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The company rebounded from the decline in military business by changing its manufacturing process, investing in new technology, and buying two firms with similar technology - Electron Technologies Inc., a maker of ultrahigh vacuum glass ionization gauges, filaments and components, and the DNS Electron Glass Co. "Historically we built large batches of components and let them sit there in a queue until they were needed," Reimann said. Now, he added, "we do the fewest possible number of pieces, then move them to the next stage. If there are negative aspects, you correct the problem early rather than at the end of the line after you've produced hundreds of them."

Fredericks has increased its inventory turns by 50 percent, reduced raw materials on hand by 30 percent, and improved its on-time delivery rate from 76 percent to better than 90 percent, Reimann said.

There are risks to such a small company.

"The greatest challenge is to, philosophically and in practice, adopt new manufacturing and marketing techniques," he said. With the Internet emerging as a powerful business-to-business marketing tool, a small company - in a far corner of the world with low wage rates - can quickly become a competitor.

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"With the world getting smaller, there is a lot of pressure on price, to take cost out of our products." At the same time, he said, customers expect on-time deliveries and less lead time than in the past.

When something goes wrong at the company, Reimann said, his response is to say, "That's water under the bridge. Let's figure out what we have to change to make sure it doesn't happen again." That approach, he said, has motivated those who work at Fredericks to contribute more ideas.

Reimann said he had no interest in going public. "When you are a public company, you have a tremendous responsibility to the stockholders. Some companies wind up putting too much emphasis on the stockholders, more than on the business itself," he said. He said he wanted to stay focused on the people who work at Fredericks. Some of them have been there nearly 50 years; 37 percent of them longer than 15 years.

"I do care about them, and I think they realize that. And I think they care about me," he said. "What greater pleasure can you get?"

Monday, November 15, 1999
Page: E01 Edition: SF
Section: PHILADELPHIA BUSINESS
Copyright 1999 PHILADELPHIA NEWSPAPERS INC.

May not be reprinted without permission.