find business success
Major companies have discovered it makes good sense to include service-disabled veteran organizations in their diverse supplier planning
The Association for Service Disabled Veterans pioneered the concept of entrepreneurship as a valid strategy in rehab of service-disabled and POW military vets
By Monique Rizer
John K. Lopez remembers thinking that not much was available for disabled veterans who hoped to be entrepreneurs. As a marine, Lopez was seriously wounded in a mortar attack during the Korean War. On trips to Veterans Affairs hospitals he met other service members who wanted to start their own businesses but didn’t have the support to get going.
“We realized we had something in common besides our service and our injuries,” Lopez recalls. “We were dabbling at being entrepreneurs, though some were more successful than others. It was time to get serious. So we started a little support group and soon discovered there was a big population out there that needed assistance.”
In 1986 Lopez and four others founded the Association for Service Disabled Veterans (ASDV, www.asdv.org) and began to lobby for change. It took ten years, but they eventually saw the passage of Public Law 106.50, the Veterans Entrepreneurship and Small Business Development Act of 1999, which asked government organizations to set a three percent spending goal with service-disabled-veteran-owned businesses (SDVOBs).
Recent laws have focused more attention on SDVOBs, but there’s still little formal tracking of how many exist. Many disabled veteran business owners self-declare their status, but proof is readily available via a letter from the U.S. Department of Veterans Affairs if a corporate procurement manager needs it. The VA evaluates all disability claims from veterans and provides a disability rating on a scale of 0 to 100, depending on the severity of the illness or injury that occurred within the period of the veteran’s military service.
A number of major companies now include SDVOBs in their supplier diversity programs, with great success.
Global Tech supplies AT&T
Global Energy and Technology (Ventura, CA) began supplying AT&T (Dallas, TX) in 2000. The company provided fuse panels to protect AT&T switchboard equipment from power surges; it has since expanded to add backup batteries, rectifiers and other electrical equipment.
In a way, owner Ronald Greenwood and his wife Lisa started the business to prove a point: working with SDVOBs is good business.
When he was twenty years old, Greenwood was severely wounded by a grenade in Vietnam; today he has a 70 percent disability rating from the VA.
After leaving the military he used his GI Bill to finance a 1976 degree in Native American studies and history from the University of California-Berkeley. He received a law degree from Golden Gate University (San Francisco, CA) in 1979.
Greenwood began his own law firm in 1984, which Lisa Greenwood soon joined. In 1990 the firm began working pro bono for ASDV and its president, John Lopez.
Greenwood goes into supply
Meanwhile the telecom industry was undergoing a transformation.
“We knew that AT&T would have to outsource its growth with small, efficient companies that could help it save money,” Greenwood recalls. “Working in a legal capacity with ASDV we had thought a lot about opportunities for SDVOBs. Now we thought, ‘Why shouldn’t we be one of those suppliers?’”
He presented a business plan to AT&T, won a contract and started up Global Energy & Technology. Ten years later Global Energy continues to hold contracts with AT&T; its performance over the decade increased on-time delivery rates and lowered shipping costs.
“They have continually provided value to our supply chain,” says Joan Kerr, executive director of AT&T global supplier diversity programs. “Global has helped AT&T solve business problems. They saved AT&T 13.6 percent on the bottom line with the unique shipping solution they implemented.”
In 2006 Global was awarded AT&T’s “best of the best” customer service award.
AT&T works with SDVOBs
AT&T’s supplier diversity involvement began in 1968 with an MBE program. The company’s disabled veteran business enterprise program was established in 1993. Last year AT&T spent $74 million with SDVOBs, an increase of 37 percent, Kerr notes. AT&T also mentors the companies, including sending business owners to UCLA’s “management development for entrepreneurs” program.
Prospective suppliers can place their profile in AT&T’s supplier database. Kerr encourages SDVOBs to check the company’s calendar of events for opportunities to interface with AT&T representatives.
“AT&T’s commitment to supplier diversity excellence has set a corporate standard for the development and implementation of innovative supplier diversity programs for the inclusion of M/WBE/DVBEs,” she says.
