Case studyLeeds Teaching Hospitals NHS Trust implements GS1 Global Location Numbers to improve stock visibility and drive efficiency savings

Leeds Teaching Hospitals uses GS1 Global Location Numbers (GLNs) to ensure the right stock is delivered and invoiced to the right location – cutting wasted stock, improving stock visibility and driving efficiency savings. Receipting invoice disputes at the Trust have reduced from 20% to 2% with just one supplier since its GLN implementation resulting in significant cost savings.

BackgroundLeeds Teaching Hospitals NHS Trust is one of the largest in the UK and includes the largest teaching hospital in Europe (St James’s University Hospital). The Trust provides high quality acute hospital services for the population of Leeds and the surrounding area and acts as a regional centre for a number of specialist services such as cancer and cardiac surgery. It employs around 14,000 staff across six main hospital sites, treating over a million patients every year with a budget of around £930 million.

The Trust has been at the forefront of implementing GS1 bar coding and RFID technology to improve patient safety and efficiency. Leeds has adopted GS1 Global Location Numbers (GLNs) to improve its data quality and standardise the way it identifies all of its physical delivery and stocking points.

Delivering the right stock to the right locationWhen it comes to ordering and delivery of stock, many NHS Trusts face the same problem – there’s no standard way of identifying delivery locations and costs are often allocated to the wrong department or cost code due to poor data quality.

Trusts have hundreds of delivery and stocking points located in different departments and hospitals. Hospital staff need to be able to communicate accurate product and location information with their suppliers, and with various departments, such as finance, within their own Trust. This ensures that the supplier knows where the order needs to be delivered within the hospital and the finance department knows which cost code to allocate to the order purchased.

Due to a lack of standards for identifying locations in hospitals, orders are very often delivered to the wrong delivery point or tend to go missing. This results in wasted stock, increased administrative work and increased costs caused by stock being left in the wrong location unused, and staff wasting time trying to locate or re-order missing stock.

Poor data quality in the ordering system also affects the Trust’s Finance function which requires an accurate cost code to be matched to each order. Staff at Leeds previously manually charged orders to cost codes which was prone to errors and resulted in the wrong departments being charged for the order. Fixing these types of errors usually involves time-consuming and complex investigative processes which costs the hospital vital resources.

Leeds uses GS1 standards to identify its locationsAt Leeds Teaching Hospitals NHS Trust, GS1 Global Location Numbers (GLNs) are used to identify physical locations such as the Supplies department reception, theatre store or ward reception. The GLNs are allocated and maintained by the Trust’s Supplies department. The full list of GLNs which includes the unique number, location address and description is sent electronically to distributors together with the corresponding cost codes. The lookup table is stored by GHX, the Trust’s healthcare e-commerce exchange provider, and any updates to the list are sent daily via email.

Hospital staff can order stock electronically using the Trust’s inventory stock replenishment system and web requisitioning tool which is linked up to suppliers’ systems. Staff can also top up their stock using handheld bar code scanners which are linked to Leeds electronic ordering system. This ensures that only the products scanned will be ordered, avoiding any potential manual keying-in errors. Over 94% of the Trust’s orders are made electronically with each user of the ordering system located at each stocking point being linked to a Global Location Number (GLN) which is also linked to the Trust’s Oracle finance system that holds the matched cost codes. This means that the order location and cost code are identified and recorded automatically by the ordering and finance systems.

Significant benefits for Leeds and its suppliersBy using the GLN and associated information, suppliers receiving the order electronically now know where to deliver the stock and who to invoice. This accurate order information ensures that the supplier delivers the order direct to the delivery point. A printed bar code label containing the GLN is also included on the order’s roll cage, tote or box.

The Trust’s Supplies team is able to keep an accurate and up-to-date record of all the stock ordered and delivered to each department or ward. “We now have full visibility of exactly how much stock each department orders by using the GLNs to uniquely identify them. This has improved the efficiency of our stock management which has in turn reduced the amount of wasted stock held in our hospitals,” says Graham Medwell, Information Manager, Supplies Department, Leeds Teaching Hospitals NHS Trust.

The Finance team have also benefited from the use of GLNs which are matched to the hospital’s cost codes. Staff are now able to match the invoice received from suppliers to the electronic order accurately. This ensures that the right department is charged for the right stock. This has improved the Trust’s data quality and reduced the number of invoice disputes and investigations which are very costly processes.

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The Trust has already managed to reduce stock levels by £570,000 in one department over three years by implementing bar coding and GS1 standards for its automated stock control and forecasting system. By integrating this system with the use of GLNs, Leeds expects to make even further cost savings.

“The financial benefits of adopting the GS1 GLN location protocol comes in the switch of resources from reactive supply chain rectifications to more value add activities. For Leeds, delivery issues form the largest pain point and so efficiency savings in this area are considerable.

In addition, the use of GS1 GLN identifiers is complementary to the Trust’s strategy of e-invoicing. Using technology without the adoption of standards will only deliver sub-optimal solutions and as a result the potential for benefits realisation will be lost. Technologies allied with standards form sound foundations ensuring the Trust delivers the saving potentials inherent in a supply chain of our magnitude.

Finally use of standards will ensure consistently meaningful management information is captured at the point of transacting; ensuring accounting time is released for planning and decision making activities,” says Robert Angel, Associate Director of Finance, Leeds Teaching Hospitals NHS Trust.

“The work that has been done at Leeds Teaching Hospitals shows the benefits the NHS could gain through the use of GS1 GLN’s, not only on the Hospital supplies side but throughout the NHS supply chain. I would encourage other organisations to adopt these standards and encourage the suppliers and logistics companies to get involved to maximise the savings.”

- Neil Lawrence, AIDC Programme Lead, Technology Office Department of Health Informatics Directorate

“Using a GS1 standardised system for identifying physical locations is vital in the NHS. At Leeds Teaching Hospitals, the implementation of Global Location Numbers (GLNs) ensures that the right stock is delivered to the right department and is charged to the right cost centre.

This has reduced the occurrence of disputes and errors associated with stock orders and invoices which has resulted in cost savings for the Trust. The number of invoice disputes concerned with receipting with one of our main suppliers has been reduced from 20% to less than 2% since we started implementing GLNs.”

- Graham Medwell, Information Manager, Supplies Department, Leeds Teaching Hospitals NHS Trust