Malcolm Baldrige National Quality Award
2003 Award Recipient, Service Category

Boeing Aerospace Support

• Boeing AS earnings have grown at an average cumulative growth rate of 17 percent per year from 1999 to 2002.

• During a flat market, annual revenue has more than doubled from 1999 to 2003.

• Since 1998, Boeing AS has provided products and services on a particular program within three days of a request, while competitors take up to 40 days.

• Cash awards paid to employees for extraordinary performance have tripled from 2000 to 2002.
  
  
  
  

Boeing Aerospace Support

Type of Work: Boeing Aerospace Support (AS), part of the Boeing Company, provides support for an aircraft’s lifetime which can be as long as 75 years. Boeing AS products and services include aircraft maintenance, modification, and repair; training for aircrews and maintenance staff, and providing spare parts. Boeing AS’ primary customer is the military.

Sales: In excess of $4 billion
Workforce: 12,303 employees
Location: Headquarters in St. Louis; nine major sites (eight in the United States, one in Australia), more than 129 secondary and smaller sites

Quality and Performance Results:

• For the past four years, Boeing AS earnings have grown at an average cumulative growth rate of 17 percent per year.

• Orders and revenues also have grown. New orders have improved each year since 1999, exceeding the last four years, and are significantly higher than competitors’ cumulative growth. Annual revenue has more than doubled from 1999 to 2003, during a flat market, resulting in a loss of market share by competitors.

• Since 1998, the “exceptional” and “very good” responses from government customers regarding Boeing AS’ performance have gone up 23 percent. So far in 2003, the exceptional responses have nearly doubled those in 2002 and represent nearly 60 percent of the responses received. Another survey of customers, conducted by an independent third party, shows positive responses improved from nearly 60 percent in 2001 to more than 75 percent positive in 2002.

• AS is very effective in quick, on-time delivery of products and services. For example, since 1999, on-time delivery of maintenance and modification products and services has been at or near 95 percent. The overall depot quality for the maintenance of C-17’s has been at or near 100 percent since 1998 compared to AS’ competitor at about 70 percent in 2002 and 90 percent in 2003. AS is able to provide products and services to their customers quickly. On one particular program, Aerospace Support has provided turnaround times that have been steady at three days since 1998, while AS’ competitor has been losing ground, going from 30 days in 1990 to 40 days in 2001. On-time delivery of significant hardware, aircraft, kits, and other has been at about 99 percent since 2001.

• Contracting Cycle Time, which measures the time elapsed from receiving a request for proposals from customers through modification of the contract, consistently has improved from 100 days in 1998 to the current performance level of 23 days, well below the internal goal of 50 days.

• AS works with its suppliers to ensure high quality services and products. Supplier On-Time Delivery Rate has improved from about 68 percent in 1999 to about 95 percent in 2003, and year-to-date is 95.9 percent, which is 25 percent better than a recent Baldrige recipient and matches best-in-Boeing results. Quality of Supplier Deliverables has been above 99.5 percent for the last three years and is at 99.7 percent for 2003 year-to-date.

• Employee involvement (employees taking ownership and responsibility for operations and processes leading to a high performance work environment) survey scores show improvement from 150 in 1999 to 170 in 2002, outperforming industry and Boeing data and are close to the best-in-class performance score of 178.

• From 2000 to 2003, AS employees had about one lost work day due to on-the-job injuries per 100 employees. This is under the parent’s rate of 1.9 and a similar competitor’s rate of 3.1.

• Voluntary terminations by employees have decreased from 3.5 percent in 2000 to 2.3 percent in 2003; better than the best-in-class level of 5 percent and the industry average level of 8 percent.

• Cash awards are paid to individuals and teams to reward extraordinary performance. The dollars spent for this have tripled over the past three years. Additionally, employees who successfully complete higher education degree programs are awarded shares of stock.

Processes

• AS has succeeded in creating an organization where collaboration and “shamelessly sharing” information across businesses, sites, and functions is the norm. Employees receive a continuous flow of information from a variety of sources including on-line newsletters, cross-functional teams and meetings, and functional and business councils, making AS a role model for rapid adoption of new information.

• An Emergency Operations Center in St. Louis provides backup computers, phones, direct lines, and a dedicated generator. Plans are in place based upon site, business, and government regulations to ensure continued operations in times of emergencies or disaster. These plans were refined after natural disasters in Oklahoma City and Wichita. This is significant in that national defense is dependent on operations remaining in place and effectively functioning.

• Boeing AS considers process management key to delivering high-quality products and services and to continuous improvement. The company’s over-arching process management approach, which stems from the Baldrige criteria, is a seven-step process which starts with defining the process and ends with implementing improvements. A new “tool box” brings together all of Boeing AS’ assessment, process management, and process improvement approaches. This integrated system of approaches is being shared with other Boeing divisions.

• AS uses an Enterprise Planning Process to effectively develop strategic plans. The EPP is comprised of four process elements (Key Data Factors, Strategies, Plans, and Execution) with 10 defined steps. Key participants and responsibilities have been defined for senior leaders and Business, Strategic Planning, and Functional Councils. Action plans with timeframes are developed by both the Business and Functional Councils.

Leadership/Social Responsibility

• AS has established policies and procedures for corporate governance and ethical behavior in employees. Expectations for ensuring ethical behavior are set during new employee orientation and annual refresher training. Ninety-five percent of the staff was trained in 1999 and over 98 percent in 2002. A 24-hour ethics line is available to report ethical concerns or to seek advice. Requirements for suppliers are communicated through their contract, personal contact, or on the AS “Doing Business” Web site. Compliance is monitored through regular AS audits.

• Boeing and AS policies and procedures and various AS process improvement tools help the company deploy its values through all areas of the organization. The strength of Boeing policies enabled it to be one of three Fortune 500 companies compliant with the new government accounting standards (Sarbanes-Oxley) with no change in accounting practices.

• Employee Survey Ethics Indicators show a positive trend since 1998. Three statements are assessed: “Management will act upon reported unethical practices”; “I can report unethical practices without fear of reprisal”; and “I feel free to communicate bad news to my management.” With close to 70 percent positive responses for these questions, AS scores better than the industry average and other Boeing units.

• AS encourages employees to become involved in community activities through its Employee Community Fund programs located at all of Boeing AS locations. The ECF, which is sponsored by AS’s parent organization Boeing, is the world’s largest employee-owned charitable organization. AS charitable contributions and community involvement activities address four areas: education; health and human services; culture and arts; and civic and environment. Although AS makes up less than 10 percent of total Boeing employees, for the last two years, AS employees have won Boeing’s William M. Allen Award which recognizes exceptional volunteer work by employees.

• AS has received numerous awards for its efforts to protect the environment, including the EPA Clean Air Excellence Award in 2002. Since 1999, AS has received either the gold or silver California Governor’s Environmental and Economic Leadership Award and the Kansas Water Environmental Association award.

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Created: 11/25/03
Updated: September 17, 2004
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