GE and Six Sigma Help Vacuum Technology Company Clean Up Operations Proven Business Methodologies Reduce Inventory, Improve Cost Management for Success | Automation.com

GE and Six Sigma Help Vacuum Technology Company Clean Up Operations Proven Business Methodologies Reduce Inventory, Improve Cost Management for Success

May 222003
MOORESTOWN, N.J. * May 21, 2003 - A company can have a solid customer base, no manufacturing or quality issues, and an outstanding international reputation but still have operational challenges that drain much-needed resources. Denton Vacuum, Inc., a 40-year-old company serving essential industries such as optics, semiconductors, medical devices and telecommunications, can attest firsthand to this situation. Fortunately, with help from long-time supplier GE Fanuc Automation, an affiliate of GE Industrial Systems, Denton discovered that the Six Sigma methodologies implemented by GE are as solid as its automation products. Since then, GE and Six Sigma have helped Denton reap enormous financial and organizational benefits that enabled the company to not only improve its business practices but to expand at a critical time. For a company that provides equipment to help organizations around the world prepare fragile cell and tissue samples for artificial organ and Recombinant DNA esearch, speed fine manufacturing of computer chips, and place eye-protecting coatings on sunglasses, this business success has far-reaching benefits.

Bring on the Black Belt
For nearly four decades, Denton has enjoyed an international reputation for providing high-quality, state-of-the-art vacuum equipment and coatings. Since the mid-1990s, Denton has used GE's hardware and software control products on all of its equipment, and GE Fanuc's CIMPLICITY* software is the
basis for Denton's industry-leading Process Pro* control package.

When he was invited to a attend a presentation about the benefits of Six
Sigma processes by GE Chairman of the Board and CEO Jeff Immelt, Denton Vacuum President and CEO Frank Zimone figured that, since he was so happy with the performance of his GE Fanuc automation, the presentation could be
time well spent. Little did he know how valuable that investment of time would be!

Intrigued by what he learned about Six Sigma during the presentation, Zimone told his GE Fanuc representative that, while he didn't need to solve defect issues or build better products, he did need to figure out how to solve his huge inventory problem. Zimone knew that Denton's bloated inventory level
was the root cause of its financial troubles but was frustrated that all internal efforts to address the problem had produced limited success.

"Inventory was discussed on a quarterly basis in the accounting department and was nothing more than an abstract concept to the rest of the organization," Zimone says. "Therefore, no one else did anything to
proactively control inventory, despite the fact that the actions of nearly everyone in the company had some direct or indirect effect on inventory levels."

Six Sigma involves a set of best practices and methodologies centered on improving the quality of the processes, procedures and products. Based on the tremendous improvement that Six Sigma has brought to the quality of its own products and services, GE now helps its customers implement Six Sigma best practices and methodologies to improve their overall business operations.

Six Sigma revolves around several key concepts that are designed to provide
an objective look into business processes and to generate the hard data needed to improve quality. A Six Sigma Black Belt works with the customer on each project to identify, define, measure, analyze, improve and control their processes, procedures and/or products.

Dan Barton, GE's Six Sigma Black Belt on the Denton project, was "a fantastic facilitator," Zimone explains. "He was great at breaking the problem down into its various process stages, and this is now how we approach every problem we encounter in our company."

The Power of Hard Data
The numerous benefits that Denton Vacuum has realized as a result of implementing Six Sigma are a testament to the process. "When we began the Six Sigma process, we had $7 million in inventory, and it was killing us," Zimone says. "A year later, our inventory had dropped to $2.7 million. We could have gone under had we not been able to preserve our cash position by reducing our inventory and managing our cash to the penny.

With these changes to our operations and business environment, the company is growing, and our financial strength is solid."

The dramatic reduction in Denton's working capital requirements has also led to several associated financial benefits, including the ability to: reduce interest charges through accounts payables management, negotiate better terms from suppliers, and deliver machines to customers more quickly.

"Six Sigma identified a huge hole in how we were running the purchasing department by showing us that we were just issuing purchase orders without negotiating pricing," Zimone explains. "As a result, Six Sigma not only enabled us to reduce our overall inventory levels, it allowed us, through a complete re-organization of the purchasing department, to drop our level of
materials purchases to half of our previous level. Six Sigma is a fabulous, fabulous process."

Even in light of the huge financial savings resulting from Six Sigma, Zimone points to teamwork as the most tangible benefit of Six Sigma to his company. "Six Sigma provided the vehicle for me to get together people from all departments in the company so that we could understand and analyze a problem as a team, and understand all the inter-dependencies of each person's inputs on the inventory," Zimone says. "We were able, through Six Sigma, to move inventory into the collective consciousness of the company-it was no longer just an abstract concept in the accounting department."

Because it is based on quantitative data, Six Sigma often reveals costly misconceptions that drive a company's decision making. "Until we went through the Six Sigma process, it was a generally ccepted truth in our company that our MRP system was responsible for our runaway inventory," he says. " It turns out that this couldn't have been farther from the truth-the problem was the inputs going into the system.

"There is no substitute for hard data," Zimone concludes. "GE and Six Sigma were the start of our company's transformation, and I can't say enough good things about them."

About Denton Vacuum
Denton Vacuum is a world-class designer and manufacturer of high vacuum deposition systems and a provider of thin film optical coating services.

Denton systems have currently been placed in North America, Europe, and virtually all of the Pacific Rim countries. The company supplies coating services and coating equipment to leading industrial companies such as Pentax, IBM, AT&T, Texas Instruments, 3M, Kodak, Solar, Xerox, JDS Uniphase, as well as most leading universities and research facilities worldwide. For more information, call (856) 439-9100 FAX: (856) 439-9111, E-mail
[email protected] or write Denton Vacuum, Inc., 1259 North Church Street, Moorestown, NJ 08057 USA.


About GE Fanuc Automation
GE Fanuc Automation North America, Inc., is a leading global supplier of
automation solutions and is a joint venture between GE and FANUC LTD of
Japan. GE Fanuc products and services include collaborative production
management, HMI/SCADA and plant intelligence software; nano to high-end
controllers; embedded systems; a wide range of CNCs; motion control;
operator interfaces; industrial computers; lasers; and integration and
customer support services. Headquartered in Charlottesville, Va., GE Fanuc
is part of GE Industrial Systems. For more information, visit www.gefanuc.com.

About GE Industrial Systems
Since the founding of the General Electric Company (NYSE: GE) by Thomas
Edison in 1882, GE Industrial Systems has been known for technical
innovation. GE Industrial Systems has over 7,600 U.S. and foreign patents
on products that help provide peace of mind for people, the properties they
own and their workplaces. In 2001 alone, GE Industrial Systems filed more
than 200 U.S. and 340 foreign patent applications.

GE Industrial Systems spans the globe as an industry leader in integrated
industrial, electrical and security equipment, systems and services. The
business brings to customers the latest technologies that are used to
distribute, protect and control energy and equipment, and to provide premise
management. GE provides innovative product and service solutions for
commercial, industrial, residential and utility customers. For more
information visit the website at: www.geindustrial.com.

For more information, visit www.gefanuc.com[email protected].
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