King Faisal Specialist Hospital’s Global Standards

Subject: Administration and Regulation
Pages: 59
Words: 16133
Reading time:
60 min
Study level: College


The main role of global medical industry is to provide quality, reliable, and affordable medical care services; in above light, world Health Organization (WHO), European Union, United Nation bodies, and different regional and national bodies have continued to support programs that improve medical care provision. Jointly, the above bodies require medical facilities to offer high quality medical facilities. To attain the noble objective of quality medical care services, systems within medical facilities must be operating effectively, and jointly contribute to the vision and mission of the industry (Möller, 2006: 439-450).

As any other business entity, an effective operation requires the collaboration of different players, sectors, departments and human resources to develop a unit that contributes to the noble goal. Majority of global medical care services use technology in one area or another. There is fast movement from the traditional doctor or clinical officer, patient consultation to better services that involve the use of technology products to solve and diagnose patients. Machines like X-ray machines, thermometers, and other similar hospital equipment are products of the past; however there are other new components that have come to assist the industry offer quality services. They include the use of e-records, e-procurement, and e-medical reports. Development of technology facilitates these new segments (Pickton and Broderick, 2005: 152).

Borrowing from the retail industry, medical services industry has continued to adopt electronic medical components particularly medicine. With growth in electronic commerce, there has been the emergence of stock computerized management systems that endeavor to improve service delivery. The methods keep track of medicine in an organization and facilitate the provision of quality medical services (Donaldson, 1995: 45-63). One such system in use today is the Global Standard 1 (GS1). GS1 is an open global standard for product identification and bar-coding. GSI Health participates in the industry following industry initiatives and workgroups to drive health IT policies, standards, architecture, and interoperability strategies. This enables greater visibility and collaboration in the healthcare supply chain. GSI has the main mandate of facilitating improvements of quality standards adoption and it builds trust among stakeholders; the stakeholders include human capital and the sector in general. Improvement of the efficiencies automatically leads to better patient care and improved financial performance. It aims at improving efficiencies in medical facilities by promoting current or modern management systems that are reliable and effective (Kontopoulos, 2009: 41-58).

King Faisal Specialist Hospital and Research Centre

King Faisal Specialist Hospital and Research Centre is a national health facility located in Riyadh, Saudi Arabia. The facility aims at providing reliable and effective medical care services to the entire Saudi Arabian republic. Its positioning enables the company to attend to the first patient cases, referral cases, and emergencies. The facility has medical and support staffs of approximately 8500 to manage its bed capacity of 850 beds. With the capacity, the company requires an effective supply chain management system that will see every corner of the facility integrated in a single platform. The supply and logistics department of King Faisal Specialist Hospital and Research Centre plays a vital role. It ensures the facility has continued supply of medicine and other medical apparatus.

For the last 29 years, the facility has handled referral cases in oncology, organ transplantations, cardiac surgery, and genetic diseases; it is among medical facilities in Saudi Arabia respected for its quality and effective human resources management team. The medical crew comes from different nationality, and has placed diversity at its core, with over 60 different nationalities and ethnic backgrounds. Other than what happens indoors, the company has made some medical journals productions which among them include bimonthly general medical journal and the Annals of Saudi Medicine. The facility also has a college that offers medical care training to students using the equipment of the facility. With this, the facility aims at developing or attaining some development and continuity in the medical care system. The quality of the facility allows it to offer medical facilities to Saudi Royal Family and other VIP’s visiting the country. With such appealing portfolio, King Faisal Specialist Hospital and Research Centre management has opted to adopt Global Standard 1 (Kouvelis, Chambers, & Wang 2006: 449–469).

The facility aims at bringing on board suppliers, group purchasing Organizations, manufacturers, wholesalers, distributors, hospitals, and physicians to record and track product information. The use of the system by the facility has enabled it to understand why there are differences that open the flood gates for medical errors, which severely impact on patient safety and the quality of care. With the current state of art, this research is a report that evaluates the impact that GSI has had at King Faisal Specialist Hospital and Research Centre (Kaushik and Cooper, 2000: 65–83).

GS1 deals with the growing challenge that has prevailed in the health industry which among others includes; increased costs and deteriorating quality. The technological development included reforms that the hospitality industry aimed at adopting. It offered the platform for conducting value analysis processes, implementation of changes in reimbursement based on patients’ outcomes and the general performance of patients care continuum. Through the system, the hospital has been able to use Global Data Synchronization Network (GDSN) to update hospital systems with standard information like those of product attributes that are pertinent to patient safety. With the shared information, medical officers are able to recommend and prescribe the right medication to a patient. The system has assisted medical officers to diagnose different diseases; for instance, using the system, a medical officer will know the kind and number of say allergies that exist, and ability to perform a quick scan on the medications available for such ailments.

GS1 has called for medical equipment and medicine suppliers to have bar codes on their primary package (inner package), and also on the secondary package (outer packages). With the existence of information fed via the code, medical officers are minimizing the number of errors they have in their prescriptions. On the other hand, patients are receiving services that can be characterized with fewer medication errors (Ketchen and Hult, 2006: 573-580).

Supply chain integration can be viewed as a competitive advantage which has significant strategic value for the organization. GS1 is a strategy to address integration issues in the organizations. Companies used to adopt information systems in conducting business whereas nowadays, with GS1 the strategy is overturned. In other words, the business processes need to be adjusted to fit the GS1 system. Organizations will gain the most advantages from GS1 by incorporating the system in strategic and organizational context. GS1 can also have a significant impact on the company’s culture. Moreover, through providing universal, real time access to operating and financial data, the systems allow the company to simplify the management structures, producing a flexible and democratic atmosphere. However, different views about ERP systems exist. They think GS1 systems break down hierarchical structures, make people more innovative and free because ERP systems standardize the main business operations. The ways in which the business is running will be changed substantially when the ERP system is installed.

Whether or not organizations will gain a competitive advantage and therefore, a good return on investment will depend on whether it can attain a better fit between the business processes, and the GS1 systems. The GS1 system can streamline business processes by utilizing a central database. It claims to be able to reduce costs and improve productivity. However, organizations need to consider the following arguments before they can decide if GS1 systems are for their businesses:

  • What level of customization will be made? An organization needs to adjust their operations to meet the GS1 systems’ requirements instead of customizing the software. The adapting process will need strong leadership, effective management, time and money to counter resistance.
  • What level of integration is needed? Legacy systems need to be integrated to avoid duplicate work and keep data integrity.
  • One needs to work out the data security requirements and make data security a main part of the software selection process.

The dramatic shift to knowledge economies has generated a flurry of interest in workplace creativity and innovation; today’s medical care industry environment requires organizations to develop strong capabilities to innovate for long-term success and survival. This requires businesses to develop creative work environment and innovative products and services. Haag, Cummings, McCubbrey, Pinsonneault and Donovan (2006: 36) assert that creativity and innovation can be viewed as closely related constructs, as they exhibit significant overlap in characteristics. To facilitate the discussion presented in the later part of this section, it is imperative to have a clear understanding of the two constructs.

As pointed out by Haag, Cummings, McCubbrey, Pinsonneault and Donovan (2000: 36), creativity refers to the ability to generate novel and useful ideas, mainly at the individual level, while innovation refers to the process of developing and implementing these new ideas. Thus, innovation of GS1 at King Faisal Specialist Hospital and Research Center can be defined as the process of capturing, filtering, developing, accepting and implementing new ideas, processes, products, or services. Haag, Cummings, McCubbrey, Pinsonneault and Donovan (2006: 36) assert that creativity enhances innovation. Therefore, it is imperative for organizations to generate creative ideas and effectively utilize their innovation process to realize the value of those ideas (Hines, 2004: 52-80).

Review of the literature reveals that a large number of scholars and practitioners have acknowledged the importance of innovation in order to facilitate organizational success and survival. Literature reveals that there are numerous ways of defining the concept of innovation. According to Amabile (1988), innovation can be defined as the process of successfully implementing the various creative ideas generated within an organization (Ozsomer, Calantone and DiBonetto 1997: 400-411).

Additionally, West and Farr (1990) highlight that innovation is the planned and deliberate attempt to introduce, and apply various new ideas, processes or products within a particular group or organization. This attempts to generate significant benefits such as higher productivity, better service or product quality and improved working conditions (Leach 2005). Montalvo (2006) points out the presence of two types of innovation in an organization – ‘internal’, which deals with the collaboration and communication between various individuals and departments; and ‘external’ innovation, which deals with an organization’s willingness to enhance its organizational boundaries.

It is possible for senior management to impact and lead innovation within the organization by influencing organizational enablers of innovation (Oppenheim, 1997: 78-117). Research conducted by Fernie and Leigh, 2009 establishes six key enablers of innovation in an organization. They are integrative organizational structures, emphasis on diversity, multiple structural linkages inside and outside the organization, intersecting territories, collective pride and faith in people’s talents, and emphasis on collaboration and teamwork. Further, Fernie and Leigh (2009: 80) also identified a series of enablers of innovation such as ‘processes, systems and structures, culture and competencies, and networks’. According to Fernie and Leigh innovation is usually a forced decision which is rarely ‘spontaneous’. Therefore, leaders need to develop a structured approach to innovation and creativity (Fernie and Leigh, 2009: 93). Further, Rosenfeld and Servo (1990) also assert that creativity is the “starting point for any innovation”.

