12 - 18 April 2001

Logistics, value added – key to STMicroelectronics (Malta) Ltd’s success

by David Kelleher

One of the reasons why customers prefer one product to another is the level of quality and brand. The better the quality, the easier it will be for a company to make a sale.
However, in the world of technology and microchips, a sale depends on much more than quality and branding. There has to be added value. The customer must feel that he is receiving that something extra that another company does not provide.
And it is here that STMicroelectronics (Malta) Ltd – a world leader in microchip technology – excels. While quality and branding are high up on the agenda, the company provides excellent customer satisfaction by being reliable and giving logistical support that is unrivalled.
STMicroelectronics (Malta) Ltd is this year marking its 20th anniversary here in Malta. Starting off as a relatively small foreign company with 187 employees, today STMicroelectronics (Malta) Ltd employs around 2,600. Of these 500 are engineers and technicians. Total investment over the past 20 years has totalled $630m and $149m alone were invested last year. Such investment has naturally allowed STMicroelectronics (Malta) Ltd to become an important pivot for the local exporting economy. In fact, STMicroelectronics exports 70 per cent of all Maltese exports.
“STMicroelectronics has grown enormously over the past few years. We have strived to improve our service and our productivity. We produce more than 1.3 million pieces per day, 363 days a year. Yet, although we take pride in our product quality, we are even prouder of the fact that our products are delivered on time as requested by the client,” Santino Portera, STMicroelectronics (Malta)’s financial director told The Malta Business Weekly.
The figures are impressive. ST Malta had a turnover of $1.567bn and it exports to the US, Europe, Japan and Asia. All shipments are by airfreight to warehouses in Geneva, Singapore, Phoenix and Tokyo.
“The value added we provide is our efforts to reduce delivery time to a minimum. If our client wants an order to arrive on a Monday, we guarantee that the shipment will arrive on a Monday, neither before nor after. Meeting such guarantees is never easy and requires an enormous amount of pre-planning and innovation along the whole of the logistics chain,” Mr Portera explained.
In fact, improvements to its supply chain and constant search for alternatives have won STMicroelectronics (Malta) numerous awards over the past five years. Earlier this year, ST Malta won the Exporter of the Year award during the Sixth European Freighting Industry Award Ceremony organised by the International Freighting Weekly of UK.
“Held at the Grosvenor Hotel in London, the awards were attended by the top 770 executives from the world’s major airlines, multi-international freight forwarders, railway companies, sea lines, land haulage companies, express couriers and manufacturing companies,” Mr Portera told The Malta Business Weekly.
“This was the second consecutive year the Exporter of Year 2001 was awarded to STMicroelectronics (Malta) Ltd and it was awarded on the basis of the incredible proactive approach shown in implementing a redesigned transport supply chain for its demanding customers in North America,” Mr Portera added.
Mr Portera said that most of the merit goes to the export/import department led by Philip Debattista.
“They are the masterminds behind our delivery and shipping systems. With Philip’s guidance, the small team has managed to develop a supply chain that seems so simple, yet the hard work put in by the team is enormous,” Mr Portera said.
Mr Debattista has been with the company for the past 18 years and was appointed manager of the export/import department five years ago. His innovative way of thinking has enabled STMicroelectronics (Malta) to reduce its delivery times to just 1.2 days to Geneva, 1.7 days to Singapore, 2.3 days to Phoenix, US, and 3.1 days to Tokyo in Japan. With 800 cartons shipped per day, the task of ensuring that each carton arrives at its destination on time and at the correct recipient, is highly demanding.
STMicroelectronics were also the first company to introduce software – Traxon – that allows the export department to monitor each shipment over the Internet.
“Instead of having to phone up people along each stage of the route, we simply log the shipment’s progress on the Internet. We have not only cut down on costs, but our efficiency has increased a great deal. That all cargo is pre-cleared for customs before the consignment even arrives has speeded up the process,” Mr Portera explained.
The clockwork process would not work however without the help of the airlines, freight agents, the local authorities and customs who contribute to the success of the system. STMicroelectronics uses up to seven different airlines and each one is monitored for efficiency.
“Our assessment of their abilities to deliver on time does not only give us a choice of airline depending on the urgency, but it has helped the airlines to look closer at their operations as well because they know they are being assessed by a customer every day,” Mr Porter said.
STMicroelectronics (Malta) is constantly looking for innovative ways to improve its products and value added services to customer. Its efforts have paid off but more importantly, the company has put Malta on the big technology map. The numerous awards the company has received are a tribute to the company’s workers and their efforts to succeed despite the odds.