Airbus Improves Productivity with RFID

Group Case Study

Prepared for
Gary Gora, Instructor of E-Commerce
Northern Alberta Institute of Technology
Edmonton, Alberta

Prepared by:
Qiang Hua
Qinzhi (Rachel) Zhang
Yu Chen
June 06, 2014

Airbus Improves Productivity with RFID

Group Case Study
TABLE OF CONTENTS
TABLE OF CONTENTS.................................................................................................. 2
INTRODUCTION........................................................................................................... 3
THE DRIVERS OF THE RFID PROJECT..........................................................................4
Visibility.................................................................................................................... 4
Business Process.......................................................................................................... 5
Business Benefit:.......................................................................................................... 5
INFORMATION TECHNOLOGIES.................................................................................... 5
RFID Tags.................................................................................................................. 6
RFID Readers.............................................................................................................. 6
Software Infrastructure................................................................................................... 6
THE PEOPLE ARE SUPPORTED BY RFID.......................................................................7
Warehouse employee..................................................................................................... 7
Mechanics.................................................................................................................. 7
RFID IN BOEING'S SUPPLY CHAIN................................................................................ 8
CONCLUSION.............................................................................................................. 9
REFERENCE................................................................................................................ 9

Airbus Improves Productivity with RFID

Group Case Study

INTRODUCTION
Radio Frequency Identification (RFID) is a type of automatic identification system that uses a
tiny wireless device that can be attached to an object or a part. The RFID can provide accurate
and fast way to track the activities of a part in the business cycle. With the advance in
technology, RFID is being used in almost every industry to streamline business processes, reduce
inventory, increase productivity, and improve quality of the business operation. Airbus is one of
the pioneers in using RFID to streamline the business process. In 2000, Airbus started piloting
the RFID technology in its tool loan business with airlines, and by 2006, RFID was being
expanded to 15 business sectors of Airbus. The rapid expansion in the use of RFID came to need
for better coordination, so in 2007 Airbus launched company-wide program to increase the
visibility of the entire life-cycle of an aircraft using an array of automatic identification
technologies including RFID. We will take a brief look of how Airbus benefited from using the
RFID technology.

Airbus Improves Productivity with RFID

Group Case Study

THE DRIVERS OF THE RFID PROJECT

An Airbus jetliner is the product of highly-efficient cooperation across thousands of different
suppliers, vendors, and partners. As a constant rival with Boeing, the Airbus is looking for every
opportunity to increase productivity, reduce cost, and make its production process more efficient.
Visibility
Radio-frequency identification (RFID) is a small wireless electronic device that by uses radio
frequency electromagnetic fields to transfer data for the purpose of automatically identifying and
tracking tags attached on the objects (http://en.wikipedia.org/wiki/Radiofrequency_identification). After introduction of RFID technology in Airbus, all the information
about products, equipment and even people can be traced and analyzed in real time manner. By
providing absolute transparency, real-time and automated information through lifecycle
traceability, Airbus reduced the time required to detect and deal with inventory, production and
service-related problems before they occur. Mechanists can track the part's journal, historical
service, and its original manufacturing resource, thus the deficient and malfunction became
detected more easily and earlier. Furthermore, all aircraft part must be double checked and
confirmed whether they are matched with design before general assembly, the use of RFID
remove the need for manual-based processes and speed up the configuration-management
process. Airbus is the final integrator, rather than builder, therefore Airbus has the responsibility
for every parts used for an aircraft, being able to ensure the authenticity of each component is
another benefit of introducing RIDF technology (Ong, 2010).

Airbus Improves Productivity with RFID

Group Case Study

Business Process
RFID enabled Airbus to be more efficient in business process. The cycle times are reduced as
well as the need to store up lots of inventory. The accuracy of the business operation is
increased, and less manual intervention is needed. Additional benefit of using RFID is improved
quality of management since information tracked through RFID is much more accurate. The
flow of information is optimized so that all members in the supply chain can track the life cycle
of a particular tool accurately. The sharing of accurate information between all partners is
critical for the uninterrupted flow of goods (Ong, 2010).
Business Benefit:
The use of RFID makes the inventory, capital assets, and stock reconciliation leaner, while
monitoring of labor productivity and supplier more stringent. Airbus achieves better supplier
delivery performance through better supplier-forecasting. The business process becomes more
competitive. Using RFID, Airbus can reduce the repair cycle by as much as 6.5 days (Ong,
2010).
Airbus is the first commercial aircraft manufacturer to utilize Radio-Frequency-Identification
(RFID) part-marking technology across its value chain. This innovative system leads to supply
chain visibility, error-proof identification and efficiency savings in component lifecycle
management (http://www.airbus.com/presscentre/pressreleases/press-release-detail/detail/airbusextends-rfid-part-marking-across-all-its-aircraft-families/).

