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KSR Publishing, Inc.
Copyright © 2016

         Clinical intelligence for supply chain leadership



March 2011

Standard Practices


Questions can be e-mailed to: editor@hpnonline.com

Called in to Jeannie Akridge at:
(941) 927-9345 ext.202

Mailed to:
HPN Standard Practices
2477 Stickney Point Road,
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The Perfect Order: Lessons learned from BD and Mercy/ROi

by Karen Conway, Industry Relations Director, GHX

For most healthcare providers and suppliers, the ability to process a purchase order (PO) electronically (from order to payment) without human intervention and without errors on the first attempt remains elusive because of unclean data, inefficient or manual processes and un-integrated systems inherent to the healthcare supply chain. To achieve the "Perfect Order" in healthcare, as defined by Strategic Marketplace Initiative (www.smisupplychain.com), requires data synchronization, process refinement and adequate infrastructure.

But with increasing financial pressures on both providers and suppliers, trading partners are putting in place the elements required to achieve the "Perfect Order," recognizing that they simply can’t afford the time, labor and cost resulting from data discrepancies and manual processes.

In this month’s column, we will delve into steps taken and lessons learned by BD (Becton Dickinson and Company) and ROi (the health care supply chain organization founded by St. Louis-based Mercy) during their "Perfect Order" enablement project, as presented by Dennis Black and Glen Pfeiffer from BD, and Alex Zimmerman from ROi at the March 2012 GHX Global Standards User Group meeting.

BD and Mercy/ROi’s Perfect Order Process today

Working together, BD and ROi have achieved the "Perfect Order." In addition to other supply chain process changes, this accomplishment was supported through an end-to-end integration of GS1 Global Location Numbers (GLNs) for organization and location identification and GS1 Global Trade Item Numbers (GTINs) for product identification in supply chain processes from the point of manufacture to the point of use. Here is a high level overview of the steps these two trading partners have taken to implement GS1 standards:

  • BD: BD enumerates its products with GTINs for each packaging level and creates/manages product data associated with the GTIN (e.g. unit of measure, product dimensions)

  • At BD Factories: Each product is marked at the applicable unit of measure with a scannable barcode representing the GTIN along with production data (e.g., lot, expiry date)

  • At BD Distribution Centers: Product barcodes are scanned to verify receipt, track inventory, pick products and create shipments

  • At the ROi Distribution Center: Product ordered from Mercy systems containing the GTIN are delivered to the ROi Distribution Center. ROi staff scans the native barcode on BD’s products to validate receipt and pick products for shipment to Mercy hospitals

  • At Mercy Hospital Receiving: Products are scanned at the hospital docks to confirm delivery and facilitate product tracking

  • At the Patient Bedside: Clinicians scan the barcoded patient wristband and barcoded BD products, triggering inventory replenishment, patient charges to the billing system and device documentation in the patient’s EHR

  • In the OR: Products used in the OR from case pick drive the decrementing of inventory, possible automatic inventory replenishment, patient charge capture and documentation to the patient’s EHR. Products in the OR can be scanned for easy product identification and to determine chargeability

  • In the Data Warehouse: Mercy/ROi has a data warehouse which draws data from patient EHRs and its ERP system providing visibility into which physicians used which products on which patients and the costs of the procedures. Business Intelligence is then used to facilitate comparative analysis and product recalls.

As a result of these efforts and other processes to support "Perfect Order", ROi and BD have achieved the following supply chain results:

  • A 73 percent reduction in discrepancies

  • A 30 percent reduction in days payable outstanding

  • Greater process efficiency

  • Fewer stockouts

  • Fewer calls to customer service

  • Better charge compliance

Lessons learned

Speaking the same language

There are subtleties to global data standard enumeration that must be communicated and understood among trading partners. For example, the same product might have multiple GTINs if it is available in multiple units of measure (e.g. case, pack, single item). To overcome these issues, trading partners must reconcile product and location data in advance.

ROi and BD were able to synchronize GTINs for a subset of BD’s products via GS1’s Global Data Synchronization Network (GDSN) using the GHX Health ConneXionSM data pool. However, for products that BD has not yet loaded into the GDSN, data was shared manually using spreadsheets.

"It was really easy to just download the GDSN data via GHX Health ConneXion and upload it into our Lawson ERP system but there was a lot of manual effort involved for those items not in the GDSN," said Alex Zimmerman, director of Integrated Business Solutions for ROi.

In most provider ERP systems today, there is a part number that must be linked to a part number referenced in the supplier’s GTIN. This part number expands into multiple GTINs if there are multiple units of measure. In some cases, ROi and BD described various units of measure differently, with BD calling something a pack that ROi describes as a sleeve. The two trading partners had to work carefully together on the cross-walking process.

"It was helpful to share data via the GDSN and gain additional experience with this process," said Dennis Black, director of eBusiness for BD. "We also needed to share product data using spreadsheets. Regardless of the method used to share GTINs and product data, it was absolutely critical that we had a mutual understanding of the saleable units. We didn’t want ROi sending in electronic purchase orders with GTINs for unsalable units of measure. It is critical for trading partners to clean up their item masters because at the end of the day, we are using each other’s data in our systems and everything must match up."

Collaboration is critical

According to Glen Pfeiffer, e-Business manager, BD, standardized and synchronized data must be used in conjunction with standardized processes in order for the effort to succeed.

"We worked very closely with ROi to develop a process that works very well for both parties," explained Pfeiffer.

In order to standardize and automate processes, both BD and ROi had to change system configuration and establish one common map in an agreed-upon format for EDI transactions. This involved working closely with GHX and with their software vendors.

It’s all or nothing

When BD and ROi decided to make the switch from proprietary account and product numbers to GS1 standards, they decided that all mutual transactions would be fully compliant. Today, all EDI transactions (including purchase orders, purchase order acknowledgements, advance shipping notices and invoices) sent via GHX between these two trading partners include GLNs and GTINs.

This approach eliminates the need to maintain cross-reference tables and reduces the risk of errors that can be made in the process.

"We didn’t want mixed orders where half of the products were identified as GTINs and the other half were not," said Pfeiffer. "It allows for a much more efficient and accurate process when both supplier and provider make the switch and transact using the same agreed upon values."


Success stories such as the ROi and BD "Perfect Order" project demonstrate how standardized data can be used to increase efficiencies, reduce errors and enhance patient safety.

"Providers and suppliers don’t have the time and resources to conduct one-off projects to implement GS1 standards with each individual trading partner," said Black. "By sharing the lessons learned in our collaborative effort with ROi to achieve the ‘Perfect Order,’ we hope to align processes and best practices with others in the industry so we can all collectively succeed."

BD and Mercy/ROi recently published a case study on this effort, entitled Perfect Order and Beyond. It can be downloaded from the GS1 Healthcare U.S. website: www.gs1us.org/BDMercystudy.

Karen Conway is industry relations director for GHX. She serves on the board of directors of AHRMM, on the leadership council of the Arizona State University Health Sector Supply Chain Research Consortium and as co-chair of the HIMSS Supply Chain Special Interest Group. She is also active in the Strategic Marketplace Initiative (SMI) and a member of the editorial board of Healthcare Purchasing News.