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The establishment of standards within an industry is essential for innovation and collaboration, whether it be technology standards, nomenclature standards or process standards. In fact, one of the key objectives of professional associations is to establish and enforce standards across the organizations that operate in that profession or industry. Diffusion and adoption of standards continue to be an area of interest due to the diversity of outcomes and cases observed across many industries and eras. This research builds upon the vast literature of standards adoption and diffusion by specifically examining a case of product identification standard diffusion in the medical devices industry.
In health care, effective management of medical devices is a significant contributor to the clinical success and hospital profitability. Medical devices management involves hospital administrators, physicians, patients, and the medical device suppliers (Burns, Housman, Booth, & Koenig, 2009; Young, Nyaga, & Zepeda, 2016). The proliferation and complexity of medical devices stress the need for a mature and standardized system to track and manage them both within an organization and across organizations. Many studies have demonstrated that the proper implementation of universal product identification can significantly improve supply chain performance and reduce risks (Ozelkan & Galambosi, 2008; Sodero, Rabinovich, & Sinha, 2013).
In the medical devices industry, a standardized coding scheme has been recently established by the United States Food and Drug Administration (FDA). The Unique Device Identification (UDI) standard is an alpha-numeric code that consists of two segments: A device identifier and a production batch identifier (Department of Health and Human Services, 2013). This code can then be cross-referenced in public databases and systems of other organizations consistently.
Having a standardized labeling system carries potential benefits to all organizations in the medical devices supply chain (The Brookings Institution, 2015). Medical device manufacturers can use UDI to track inventories being stored or transported around the globe. Healthcare providers can improve medical record documentation, more easily search for product alternatives, and have easier access to information about clinical use and safety (Wilson & Drozda, 2013). Intermediaries, such as distributors and group purchasing organizations can utilize these standards to minimize search costs and transaction efficiency (Pheney, 2014). However, a major challenge has been to assimilate the medical devices supply chain towards this standard: Convince manufacturers to use UDI in product packaging and convince hospitals to invest in the infrastructure to track and make use of UDI data (Daniel, McClellan, Gardena, & Deak, 2014).