OCTOBER 15, 2003
Smoke Signals 9
Spirit Mountain Logistics Continues To Grow
'Cost-plus' contracts translate into profits for the Tribe.
By Ron Karten
Spirit Mountain Logistics LLC (SML) has been
consistently successful. Originally part of the
Spirit Mountain Development Corporation, the
Tangent, Oregon-based facility was placed un
der direct Tribal Council control when the coun
cil dissolved SMDC at the end of 2002.
The warehouse facility at 54,000 square feet
is now home to three distinct businesses, with
room for more as Tribal member and General
Manager Clyde Stryker and Operations Man
ager Dawn Tolotti continue to uncover new op
portunities. The first business, started in 1998, cleans plas
tic totes for the Hewlett-Packard (HP) Corpora
tion division in Corvallis. The company uses these
totes to send parts around the world. SML's job
is to clean them so well that no dust infiltrates
sensitive parts, and that labels used to describe
the contents or indicate addresses or directions
are peeled off for the next use. Once cleaned and
dried, the totes are wrapped in plastic.
SML uses a machine that jet sprays 300 gal
lons of water per minute to clean the blue totes.
Running full bore, it cleans 900 totes or 1,380
lids per hour. On average, the facility cleans
6,500 totes and tops each month.
The second business, started in 2000, manages
inventory for HP. SML manages 600 different
products needed by HP in 90 different locations,
but SML owns, purchases, manages and deliv
ers these products to HP. In fact, six SML em
ployees work at HP to help keep track of these
items so that they are on hand as needed.
On average, the facility sells 3,500 different
items in 1,400 different sales orders each month.
The last business to come on line, also in 2000,
is another cleaning business. This business dry
cleans reels holding an interleaf that protects
the gold circuitry on ink cartridges. The pro
gram cleans an average of 4,000 reels per
month.
The 800 square foot clean room has a filtra
tion system sufficient for Class 10,000 cleanli
ness, though current needs call for only Class
VUkAJ
100 cleanliness, said Stryker.
This extra capacity is typical of Stryker's forward-thinking
approach to the business. "We're
hoping to grow the business," he said.
"It's all about flexibility," said Tolotti.
Particularly with a client like HP and its
Corvallis Research & Development
(R&D) facility, flexibility means that
SML can quickly take advantage of op
portunities when HP seeks to make a
change in process or procurement.
"As times get tighter, HP has to be bet
ter, more efficient, creating new products,
and we cater to that," said Stryker.
"HP tends to rely more on service pro
viders," said Tolotti, "and concentrate on
its core competencies."
The facility's focus on R&D encourages
it to farm out a number of unrelated
tasks. "They don't want to manage these
things," said Tolotti. "It allows them to
consume and only pay for what they
use."
Fortunately, stocking and cleaning jobs that
the Corvallis HP doesn't want are among the
jobs where SML excels. This company-wide flex
ibility comes as a combination of internal flex
ibility, which allows employees to set up flexible
schedules including four ten-hour days and even
three 11-12 hour days plus one 5-12 hour day;
and external flexibility that most recently trans
lated into a new storage capacity at SML for the
HP facility.
Ideally for the Tribes, the core cleaning busi
nesses are 'cost-plus,' meaning that as long as
SML fulfills its part, HP pays SML a variable
cost for each job plus a pre-determined profit.
SML maintains its part of the bargain by track
ing and rewarding four areas that encourage
good work, and also lead to a company better
prepared for opportunity: safety, delivery, qual
ity and attendance. Goals in each area are as
follows: zero events marring safety in the work
place; 99 to 99.7 percent correct shipments; 96
Spirit mountain
LOGIITICI-IIC
www.smlogistics.net
to i
The Logic of Logistics Operations Manager
Dawn Tolotti (left) and General Manager, and Tribal mem
ber Clyde Stryker, have kept Spirit Mountain Logistics
consistently profitable since 1998. Their efforts have
been good for employees, for the Hewlett-Packard Cor
poration and for the Confederated Tribes of Grand
Ronde.
to 99 percent acceptable work completed; and
99 percent attendance.
For meeting these goals, employees can receive
$25 extra each month. In any given month, the
company pays rewards on up to three-quarters
of the measurements, according to Tolotti. "They
challenge people to plan ahead," said Tolotti.
"What I'm most excited about," said Stryker,
"is that the company is standing on its own two
feet."
Twenty employees make that happen.
"There's a lot to be proud of here for the Tribe,"
said Stryker.
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Passing The Test
into future opportunities. I
a case for reuse.
The 54,000 square foot warehouse facility at the Tangent Business Park in Tangent, Oregon has plenty of room to do the SML jobs right, and to grow
Here is a look at some of the 6,500 totes the facility cleans monthly. In the inset, Gustavo Pena scrapes off an old label in the clean room to prepare
Photos by Willie Mercier