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get everything but the avionics. That didn’t happen, Williams said. Fred Smith won the bid, “so I called him and asked if he wanted to sell the radios.” Smith offered them on consignment. “I didn’t know what consignment was. So, I said, well, I’ll come get it, and when I sell it, and when I get the money, I’ll give you some of it.” When Smith asked how much, “I

One of The Memphis Group’s warehouses.

pulled some percentage out of the air, and he said, OK, come get it. That’s when I got into the corporate jet avionics business.” After loading the radios in his old station wagon, Williams went to see Smith and asked, “You got something for me to sign?” He didn’t, and neither one had made a list of the consigned radios, said Williams, who offered to unload, make the list and reload. Smith was in Little Rock, Ark., at the time, and with the day growing short, “he said, never mind, just take it and go. So, I left with all the avionics with nothing but a handshake.”
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Smith soon called with another avionics consignment from a dozen Falcons, also done on a handshake. “It continued that way for a number of years. Finally, after FedEx stacked up to a certain size, we ended up with a contract to sell the entire surplus. That’s what got us off to the right start in the used equipment business.” FedEx had just stepped up to the Boeing 727, and other operators were offering to buy its surplus parts. To make sure it was getting a “fair shake” on the offers, FedEx called The Memphis Group. “We didn’t know much about airframe and engine business then,” but the company started learning with an all-nighter. It looked like FedEx was “being gouged,” Williams said. “We told them that, and they consigned it to us. That launched us into the 727 business, and it grew from there.” The Memphis Group modeled its parts operation on Boeing, Williams said. All orders go through the main office in Memphis, and the parts are dropshipped from strategically located warehouses, including one in Singapore and another in Hamburg, Germany. Parting out airplanes, from corporate jets to wide-body airliners, was the most visible part of The Memphis Group’s business, but more than two-thirds of its inventory came from airlines selling their surplus, excess or unneeded parts after a fleet change. “Our biggest business was buying from airlines and selling to other airlines.” This grew into the Inventory Locator Service, launched in 1979.

Before ILS, finding parts an airline needed but didn’t have was a scavenger hunt. Every airline had a list of its surplus parts and equipment, Williams said. For its members, the Air Transport Association started compiling them in part number order, in printed volumes. When the list surpassed 1 million items, ATA went to microfilm generated from a computer tape. Seeing an opportunity, Williams turned to his younger sister, Minnie Ash, a computer programmer. She and the vice president of information technology at FedEx wrote a program that enabled people to search this database using a Texas Instruments Silent 700 terminal. Williams described it as a teletype with an acoustic modem where you stuck a telephone handset into rubber cups. Initially, the database was loaded on the FedEx computer. ILS stepped up to DOS in 1988, Windows in 1994 and the World Wide Web in 1999. Williams sold ILS in 1985, to Ryder, which made it a division of Aviall Services, the company Boeing bought in 2006. Ryder “offered us more money than we had ever heard,” Williams said, “and we decided that they wanted it more than we did.” He sometimes second-guesses the decision, given ILS’s success since the sale, but he always recalls the friend who told him he “never knew anyone to go broke making a profit. In other words, it was a good deal, so we shouldn’t look back.” When Williams sold The MemContinued on page 32

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Avionics News April 2012

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