In virtually every hospital supply chain across the U.S., it is a pretty safe bet that one or more of these things happen on a weekly basis:

  • Suppliers accidentally ship products to the wrong location 
  • The invoice price for a product is not accurate
  • Employee resources are used to track down a shipment
  • Employee resources are used to maintain a database with thousands of account numbers and an array of ship-to locations

These core challenges, along with the additional costs incurred related to the inefficient use of resources, are not unique to the health care industry. What is unique is the reluctance by many trading partners in health care to begin using Global Location Numbers (GLNs) to overcome the issues.

Global Location Numbers are 13-digit unique data structures that identify any legal, functional or physical location within a business or organizational entity. They are used by 23 industries in the U.S. - many of which are key suppliers for health care goods and services - as the customer identification standard for global and domestic business transactions.

The benefits of using GLNs in transactions are improving price accuracy, data accuracy and ease of business communications—benefits that seem highly relevant for health care.

“The value of using GLNs crosses our industry. Trading partners are able to clearly identify your locations and the structured hierarchy supports price accuracy as you work to access available contracts and tiers. It is vital to ensuring efficiency in the supply chain and in patient care,” said Ricki Wilson, director, standards implementation at Vizient.

Making the decision to act

According to information published by AHRMM, at least three different numbers (and databases) are used in health care to complete a single transaction. By everyone using one number and one database, it increases the likelihood that the price charged was the price that was originally communicated between the GPO, manufacturer, distributor and provider.

GS1 Healthcare US® is an industry group that supports standardized data, including the use of GLNs, across the healthcare supply chain, for improved patient safety and supply chain efficiency. The GS1 US Data Hub® | Location, formerly known as the GLN Registry®, provides trading partners with a single source of information for locations and how they are related.

Vizient has enumerated GLNs on behalf of members in the GS1 US Data Hub | Location based on the locations in the GPO roster. We work to keep up with additions, duplications and deletions to provider locations within the database, however it is critical that providers review and manage their own GLNs to ensure accuracy.

Mayo Clinic was an early adopter of GLNs and has been managing them for more than seven years. “By implementing the GLN within our supply chain, we are better aligned to improve patient safety and reduce maintenance costs. We can focus our efforts on providing accurate information to our suppliers rather than maintaining seemingly inaccurate information,” said Karen Wolfe, ERP system analyst, supply chain management for Mayo Clinic.

The role of GPOs in GLNs
Vizient can support your organization as you transition to using GLNs to transact with your trading partners. A first step is to make sure that your materials management system can use GLNs. Once it is set up, hospital supply chains can use them in all standard business transactions, such as:

  • Ordering products
  • Processing supply-related order and invoicing inquiries
  • Corresponding with suppliers

The next step is to understand best practices for assignment of GLNs and how to manage your own hierarchy. Maintaining your GLNs in the GS1 US Data Hub could be as simple as reviewing it every six months or annually to make sure everything is still accurate.

“Vizient is working on behalf of all trading partners to remove barriers with the adoption of GLNs as well as supporting the use of Global Trade Item Numbers (GTINs) for product identification in industry transactions,” said Wilson.

To learn more about how implementing GLNs into your procurement processes will improve data accuracy, how to take ownership of your facilities GLNs in the GS1 US Data Hub and GS1 Standards in general, register to attend one of the Vizient webinars on July 28 or August 11. Contact Ricki Wilson for more information.

Published: July 19, 2016