December 2004/January 2005 
Volume 03, Issue 8 
Shared Services Group


Benchmarking study shapes Surplus Sales unit


Mike Emerson and Gerry Croy examine a piece of surplus equipmentInvestment Recovery & Distribution Services-the organization that runs Boeing Surplus Sales-is strong and getting stronger, according to an employee-led benchmarking study comparing it to similar operations around the country.

"We learned an awful lot about ourselves," said Gerry Croy, Capital Assets Sales and Distribution Center manager in Kent, Wash., the only manager on the benchmarking team. "We're better than most and a little shy of some."

Findings of the ongoing, year-long study show that Boeing has developed its investment recovery processes to mature, well-documented levels and should apply them uniformly across the enterprise for greater benefit. "We have a documented process for everything we do," Croy said. "Some of the companies we surveyed didn't even know what they did because their organizations don't talk to each other."

Survey participants included other large corporations with far-flung operations. Company names were not revealed.

IR&DS is Boeing's reclamation, recycling, and reselling arm. Its charter is simple: Generate revenue by selling what Boeing doesn't need any more-everything from office furniture to scrap metal to used equipment and machinery costing thousands or even millions of dollars.

With operations in Puget Sound, Wichita, Kan., and Southern California, it's big business. IR&DS earned at least $50 million each of the past three years and last year generated revenues of $54 million, an all-time high. The organization also saves acquisition costs by finding new homes for unused but perfectly good equipment. So far this year, redeployment and reutilization of nearly 100 pieces of equipment has saved more than $31 million.

"We wanted to find out how we stacked up," said IR&DS Director Steve Turkle of the benchmarking study "Are we better, cheaper, faster? Are we an industry leader or industry follower?"

To perform the survey, Turkle "took employee involvement to the next level" by forming the Strategic Planning Team and staffing it with a cross section of nonmanagers, including three hourly employees represented by the International Association of Machinists and Aerospace Workers.

"We were given free rein to go out and investigate," said team member Ron Myers, a property management specialist at Wichita Surplus Sales. "There were no predetermined views."

IAM member Mike Emerson said being on the team was the "most interesting, invigorating, and enjoyable experience" of his career. "When I was first told of the scope of this team, I had a hard time believing that we were really being empowered to do all this," he said. "It was a great example of true employee involvement."

Turkle and Croy commended team members for their ability to work outside the box.

"It was totally outside anything they've ever done in the past," Turkle said. "I couldn't be more pleased with the result."

The team developed a 124-question "discussion guide" covering all aspects of their business, used it in benchmark meetings with 11 peer participants, added each meeting's findings to a wall-sized matrix for further analysis, and presented short- and long-term recommendations.

As a result, IR&DS is forming an Accelerated Improvement Workshop to help determine which recommendations to implement first.

Boeing is incorporating best practices into a suite of business systems it can standardize across all 34 U.S. Boeing sites, and is developing an improved internal communication network to help leaders make better decisions about the sale or redeployment of assets.

The next time a "new" piece of equipment shows up in the factory or office, it might be older than it looks. It may have come from a Boeing facility halfway across the country as part of asset redeployment.


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