the year of the GTIN.
ADOPTION OF THE GTIN
Manufacturers of products or services can decide to unilaterally adopt the GS1 GTIN standard for all of their products and they can reap some small internal benefits from that decision as I’ve outlined above. That may not offer enough of a gain to offset the cost of conversion from proprietary product identifiers. The problem is, for the downstream trading partners to benefit from GTIN use, more than just one manufacturer has to switch to GTINs. In fact, the benefits don’t start accruing to those companies until a significant number of manufacturers switch to GTINs, and until all manufacturers in a given supply chain switch to them the benefits do not reach their maximum potential. For this reason, GTINs should be adopted by a supply chain as a whole and not just one company here and there.
How do you trigger a switch within an entire supply chain like that? The GPOs may have it figured out. Like Walmart in the fast-moving consumer goods (FMCG) supply chain and the big automakers in their supply chain, they have to start dictating the switch and they have to be hard-nosed about it. Can the GPOs fill the role of the “800-pound gorilla” like Walmart and the automakers? We’ll see.
There are some encouraging signs and some discouraging signs in the recently released results of a survey in a document called “GS1 Data Standards Adoption Survey, Progress toward Global Trade Item Numbers (GTINs), December 2011” conducted by the University of Arkansas Center for Innovation in Healthcare Logistics (CIHL) on behalf of the Healthcare Supply Chain Association (HSCA) (the industry association of GPOs, formerly HIGPA) and the Healthcare Industry Supply Chain Institute (HISCI). I’ll have more to say about this paper and the results it documents in a future essay.
I’ll stop here for now. Watch for future related essays on “Depicting an NDC Within a GTIN”, and “Anatomy of an SNI”.
I am going to attend the 2012 National Pharmacy Forum in Tampa on February 9th. The full conference runs from the 8th through 10th and is co-hosted by HCSA and HISCI. If you run into me there please introduce yourself and tell me what you like and don’t like about RxTrace.