This discussion reiterates the need to develop a creative work environment to facilitate and lead innovation in an organization. To drive innovation within the organization, there is a need to blend creativity with business processes, by developing and supporting a creative environment that recognizes and nurtures innovation. In this regard, Amabile et al. (1996) study of creativity within organizations is of utmost importance. Fernie and Leigh (2009: 88) pointed out the six key characteristics that help in differentiating between high-creativity workplaces and low creativity workplaces.

These include; organizational encouragement to innovate and contributions, supervisory encouragement to support work groups and show confidence, work group supports, freedom to be creative and innovative at work, sufficient resources, and a challenging workplace environment. It is essential for organizations to provide their employees with the freedom to experiment and be creative (Nunnally, 1978: 56). David (2000: 104) is of the view that to build a creative workplace environment, it is vital for the management to develop goals that encourage creativity and innovation, and communicate these goals to the employees in an effective manner. David emphasizes that individuals within the organization are more likely to engage in a creative behavior if an organization can clearly communicate the importance of creativity and innovation, as valued business goals (David, 2000: 106).

Literature Review

International standards are guidelines which are extremely valuable for companies. They serve as tools that help organizations and institutions to manage day to day challenges of organizations that occur in the contemporary business world (Verman, 1973:25). They are applied in many companies and organizations in the globe due to their significance. Their sole aim is to integrate different processes in a business so as to enhance efficiency. They are also of technological and economic significance.

International standards are as old as human kind. They have been part and parcel of society since time immemorial. During the evolution era, human beings utilized standardization in several ways. For instance, Harappa civilizations in the Indus Valley utilized high levels of standards in planning how to build the town and houses, as well as implementation of effective drainage systems in the region (Sanders, 1972: 17-30). Standardization is attributed to Eli Whitney who developed the cotton gin several years back. Whitney later made several advancements while basing all processes on standardization. The concept became widely accepted on the globe around the 19th century. During this time, it enhanced mass production of goods in industries, through the use of a variety of tools and machines to produce goods.

In the early 20th century, establishment of several standardization bodies started taking course. Many organizations were established in the United States of America. Some of these organizations include; the Society of Automotive Engineers (SAE), the National Bureau of Standards (NBS) and the American Society of Mechanical Engineers (ASME). There were several standardization bodies by the year 1928, mainly in countries where industrialization had taken root. The notion of standardization continued to gain momentum following World War I. The main emphasis of standardization bodies lies on the need to reduce the variety for reduction of production costs.

It is worth noting with keen interest, that the increase in international trade brought about the need for the establishment of international standards. These usually act as checks and balances on international trade. Consequently, there came the need to have international standards bodies that would regulate trade among different nations. Therefore, bodies such as International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) were established (ISO, 1991: 12. These bodies act as guidelines for the provision of the best services in organizations (Sanders, 1972:20).

A standard provides guidelines into how an organization carries out its processes or how it makes its products. Standards come up as a result of agreement among several bodies, on how to handle certain issues. They receive documentation after receiving approval from a recognized body. Standardization refers to the whole process of planning, issuing and implementing the agreed upon standards. International standards, also known as global standards, are acceptable in modern health institutions. One institution, whose operations should be guided by international standards, is King Faisal Specialist Hospital and Research Centre. This research highly recommends its use in the centre.

Use of GSI Healthcare standards in medical centres improves the way in the provision of an array of services. It also aims at making medical services reliable in the globe. It aims at achieving this by synchronizing data from various organizations in a bid to; ensure patient safety and improve efficiency in all operations (Bix et al, 2007:22). The standards goals have been utilized by manufacturing organizations such as GlaxoSmithKline (GSK), Johnson & Johnson, as well as Merck. They hardly fail any logistics management team in its activities, when they are well utilized.

One of the aspects necessary in organizations is logistics management. Logistics simply involves activities such as procurement, inventory processing and delivering orders. It is an aspect that enhances efficiency in operations, in any organization. It works by looking into how organizations provide products as well as services to employees and clients. Logistics, also known as supply chain, is an indispensable department in healthcare. Therefore, it requires use of GSI Healthcare system to achieve all the goals of a medical centre.

GSI Healthcare puts checks and balances on organizations so that they carry out effective management of their logistics (Bix et al, 2007: 1-41). Logistic management involves handling of materials, management of inventories, planning for demand and supply and order fulfilment. It also includes provision of services to customers and procurement. Logistics management is an integration technique which provides coordination of logistics and integration of logistics with the other operations of a company. In the health sector, the people involved in the supply chain management ought to discuss data arising from different departments of the healthcare centre. This enhances transparency, accountability of medics and support staff as well as providing of services to patients (Wolf, Bradle, and Nelson, 2005: 55). Good communication flow regarding treatment given to patients among medics is extremely beneficial.

Manufacturers and distributors of medicine also play a key role in healthcare. They should tell customers the ingredients that they use in the manufacture of drugs. Standardization comes in handy in ensuring that this information reaches the users of the drugs. This is essential for customers as it helps to understand the adverse effects of drugs. It is also crucial for patients who have allergies to certain components such as aspirin.

Owing to this pertinent need of good communication flow, there comes a need for a universal language in health care. This need has led to use of instruments such as Health Level (HL7) in healthcare. These communication standards enable medical practitioners and all stakeholders in a medical centre to have effective communication regarding patients. These standards ensure there is good communication in all departments, especially through the use of databases. Eventually, the good flow of information reduces unnecessary costs, loss of data and tabulation of inaccurate data (Pielstick, 2005:154-158).

The logistics management team in a healthcare centre ensures that the centre is served with quality materials at a worthy cost. The team also ensures that the materials delivered fit the quantity requirements of the healthcare centre. The team’s commitment also determines whether customers get products that are deemed to be of high quality and the correct amounts. In order to have a remarkable logistics management team and system, a healthcare system should do a number of things. King Faisal Specialist Hospital and Research Centre ought to interact with other medical care providers in an effort to achieve its objectives.

GSI Health care aims at attaining the following goals in King Faisal Specialist Hospital and Research Centre:

  • Reducing illicit activities such as, lax penalties, issuance and refill of counterfeit drugs as well as wrong use of internet pharmacy services. The World Health Organisation (WHO) asserts that there are extremely many counterfeit drugs in the market (about 10% of the drugs sold). Therefore, global standards serve a vital role in restricting trade of illicit drugs.
  • Reducing complexities of handling hospital inventories; there are different products used in healthcare centres. They vary in size, expendability and disposal. Keeping records of all items used can be cumbersome and tedious. However, GSI Healthcare reduces these problems.
  • Reducing medical errors in the centre; it will ensure that patients get the right drugs in the correct amounts. Adopting the GSI Healthcare will ensure good timing for medication, as well (Parker, 2009:56).
  • Enhancing traceability; the system can trace manufacturers and suppliers in a quick manner. Thus, in case medics want to gather further information regarding drug components or any further clarifications, they can easily use the system to do so.
  • Enhancing automatic identification (Auto-ID) of patients and any relevant data in the centre; The Auto-ID helps to relay information among different departments in a quick manner. This reduces medical errors and makes the supply chain more efficient.
  • Enhancing product authentication; Authenticity of products is critical in any supply chain. Once stakeholders get the right medicine they are assured of maintenance of customers. The system also enables stakeholders in a medical centre to be able to follow up suppliers once they realize that products are of low quality.
  • Reducing time spent on manual record keeping. GSI Healthcare system advocates for electronic record keeping which is fast and easy, in computation of data. Computerized Physician Order Entry (CPOE) enhances record keeping. Once databases get protection from third parties, then information remains a confidential matter among stakeholders. Electronic record keeping allows for faster retrieval of documents and wide consultation between a medic and a patient (Ulrike, 2010: 32).
  • Improving the processing of orders and invoices; this is achievable through the Computerized Physician Order Entry (CPOE). The system reduces the time that would be wasted on manual order and invoice procession thereby enhancing profitability.
  • Bringing all stakeholders in the realm of healthcare together for better provision of services; the system brings together pharmacists, hospitals, distributors, wholesalers and manufacturers together to discuss health-related issues. This enhances achievement of an organisation’s goals.

The system is pertinent in making decisions regarding production and procurement. Moreover, it involves all stakeholders in the medical care field. Thus, it is a key benefit to consumers who are often left out when making decisions about healthcare. They get an opportunity to access the right medication; at the right quantity anytime and medication of the right the system provides the logistics management with a broad framework for initiating and implementing plans that are geared towards achievement of quality of products.

The system is a remarkable recommendation for King Faisal Specialist Hospital and Research Centre. The centre ought to adopt a computerized system for all its operations. This will enhance communication in the centre by integrating or incorporating all stakeholders in the operations of the centre.

In essence, the system will promote communication about medical issues in all departments. This will take medical service delivery to a higher level. Once all stakeholders learn how to use databases and maintain confidentiality, they will have achieved high levels of efficiency. The system also enhances attainment of the right commodities within a competitive range. This keeps an organization alive in the competitive market so that it can compete effectively with other actors in the market. Therefore, the logistics management team aligns the medical centre processes and techniques in a way that presents the best interests of the company (Leach, 2005: 228-237).

Research Purpose

Main research question: What is the impact of adoption of GSI at King Faisal Specialist Hospital and Research Centre? Second question: Have conflicts that existed between the procurement department stocks segment and the sales department eased because of the system Third question: what are the areas that have come up that need continued development? GSI got implemented at the organization’s stock management department, supply chain management, the transport department and the docking segment (Stanton 2008). Faisal Specialist Hospital and Research Center supply chain management manager must ensure attainment of the objectives of the costly engagement (Roberts, 1994: 42-48).

