Baldrige Award
Winner Profile
 

An interview with
Richard Pieranunzi,
 president and CEO of STMicroelectronics Inc.

by Robert Green

On Feb. 25, President Clinton and Commerce Secretary William Daley presented the 1999 Malcolm Baldrige National Quality Award to four companies in a ceremony held in Washington, D.C. Among those companies was STMicroelectronics Inc., Region Americas, the only 1999 award recipient in the manufacturing category.

 What follows is an interview with Richard Pieranunzi, president and CEO of STMicroelectronics. This is the third of four interviews conducted with a representative from each 1999 Baldrige Award winner.

 STMicroelectronics designs, develops, manufactures and markets a broad range of semiconductor integrated circuits and discrete systems, computer systems, consumer products, automotive products, and industrial automation and control systems.

  The ST group was formed in June 1987 as a result of the combination of Thomson Semiconducteurs of France and SGS Microelettronica of Italy. In May 1998, the company changed its name from SGS-THOMSON Microelectronics to STMicroelectronics.

 In 1999, ST's net revenues were $5 billion and net earnings were $547 million. According to leading market analyst Gartner/Dataquest's 1999 preliminary ranking, STMicroelectronics is now the eighth largest semiconductor company in the world, moving up from ninth position in 1998.

 Since 1995, STMicroelectronics has won 18 environmental awards, certificates and other special recognition worldwide. Based in Carrollton, Texas, ST employs 34,000 and offers more than 3,000 products to more than 1,500 customers.

QD: Who are some of your largest customers?

Pieranunzi: Number one is Nokia. It's an incredibly fast-growing customer of ours driving a lot of our manufacturing expense and revenue. Hewlett-Packard, Western Digital and Seagate Technology are a few of the others.

QD: What is the scope of this Baldrige Award?

Pieranunzi: It encompasses our Region Americas division, which consists of about 3,300 employees.

QD: Are the corporation's divisions in other regions pursuing similar quality awards?

Pieranunzi: Absolutely. In fact, we've won the Singapore Quality Award for Business Excellence, the European Quality Award and others. Our Singapore division won the Singapore Quality Award the same year we won the Baldrige Award.

QD: Are you involved in other quality endeavors such as ISO 9000 registration?

Pieranunzi: Yes, ISO 9000 as well as QS-9000, ISO 14001 and EMAS in Europe.

QD: How far back does your history with the Baldrige Award go?

Pieranunzi: We did our first assessment using the Baldrige criteria back in 1991. We had quite a few gaps at that point, but around that time, the corporation launched a "five key principles" quality program. From that effort, and also through quality certifications at different levels, we've now closed a lot of those gaps. After doing so two years ago, we decided to apply for the Baldrige Award.

QD: What are some of those gaps that were pointed out in your internal assessments?

Pieranunzi: We had a polycentric corporate structure. Some of our remote sites needed a better understanding of how they could align day-to-day activities with the corporation's goals and objectives. But this process closed a lot of those gaps.

QD: How did your goal of empowering employees affect the process?

Pieranunzi: It's been a continuing effort to help maintain the good spirit of our people toward our business process and various programs. It's made a big change in the spirit in the environment.

QD: Did any of your employees or business partners provide obstacles to the award process?

Pieranunzi: This is a very demanding time: Just four months ago some of our customers forecasted orders only one-third as large as what they now need. As such, completing the award process was very difficult because we were also trying to support the customers. That was one of the biggest challenges we faced.

 It certainly takes a large investment of time to prepare yourself for the Baldrige Award. But it's beneficial because it allows us to get a good assessment of our strengths and weaknesses in some areas we may not have reviewed if not for the award application. One of the amazing things about this process is getting a book that assesses every aspect of your company. We had never gone into that much detail before. And that, in itself, was a great benefit.

QD: Do you expect a bottom-line impact from winning the award?

Pieranunzi: At this point the award criteria represent a journey toward perfection that we'll never finish; they're tools that we use for continuous improvement. But they're different from ISO 9000 or QS-9000 in that they encompass our business model. I think they're an important tool. In addition, some of our customers have indicated that we're probably one of the industry's best-kept secrets, and winning the Baldrige helps get recognition.

QD: Have you been able to quantify any of the benefits of the award process, such as measurable savings reductions in terms of rework or scrap?

Pieranunzi: It's hard to put a value on it. However, if you look at the communication factor, the ability to pull everybody together for a common goal, it certainly has helped bring the company even closer together.

QD: What's next for ST?

Pieranunzi: We have an endless amount of work to do around the environment in which our employees work in order to set them up to succeed with our quality systems. We also have an endless amount of work and policy deployment ahead, in terms of getting the organization synchronized to accomplish other objectives. It's an endless journey.

 One of the things that happens in a situation like this is that as you're working so hard at improving your own processes that you don't have time to see how other companies compare to yours. By winning this award, we definitely have a feeling of "It looks like we're on the right road. Let's refine it and improve on it."

QD: Are you going to continue to do annual self-assessments based on the Baldrige criteria?

Pieranunzi: Well, we have a feedback report from the examiners that offers many opportunities for improvement. We will definitely be examining that very closely on this continuous improvement journey.

QD: We're a long way from it, but do you see yourself applying for the Baldrige Award again in five years?

Pieranunzi: It does bring a lot of excitement; I wouldn't doubt that we will really consider it. But for now, it's just one year at a time.