INFORMATION TECHNOLOGIES
European aircraft manufacturer Airbus applies RFID to manufacturing, maintenance,
warehousing, and supply chain process improvements. Since E-supply Chain has been applied

Airbus Improves Productivity with RFID

Group Case Study

to all trades, RFID plays a key role to revolutionize supply chain management. RFID, the
abbreviation of radio frequency identification, includes RFID tags, which sometimes contain
intrude sensors, readers and tracking system software.
RFID Tags
RFID tags, which can be attached to a product, crate, pallet or other package, have electronic
chips, batters, which contain electronically stored information and act as a transmitter to emit
radio waves. First, suppliers ship to Airbus RFID tagged parts, in which the information stored
include tag name, serial number, manufacturer name, date, and inspection information. Secondly,
Airbus uses RFID technology in aircraft tool management by equipping parts and tools with
RFID tags which contain shipping, routing, customs information and maintenance history. As
RFID tags can communicate with reader in a specific range which can be received and
transmitted.
RFID Readers
Mobile readers can be handheld or installed on carts or vehicles for those tags easily out of
interrogation zone. When track parts travel from one location to another location, after reader
collecting information from RFID tags, data base will update the information which include
time, location, receiving status, and so on.
Software Infrastructure
After readers are connected to data base and update the information, those inputs need to be
selected, organized, and integrated with business system. In this case, Airbus uses IBMs RFID
infrastructure software to integrate RFID data. So Airbus employees can access objective
updated information and track every tagged objective. But if tracking parts from supplier side,
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Airbus Improves Productivity with RFID

Group Case Study

RFID also need to apply to supplier which will put in cost including RFID tags, readers, and
tracking system.
Upon studying the Airbus case, we found RFID do enhance supply chain visibility, eliminate
disruptions from the supply chain. While an international company like Airbus is a leader in
implementing RFID and putting pressure on suppliers to comply, many businesses still are on
test stage and evaluating RFID. When RFID is accepted worldwide, as Nizam, Airbuss head of
value chain visibility predicted, RFID will become as everyday as bar code.

THE PEOPLE ARE SUPPORTED BY RFID

Airbus expects both internal and external stakeholders are supported and benefited by
introducing RFID system. The majority of the people in Airbus that are supported by RFID are
warehouse employee and mechanics.
Warehouse employee
In Airbus, the warehouse workers are getting the advantage, because RFID can help them to
search and track parts inside warehouse when these parts are moved from one region to another,
and even when they are built into aircraft. The task of tracking how, where, and the condition of
the tools are made faster and easier. RFID allows inventory managers to electronically track and
monitor orders and production activities in real time manner. The inventory management is
improved due to the managers knowing precisely the location of inventories at any given time; as
the result, inventory levels and the expenses of inventory management is minimized.
Mechanics
As mentioned before, mechanists can track the part's journal, historical service, and its original
manufacturing resource, thus, they can minimize unplanned maintenance and detect malfunction
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Airbus Improves Productivity with RFID

Group Case Study

earlier. Mechanics also can access database to check the configuration data of aircraft, perform
troubleshooting on aircraft, locate and track approved spare parts and know the accurate waiting
time for obtaining required parts and tools. However, RFIDs cost more than $1 per tag, so
Airbus uses them only on rolling cages, pallets, cases, and high cost parts.

RFID IN BOEING'S SUPPLY CHAIN

Boeing can get automatic updates of events and information in the value chain With RFID. By
applying the RFID technology to work, Boeing is able to enhance its communication and quality
of management and therefore to gain a real-time visibility of improvement in the key process. It
reduced the time required to solve service-related problem and assist to detect potential problems
in aircraft as well.
Depend on the market supply and demand, how to avoid out of stock or too much stock became
a big concern for the management. In Boeing, people strive to make their supply chains more
efficient by improving the information sharing throughout the supply chain. The forecast and
actual sales information are collected automatically.
Boeing is developing a point-of use delivery system, which sends parts requests to the
warehouse. It results in delivery directly to the mechanics station and the delivering parts are
just right for the mechanic needs. Indeed, it speeds up the Boeing streamline process by
checking, confirming and matching the required parts automatically. Thus, RFID brings realtime visibility in Boeings supply chain, which reduces the loss of expensive parts. Misplaced
tools or equipment can be detected by RFID reader.
In the high-efficient automated processes, the cycle times are shortened. Thus, the need for
inventory is estimated more accurate. Moreover, RFID technology simplified the administration
and parts repair management. The microchip ensured the accuracy and availability of key
information. The electronic records showed the repair and flight history of component
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Airbus Improves Productivity with RFID

Group Case Study

information, which significantly increased safety and services level, and reduced the required
time for inspection.

CONCLUSION
Airbus is using RFID as a business radar to improve its business process through better
visibility and taking a lifecycle based approach though a single corporate program whose goal is
to maximize traceability of any parts and tools to all participants involved in the value chain. As
part of this lifecycle based approach, Airbus has developed a full portfolio of RFID processes
and solutions that is ready to support its airline customers and industrial partners, and creating a
win-win situation for all participants. (Radio Frequency Identification (RFID), Airbus Business
Radar).

REFERENCE
Ong, S. (2010). Using RFID to Enhance Supply Chain Visibility - Airbus Case Study. Retrieved
from http://tegoinc.com/wp-content/uploads/2013/01/Airbus_UsingRFID.pdf