The management has the mandate of evaluating every scene and every outcome of the process, to advice the management if there is any improvement required (Lewis, 2004: 201-208). GS1 has developed as a special form of bar-coding that combines stakeholders in the sector with the aim of ensuring there is effective sharing of medical information. Some of the stakeholders in the industry include pharmaceuticals, medical equipment and products manufacturers and suppliers, hospitals, and other medical facilities (Crother-Laurin, 2006: 4-6). GS1 came up following the collaboration of HLS (GS1 EPCglobal Healthcare and Life Sciences Industry Action Group), players in the medical services provision, and GS1 HUG (GS1 global Healthcare User Group). The main objective of the new development was to improve patient safety, supply chain security and efficiency, traceability and accurate data synchronization (United Nations Standard Products and Services Code 2010).

Industrial background

The global medical care services face different challenges and advancements. It is responsible for ensuring and maintaining a healthy community through its services, supported by research and development. The industry constitutes institutions like hospitals, physicians, nursing homes, diagnostic laboratories, chemicals, medical equipment, and pharmacies and ably supported by drugs, pharmaceutical manufacturers and suppliers (Nellis, and Parker, 1997: 78). According to the World Health Organization (WHO) health comes in as number five among the basic needs.

Being healthy is a component of personal initiatives that include; choosing the foods that someone eats, living in a clean environment and following basic hygiene parameters. Despite efforts at a personal level, there are times that human kind cannot deviate from being sick. When sick, they need quality and reliable medical care services to make them productive once again. The health care industry has the mandate of coming up with a new method of handling different diseases that face human kind. The industry should offer high quality medical care services so that the world remains productive. It is imperative to note that a sick community can hardly make a positive contribution to an economy; they demand more from the economy through their regular medications (Anctil, 2008:31-47).

With the noble goal and expectation that the globe has over the industry, the industry uses different tools and approaches to meet customer demands. Some of the services deployed by the industry are those of medical professionals, Information Technology (IT) professionals and sales or marketing professionals. This industry also utilizes the expert services of public policy workers, medical writers, clinical research lab workers, and health insurance providers. One of the main reasons why players in the industry have to be passionate of what they do is that it involves dealing with people’s life, thus cannot afford to joke or take any risk with them. In the wave of advancement in technology, the industry can be commended for the fast adoption of the new development with the aim of improving service delivery (Sola, 2010: 45-63).

Concerning supply chain management or logistics management, the industry has noted the need to have an effective system that brings all players on one platform for efficiency, transparency and sharing of information. Effective supply chain system is a strategic management tool, which involves the ultimate provision of products and services. When dealing with supplies of different types necessary for the industry setting requirements, there are three main categories that they can be classified into; producers, purchasers, and providers. Producers in the industry include medical surgical products companies, pharmaceutical companies, manufacturers of capital equipment and information systems device manufacturers. For efficiency, all these producers must develop high standard goods, tools and services to consumers (in this case the providers).

The medical industry suppliers include among others the following players; Grouped Purchasing Organizations (GPOs), product representatives from manufacturers, pharmaceutical wholesalers, medical surgical distributors, and independent contracted distributors. With this wide range of players, the industry has needs to have effective and reliable systems through which it can get the right supplies when required. Other than the players above, there are other different categories of players who rely on the supply chain system to conduct their businesses. They include; hospitals, systems of hospitals, integrated delivery networks (IDNs), and alternate site facilities. The above players should coordinate and ensure each works on its area to boost the general performance of the industry. Their common goals, objectives or agendas are quality provisions, value additions, and physical distribution of material stocks, trading products, work in progress inventories, and manufactured goods.

Although the medical industry has been on the forefront looking for the right systems to support its trade, it has been facing numerous challenges. These include outdated IT systems and infrastructure, ad-hoc procurement systems, lack of executive involvement, poor inventory and distribution management, and lack of process improvement culture. This has been possible because of its much concentration which rests on research and development of medications, and technologies directly relating to the provision of health care services like surgery; they seem to have forgotten the genesis of the entire process which is the supply chain system.

Research Methods

In order to develop the research, the researcher adopted varying data collection and interpretation methods. All the chosen methods aimed at answering the research questions of the paper. The methods included are both primary and secondary methods; using the two methods, the researcher aims at attaining high quality report and recommendations. The most pertinent question that the research seeks to answer is whether adoption of GSI Health care system is likely to improve provision of quality, affordable, and reliable medical care services. The report will aim at reviewing what success the implementation has brought at King Faisal Specialist Hospital and Research Center. With the understanding of the needs of having an effective supply chain system, the research will look into both the gains and challenges that the system has brought to the health facility.


The assumption is that the research is going to be conducted and implementation of GSI System will improve the provision of quality medical care services; the parameters that have high correlation are quality medical information and service quality.

Alternative Hypothesis

There is a correlation between quality medical services products (the information provided by GSI System) and provision of quality medical care services

Null Hypothesis

There is no correlation between quality medical services products (the information provided by GSI System) and provision of quality medical care services.

In order to get an in-depth analysis of the situation on the ground and evaluate the effect that GS1 has had on King Faisal Specialist Hospital and Research Center, the researcher adopted a deductive reasoning research methodology approach. The methodology is unique, appropriate and reliable. It is a systematic method of obtaining knowledge, where one proceeds from a general point of view to a specific analysis. In this case, the general view point was that technology and integrated supply chain system lead to better business, or better management of the supply chain operations. The methodology moves from the known, to explain the unknown; other than the known stated above, the researcher moved from believe or information on an increased demand professionalism and effective logistics and supply chain management in hospital facilities and medical center.

Scholarly works from different documentary resources triggered the choice of the method by recommending it to be the most favorable method in qualitative research. In order to come up with a reliable solution, it is meaningful to present the data and other sources of documentary evidence much aligned to the overall research objective. This called for massive data research and primary data analysis. With understanding, the paper looked at both primary and secondary data, and information to offer the right solution to challenges affecting the medical care industry, with the focus being on supply chain management at King Faisal Specialist Hospital and Research Center. The sensitivity of the matter requires use of all sources of documents with due consideration so that the results obtained are meaningful. Although there was the use of different methods, the case study approach had many preferences and support by other data collection methods integrated in it. The research does not claim any data collection and analysis method and, therefore, any method of data collection such as testing, interviewing and surveying can be used in the case study method.

Research Methods

Based on the objective which is to explore the effect that GS1 has had on the medical facility, there was a need to have much time. With a deductive stance, the researcher considers the results of the statistical surveys. This approach is a well-established method for examining existing theory and explaining existing phenomenon as well as predicting how it is likely to develop. This allows for the possibility of changing, or advancing it in the future, and indicates that quantitative measurement is suitable for the clearly defined research issue, leading to a basic data interpretation. Questionnaire, moreover, is the distinct form of quantitative analysis, collected in a large number of samples. Therefore, this research utilized a quantitative approach and collection of data through the utilization of questionnaires. Case study is a suitable research method carried out in this study because it provides the fundamentals of better understanding, by focusing on certain issues. Case study is a strategy for performing the research that accords with an observed investigation of a specific contemporary event within its real life circumstance by using diverse sources of evidences (Friesen & Johnson, 1995: 165).

According to Yin (1993), case study is an appropriate research method when researchers are trying to attribute causal relationships and not just wanting to explore or describe a situation. This method can also be used as various aims such as offering a rich explanation or testing to generate theories. In order to collect a large number of opinions of those involved in GS1 system implementation or utilization, one requires a quantitative method. A survey is appropriate for this study, and a statistical analysis on collected data is also meaningful. Leedy and Ormrod (2005) pointed out that a survey design is the most suitable approach when we seek for agreement of large numbers of viewers regarding a certain topic.

The survey goal relates to questions like “How..?”, “What..?”, therefore, questionnaires to be presented to the ERP experts or users are the most convenient way to gather the opinions (De George, 2003: 58-65). As the participants of the survey will be ERP system experts or users, we need to focus on sending survey emails to the ERP system providers and companies which have adopted the systems. In order to collect empirical data, one designs selections of questions covering different themes, which differ depending on the participants. For the GS1 experts, themes relate to ERP implementation and successful factors whereas for the ERP system users, themes will associate with the usability, better productivity and reduced labor. Leedy and Ormrod (2005) suggest designing of a standard set of questions, followed by extra questions, which are more customized to individuals. These seek further clarification to investigate the participant’s opinions.

Secondary Sources or Achieved Data

The first method of collecting data and laying a strong foundation in the research analysis was the use of secondary sources. These gave the researcher a wide range of information about the world’s supply chain trends. It started by laying focus on the larger supply chain elements, and trickled down to the facility in the case and the new system on board. Wide literature review created the foundation through which other issues where analyzed. It focused on those issues that influence reliable supply chain management at King Faisal Specialist Hospital and Research Center. Specifically, focus was on areas like patient’s satisfaction, quality services, the influence of government and company’s social corporate agenda.


Although the main method adopted for collection of data for the research was a case study method, the researcher integrated it with numerous methods to get wider review of the data. One such method that was center stage was use of interviews. Interviews were conducted on employees with much preference given to those employees who worked directly in the supply chain system. This meant that they could give an informed judgment on the new state at the facility, and probably assist in looking for a solution in the future. An analysis of the logistics involved will be done. The interviews assisted in comparing the performance of the former state of King Faisal Specialist Hospital and Research Center when using old procuring system and its current state with GS1 system. Though interviews were informal and formal, and focused on all employees, much of the focus was on procurement departments (Hanssens, Rust and Srivastava, 2009: 114).

