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How to Implement a UPN System

Medical Device & Diagnostic Industry

MDDI Article Index

An MD&DI May 1998 Column


Adding universal product numbers to medical devices helps everyone in the supply chain—manufacturers, distributors, and customers—better manage and track products.

For years, medical device manufacturers have resisted bar coding medical products. This resistance stems both from a lack of understanding of the benefits that can accrue to manufacturers as a result of bar coding products as well as a lack of standardization of bar codes. Companies that code their devices experience improved on-time fill rates, reduced inventory-carrying costs, increased material-handling productivity, reduced data entry costs, and lowered picking and shipping errors. Manufacturers can also better identify bottlenecks in the production process.

Although the Health Industry Bar Code (HIBC) supplier labeling standard has existed since 1984, only recently has the medical device industry begun to take notice. In January 1995, the Department of Defense demanded that manufacturers place a universal product number (UPN) on all medical and surgical products, and group purchasing organizations and health-care alliances soon started issuing similar requirements.

Last November, the Medicare Universal Product Number Act of 1997 was introduced in the U.S. Senate. A similar bill was introduced in the House of Representatives in February. The bill states that, effective February 1, 2001, no Medicare reimbursement will be made unless a UPN appears on the claim. Also this past February, under the auspices of the Healthcare Electronic Data Interchange Coalition, the leading group purchasing organizations and alliances issued a mandate that all medical devices be bar coded by July 1999.

While the effective dates for both of these mandates sound like a long way off, manufacturers should not be lulled into complacency. Developing and using a UPN-based system is more than a technical issue—it is about integrating information and material flow between an organization and its suppliers, distributors, and customers. Good planning and successful implementation will take lots of time.


A UPN is a number that uniquely and unambiguously identifies a medical product at each packaging level. It is important to understand that the UPN requirement is not a bar code standard; rather, it specifies that a product be identified using the primary data structure of either the HIBC supplier labeling standard or the UCC/EAN.

Developing and implementing a UPN-based system is a far-reaching project. It is not just about technology and rushing out to buy a few bar code printers, labels, and a verifier, although eventually businesses will need to do that. Successful companies follow a systematic approach when choosing and implementing a UPN system.

Choosing a Team. First, a company must assemble a cross-organizational team headed by a UPN coordinator who has been appointed by upper management. Since the team will oversee the entire project, professionals from operations, packaging, marketing, shipping and receiving, manufacturing, MIS, engineering, and quality should be involved. Representatives from bar code equipment and label suppliers and consultants specializing in bar coding may be able to provide additional guidance. A word of caution: everyone on the team must understand the unique needs of the medical device industry and be familiar with the criteria of the UPN and the HIBC and UCC/EAN formats.

Initially, the team will focus on developing and using UPN labels for the company's products. However, part of the plan should forecast ways the company can benefit by using bar codes in its shipping, receiving, and manufacturing processes.

Conducting a Feasibility Study. Ordinarily, the first job of a UPN team is to do a needs assessment of all the areas where bar coding or other automatic identification and data-capture technologies, such as radio-frequency data communications and radio-frequency identification, can be used and then determine where to start. However, in the present discussion, it is assumed that the purpose of the project is to get UPN numbers on all products at all packaging levels. Therefore, the team will need to look at all operations involved with packaging and shipping.

Team members should talk with the people involved on the packaging lines, on the shipping docks, and elsewhere, then develop flowcharts to help everyone understand the actual—not just the theoretical—flow of materials, processes, and information. The flowcharts will be used as a basis to develop a phased approach, so lessons learned from one application can be incorporated into others. Spending several months on this part of the planning process may seem tedious; however, companies will be rewarded with a solid initial application that can easily be expanded to other areas.

When the plan, including the budget, is complete, senior management should review and sign off on it since many tasks will cross departmental lines.


When an approved plan is in place, the team is ready to look at the technical requirements. The team will need to agree on which UPN format the company will use, the software and hardware needed, and how to develop the UPN database. Medical device manufacturers have a special challenge: the UPN requirement allows a choice of which product-numbering method and bar code standard to follow. Companies can choose one of two different (but not conflicting) UPN primary data structures: the HIBC Supplier Labeling Standard issued by the Health Industry Business Communications Council (HIBCC) or the UCC/EAN SSC-14 format issued by the Uniform Code Council (UCC) (see sidebar on page 112 for contact information).

Remember: at this point in the project the team is deciding which method makes better business sense. The following questions from UPN Bar Code Labeling: A Guide for Implementation in Healthcare will help guide the decision-making process.1

If bar coding is being used:

  • Are universal product codes (UPCs) being used? Or are part numbers five or fewer numeric digits? If the answer to either of these questions is yes, the UCC/EAN format may be used.

  • Is the HIBC supplier labeling standard being followed? If so, the team should consider whether any products will be sold in retail or international markets that require UPC/EAN.

