Thursday, June 28, 2012

Expertise in aviation components applied to distribution to expand opportunities

Memphis Business Journal
Date: Friday, April 13, 2012, 5:00am CDT

Andy Ashby
Staff writer- Memphis Business Journal
Marcellus Montalvo and Mario Ordonez of InterSky Precision Instruments perform tests on electronic components used in the aviation industry.

Alan Howell | MBJ Marcellus Montalvo and Mario Ordonez of InterSky Precision Instruments perform tests on electronic components used in the aviation industry.

InterSky Precision Instruments Inc. is expanding its horizon to expand its business.

Memphis Skyline HDR [Reinhard]
Memphis Skyline HDR [Reinhard] (Photo credit: Exothermic)
The 32-year-old company, which has made its name in aviation component maintenance, sees growth possibilities using the same skills but in different industries.

It’s part of the company’s versatility.

InterSky mainly repairs cockpit instrumentation for commercial, corporate and government aircraft, but also fixes aircraft lighting, probes and accessories such as fans or motors. It also calibrates equipment.

Originally launched in North Hollywood, Calif., the business migrated to Memphis to be a supplier to FedEx Corp. 13 years ago.

FedEx A310 and A300 cargo aircraft fly daily f...
FedEx A310 and A300 cargo aircraft fly daily from Memphis and Indianapolis to GSO. (Photo credit: Wikipedia)
FedEx was developing its supplier diversity program and since InterSky is a 100 percent Hispanic-owned business, the company thought it would give Memphis a shot.

“There was no promise of business, there was just a handshake and (founder) Hernan (Montalvo) took a shot on his own dime,” Marcellus Montalvo, president, says.

When the company moved to Memphis, the Tunica casino building boom was happening and it was hard to find contractors to build out InterSky’s office space.

Montalvo’s uncle and a friend flew to Memphis to teach the 12 families who moved here for the company how to do the construction work on the FAA-approved facility.

“Everyone literally learned on the fly,” Montalvo says. “That’s the roots of the company.”

While InterSky handles repairs for companies such as Boeing, FedEx, and the U.S. Air Force, it has been looking to expand its business model.

“The aviation business is very capital intensive, especially for a small business,” David Hughes, vice president of government services, says.

For example, the company’s inventory has a commercial value of more than $30 million.

They took their problem-solving prowess and decided to go beyond aviation.

Its core competency is fixing electronic equipment such as microcircuitry boards, which run everything from slot machines to public utilities. So InterSky applied that expertise to help Fred’s Inc.

PCB with testpads
PCB with testpads (Photo credit: Wikipedia)
The Memphis-based discount retailer has a major distribution center in Memphis with an automated system that has more than 4,000 small, printed circuit boards. The system was giving Fred’s problems, but the company didn’t have schematics to guide repairs.

“We basically reverse-engineered our repair capabilities just from the broken boards we were looking at,” Montalvo says.

InterSky’s employees learned how the system worked, then figured out the problems.

InterSky has also expanded existing relationships for growth opportunities. The Great Recession impacted many of InterSky’s partners.

InterSky responded by partnering with companies with complementary parts and services. When talking with a manufacturer, for instance, they asked to add maintenance components.

“We’re looking for companies where we can say ‘We can add to what you’re already doing,’” Montalvo says. “That’s so we can service a broader customer base through partnerships.”

Southern California Aviation LLC has been working with InterSky for just over a year.
The company, which stores and maintains mainly commercial aircraft, sends equipment to InterSky for repair and recertification.

“Compared to other vendors I’ve dealt with, their open line of communication is 100 percent,” Lisa Mullaney, purchasing manager, says. “I’ll send something and as soon as it gets there, they let me know. As soon as he knows what’s wrong with it, he’s sending a formal estimate.”

InterSky is apparently following the old business maxim of “under promise and over deliver,” as Mullaney often gets equipment back faster than InterSky’s employees say they would.

“I’ve found I haven’t had to follow up with them, as they’re very proactive,” she says. “Some vendors it’ll go a week or two and I’ll have to call them.”
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