Case Study and Survey

The nature of the business question for this research is unique. It looks at a single business process at King Faisal Specialist Hospital and Research Center which can influence the entire facility’s decisions in different areas. The study question of this research proposal looks into a business process that has just been implemented. Much feedback and reviews from concerned parties has not been attained yet. King Faisal Specialist Hospital and Research Center is one of the initial health facilities to have the system while others are still in the initialization or implementation stage. The nature of the research question will call for the need to undertake a case study, and survey on existing medical services’ stakeholders (Borodzicz, 2005: 36).

When undertaking the approach, care is vital since the supply chain management has numerous players. For a comprehensive result, there is the need to consider not only the facility under review, but also all those players that come into the picture. In the survey, the choice will focus on distributors, suppliers, manufacturers, users, and medical facilities that have adopted the system. In order get a wider picture, the researcher evaluated the differences on quality service provision with those organizations that have failed to implement the system. There was a lot of care taken when focusing on areas that gave rise to appropriate answers, to the challenges of the question. When undertaking the research survey, the researcher was keen to keep the original objectives of the research and not deviate whatsoever (Duening, Hisrich and Lechter 2009: 44-48).

Integration of different approaches came up with the methods of data collection. Their rationale underwent evaluation and the methods of collecting data chosen combined both secondary and primary sources of data. The combination will offer in-depth information on supply chain management using the GS1 system, and how its implementation has affected King Faisal Specialist Hospital and Research Center. The study considered the preferences of physicians and medical practitioners, for better analysis and gets to realize what motivates them to buy certain goods. As the researcher interacted with employees of King Faisal Specialist Hospital and Research Center, he realized every step and moves to offer some other areas that require future research and development. Much of data collection took place at King Faisal Specialist Hospital and Research Center. However, there was a need to look into the larger picture and involve other players in the medical care supply chain systems (Esquerre, 2005: 24).

  • Medical facilities will be the main focus of study, and King Faisal Specialist Hospital and Research Center will represent them. The categories that the case facility will represent are; hospitals, clinics both private and public, that have or have not adopted the system. Comparison of their differences will be the main focus.
  • For an effective supply chain management, the roles played by suppliers, distributors, manufacturers, middlemen, controllers, policy makers, and sellers of medical care products like medicine are paramount. The research looked into all these parties as they affected the process of the implementation
  • Manufacturers of medical care products have much effect on how the supply chain system will fair. With this understanding, the researcher was keen to interpolate their effect and the role they played in the entire GS1 system implementation
  • Patients and beneficiaries of medical care services include those people with incurable diseases. They will help the study to reflect how the new structure of the facility is affecting their conditions, as well as their implementation. The rate of the condition management will go through an evaluation process.

The above method of collecting data called for effective sampling. In order to determine the sample population to be adopted in the research, the researcher will use a stratified sampling. The method is superior because it focuses on a sub-group so as to investigate the research question. In question, the area of focus was the supply chain department, and those people or employees at King Faisal Specialist Hospital and Research Center who get direct linkage with the department. The case of King Faisal Specialist Hospital and Research Centre was not much remarkable in that case. Focus was on medical care facilities, suppliers of medical care products, distributors and manufacturers of medical care services. Using the stratified sampling methods, determination of the population from the larger one is a crucial stage in determining the organizations to be investigated by the study. The research focused on only one medical care facility to ensure maximum concentration and easy trail of events. Note that this is happening when the facility has already adopted the GSI Health care system. When evaluating a single organization, the research will consider the entire supply chain.

This section depicts a survey carried out with the help of e-mails and concentrates on the teachers, graduate staffs and King Faisal Specialist Hospital and Research center. One of the main objectives of the method was to involve employees from various fields of employment, in so as to fulfill the actual aim of the study. The sample size for the research is 20. For the purpose of the research, the investigators sent questionnaires by emails, to 20 employees from the fields depicted. The responses of the survey came into the hands of the researcher, and they revealed that most of employees from the various fields have completed the survey. The questions will help in the generation of data for the survey, and for this purpose most of the questions were close ended.

The responses from the respondents of the survey will go through an analysis in the next section of the paper. It has to be stated, the responses from the respondents have been able to develop data which will be useful in the fulfillment of the research aims and objectives. The period for the collection of the survey was 15 days within which the researcher took into account the completed surveys. Analysis of the data will occur in the subsequent sections, and it will help in the development of the proper renditions to the study. There were 5 questions in the survey, prepared with the consideration of the aims and objectives of the research paper. The responses to the questions will go through an analysis, one by one, to find out the connection between the engagement of the employees and the performance of the organization. The responses of the survey will find out the ways by which employees can be made a part of the organization. This can be made possible by analyzing the data gathered in the survey one by one. The main aim was to evaluate the response that employees have had on the new system to the company logistics.

The questions aimed at finding out the ability of the employees to clarify the products they need for effective delivery of quality services. Most of the employees in the survey stated that they were always sure of the expectations from the system. It has to be stated that the development of the organization is in many ways dependent on the activities of its employees. Every organization in the modern business world has clear cut aims and objectives to underline what they want to achieve in the market. However, the management of the organization has to make the employees understand the pros and cons of the aims and objectives. They have to make employees’ expectations clear, and this influences the activities of the organization.

The literature review has depicted a study by Wellins, Bernthal, and Phelps (2005) which claims that employees must understand their expectations in the organization. This is often the first step of the employee engagement in the organization. The strategies of the company are to be aligned with the activities of the employees. This will make the employees understand their value in the organization. Thus, they will be more willing to give more efforts to the activities of the organization. In the case of the question in the survey, it occurs that most of the employees are aware of their responsibilities in the organization. This means that most of the employees in the surveyed organizations are an indispensable part in their respective organizations. They get to know details of their jobs, as well as their activities. This helps them in putting more efforts to their job, and it can go a long way in the development of the activities of the organization.

It has also been found in the case of the question, a small number of respondents seldom understand their expectations in the job. Others are aware of the job responsibility sometimes. These responses underline the fact there are organizations which have not given too much importance to clarify the responsibilities of the employees. This can have an influence on the activities and the performances of the organization in the long run. The responses of the employees show lack of involvement with the activities of the organization. They do not take themselves to be a part of the organization. The discussions made in the literature review of the paper states that this situation can be difficult to handle by the management of the company.

The management of the company will not make the employees work according to the overall aims and objectives of the company, which can be extremely difficult in the long run. Therefore, from the responses of the question it can be underlined the clarity of the activities and responsibilities of the employees in the organization are essential for the fulfillment of the aims and objectives of the companies in the long run. The question aimed at finding out the ability of the organizations to delegate the job to the employees according to their expertise. If the employees get an opportunity to do what they did best, then the satisfaction of the employees at work will increase. This can do a lot to increase the employee involvement in the activities of the company.

The responses of the questions from the survey have found out only handful employees seldom get this opportunity. This means the employee will not be doing the job he does best in the course of the job every day. This can influence the job satisfaction and the moral of the employee. Thus, the employee will not be connected to the job and will not think of himself as a part of the organization. This can be disastrous for the long term activities of the company. However, the survey has also found out that some employees get the opportunity to do the job which they do best sometimes, and some employees always get this opportunity. Naturally the job satisfaction and the involvement of employees with the company in this regard will be much more in comparison to the previous employee. This underlines the fact the employees get the opportunity to specialize in one job. This can help in making them real expert in the field.

The literature review has underlined the fact that employees given the opportunity to specialize and move forward in the company ladder, are more likely to be a part of the company. They will think of themselves as a part of the objectives and goals of the company, and this will increase the involvement with the company. Thus, one can conclude that employees given the opportunity to do what they do best every day will go a long way in increasing the employee involvement with the company. A strategic sampling method is to be used in this study, whereby only those respondents related to the topic will be the subjects of the survey. There, will be an interview for GS1 managers and consultations from famous GS1 providers. GS1 system users from the companies which adopted GS1 systems are also part of the target respondents. The research method is cost and time saving. Administering the questionnaires can be time consuming, and using respondents who are irrelevant to the study also wastes time, and resources in terms of preparing and collecting data. Therefore, the research will only involve GS1 experts and users as they have the relevant experience and information regarding the GS1 systems selection, implementation, and usage.

Validation of Data

Qualitative studies get plagued by validity issues especially since most of them have a lack of triangulation. To avoid this issue, this study will utilize multiple perspectives, as an approach to validate the findings of the study. The literature recommends multiple perspectives for validation of explanatory qualitative studies, and the qualitative method fits this perspective. The participants’ opinions regarding the findings of the study are pertinent. The findings will go back to the participants, and their personal experiences will determine the perspectives of the findings.

Ethical Issues

Salkind (2006) believes that the main ethical issue that related to research is maintaining the privacy of the participants. When dealing with ethical issues, one should consider issues of confidentiality and anonymity. In order to ensure the confidentiality, the research assures that any information will not be disclosed to any third parties. The participants will remain anonymous to the researchers during the study, to ensure that no information leaks and create confidence. For anonymity, the facility and the participants will give consent before the survey begins. The participation is entirely voluntary, and they can refuse to answer any questions though they know the importance and aim of the study. The identities of the participants will remain anonymous, and all data will remain confidential. The questionnaires will exclude questions which may sound personal, therefore, profession and years of using ERP systems will be adequate when analyzing the data.


