American Diagnostic improves inventory, shipping accuracy, while reducing pricing errors

American Diagnostic Corp. (ADC) is one of the world's premier suppliers of diagnostic medical products, personal instruments and accessories for the healthcare industry. In the United States, it's the largest private supplier of two physicians' tools: stethoscopes and blood pressure instruments.

What needed healing at ADC was it's information technology system. Its illness was adversely affecting the economic health of the entire company. Marc Blitstein, ADC chief executive officer and president, characterized the system as "outdated, arcane and poorly managed. We couldn't grow because of the system's shortcomings. Frankly, we were imploding."

Symptoms were everywhere. "Orders were on handwritten tickets," Blitstein recalled. "Inventory wasn't maintained accurately. We didn't even have accounts payable live on our old system, much less general ledger. There was virtually no inventory control."

What cured the IT illness and helped the company thrive was System 2000 software from Vormittag Associates, Inc. (VAI), an IBM Business Partner. The solution runs on an IBM iSeries^TM 270 with WebSphere® Standard Edition Version 3.5 and DB2® and SQL Development Kit Version 5 Release 3.

American Diagnostic uses the IBM and VAI solution across its business, including customer orders, manufacturing, accounts receivable and payable and ledger.

Blitstein said American Diagnostic considered several alternatives in searching for a cure—first looking at Microsoft® Windows® systems but deciding they weren't reliable enough. By way of contrast, he said, the underlying IBM offering "is rock solid," and he found the IBM and VAI proposal to offer more function at a better price.

Blitstein pointed to inventory turnaround as one example of what the system means to the ADC bottom line. He said turns have almost doubled and that's "allowed us to reduce inventory growth by millions of dollars despite our doubling in size."

Other results of the IBM and VAI solution are cutting order time in half and reducing pricing errors by 80 percent. "In the past," Blitstein admitted, "there were dozens of notes posted on each terminal manned by our customer service people to remind them of various special promotional pricing programs."

The system dramatically improved shipping accuracy to 99.95 percent. For instance, in May 2005, there was one error out of 300,000 items shipped. In those relatively few cases when an item is out of stock, the system lets the customer know when a shipment can be expected.

Despite the doubling of volumes, the number of people in the shipping department is the same as it was six years ago. On an average day, they handle 400 cartons containing 15,000 items.

• Shipping accuracy is up to 99.5 percent.
• Pricing errors are down by 80 percent.
• Improved inventory turnaround saves millions of dollars.
• Order time has been cut in half.

American Diagnostic improves inventory, shipping accuracy, while reducing pricing errors  (383KB)

Get Adobe® Reader®

Contact the Express Advantage Concierge, a team of specialists dedicated to midsized business 1-877-IBM-ACCESS (426-2223).