IdentiCo: durable labels for UPS
IdentiCo (Alpharetta, GA), a pressure- sensitive label manufacturer, supplies direct thermal shipping labels to UPS (Atlanta, GA).
“If you look at the materials independently it’s pretty basic, but combining the right ones to meet the extremely high requirements of a company like UPS is where the science and art comes in,” explains IdentiCo owner Luis Perez. “From a technology standpoint the labels have to be quite resilient: withstand heat, moisture and cold; stick on the package and still be legible. For UPS, you can imagine the problems that would occur if that small component of the operation went down.”
Perez earned his 1987 BSCS at the University of Maryland and has a 1993 MBA from Boston University (Boston, MA). He discovered the label printing industry while working on a project with his first business venture, Teracore (Atlanta, GA). Teracore, a technology consulting company, owns IdentiCo and holds the contract with UPS.
At Teracore, Perez was working with a major nonprofit organization on a computer-based system for on-demand printing and shipping. He learned a lot about the printing industry and saw the potential for new technologies like RF identification and holographic labeling. Teracore bought IdentiCo in 2004, and Perez landed a contract with UPS to provide its labels.
Part of the team
“It took a while,” he recalls. “We had to compete against big players, but we won about 25 percent of the bid. We know they are happy with us because they’ve told us so: we seek constant feedback on our level of service.”
Perez served in the Air Force from 1987 to 1995 as a command and control systems officer. He was in Desert Storm and Desert Shield and supported operations in Kosovo. His business qualifies as small, minority- and service-disabled-veteran-owned.
“This combination of diversity and high quality product is a formula that works well for UPS and for us,” Perez says. “Some companies think of diversity and working with SDVOBs as something they are forced to do. You don’t get that reaction at UPS: they look at us as part of the team.”
So far IdentiCo has printed enough rolls of labels to go around the world seven times, Perez figures. “Saying we passed the rigorous process of becoming a UPS supplier and using the UPS brand as a reference goes a long way in our industry,” he explains with pride.
UPS is delighted when partnerships like IdentiCo’s form strong bonds. “Some of these companies are going to grow, as UPS once did, from small businesses to world-shakers. When they do, we hope they’ll ship with UPS,” diversity director Kathy Homeyer says with a smile.
Formalizing the program
Two years ago UPS became a member of the National Veteran Owned Business Association (NaVOBA, www.navoba.com). The overall UPS supplier diversity program was formalized in 1992 and centralized in the company’s Atlanta HQ.
In 2008 UPS aimed to have greater than five percent of its spend with its diverse suppliers. That goal was attained, and increaed to six percent for 2009.
In addition to being a corporate member of certifying bodies like WBENC, NMSDC and NaVOBA, UPS likes its diversity managers to personally mentor small business owners. “A lot of our goal is networking and finding companies that have a passion,” Homeyer says. “Many of our contracts are three to five years: long-term relationships.”
Diverse suppliers can get in touch with UPS through the certifying associations, or by registering on the UPS supplier diversity website. “They’re building a relationship with us for when the right opportunity comes up,” explains Homeyer. When a suitable RFP does come up, UPS buyers look in their databases for a match.
“We want to touch all the communities we work in, and, of course, we’re everywhere!” Homeyer says with a smile. “We’re always asking ourselves ‘Who are we missing? Who do we need to include?’”
Tech services for the government intelligence community
SDVOB Advantage Engineering & IT Solutions (Eldersburg, MD) is John and Susanne Scott’s consulting company. It provides systems engineering services to the government intelligence community.
“The customers know when they need a new capability,” Scott explains. “But they need someone like us to help them define it and gather requirements. If they need a material solution rather than a process solution we’ll help them design, build and implement that as well.”
Scott is a retired sergeant major, the highest enlisted rank in the Army. He provided intelligence support to special operations commands, and is a veteran of Desert Storm and two tours in Somalia.