With the implementation of GS1 at King Faisal Specialist Hospital and Research Center, the management had the vision of addressing four main areas as product management, sourcing and services, purchasing systems and technology, and inventory and distribution management. The automation of the supply chain systems at the facility meant that the company will have an adequate supply of medical and logistical materials. King Faisal Specialist Hospital and Research Center operation or procurement managers have the mandate of ensuring that their hospital has quality and quantity supply of materials, at any one instance. GS1 at the system will add value to the entire facility to place much focus on inwards logistics, outwards logistics and reverse logistics. When coming up with the GS1 system, the company has numerous choices that it had to scrutinize, some of the technologies included Global Data Synchronization Network (GDSN), Radio Frequency Identification (RFID). Geographical Information System (GIS) and various Data Mining (DM) technologies; we are now cashless, paperless, wireless and seamless in the day-to-day operation activities, Electronic Point of Sales (EPOS), Electronic Point of Sales systems (Epos), Electronic Data Interchange (EDI) and the GS1 system. The choice of the GS1 system depended on its ability to handle the following objectives in the system’s facility:

  • The quality objectives; the system showed the ability to assure an adequate supply of materials in a facility when needed. Other than the supply, the system showed the potential of ensuring global quality through its central management.
  • Quantity objectives; the system showed the ability to supply quality materials for various purposes in the facility
  • Supply of materials at a competitive price (price objective)
  • The system aims at ensuring remarkable operation and collaboration of logistics, reverse logistics, inward logistics and outwards logistics.

In order to understand how the system has affected the operations of the system, this paper will look at three areas independently:

Interview Outcome

Product Management

Firstly, the healthcare industry is a hub of activities and a cottage industry. Clinicians are independent contractors with preferences and clouts for supplies. At King Faisal Specialist Hospital and Research Center, it can be estimated that Physician Preference Items (PPIs) account for 40% of total medical supply spending. Despite the allowance that the hospital has given to physicians, the management was stomaching the burden of the varying supplies meant to satisfy every clinician’s needs or preferences. The supplies initially constituted too much expenses and failure to have an added value to the system. In spite of the expected and observed resistance at the facility, the targeted physicians relaxed and adopted the changes in products delivery eventually.

GS1 gave information to the medical practitioners on the available products in the markets, and their past use or how they can be used in line of their duty. With the enlightenment, the players started getting relaxed on other products or equipment, other than the ones they had initially preferred. GS1 was a successful project that promoted the spirit of buy-in from physicians; for example the system promoted the spirit of universally adoption of cost-effective items for use within the hospital. The net effect of this was low costs of medical care provision at the facility (Livingston, 2008:63). The success of the project in convincing the physicians to adopt new methods was successful to a rate of over 90%, largely achieved in part through their use of a process the management called “Sourcing and Standards teams”; the teams consisted clinical experts and sourcing personnel, evaluate and determine the best and most cost-effective products to implement.

With the teams, the hospital was able to develop a matrix of decision making when doing purchases with the sole aim of ensuring that the right equipment and hospital facilities are available throughout the year in the facility. Other than developing the pathways and system through which a purchase could happen, the teams in their meetings involved prioritizing the features that physicians prefer and utilize most of them when making their decision making matrix. In the move to toss some professionalism, the procurement managers get a chance to educate physicians on the financial impact of various supplier options. The teams were also keen to use consensus in minimizing post-sourcing disagreement instead of majority rule. This resulted in the high compliance rate and buy-ins from all physicians (Polaniecki, 2008: 56-58).

Another element of product development present as a result of the GS1 adoption at King Faisal Specialist Hospital and Research Center is fully testing of surgical equipment. Before a commitment to purchase a certain item, the team ensures that the management has initiated the need to test the machine using various mock processes (McCartney, 2004: 77-80). For instance, when committing for a surgery machine, the management with the assistance of the team undertakes a mock surgery to test the reliability of the machine. Other than at hospital level, players in the global GS1 unit have come up with methods of ensuring that the products they get to medical care providers are of high quality. They have established their own testing kits and systems to see that before they recommend for a product, then it is of the wanted quality. The larger GS1 team focuses on consensus approach to selecting products and agreement to the centralized testing rather than individual hospital product selection testing. This has allowed having reputation growth and discouraging counterfeits products (Porter and Van, 1995: 120-134).

Concerning the costs of products, GS1 takes the global view of ‘total cost’ rather than just ‘unit product cost’. Using this method, the central body is determining the types of products to purchase and yet have effective cost management. This evaluation process, nicknamed ‘from cradle to grave’ within GS1 facilities, protects medical care providers from exploitation by manufacturers (Porter, 1985: 103). When determining or recommending the price at which a certain supply should be sold, the body considers among other things, the initial input costs of the product from the types of raw materials used and how this will impact the disposal cost associated with the product. With the approach, there is a fair costing adopted. For instance, certain surgical machinery may have a lower unit cost initially, but if the tool utilizes reagents that contain heavy metals, then the disposal costs or expense incurred will be substantial. Thus, there is a need to consider that when determining its cost. With the approach adopted by GS1 global management system, King Faisal Specialist Hospital and Research Center has been able to know the products in the market, and have their prices set at their best cost after determining different elements that influence current and future costs (Porter, 1980: 36-52).

Sourcing and Services

Using the GS1 system, Group purchasing organizations (GPO) have benefited from economies of scale through either supplying to a number of providers at once or linking to suppliers who have quality and quantity products from the system. This has provided significant cost saving opportunities. The cost effectiveness came through the adoption of GPOs and contracted Broadlane, a GPO, to conduct all of the negotiations with its supplier vendors. The advantage of this is that there has been a global network of suppliers, which gives GS1 the leverage to access more suppliers. Provision of products at relatively low costs and benefits of economies of scale to the suppliers, lead to the transmission of benefits to individual facilities which depend on the system.

The manner, in which benefits accrue to individual hospitals like King Faisal Specialist Hospital and Research Centre, with regard to efficiency in production, can be traced from the benefits that accrue from general GSI streamlining. GS1 has managed to streamline purchases and sales processed, and provide cost savings. It expects most of their supply chain savings to come from better contract terms (Ebbena and Johnson, 2006: 851-865). The cost management becomes effected through effective systems of savings from price improvements, rebates, administrative fees and overhead cost. With the random and fast change in the system, King Faisal Specialist Hospital and Research has been able to enhance its property development and reduced its costs of supplies (Schoderbek, 2006: 63-79). Management can now rest assured that supplies ranging from medication are of the highest possible quality and are freely available.

With the system of GS1 in place, King Faisal Specialist Hospital and Research head of procurement department have managed to trickle down the operations of the supply chain functions into two principal departments, the procurement section and traffic or freight. Both departments work hand in hand to ensure that the hospital benefits from the framework of supply chain that it has implemented. The integrated supply chain as supported by GS1 can be looked at two main levels; from the manufacturer to the company’s stores (inward logistics), and from the stores to the customer (outwards logistics). The system aims at ensuring that the company maintains a winning relationship with suppliers, manufacturers and the internal structures (Duening, 2009: 22-33).

When using the system, it gives King Faisal Specialist Hospital and Research center a chance to visualize the global environment, and compare the business risks and opportunities that can be available. The available chains of supplies get to the same platform and go through an analysis accordingly. GS1 has proved to be a strong decision making tool in the center, and management has been able to tap its design in visualizing real world data of countries, states and cities. The deviation point of the system is that the globe has manufacturers who make different products that the company stocks (Lynch 2003). With the number of suppliers, GSI assists the management to find the shortest route to get a supply to minimize the costs and time.

The mode and method of supplies deliveries plays a crucial part in the general performance of the center. Low accessibility and fast delivery system lead to low cost of getting products. The system also seeks an alternative path if something goes wrong, to allow the flexibility of operation activities, one of the five performance objectives in operations management (Dhillon, 2007: 12-19). The system operates from the understanding that, King Faisal Specialist Hospital and Research center has a number of suppliers of different commodities. Therefore, the company accepts requests of supply and those responds to future supplies according to the demands of a certain commodity. The system has information on previous performance of a supplier that can be of substantial help in making current decision (Robinson, and Fornell, 2006: 305-17).

The system GS1 simplifies the complex operating tasks by not only mapping the locations, but more importantly, drawing relationships spatially as well as identifying value in each relationship; it also stock the company with details on the way to handle a future purchase. According to Gates, Lana “GS1 analyzes and represents information visually, allowing for greater understanding of the operating environment around the corporate. Route analysis helps managers to generate the most efficient route (best or shortest route) that the vehicle should take between the company and it supply chain link” (Gates 2009), the above statement illustrates the role that the system plays in contemporary supply chain system (Montgomery, 1978: 321-338).

The system also addresses the effect of the developing trend in the healthcare industry, of outsourcing of supply data management to professional supply data service providers. It has been able to have such pertinent information and is using it to facilitate trade and improve the supply chain system in the company (Rios and Riquelme 2008: 719-742).

