MBE spotlight: Area51 ESG, Inc.

From left, Area 51ESG founders Peter Nguyen, Steve Shammah and Travis Lien.

From left, Area51 ESG founders Peter Nguyen, Steve Shammah and Travis Lien and their “alien” colleagues.

Providing components, assemblies for every product imaginable

Jet Propulsion Laboratory needed a new noise diode control unit made from scratch to listen to soundwaves in space. An MRI scanner manufacturer faced a costly redesign on a machine if it couldn’t locate or recreate an obsolete part. Northrop Grumman had to ensure that components used in its mission-critical aircrafts were counterfeit-free.

Enter Area51 ESG, Inc., an electronic, electrical and electromechanical components and assemblies distributor that provided timely and cost-effective solutions to these challenges.

The firm was founded in 1999 by Steve Shammah, Peter Nguyen and Travis Lien, former colleagues who worked at another ‘EEE’ components distributor. Today, the company – which gets its name from a top secret military base that is rich in conspiracy theories and UFO and alien folklore — has 52 employees at its 14,291-square-foot headquarters and warehouse in Irvine and offices in Tucson; El Paso; Sutter Creek, Calif.; and the Philippines.

Area51 ESG collaborates with original equipment manufacturers and contract manufacturers and distributes such items as connectors, hardware, wires, cables and circuit board components. It also provides kitting, testing, materials planning, supply consulting, sourcing and other services. The company serves a wide range of industries and counts JPL, Northrop Grumman, Boeing, Intel, Medtronic, Lear Corporation and Honeywell among its clients.

“We provide components and assemblies that are used in every product imaginable, from toys to deep space satellites,” according to Shammah, Area51 ESG’s CEO and president. “We not only supply components, but also create programs that fill unmet needs, changing and challenging ordinary distribution.”

Overcoming challenges

Many minority business enterprises (MBEs) face start-up and growth challenges. Area51 ESG’s greatest challenge came after it enjoyed steady revenue growth, brought on by new government regulations to combat the growing proliferation of counterfeit electronic components in the supply chain.

In 2009, standards and guidelines were created to achieve a higher level of protection against fraudulent/counterfeit electronic parts as they posed a threat to the reliability and functionality of defense and aerospace systems, commercial products, medical devices, industrial products and more.

Organizations affected by the new regulations, which called for standardized practices to detect suspect counterfeit parts, flowed these requirements down to suppliers like Area51 ESG. The company was faced with designing and creating a lab at its Irvine headquarters to test, inspect and verify parts before they are distributed to clients. They also had to buy new testing equipment, hire quality control personnel, create new systems and integrate new protocols and procedures.

“As an electronics distributor, we were forced to take action,” says Shammah. “Now when we buy a product from a manufacturer, it goes through our lab where we must test and verify its authenticity and functionality and ensure it’s made to the specifications and standards of our customers. Our job is to make certain they’re produced the way they’re supposed to be – we’re the check and balance between the manufacturer and client to ensure it’s 100 percent right every time.”

SCMSDC support and keys to success

The company, which became MBE-certified in 2003, landed its first major contract through Northrop Grumman’s supplier diversity team with the council’s support, according to Shammah.

Area51 ESG continues to work with the aerospace company and was recently awarded the U.S. Small Business Administration’s 2016 Region IX subcontractor of the year and Northrop Grumman’s 2014 World Class Team award. Area 51 ESG was also nominated for a 2016 SCMSDC Supplier of the Year award – its second nomination in two years.

Shammah says the key to Area51 ESG’s success is “the collaboration between people who share the same passion. It’s about coming together, learning together and working together to accomplish a goal.”

The company’s founders offered this advice for other MBEs – take advantage of SCMSDC’s services. “The council is a great place to start your journey. Nothing is better than the introductions and events the council facilitates and organizes. Their involvement in the minority business community opens doors.”

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