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For fifty years Freescale Semiconductor (Austin, TX) was part of Motorola. In 2004 it became a publicly traded company. Some 24,000 employees working in more than thirty countries provide semiconductors across the globe, including microcontrollers, memory, power management, RF and more, for consumer electronics, control, wireless and mobile apps.
The company's U.S. fabs are concentrated in Arizona and Texas, and the Freescale supplier diversity program is primarily directed at the U.S. facilities, says program manager Richard D. Moore.
His role, he explains, is to "make sure we are engaging qualified, dynamic women-owned and minority-owned companies to help us do our work." The products and services they provide are "across the board," he says.
A significant portion is in the maintenance, repair and operation area. Other companies provide chemicals and raw materials used to make the semiconductors. And some contribute to the "just in time" logistics that are so common in the electronics industries.
New company, new program
Moore originally worked in Motorola's supplier diversity program, "and when we became a stand-alone company I was offered the great opportunity to run the whole program for the new company."
Freescale, says Moore, is "proactively looking for opportunities to engage diverse suppliers." Since the spin-off it has become a more active supporter of NMSDC and its regional chapters, the Central and South Texas Minority Business Council and the Grand Canyon Minority Supplier Development Council in Arizona. "We have board seats on both those organizations," Moore notes, "and we're active with WBENC, too."
Exponential growth
"We're definitely on an upward trend," Moore reports with pleasure. "Our spend with diverse suppliers was very small six years ago when I took over the program and for 2006 it will approach the $100 million mark. This is a really competitive industry and having a strong supplier diversity program is a competitive advantage."
At Semitech, the semiconductor company consortium, Moore is the supplier diversity sub-team chair. "I believe that semiconductor companies are taking a look at their supplier diversity programs as a competitive advantage for themselves as well," he notes. "Although we are often intense competitors in the marketplace, supplier diversity is one of the few areas where competitors can collaborate and do things that help each other," he adds with a smile.
Hitting the ground running
"We're looking for suppliers that can hit the ground running, be nimble and flexible and give us the pricing we need to remain competitive," Moore says. "The semiconductor industry is a fiercely competitive environment, so we're constantly on the hunt for the best, brightest, most efficient and most cost-effective suppliers out there.
"We want the ones with fire in their bellies, folks who are hungry for our business. If they're MBEs or WBEs it's a plus, but it's not the determining factor."
Working with Aeronet
One of Freescale's most fiery MBEs is Aeronet Logistics (Santa Ana, CA). "They came on board with us a couple of years ago," Moore says.
In a semiconductor company, he explains, "Much of the business is time-critical. Getting our product to our customers in time is the lifeblood of our business, so we have to be very sure of the abilities of our shipping services suppliers."
Moore and his people first met Aeronet Logistics at a Freescale "meet the buyer" get-together, where regional MBEs and WBEs are invited to spend a morning talking with buyers and learning how to do business with the company.
"The Aeronet folks really impressed Dan Wiser, our commodities manager for the logistics area, and he invited them to bid on shipping services. After their first year working with us they won our diversity supplier of the year award, and since then they've continued to be very impressive across the board and we've been doing more and more business with them."
Centers of excellence
Freescale is also sponsoring Aeronet through NMSDC's "centers of excellence" (COE) program, looking at ways to help them become a better company servicing Freescale and other NMSDC sponsors.
Each of about ten NMSDC member companies names two of its MBEs or WBEs to participate in the COE program with them. COE will eventually be rolled out across many NMSDC regions, Moore explains, but this is the first round to be done in Texas. Johnson Controls sponsors the module that Freescale and Aeronet are in, and Reggie Layton, Johnson's supplier diversity guru, moderates the meetings.
It's a wonderful program, notes Aeronet VP Felipe Arjonilla. "When I was with DHL in Mexico we went to a Harvard University business program for reengineering the firm.
"It was pretty much like COE except it cost us a lot of money to participate," he adds dryly.
As a result of its COE participation, Moore notes, the Freescale commodity manager has given Aeronet more opportunities to ship products and get more integrated in the company's supply chain.
Focus on high tech
Aeronet Logistics is a fairly new entity, says VP Arjonilla. "We are focused on servicing the high-tech industries because of the experience of Andres Aceves, the founder and president."
Aceves got his experience with a transportation company serving Silicon Valley firms, and became an expert in meeting "just in time" shipping needs. When he planned Aeronet, "He targeted the niche market of the very urgent, same-day type service," Arjonilla explains. "Whatever it took, even renting a plane to deliver one package, the service would be offered."
About 30 percent of the company's revenue comes from Freescale. It also works for Cisco, HP, Nokia and Rolls Royce, and handles urgent shipments for many other high-tech and pharmaceutical manufacturers.
Third-party logistics
Aeronet, Arjonilla notes, is a "third-party" logistics company. It does not own any truck or plane fleets. "The value is in the logistics, our knowledge of how to bring an infrastructure together. We use a series of agents, existing infrastructure and land and air and ocean shipping, and get the most efficient use out of them at the best cost."
The company has well-defined procedures for responding to a client's call and monitoring the process through. For example, shipments are sent out immediately, using either passenger or cargo planes throughout the day. "We dispatch an expeditor to the client's location, pick up the shipment, take it directly to the airport, and track its status at all times."
Company stats
Aceves has been in high tech freight forwarding for thirteen years. Arjonilla has twenty-three years with United Airlines in Mexico and the U.S., and another four with DHL.
"Our industry is very dynamic and has changed significantly, especially as a response to 'just in time' requirements," Arjonilla explains. "As companies turn to lean manufacturing our industry has responded."
Aceves began the company, brought Arjonilla on board and put together a small, savvy team of operational and customer service people who "take ownership for every single shipment." The company employs just six people, but they have the know-how to call on a huge infrastructure network.
"We learned logistics engineering on the job," Arjonilla adds.
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