The base of GSI strategy is value innovation, which pursues differentiation, and low cost simultaneously. Its systematic approach avoids inefficiencies and makes the competition irrelevant by rebuilding barriers to create a leap in value for both the King Faisal Specialist Hospital and Research centers, stakeholders and patients. With relation to innovation, Ketchen and Hult, 2006: 573-580 assert that innovation is a strategic decision that is critical to many organizations as it provides one fundamental way to adapt to changes in markets, technology, and competition. Likewise, innovation has an impact on a firm’s strategic initiatives, processes, and organizational structure. A firm can obtain an advantage by innovation in market positioning, which is not merely innovation in the technical arena but in the strategic sense. Ketchen and Hult, 2006: 573 argues that a firm can win without the fight by carefully positioning itself to critical positions, which furnish competitive advantages that are mostly incontestable. Besides, innovation can be pursued by the repeatable processes of blue ocean strategy. In turn, if a company is offering nothing more than an imitation, or increasing improvement over its competition, it will only be treading water in a red ocean.

In the current environment, value creation of most products and services has moved towards innovation since it regards continuous change as a motivating force that drives economic development). According to Backhaus and Ketchen and Hult, 2006: 576, creating value means increasing the total value that can be divided among the transaction partners. Additionally, innovation opportunities depend on improvements of functional features and benefits in a market-based approach. By contrast, it is more difficult to create value in red oceans. Blue oceans will become red after 10 or 20 years as the industry moves into maturity and structures are inflexible. Direct competition among players in mature markets hinders any remarkable creation of value and limits value creation in the long term.

From the abovementioned points, the innovative practices of value innovators lead to advantages. However one innovation gets exceeded by another innovation. Thus, the only way a first mover can retain its growth is to launch new products and stay one step ahead of the competition. This requires a high rate of technical innovation and new product development. King Faisal Specialist Hospital and Research center, for example, has dominated its blue ocean for more than a decade. However, this company is now in a highly competitive red ocean with descending performance. The reason is its fail to reach out for another value innovation in the face of constant competitors’ imitation (Ketchen and Hult, 2006: 579).

With the adoption of GS1, King Faisal Specialist Hospital and Research center takes advantage of opportunities as they come along. Thus, delivery of goods is timely. It aims at ensuring that there are no goods lying in the warehouse; goods either remain displayed on shelves for sale, or in transit (Andraski and Novack, 1996: 23-39). Operating an effective inventory management, information on market dynamics, supplier’s power and the costs of goods should be undertook, there is also need to have all procurement departments integrated in the system for proper communication among them (Kouvelis, Chambers, and Wang, 2006: 449–469). The system of GS1 has a similar approach with just in time logistics. The system allows a company to maintain a limited number of warehouses. Consequently, this ensures that there is minimal storage between loading and unloading of goods (Kinsella 2003). This system will ensure that King Faisal Specialist Hospital and Research center suppliers get their goods timely in their best state. It will also facilitate the delivery of supplies to customers. Collaboration among different supply chain management players is the main strength attained by King Faisal Specialist Hospital and Research center, using the GS1 (Haag, Cummings, McCubbrey, Pinsonneault & Donovan 2006: 36).

King Faisal Specialist Hospital and Research center had no option other than maintaining good business relationship with its suppliers further. This will assist in making sure that there is reliability in the supply of materials. GS1 offered the platform through the system that aimed at enhancing the relation that prevails. The relationship meant that suppliers were getting more concerned on demand from medical facilities like King Faisal Specialist Hospital and Research center. They also aimed at fulfilling the demand in quality and quantity; suppliers have crucial information that they can give to the company, and assist in making strategic decisions in order to take advantage of market opportunities (Mentzer, 2001: 16).

King Faisal Specialist Hospital and Research center needed to look into its database for suppliers; some suppliers have supplied satisfying equipment leading to better provision of medical care services. Using GS1, the company has been able to maintain a pool of data detailing these times for future decision-making. It is from the system that the management has been able to establish building blocks that enhance the relationship between the facility and suppliers (Simchi-Levi, Kaminsky, and Simchi-levi, 2007: 45). GS1 creates documentation of past transactions for future audits and decision making. It also ensures timely supply of products. GS1 ensures the company has adequate supplies at any one point in time. (Mentzer, 2001: 23).

King Faisal Specialist Hospital and Research center procurement department fulfills this task. It considers factors like:

  • Reliability: through the use of GS1 system, the management has been able to answer some of the burning questions facing the company which include, the supplier able to deliver when called upon whether in short notices or otherwise how much can the supplier be relied upon. Is the supplier able to deliver when called upon whether in short notices or otherwise?
  • Capability: future recorded transitions have been able to give an insight about the capability that different suppliers have. This assists in procuring from those suppliers who can meet the demands of the company at any one time (Hines, 2004: 52-80).
  • Price: as illustrated, above, GS1 system ensures that the prices sold for a commodity are the right or the fairest price. It answers the question: does the supplier offer well at an appropriate rate? When prices go down do the suppliers adjust them accordingly? What technical advice regarding prices do the suppliers offer to their customers?
  • Experiences: GS1 is a platform of information and experiences sharing. Using the system, King Faisal Specialist Hospital and Research center has known the experience that the company had in the last business with the supplier, which include: did the supplier disappoint facility or the industry in general? (This information should be gotten from the suppliers management system)
  • Quality assurance and effectiveness: when vetting for quality, GS1 had been able to answer the query to note the general response of customers (medical care providers) and the responses that customers have had when using some products. Others include; an analysis of strong suppliers’ brand name (Larson and Halldorsson, 2004: 17-31).

The above questions have been challenging to King Faisal Specialist Hospital and Research center supply chain system, but GS1 has given a satisfactory answer (Larson and Halldorsson, 2004: 17-31).

Purchasing Systems and Technology

The medical hospitals or facilities have been facing a challenge in their technology. They have for a long time depended on outdated computer system that can hardly support the changing industries and associated changes. With the coming of GS1, King Faisal Specialist Hospital and Research center has been able to have effective business structures that facilitate purchasing and managing stocks. The system has taken a center-stage role in promoting technological development among the facilities, instead of the traditional notion that the facilities must not have effective ways (Ries and Trout, 1986: 32). With GS1, King Faisal Specialist Hospital and Research center has realized it is not only necessary to have the structures, but it is even more valuable to have working systems.

GS1 has further improved the facility’s purchasing systems and technology. The system has facilitated the team to use the new technology or development called virtual item files, which have already been deployed in other industries. Under the system, the organization can be able to use data of different sources to make the right decision (Peltier, 2002: 57). The system integrates different, complex supply chain systems into one framework that facilitates third party data management. Providers can help GS1 to integrate their existing data repository, with the purchasing or requisition systems. This facilitates the growth in database management. The system has facilitated faster, more valuable and easier access to necessary supply information when ordering; this means that the organization can concentrate on its core business of improving medical care services (Wheelen and Hunger, 1999: 78).

GS1 has been able to facilitate on-time or immediate supplies management or stock management system, using an order (an order in this case means, for example, when some medicine gets dispensed from the pharmacy). They process it through GSI system, and then the buyer, after placing the order will have the details keyed at the selling point. The completion of the transaction which is via a click of a bottom will mean that information passes down to the stores department to show that a sale took place, and thus stocks have reduced. This assists in managing the reorder level and keeping the company rich with the products necessary for production (Hitt, Hoskisson, and Ireland, 2003: 77).

King Faisal Specialist Hospital and Research center stores managers can get real-time information from one point; this boosts confidence and improves customer service. The system has seen the collaboration among different departments as information trickles down through the system for convenience. It ensures that there is effective supplier integration, and enhancement of the queuing strategy and capacity planning (Ranchhod and Gurau, 2007: 12).

Globalization and better international relations have improved markets so that organizations can sell their products. When selling in the international markets, an organization’s sales and marketing team should be robust in order to advise the organization on the best business, and corporate strategy to adopt in the global market. One of the most obvious advantages is the integration of different departments in to one system; GS1 has seen all system integration into a system possible. When King Faisal Specialist Hospital and Research center operates as a single unit, then the corporation and business integration becomes enhanced. Better corporation means that the center will offer high quality services; there is no one department that feels is more superior to the other. King Faisal Specialist Hospital and Research center leaders are able to monitor transactions and business deals at a single point thus facilitating the establishment of areas of deficit for strategic actions, as a result of GS1 implementation (Blackhurst, 2003: 54).

Inventory and Distribution Management

The system has been of substantial help to the facility in managing of their inventory. There are different costs associated with managing of inventories and stocks. The costs include storage costs, handling costs, as well as costs of managing the stores (Parker, 2009: 11-24). With the effective change, the system has come to limit any effects or costs that result from supply chain system with the most talked one as Bullwhip effect (O’Brien, 2003: 13-21 ). Bullwhip effect is a supply chain phenomenon which arises with increasing demand variability. It is a trend of larger and larger swings in inventory in response to changes in demand; the net effect is likely to be uncontrolled stocks leading to business losses (Barney, 2007: 55).

The effect occurs when there is:

  • Over batching; this ensures that the facility has the right supplies required for the optimal operation of the facility
  • Poor supply chain management that has limited coordination; use of the system eliminates this scenario from the institution (Paliadelis, 2005: 1-7)
  • Poor communication among departments more so supply chain, procurement, stores, and sales department, and delayed times for information and material flow
  • Overreaction to backlogs, free return policy, shortage gaming and demand forecast inaccuracies (Ward and Glass, 2008: 24).