If bar coding is not being used currently:

  • Is the company contemplating selling to retail or international markets that require UPC/EAN? If so, the company should use that structure, paying special attention to the UCC/EAN format. The catalog number must be exactly five numeric digits in length, and no punctuation marks may be encoded. Of course, without punctuation, the human-readable text beneath the bar code may lose its meaning. The team should keep this in mind when it develops labels later in the process.

  • Is the company planning to use existing catalog/product numbers in the bar code? Are they alphanumeric and of variable lengths? If so, consider the HIBC supplier labeling standard. Per the standard, the catalog/product number must be 13 characters or fewer. Again, because only alphanumeric characters, not punctuation, can be encoded, the human-readable text beneath the bar code may lose its meaning. In addition to the human-readable information under the bar code, the existing catalog/product number with the punctuation can be displayed elsewhere on the product. If catalog/product numbers are long, the team may decide to provide a "shortcut number," which would be most practical in the UCC/EAN format.

If the company does not already have a UPN, when the most logical format has been chosen, the firm will need to purchase a labeler identification code (LIC) from HIBCC or a manufacturer's identification number from the UCC.


In 1994, the Health Industry Distributors Association (HIDA) issued a challenge to medical device manufacturers: All medical/surgical products should be source coded (with a universal product number and bar code) at all packaging levels to reduce health-care costs, improve the accuracy and responsiveness of product movement across the entire supply chain, and create a more efficient consumer-response system.

Figure 1. The Health Industry Distributors Association's 1997 bar code audit found that the number of packages marked with a UPN had increased by 31%, from about 40% in 1995 to more than 52% in 1997.

A UPN is the number contained within the bar code that manufacturers place on their products, and it uniquely identifies a product. It can follow one of two data structures: the Health Industry Business Communication labeler identification code (HIBC-LIC) or the UCC/EAN. The HIBC-LIC primary data structure includes the manufacturer's LIC, manufacturer-assigned product number, package level indicator, and a link character (check digit). The UCC/EAN primary data structure consists of a package level indicator, UCC/EAN manufacturer ID number, manufacturer-assigned product number, and a check character.

In 1995, HIDA's Supply Chain Committee sponsored its first bar code audit to assess the degree of movement toward universal source coding of medical and surgical products. In 1997, a follow-up audit measured the progress the industry has made in implementing the UPN during the past two years. Results showed that the number of packages marked with a UPN increased 31%, from about 40% of total packages in 1995 to more than 52% in 1997 (Figures 1 and 2). Similarly, the percentages of cases (shipping cartons) and boxes (shelf packs) with UPNs also increased significantly during that time. Cases with industry codes rocketed 81%, from nearly 39% to 70%, and boxes rose 40%, from 55% to 77%.

Figure 2. In 1995, 1443 industry standard bar codes were recorded, and nearly 77% used the HIBC-LIC primary data structure. By contrast, in 1997, 3611 industry standard bar codes were recorded, and only 64% chose the HIBC-LIC structure; the rest used the UCC/EAN data structure.

The second audit was conducted at the same three distribution centers as the 1995 audit with the addition of a long-term-care/home-healthcare products distribution center. Centers were chosen based on product mix (types and numbers of products should approximate industry averages), customer mix (types and numbers of customers supported should reflect industry averages and include a range of hospital, physician, long-term-care, home-health/long-term care, and other alternate-site purchasers), and volume (the dollar value and purchase order transaction numbers for sales volume should reflect industry averages).

The audit further refined the sample universe by examining all products within a group representing 70% of the items most frequently picked. Of the 6908 packages chosen, each was then given a value based on the number of times it was picked, regardless of the number of units picked. Auditors examined each packaging layer at the package's shelf location, recording the presence of bar coding at each level and scanning the code to determine machine readability.

As a result of duplication of stock between distribution centers and different packaging configurations for the same product, a total of 3396 unique products were found in the 6908 sampled. About 52% of these met industry bar code standards (Figure 3).

Figure 3. About 52% of the medical and surgical products sampled contained bar codes meeting industry standards.

While the 1997 audit results indicate that industry is making significant progress toward 100% source marking on all medical and surgical products, much work still remains, especially in coding the unit-of-use levels. (Only about 26% of such packaging contains a UPN.)

The Efficient Healthcare Consumer Response initiative—which gathered experts from manufacturers, distributors, and providers two years ago to find ways to curtail health-care costs—identified $11 billion in potential annual cost savings in the health-care products supply chain if current inefficiencies are eliminated and new business paradigms adopted. However, these costs savings cannot be realized without universal source marking of products at all packaging levels. HIDA plans to continue its efforts to educate manufacturers about the benefits of using bar codes and UPNs and expects to conduct further audits to chart industry's progress.

Source: Koenig, S L, A Status Report on the Implementation and Use of Bar Codes in the Medical/Surgical Industry, Alexandria, VA, Health Industry Distributors Association, 1997. Copies of the report may be downloaded from HIDA's Web site.


Once the team selects the UPN format, hardware needs can be considered. Keeping one rule in mind will take the mystery and uncertainty out of deciding what type of bar code equipment to choose. That rule: Know your application. Although it is tempting to make purchase decisions early in the process, when developing a bar code applications, equipment decisions should be among the last made. To avoid mistakes, the UPN team must consider a few fundamentals about the technology while planning the system.

