GS1: What Do the Standards Mean for Healthcare Procurement Professionals?

Nicola Hall, managing director at Ingenica Solutions, which provides the first GS1 certified inventory management solution in the healthcare market, explains how to take advantage of the new developments and the benefits it brings.

Since June this year, as announced by the Department of Health’s eProcurement Strategy, it became mandatory for hospitals across the country to have a GS1 strategy in place.  This milestone is a shake-up for the NHS, a long-awaited step forward that forces transformational change in procurement, inventory management and the supply chains across the healthcare system.

From now on, all items in a hospital from surgical implants and medicines to patient wristbands, will have a unique identification, a GS1 code.  All locations will also be uniquely identified in the supply chain. This, alongside the use of Electronic Data Interchange of transactions, is expected to save every hospital millions of pounds every year by increasing efficiencies and significantly improving the quality and safety of care.

Whilst some trusts fully back the developments and are implementing change with great energy, others are not quite so enthusiastic and as yet do not recognise the vast difference these standards will make to the future of the NHS, and indeed the advantages it brings to their individual roles and responsibilities. Indeed a number of procurement professionals have noted that they “won’t be bothering with GS1.”

There are significant benefits in terms of: patient safety and outcomes; savings and efficiencies; data standardisation, reporting and visibility; and management information and costing.  All of these aspects fall within the realm of a procurement professional, which means better working practices will surface. The ultimate long-term game changer is linking the cost of a product with the outcome of the patient, especially for implants. Is a £200 unit cost saver today, a revision cost in the future?

Historically, procurement and inventory management in the NHS has of course proved a difficult challenge for everyone involved.  For those involved in the day-to-day procurement, the lack of information  has created difficulties in terms of traceability, management and efficiency in terms of purchasing products, visibility of pricing, and especially making their case with clinicians for change.

Today, GS1 standards provide an opportunity to improve the existing procurement and inventory management landscape, something at the heart of all procurement professionals. The additional element of this for procurement professionals is that data standards will provide information that is transparent and not only highlights comparable pricing, but the true cost of supplies from that supplier.

The changes significantly impact those working in procurement in hospitals.  It’s a step forward that will improve processes and practices; it invokes significant change, and provides a long-awaited window of opportunity for procurement professionals to contribute and make a real difference.

Using common data, along with proven industry standard tools and techniques procurement teams will now be able to analyse and guide effective purchasing and significantly reduce stock holding.  It will also help them to rationalise and standardise the number of products to facilitate the development of a flexible, yet clinically effective supply chain.

Collectively, these improvements will make life easier for procurement and supply chain  teams; effectively it will enable them to reply on a unique identifier for  one product.  So manual processes that relied on individuals’ knowledge and checking shelves is a thing of the past, and can be replaced by modernised processes and technology.

There is no doubt that finance and procurement need better information, and these changes also allow procurement professionals to really understand the cost drivers in the organisation, and ultimately understand where budgets are being spent, and how products are being used.

Through the ability to share information, supply chain teams will have wider visibility of orders, levels and costs.  They have a full understanding of what is needed, when and where -- so less wastage and less out-of-date products.

It is, of course, predominately about changing processes and behaviour.  Working relationships will change too, and rather than working in isolation, the new processes bring teams together, to bridge the gap. Procurement teams are now in a much stronger position to be able to provide a truly proactive service, and work alongside clinicians in their hospitals to deliver supplies at point of use. Importantly they will have real information as to the wider performance of a supplier on delivery, quality and price, which to date has been reliant on clinical feedback, rather than demonstrable information.

Supply chain activities that clinicians would often find themselves tangled up in, are reassigned to the supply chain teams, which standardises working practices.  Procurement people will now have more interaction with suppliers than the clinicians, which is exactly what should be happening.

Of course the first few months following implementation of any new process will be difficult, and it takes time to adjust to new ways of working for everyone.  However GS1 standards provide procurement teams with new, different ways of working to really drive much-needed change.

 

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