A significant and somewhat unexpected im- provement was in the area of inventory control. The finished goods warehouse was converted from zone storage to assigned, random storage using standard features of the new system. By utilizing system rules for lot/location control, the ware- house space requirement was reduced by 40%. Inventory accuracy increased from 94.5% to 98.8%. The improved accuracy would be aston- ishing even if the error tolerance remained un- changed, but in fact, the current tolerance is much stricter than that used in the past. Previously, a cycle count was considered ‘‘bad’’ if the error was greater than 0.5% of six months usage. The current standard is that the cycle count is ‘‘bad’’ if there is any variance, in any location, or any lot number. The accuracy level is 99.6% in locations that are wholly under control of the warehouse system.
The non-financial improvements are probably the most significant. The company is now posi- tioned to continue to grow and to pursue new partnership opportunities that would not have been possible using the old information system