Change the forecast from perfect storm to perfect order

Today, hospitals spend countless hours and resources manually gathering, scrubbing and modifying product data to populate procurement systems, electronic health records and clinical systems. These error-prone processes involve inputs from many supply chain participants, including group purchasing organizations, distributors and suppliers. The root cause of many pricing, delivery and chargeback errors that exist today is a lack of common product data standards and a system to synchronize this information up and down the supply chain.

Yet, behind every storm cloud lies a silver lining. Now, more than ever before, momentum is building for supply chain data standards that can help eliminate waste and inefficiency, which cost the industry billions of dollars each year. Over the last 18 months, the U.S. healthcare industry has made tremendous strides in testing the applicability and scalability of product data standards that are successfully being used by other large industries to manage supply chain processes. The results are exciting.

It now appears that hospitals and some suppliers, including BD, are rallying behind a single set of standards that we can use to drive down costs, create efficiencies and, ultimately, improve patient safety. These standards from GS1 are sometimes referred to as the "3Gs": the GLN (Global Location Number), the GTIN (Global Trade Item Number) and GDSN (Global Data Synchronization Network).

The ability to move medical products accurately and efficiently through the supply chain is critical. With common, synchronized product data standards, we can help get the right product to the right patient at the right time with the right price and right information electronically (without human intervention) on the first attempt. Instead of a Perfect Storm, the "Perfect Order" can become a reality in our industry. As we have heard from our customers on the forefront of product data synchronization, bar-coded products and point-of-care scanning assist them with important patient safety initiatives by tracking products, recording serial numbers and managing expiration dates.

Although suppliers generally have clean product information in their ERP systems, current manual processes, coupled with the lack of product data standards, cause data moving through the supply chain to be misinterpreted and corrupted. This leads to hiring costly staff to manage non-value added re-work processes. In extreme cases, bad product data could cause questions or errors regarding latex, sterility, product reuse and other important clinical attributes.

Perfect, synchronized product data through data standards and GDSN are invaluable for Electronic Health Records and other clinical systems. It also helps providers ensure they are speaking the same language as their suppliers, and also between departments in the same hospital. For suppliers like BD, product data synchronization can enhance efficiency by eliminating redundant efforts to share product information across multiple customers, using separate and unique lists of data elements and formats. Accurate product data also create the foundation for accurate e-commerce and supply chain efficiency.

To be successful, all healthcare supply chain stakeholders must adopt a common set of data standards in a system that synchronizes supply chain information across the board. Many healthcare suppliers, including BD, already use GS1 Standards for product bar codes today. Likewise, BD and others are using GDSN as a single location for product information to support customers in other markets.

As global healthcare suppliers know, product numbering requirements are growing around the world. It is imperative that the market harmonize data standards to support the global market, rather than pursuing country-specific numbering systems and bar code requirements. Suppliers should adopt a common worldwide product numbering system, with the GTIN emerging as the system of choice.

Hospitals must not only adopt these standards, but also encourage their suppliers to do the same. Many facilities are already taking a stand by mandating the incorporation of specific GS1 Standards by 2010 and 2012. BD has received letters from several leading healthcare institutions indicating their intent to adopt these standards. Many healthcare providers are beginning to utilize data standards by participating in industry pilot programs. This kind of leadership is needed to effect change in an industry that, until recently, has been resistant to it.

Influential industry groups, such as the Strategic Marketplace Initiative (SMI), the Association for Healthcare Resource and Materials Management (AHRMM) and the Healthcare Supply Chain Standards Coalition (now part of GS1 Healthcare US), support the 3Gs to meet specific healthcare supply chain needs. Group purchasing organizations – Amerinet, Premier and Resource Optimization & Innovation — are making GS1 adoption a contract requirement for healthcare suppliers and hospitals alike. GHX recently announced its plans to become a GDSN-certified Data Pool.

You need only take a trip to Target or Home Depot, where scanning a bar code is a given, to begin to imagine the possibilities that data standards could bring to healthcare. Returning a product without a receipt is done in a blink of an eye, and there are no mysteries in finding needed information to complete a transaction.

As the buyer of products, Materials Managers have the power to encourage adoption of the 3Gs. Please join the standards movement now. Arm yourself with information about the benefits of product data synchronization to garner executive support and convince your supply chain partners to improve their business processes (www.standards.ahrmm.org).

You should encourage suppliers to assess their state of readiness for using GS1 Standards by sending letters communicating your specific implementation dates and plans. Likewise, ask your GPO what it is doing and how you can help move the process along. Finally, encourage your suppliers to join ongoing tests of GS1 standards, including the U.S. Department of Defense GDSN pilot. Most importantly, take personal responsibility – begin using the standards.

While many of the pressures we face seem to be beyond our control, establishing product data standards for the healthcare industry is completely in our hands. Collaboratively we can improve the quality of patient care and our bottom line at the same time. We cannot afford to wait any longer.