In order to avoid the occurrence of Bullwhip effect, hospital facilities have adopted strategic supply chain management system. King Faisal Specialist Hospital and Research center benefits from appropriate GS1 system implementation. The GSI system has ensured there is good communitarian among departments more so the sales, procurement, and supply chain system. Information technology should also be used in supply chain systems (Roddick, 2001: 85). It is worth noting that some of the challenges that face firms are how to maintain their stocks, at levels that ensure adequate supplies at all times, and maintain the firm afloat. This calls for the combination of different tactics that include ensuring that all departments are operating effectively. The sources of materials and medical equipment are another area that always requires focus. Managers of the firm have ensured there is continuity in business through the provision of structures that facilitate growth (David, 2008: 99).

Discussion, Implications and Recommendations

GS1 system results at King Faisal Specialist Hospital and Research center has resulted to a number of benefits to the center’s operations, as well as how it is relating with other players in the medical field. The system has enabled the facility able to transact business effectively, and handle patients in the right manner considering the operational costs involved. There has been a discussion of the general gain that organizations get from having effective supply chain management, and results of it have been evident at King Faisal Specialist Hospital and Research center. A facility that uses the system provides high quality products at minimal costs. Business enterprises have been the main pioneers of using customized business applications to handle different elements of their lives; they have used them as their source of inspiration in cost management and flow of business (Barney 2007).

The system (GS1) aligned with the mission and vision of King Faisal Specialist Hospital and Research center which revolve around the provision of high quality medication; the facility has brought positive changes in the health care sector. The new global system aims at improving the general provision of quality, and reliable medical care services to the world, through reinforcing collaboration and effective costing among different players in the industry. The system’s principles become reinforced on data synchronization, in order to address patients’ safety matters, through improved supply chain management and efficiency in different segments of players in the industry. So far, the system has gained numerous successes in several places. Adoption of the system in 2008 by leader companies in the sector of health care, mainly GSK, Johnson & Johnson, Comparatio, CVS, McKesson and Premier Medtronic, and Merck (manufacturers), and Group Purchasing Organizations have proved that it is an effective method of improving medical care provision (Haberbeg & Rieple 2001).

The system embraces the spirit of logistics management, stock movement management, supplier’s data management, as strategic management tools, with their ultimate goal as that of provision of products and services required by players in the medical facilities. At King Faisal Specialist Hospital and Research center the system creates growing efficiency in operational functions while focusing on quality provisions, value additions, and work in progress inventories, physical distribution of material stocks, trading products, and manufactured goods (Hambrick and Finkelstein & Mooney 2005). It also links different players in the logistics or supply chain management. The linkage offers a platform through which they can share many and complex pieces of data, so as to facilitate efficiency, effective costing, information sharing, innovation and invention growth, transparency, and improve business and health care provision (Wolf, Bradle & Nelson 2005).

When using the system, the benefits are in two-folds; for instance technology used in making a certain machine or medicine can be communicated by manufacturers and distributors. When this happens, then the entire industry is moving in the right direction in terms of improving, and responding to changes in demand. The efforts ensure users of the products understand what they are dealing with. When using GS1, King Faisal Specialist Hospital and Research center has been able to contribute to the growing medical care industry through essential sharing and the importance of the data to all players in the sector (Couturier & Sola, 2010: 45-63).

Summary and Conclusion

The main reason for adoption of GS1 system at King Faisal Specialist Hospital and Research Centre are to; look for avenues through which supply chain can be managed effectively and still maintain operations costs at minimal costs. GS1 is an internationally accepted language and central control, which aims at reinforcing supplies quality management, and enhancing relationships in the medical care industry. Use of the method at King Faisal Specialist Hospital and Research Centre aimed at developing reliable structures for effective business (Pielstick 2005). GS1 has the role of ensuring health facilities have material supplies of the right quality. King Faisal Specialist Hospital and Research Centre had the challenge of harmonizing and maintaining a single, reliable and efficient system, prior to the implementation of GS1.

GS1 system goes a step further to ensure that medical components and products get an appropriate price that resembles their quality reliability and to some extent their quantity; when effectively managed, patients get reliable and quantity products. To fulfill its objectives, GS’ managers integrated the supply chain management operations in three main levels that interlinked for an effective process; ensuring quality, ensuring cooperation, and facilitating good pricing of commodities. The system has called upon King Faisal Specialist Hospital and Research Centre management, to join efforts with other medical service provisions and their stakeholders (David, 2008: 56-59). The collaboration and common effort pulling are necessary in maintaining quality of their services and sharing of information (David, 2008: 94-104). The following are the main areas that GSI Health care has been able to attain at King Faisal Specialist Hospital and Research Centre:

  • The system has reduced medication errors. It is through the system that the right information flows within the medical facility; information and experience from other sections and areas in the globe plays a crucial point in improving service knowledge and quality improvement. Medical professionals at King Faisal Specialist Hospital and Research Centre know what medicine they are giving their patients, and probably the effect it has had in the past to those patients who used it (Raman and Bhattacharyya, 2003: 143).
  • Patients are now confident that they will get medication at the right time through the right route and in the right dose. This has come true through the operations of the system that facilitates documentation and sharing of burden among different players. Dosage and the timing of the same are essential for quality medical care (Parker 2009)
  • Efficient traceability and accountability promotion; GS1 has ensured that companied have high levels of dependencies and each can be accountable of its actions and did; manufacturers and suppliers can be easily traced by the system thus in the case of further consultation it is easy.
  • Efficient product authentication; with product authentication, then players can get the right medicine with quality degree. In case of elapse of quality, then manufacturers can be tracked back.
  • Less time spent on manual documentation, leaving more time to consult directly with patients. This is likely to improve the efficient and effectiveness of medical care provision (Huang, 2000: 83).
  • With the adoption of GS1, the facility has been able to undertake cost reduction strategies effectively, through increased supply chain efficiency. Management of the cost of medication leads to wide and far-reaching effects. It assists in general improvement of the health care system (Kraemer, 2003: 16-20).
  • GS1 has assisted King Faisal Specialist Hospital and Research Centre to have an improved order and invoice process. This has transmitted to optimized receiving and planning of supplies when this happens, then the organization benefits (Tan, 2010: 189).
  • In the medium term, King Faisal Specialist Hospital and Research Centre has reduced inventory and increased productivity (Fried and Fottler, 2005: 105-111).
  • Improved product recall and improved shelf management, and improved service levels or fill rate.
  • The system has assisted King Faisal Specialist Hospital and Research Centre in having an improved benchmarking and management of supply cost. This has resulted to an elimination of the need for re-labeling and proprietary codes (Paliadelis, 2005: 1-7).

Quality enhancement level at King Faisal Specialist Hospital and Research Centre has used the GS1 Health-care system to purchase and make production decisions. Depending on demand in the facility the system tries to merge demand and supply, so as to ensure steady and reliable supplies (King, 2002: 26–27). It is through the system that the company can get quality medications and medical equipment through its ability to effective contracting, scheduling, and process planning (Ross, 2006: 22-38). Quality enhancement offers an organization’s management room to develop the frameworks on which the supply chain and logistics management work.

The method aims at operating through ensuring quality and quantity delivery of materials, medications, and medical information. Other than looking at the interests King Faisal Specialist Hospital and Research Centre, the system considers the needs of suppliers, patients, and other players in the system in the efforts of benchmarking operations against those of competitors and enacting best practice policies. GS1 system involves reliable and consistent supplies of the right commodities/medication. This assists King Faisal Specialist Hospital and Research Centre to have effective structures to compete or jointly facilitate medical care improvement with other players in the market; with this in mind logistics managers ensure they have aligned processes in the best interest of the company (Leach 2005).

King Faisal Specialist Hospital and Research Center’s adoption of the computerized internal control system (GSI Health care system) improved consumable and fixed assets. When using the system, the company has been able to develop an integrated supply chain management and facilitate effective sharing of medical information. This has played a significant role in maintaining and improving efficiency in the facility. Through the system of GSI Health care system, the medical facility has been able to offer physical verification of materials delivered to input them in the computer database. When this is taking place, then quality and quantity elements of the materials are paramount considerations. Every time the production department is making an order, GS1 ensures that there is effectiveness and quality in medications, medical equipment’s, and tools used by physicians (Kraemer, 2003: 20)

Critical Review of Research Methods

The main method adopted for data collection is the survey method. Under the method, the research was keen to observe the trend, and the effect that adoption of GS1 had at King Faisal Specialist Hospital and Research Centre. Much of the focus was to interpolate what the hospital has gained in terms of efficiency, quality improvement, and how staff members have adopted to the new system of managing supply chain management (Shane, 2003: 87-89). The survey involved human capital in the facility with the intention of getting their input on what the facility has been able to attain that far and how well they predict the trend will continue (Rotella, Abbott and Gold, 2000: 74).

It is through the method that recommendations for future improvements became a reality. Adoption of the he research paper methods aimed at finding out the connection between the GS1 technology in at King Faisal Specialist Hospital and Research Centre, its performance in the long run, and the net effect of the computerization. The research has also looked out to find out the ways by which King Faisal Specialist Hospital and Research Centre can increase the engagement of the employees, medics, and professionals of different cadre in ensuring supply chain operates in an effective and reliable manner. Development of the research paper depends on a completed literature review (Johnson, and Donna, 2010: 98).

