GS1 Canada: Friend or Foe?

Written by Tim Wilson on June 21, 2017 for 

Tech Tonic
by Tim Wilson

GS1 Canada:

The healthcare supply chain in Canada is ripe for transformation, but progress to date has been slower than expected. Some of this might be due to confusion with regard to the role of GS1 Canada, a not-for-profit organization that, by its own admission, is dedicated to fostering the continuous development and adoption of global e-commerce standards.

“We don’t need to make the point about the importance of standards in healthcare,” says Art Smith, GS1 Canada’s founder and CEO. “Stakeholders need to consolidate around a standard, or else their supply chain and information requirement costs go up.”

GS1 Canada’s support for standards was evident in its response to Ontario’s Healthcare Sector Supply Chain Strategy (HSSCS) Expert Panel’s report, Advancing Healthcare in Ontario: Optimizing the Healthcare Supply Chain – A New Model. The organization responded to the HSSCS Report with a press release lauding the “strong endorsement for the application of ‘an internationally recognized bar coding standard that provides full traceability of products, including pharmaceuticals, to the patient.’”

“The Ontario report was a breath of fresh air,” says Smith. “It’s good news for us.”

There is some confusion, however, because the report itself was highly critical of GS1 Canada, stating that the HSSCS panelists had “heard that the business model, lack of transparency and fee structure implemented by GS1 Canada are obstacles to wider adoption of the standard by healthcare providers in this country.” As well, during the May 16-17 Healthcare Supply Chain Network (HSCN) conference in Toronto, HSSCS Panel Chair Kevin Empey openly chastised GS1 Canada.

“I am not happy with you,” said Empey, speaking to the conference attendees from GS1 Canada in front of a packed house. “The GS1 Canada business model doesn’t work. We need global standards.”

This was a striking critique, given that GS1 Canada is our nation’s member organization of GS1 Global, which refers to itself as “The Global Language of Business.” The whole idea of GS1 is to promote global standards, largely via Global Trade Item Numbers (GTINs) used in the Global Data Synchronisation Network (GDSN). It’s therefore understandable that the criticism has led to some head-scratching, and defense from GS1 Canada.
“For the record: we see that as misinformation,” says Smith. “We are fully transparent. It is not about our business model. We are not sure why that is even in the report. We were not approached about pricing information. There really is no price barrier – our pricing is very similar to other organizations around the world that are providing standards.”

The concerns appear to come from past efforts by GS1 Canada to argue for added attribute sets in healthcare that would reside outside the GDSN in a proprietary system called the ECCnet Registry, which GS1 Canada brands as “Canada’s national product registry”. ECCnet, for example, is used for nutritional data and images in Canada’s food industry, with fees based on an organization’s annual sales revenue, which GS1 Canada reassesses on a periodic basis.

“A year ago GS1 Canada was being too idealistic, and not speaking the language of its customers,” says Toby O’Hara, General Manager at Healthcare Materials Management Services (HMMS), and who also sits on GS1 Canada’s Healthcare Provider Deployment Committee. “They were insisting on Canadian attributes, which created a barrier to leverage barcodes. ECCnet was a good idea – I appreciate their idealism – but it didn’t work.”

The stubbornness on the part of GS1 Canada with regard to ECCnet slowed adoption in the healthcare supply chain, and created bad faith because although GS1 Canada operates on a cost-recovery basis, it is also a non-soliciting corporation—which means that its financials needn’t be made public. As a result, there is no visibility into how fees are used to remunerate executive salaries and expenses or to support technological investments. For its part, the HSSCS Panel didn’t dive into these organizational issues, but it did try to figure out why Canada’s adoption of global standards has been so slow.

“I spent a lot of time trying to research this,” Empey told me in a follow-up interview after the conference. “GS1 Canada has a healthcare advisory panel, and I know some of the members. I reached out and said, ‘You have had a responsibility to implement, and you have failed for ten years. What’s wrong?’”

From there, Empey encountered healthcare industry grumblings about past efforts on the part of GS1 Canada to force participation in ECCnet, and its fee schedule. However, things appear to have changed. Mr. Smith himself expresses no overt bias toward standards that are specific to Canada.

“Holistically, at the big picture level, there is no reason for different standards in Canada versus any other country in the world,” he says. “Our position on the study was to look at the big picture, given that it is important for Ontario to address the supply chain issue.”

The market itself is saying that having Canada build a unique system outside of the GDSN is a bad idea, because it imbeds a legacy out-of-network technology from a single provider within our national supply chain. The argument here isn’t about standards, it’s about the folly of ECCnet.

“It’s a no brainer to recommend standards,” says Empey. “But vendors are saying that they will not spend extra fees for ECCnet.”

GS1 Canada describes itself as a “neutral, not-for-profit organization”. However, ECCnet puts a shadow on that neutrality: for GS1 Canada to have competitive motivation to drive revenue off a proprietary technology that relies on so-called “Canadian attributes”, and that resides outside of the truly global GDSN, could be seen as a conflict of interest. As well, anyone who has studied technological implementations knows that getting locked in to a legacy system from one provider can impose significant financial and technological risk. For its part, GS1 Canada now claims to have no overt bias, offering ECCnet only as an option – and not a requirement.

“Since GS1 Canada has relaxed ECCnet, we are over the moon happy,” says O’Hara from HMMS. “It allows us to develop new procedures and relationships based on the GTINs. Before ECCnet went away these developments were not imminent – but now things are happening, and they are happening quick.”

They are indeed. Ontario’s HSSCS report landed just after Quebec announced that its new Life Sciences strategy will address supply chain issues, including for medical devices. As well, in early June Canada’s Networks of Centres of Excellence International Knowledge Translation Platform announced a $1.6 grant over four years for the Supply Chain Advancement Network in Health (SCAN Health).

No doubt, in the context of these and other initiatives, GS1 Canada will consult with supply-chain community stakeholders to talk about their requirements, and also educate people on common formats like EDI and XML. That’s all well and good. However, let’s hope there’ll be no more discussion—and time wasted—on ECCnet, or any further attempts to slow our healthcare supply chain’s adoption of truly global standards via the GDSN.

Tim Wilson is principal of T Wilson Associates. Follow him on Twitter: @TimothyEWilson


Author: Deanna Fiedler

Marketing Coordinator | Commport