First, the team should focus on the UPN bar code. How will it be printed? Will it be part of the package graphics, printed on a label, or printed directly on corrugated material? All of these approaches may be used. For example, on the unit-of-issue the bar code may be printed as part of the packaging. On higher levels of packaging, labels may be applied except for corrugated cartons, which may have bar codes printed on them using an ink-jet printer. Some companies may choose to use labels until other changes in packaging are required and make all the graphics changes at once.

If the company chooses to print its own labels, a system that provides a lot of flexibility, it's essential to use a printer designed for bar code printing. A wide range of printers and printer/ applicators exist, so nearly any application can be accommodated. In some cases it may be important to have a printer that can receive downloaded information from a corporate database. If so, it is also important to know how much flexibility the printer has to manipulate those data.

The data structures for both UPN formats are somewhat complex. One way to make it easier to design labels is to use a bar code label preparation software package; many are available. All will print the symbologies needed for either UPN format, but companies should look for a package that can automatically format for both the HIBC and the UCC/EAN data structures.

In a bar code application, labels take on a new meaning. Labels are vehicles for carrying information, and they are critical to the success or failure of a bar code application. Label selection involves knowing what information, both bar coded and human-readable, will be on the label. It's also important to know to what type of material the label will be affixed and the environments in which it will be applied and scanned. For example, some labels will go through a sterilization process, some will be shipped in a hot truck, and some may be subject to abrasion because of multiple scans by a wand scanner. Label face stock and adhesive also must be determined.

Maintaining label quality is a critical factor in a successful application. One way to measure label quality is by using a bar code verifier, which ensures that the bar codes are printed to specification. In addition, the team should write quality procedures that can be used to check for the correct human-readable information and label placement, and to test label adhesion.

While cost is inherently a criterion for purchasing any kind of bar code equipment, it is important that the application—not the budget—lead the equipment and label selection decision. Label and equipment vendors should be able to provide direction in considering the essential environmental and ergonomic factors. Once those decisions are made, the UPN team should write specifications for the equipment and supplies needed. Product selection then can be made based on application requirements and budget. Purchasing additional equipment and reordering supplies should be done according to the same specifications.


A UPN program should be implemented and run parallel to the current system for a set time—a week or several weeks—depending on the complexity of the application. This phase of the project must be closely monitored and probably will need to be tweaked daily. Team members should carefully document the application and any changes that are made as well as ask actual users of the equipment for feedback.

One of the most critical aspects of the project, and one frequently neglected, is training. Everyone who comes in contact with the system needs instruction. A user needs to know the purpose of the application and his or her role. Allow people to become comfortable with the equipment. Give them time to play with the bar code equipment before it becomes integral to the application. A good education and training program can help ensure a smooth transition to the new way of doing business.


A bar code system is never really finished. It should be part of a continuous improvement strategy that constantly reviews requirements for data, reporting, and bar code equipment. Using a systematic approach when establishing a bar code application will lead to a successful implementation.


EAN International

Rue Royale 145

B-1000 Brussels, Belgium

Tel: +32 2 227 10 20

Fax: +32 2 227 10 21

European Health Industry Business Communications
Council (EHIBCC)

Josef Israelslaan 3

2596 AM The Hague


Tel: +31 70 324 4754

Fax: +31 70 324 2522

E-mail: [email protected]

Healthcare EDI Coalition (HEDIC)

1405 N. Pierce, Ste. 100

Little Rock, AK 72207

Tel: 501/661-9408

Fax: 501/661-0507

E-mail: [email protected]

Health Industry Business Communications Council (HIBCC)

5110 N. 40th St., Ste. 250

Phoenix, AZ 85018

Tel: 602/381-1091

Fax: 602/381-1093

E-mail: [email protected]

Uniform Code Council (UCC)

8163 Old Yankee St., Ste. J

Dayton, OH 45458

Tel: 937/435-3870

Fax: 937/435-7317

E-mail: [email protected]


When companies are first establishing a UPN labeling program, the emphasis is placed on the technical aspects of the bar code program. People tend to lose sight of the real reason for initiating a UPN project: creating the ability to gather information about a product by scanning its bar code. That bar code helps everyone in the supply chain—manufacturers, distributors, providers—manage and track that product. In addition, when products are bar coded at the unit-of-issue packaging level, the quality of patient care will be improved because it can be determined and documented that the caregiver has the right product for the patient at the right time. Within the next year to 18 months, bar coding medical and surgical products at all levels of packaging should become the norm rather than the exception.


1. Longe K, UPN Bar Code Labeling: A Guide for Implementation in Healthcare, Philadelphia, Tower Hill Press, 1998.

Karen Longe is president of Karen Longe & Associates, Inc. (Lake Bluff, IL), a consulting firm specializing in automatic identification and data capture in health care.

Copyright ©1998 Medical Device & Diagnostic Industry

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