There is the realization that the success of the system is dependent on various aspects, with staffs’ engagement being one of the main parameter that determines its success or failure. The employees must be made to feel as part and parcel of the organization, and their inputs must be recognized and valued and considered by the management. It is highly unlikely they will themselves feel as a part of the organization. Thus, it is the job of management to make them feel so; when employees feel part and parcel of the firm, they will give good inputs in decisions of the supply chain (Saunders, Lewis and Thornhill, 2003: 14-18). They have to be: paid well, given all the opportunities to improve, and made to understand the value for their work and the importance of their activities in the overall functions of the company. Teamwork has to be developed. The engagement of the employees has a positive influence on the activities of the company and can help in the development of the customer satisfaction of the companies. This, in turn, can help the company to be successful in the long run. The research finished in the paper has been able to find out the same points, and it has been able to point out the fact the employee engagement and the performance of the companies have a direct link (Simchi-Levi, Kaminsky, and Simchi-levi, 2007: 45)

The research paper deals with an interesting subject in the course of the connection of the employee engagement and the degree at which GS1 will be effective. The research finished in the paper is a survey which included supply of questionnaires to the employees of 3 different organizations (Margerison, 2002: 88-95). The responses of the survey have underlined the fact the management played a crucial role in the development of the employee engagement of the company. It has to be stated here “people like to be moved, rather than to move” and thus it is the responsibility of management to make the activities of the employee engagement to be successful. The survey has found out the management has to develop the motivational factors for employees to be a part of the organization. They are to be rewarded for their works, be provided with feedbacks, be developed as a team, be constantly motivated and they have to understand the importance of their position in the company. The main aspect of the findings has been the employees are to be motivated at regular intervals (Schmalensee, 1982: 349-366). They are to be rewarded, or the management has to take the responsibility to improve the workplace environment of the company. This will help in the development of the employee engagement in the company and will help the company to fulfill the overall aims and objectives (Mentzer, 2001: 1–26).

Using the survey method, the level of interaction of the system (GS1) and employees in an organization gave an account of what needed to be improved, and facilitated addressing of staffs and management needs. There is much focus on how the management has changed the organization, and held to its new development of an integrated supply chain management system. The other key focus that the method was able to capture is the mood of employees, and the rate at which the system addressed patients’ needs and surpassed their expectations. Using survey method, the reliability of GS1 has been able to be noted and attained. The management and their interaction with the system underwent evaluation, and documentation of the evaluation results will allow future improvement of the system (Larson and Halldorsson, 2004: 17-23).

Technology assists an organization to improve its efficiency and effectiveness, and resources mainly focus on the company’s agenda to facilitate better services. For instance, systematic record keeping within hospital facilities gives service providers quick access to the records. This facilitates fast and quality medical services provision. Systems maintain more durable and reliable records than the case would be for manual system of data capture and data keeping (Beynon-Davies, 2009: 87-97). With the system, history of patients can be maintained and revisited occasionally if need be, to facilitate service provision. There are some instances where medical data of a patient may be required by another facility where he is seeking medical care. When using an integrated system, such data and information sharing will be fast and accurate. It is vital to comment here that provision of quality medical services has large connection with the historical analysis of a patient and also with the current state of the patient. With an integrated system, medics will be able to share what they hold on request (the request should have the proper authorization either from the patient, his proxy or any other body mandated with the task), this in turn facilitates provision of quality medical services (McFarland, Bloodgood and Payan, 2008: 64).

Research and development in the medical field can be facilitated by remarkable documentation and sharing of information regarding diagnoses and patients’ responses to medications, within relevant bodies. GS1 system will be paramount in ensuring sharing of information across the medical scenes, so as to facilitate innovation, invention, and development in the medical field. GS1 is likely to be integrated, and seek information from more than one country. The wide spread information sources are likely to benefit the users of the information as it will offer different opinions, views, and outcomes. This is crucial in the development of new systems and ways of operating in the medical scenes (Näslund, 2002: 321-338).

With the development of GS1, the facility has been able to integrate different departments and maintains a uniform set of operations. Thing and activities can flow effectively, and all contribute to the growth of medical care offered by the facility. When issues of quality befall the facility, the management undertakes a follow up as they had initially gotten the products from a supplier who can be held liable of any misfortune resulting from substandard goods (Murphy, 2005: 132). Another main area that GS1 has looked into is the development of reliable suppliers-hospital facility such that credit terms have improved. When doing business, it is almost impossible to work without borrowed capital. Borrowed capital can come from suppliers through their commodities. GS1 has enabled the growth of company-company relationship leading to improved interaction and better credit terms. This is an area that the facility has capitalized especially when getting capital and expensive goods like X-ray machines, Surgery machineries, and information technology equipment’s (Andraski and Novack, 1996: 23-39).

The globe is undergoing numerous changes, and different parts of the globe have different experiences and innovations (Avery 2004: 72). With GS1, the choice of products that the facility is getting has considerably increased. New players in then board come with the technologies and new inventions to the benefit of the company. Global integration has meant that players with new products come on board for the good of the medical facility. The system has enabled innovators or developers to market their products across the globe and still adhere to some set regulations of standard (Brodsky and Newell, 2010: 38). Taking the case from a broader angle, with GS1, scientists, innovators, and developers in the medical care industry get encouraged to improve service delivery.

The platform of marketing that the system creates and also much sharing of information facilitates this improvement (Nedungadi, 1990: 263-276). Other than platform, the system acts as a virtue team platform were players of the medical care industry can use in solving medical care challenges (Hambrick, Finkelstein and Mooney 2005: 485). The players can sell and contribute on various medical decisions in their move to increase care or seek a solution to matters facing the industry. Different players who come from different parts of the world can express their feelings on issues of discussion as triggered by the system. An increase in the general environment of the industry benefits the suppliers. Hospitals, like King Faisal Specialist Hospital and Research Centre get products and services that can further increase their production, and service quality delivery (Kurtz, MacKenzie and Kim, 2009: 224).


King Faisal Specialist Hospital and Research Centre notes and appreciates the benefits of GS1 system. This is a positive move in improving service delivery in the facility. However, much needs to be done in order to improve the quality (Cooper, Lambert and Pagh, 1997: 12). The following are the areas the facility should look into:

Further Integration

The facility should embark on further integration among departments. GS1 on its own has much focused on the supplies and procurement departments. However, irrespective of how well the department works, it cannot work in isolation. Physicians say that inputs should be considered when making the procuring decision. Although the facility aimed at harmonizing the demand of physicians to products that are likely to be cheaper, but of high quality, the initial demand of physicians should be considered. Another area that the facility should note is that GS1 does not offer a feedback channel. The facility should get feedback from physicians and patients to determine whether the products they are getting have a good quality and its production are okay (Kerin and Peterson, 2009: 87-97).

Focus On the Whole Facility, Not On a Different Segment

Although the facility focuses on having effective structures, the management should be wise to understand that the system will only be effective in medium and long term if all segments of the facility become interlinked with the role of seeing success (Crother-Laurin, 2006: 4-6). The current medical environment comes up as a result of rapid and ongoing change; innovation and innovativeness that come with the information revolution. New product development is one of the recommended strategies for effectively attracting development and quality improvement as well as maintaining the existing users. Additionally, value-added and premium products are advantageous and profitable compared with those generic products (Bate, Robert and Bevan, 2004: 62-67).

As a result, the facility can achieve product innovativeness and sustain its leading position in the naturally-oriented medical care market by means of continuous investment in research and development in the long run. Moreover, in order to link the brand values with the patients’ loyalty, King Faisal Specialist Hospital and Research Centre should develop the association by getting involved in community actions, local events and charities. In brief, whether King Faisal Specialist Hospital and Research Centre decides to take any action in the future, it is imperative to follow the principle to focus and renew its strategic methods and leave behind the scattered marketing attempts years ago (Beerney, 2007: 116-129).

When it comes to the trends of the medical services system, there will be more and more medical facilities showing concerns about the environmental protection and contributing to social benefits (Howell and Shamir 2006: 254). Hart et al. asserted in 2000 that all businesses and markets get constrained by dependence on ecosystems and nature. It appears that firms that are better capable of incorporating concerns for the environment into their strategic planning process gain competitive advantages. In order to keep a competitive advantage, such capability must be valuable, and it is irreplaceable. Consequently, the domestic cosmetics companies are strong recommendations in laying stress on environmental issues, and devote the efforts to producing naturally-sourced products (Keramally, 2003: 45-56).

Future Research and Development

According to the research limitations, this research focused on a small number of respondents. Thus, further research should attempt to investigate on a more nationwide scale and include a greater sample in order to obtain better information. In addition, data collection in a future research can adopt both qualitative and quantitative survey methods for adequate information, as well as the in-depth understanding of people’s attitudes towards brand image in a more far-flung investigation. Moreover, the analysis methods employed in this research are mainly factor and regression tests from SPSS program. Future researchers should endeavor to conduct the further research by using different methods, such as correlation analysis, to obtain a far-reaching outcome (Avenell, 2005: 29-48).

In respect of the research subject, this study revolves around the blue ocean strategy and brand image in the cosmetics field; the future research should try studying the subject in a broader perspective or relative businesses. For the influential factors of brand loyalty, future studies can put emphasis on external market environment, organizational structure, consumer behavior, and product development etc. while this study focuses on perceived qualities, brand awareness and brand association. Furthermore, the Internet plays a critical role in today’s business environment, and the percentage of consumers’ on-line purchase preference for cosmetics is on the rise. Future studies can thus extend their research range and consider the supplementary variables such as on-line shoppers’ behavior, supply chain management or distribution strategies to have a better eye for marketing strategies and brand image (Shane, 2003: 87-89).


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