When he retired with a disability, he completed a BS in 1996 from the State University of New York under an extension program for military personnel and went on to a 2000 MSCS from the University of Maryland-University College. Many of Scott’s twenty-three employees are techies and vets as well.
The Scotts started the company in 2004 to fill a need for specialized, highly skilled experience. “There was a niche market for very senior people, which is what we provide. Our typical employee has an MS and sixteen years of experience,” Scott says.
His team’s unique skill sets have aided some intelligence agencies he’s not allowed to name. Last year the National Security Agency nominated his firm for a Department of Defense achievement award as an SDVOB that excelled in technical achievement and community outreach. “We were one of four winners. We were very flattered!” Scott says.
His business has been helped by a 2003 bill that lets government agencies award certain noncompetitive contracts to small SDVOBs. Scott says that gave his company a chance to break into the field. “As an SDVOB we were free to cold-call,” he says. “It’s great for the agencies, too. They can come to us directly because they know we’ve done good work.”
Premium products for FirstEnergy
Corrosion Fluid Products Corp (Farmington Hills, MI) provides high-end
pumps, piping, valves and related components to diversified energy
company FirstEnergy (Akron, OH), the fifth largest utility in the nation. Corrosion Fluid Products owner Joe Andronaco is proud of the business
he’s built over more than forty years. “Our reputation is grounded in
problem-solving and excellent service,” he states. “We pay attention to
details and do what we say we will do.”
Andronaco, who has a disability rating from the VA, served four years in the Navy before separating in 1956. Then he joined a pump company where he was influenced by the MEs and Navy officers he worked with. He earned a 1965 BSME on the GI Bill from Fairleigh Dickinson University (Teaneck, NJ); twenty years later he completed a three-month Harvard Business School management program.
He launched Corrosion Fluid Products in 1968. The company specializes in process pumps, valves, piping and hoses for the chemical, pharmaceutical, steel and utility industries as well as municipalities. His customers include Dow Chemical (Midland, MI), Abbot Labs (Abbot Park, IL) and Eli Lilly (Indianapolis, IN). About a quarter of his hundred employees have engineering degrees.
The company has eight stocking branches across the Midwest. “We are spread across several states as well as several industries,” Andronaco says. “We’re not impacted by the local geography or by having a limited product.”
FirstEnergy: major spend increase
Andronaco began supplying FirstEnergy in 2002. It was about then that he noticed a rise in requests for his SDVOB status.
Toby Stanislaw, supplier diversity coordinator for FirstEnergy, has also noticed the trend. “We’ve seen a tremendous increase in business spend with vets,” she says. “A lot of it has to do with the business owners realizing the importance of telling companies that they are SDVOBs.”
FirstEnergy works with ten SDVOBs; its spend with them has increased from $577,000 in 2007 to $1.7 million in 2008; the company spent $42.6 million with all veteran businesses in 2008. As a prime contractor to the government, FirstEnergy is required to track its spend individually with all veteran enterprises as well as M/WBE and HUB-zoned businesses. The utility’s overall supplier diversity program began in 2001 after a company merger.
In 2008 Chad Heyman, an Ohio-based member of FirstEnergy’s diversity team, was named veteran small business champion of the year by the Ohio branch of the SBA. The utility has also been inducted into the Ohio Veteran’s Business Symposium hall of fame.
“It’s good business practice for FirstEnergy,” states Stanislaw. “We try to have our supply base reflect our customer and employee base.”
COMPANIES THAT WELCOME SDVOBs IN THEIR SUPPLIER DIVERSITY PROGRAMS
Check websites for latest information.
|Company and location
|AT&T (Dallas, TX)
|FirstEnergy (Akron, OH)
|Level 3 Communications (Broomfield, CO)
|ManTech International Corp (Fairfax, VA)
|Advanced technology supporting national security
|Pacific Gas & Electric Co
(San Francisco, CA)
|Natural gas and electric utility
|UPS (Atlanta, GA)
|Worldwide package delivery
|Weyerhaeuser Co (Federal Way, WA)
||Timberlands, forest products, homebuilding and related wood products
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