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

  • May 22, 2003
  • GE Digital
  • News
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 thebasis for Denton's industry-leading Process Pro* control package. When he was invited to a attend a presentation about the benefits of SixSigma 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 betime 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 levelwas 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 toproactively 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 providean 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 DataThe 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 ofmaterials 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 VacuumDenton 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-mailinfo@dentonvacuum.com or write Denton Vacuum, Inc., 1259 North Church Street, Moorestown, NJ 08057 USA. About GE Fanuc AutomationGE Fanuc Automation North America, Inc., is a leading global supplier ofautomation solutions and is a joint venture between GE and FANUC LTD ofJapan. GE Fanuc products and services include collaborative productionmanagement, HMI/SCADA and plant intelligence software; nano to high-endcontrollers; embedded systems; a wide range of CNCs; motion control;operator interfaces; industrial computers; lasers; and integration andcustomer support services. Headquartered in Charlottesville, Va., GE Fanucis 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 ThomasEdison in 1882, GE Industrial Systems has been known for technicalinnovation. GE Industrial Systems has over 7,600 U.S. and foreign patentson products that help provide peace of mind for people, the properties theyown and their workplaces. In 2001 alone, GE Industrial Systems filed morethan 200 U.S. and 340 foreign patent applications.GE Industrial Systems spans the globe as an industry leader in integratedindustrial, electrical and security equipment, systems and services. Thebusiness brings to customers the latest technologies that are used todistribute, protect and control energy and equipment, and to provide premisemanagement. GE provides innovative product and service solutions forcommercial, industrial, residential and utility customers. For moreinformation visit the website at: www.geindustrial.com. For more information, visit www.gefanuc.comgefanuc@gefanuc.com.

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