European aircraft giant Airbus is one of most vocal user advocates of RFID as a way to bring unprecedented efficiencies to the supply chain. In the Airbus vision, radio tagging and tracking everything from landing gear, to wings, to bolts during a plane’s assembly would shower Airbus and its suppliers with all manner of enterprise benefits, including minimizing inventory, maximizing production lines, and expediting invoicing.
If only all of Airbus’ suppliers would book a reservation on the company’s long-haul RFID journey, then manufacturing might truly transform.
Airbus, the world’s largest maker of commercial aircraft, started dabbling in RFID about eight years ago and ratcheted up its commitment in 2006 as part of an executive-driven overhaul of resources that the company calls Airbus Resource Planning (ARP). The Toulouse, France-based pan-European manufacturer has since started a series of RFID pilots and live implementations meant to engage suppliers in the ARP initiative.
“One of the cornerstones of Airbus' philosophy was to develop an approach that maximized benefits to as many players as possible,” says Carlo Nizam, Airbus’ head of value chain visibility and RFID within the ARP program. “To be blunt, the RFID story cannot succeed if only Airbus benefits.”
Airbus is off to a good start with a portion of its suppliers that Nizam calls the “closed loop.” These suppliers send RFID-equipped reusable containers that continuously travel back and forth between suppliers and Airbus’ Hamburg, Germany, final assembly facility. The containers house everything from seats, to coat racks, to sinks, and they come from external suppliers as well as internal subassembly facilities, such as Laupheim, Germany-based Airbus Air Cabin and Airbus’ Hamburg-based Cabin Equipment Centre.
RFID technology has cut down the amount of time it takes Airbus to enter data about the contents as they arrive. Since 2006, it has helped Airbus reduce the number of containers that feed its A380 final assembly by 8% to 4,500. That translates into cost savings for Airbus because, among other reasons, “someone has to pay for those containers, and at the end of the day, the cost comes back to Airbus,” Nizam says.
What would step savings up an order of magnitude would be if Airbus could convince the “open” portion of its suppliers to affix RFID to the shipping labels of the boxes they send Airbus.
“We’re starting from the inside of Airbus and working out,” Nizam says.
Two years ago, “open” suppliers Messier-Bugatti and Michelin agreed to test out RFID. For four months, Michelin attached RFID labels to the external packaging of tires it shipped to a third-party warehouse called Mazères Aviation in Toulouse. Messier-Bugatti did the same with brake system parts. Other suppliers also participated.
“We spent a lot of time, especially during the scoping and trial phases by involving all industry players, particularly our suppliers and airlines customers to listen to their inputs and feedback,” Nizam says.
So, are any of the open suppliers onboard for good, now that some of the pilots have ended?
Well, no.
Nizam does not seem worried. He says that Airbus hasn’t even asked the likes of Messier Bugatti or Michelin to join in full time. “You have to walk before you can run,” he says.
Airbus has been working with RFID “since the turn of the century,” as he likes to say. That means that if any manufacturer has a good handle on how to extract enterprise-wide benefits from RFID, Airbus does. Nizam’s job is to carry on deploying RFID internally, and to continue to run various pilots and take them live. He’s convinced that by doing that, Airbus will, over time, demonstrate the benefits to the point where suppliers such as Messier-Bugatti and Michelin will commit.
Airbus “is, in effect, a large industrial showroom to all partners in the value chain who can look at each new process and copy and paste where appropriate to their own business areas,” Nizam says.
He’s practically an evangelist for the potential, starting simply with his job title — head of value chain visibility and RFID. To Nizam, it’s all about the “visibility” that RFID can provide. An RFID tag on incoming brakes, in theory, lets the assembly line know whether the product is arriving late, early, or on time. The knock-on effect is enormous, as data like that can help the company schedule or reschedule lines accordingly, decide whether or not to trigger invoices, figure out how to adjust customer commitments, and make sales and cost forecasts. And the same benefits flow back through the supply chain, which can “reduce its capital assets,” such as warehouses, as RFID helps everyone reduce inventory, Nizam says.
Airbus is indeed busy in its “industrial showroom” deploying RFID pilot tests. In one project, various Airbus plants in Spain, France, Germany, and the United Kingdom are affixing RFID to jigs that hold wings, tails, fuselages, and other aircraft sections that Airbus ships to its Hamburg plant via its Beluga transport plane. The RFID lets Airbus operations know when the Beluga is unloaded.
“It’s like an air traffic control system, but it’s a business control system,” Nizam says.
At its Bremmen, Germany, plant, Airbus kits out sheet metal with RFID to track it through 12 work stages as the factory transforms it from raw to polished. That process alone takes up 2 million data entries per year, so real-time, RFID-supported data marks a huge time-saving over manual entries. At the company’s U.K. plants, Airbus attaches RFID tags to tools, such as drills, that workers have to check in and out of storage, to cut down on lost goods.
Airbus even wants to extend RFID’s benefits to its airline customers. In another pilot program just starting now, Airbus is adding RFID to a plane’s various parts to help customers monitor maintenance schedules. Nizam declines to identify any airlines participating in that pilot.
The busy showroom could engender more positive thinking among suppliers and the manufacturing world in general.
“RFID represents one way to improve visibility through automation and better accuracy,” Nizam says. “Our mission is to take this enhanced attribute and turn it into a competitive advantage not just in one business area, but across our scope of operations. People have to understand how the technology can be used to benefit the business.”
Nizam could be onto something. IDC Manufacturing Insights analyst Simon Ellis cites Airbus’ RFID deployments as an influential development that could help establish RFID as supply chain technology because it “is built off fundamental business problems for which RFID was evaluated to be the best technological solution.”
Of course, extracting business benefits will require integrating RFID-derived data into enterprise systems such as the SAP ERP software in place at Airbus. The integration mandate became even clearer last spring, when Airbus announced a deal with IBM and IBM’s RFID partner, OATSystems, to help integrate RFID data. Anyone who thinks integration will be uncomplicated should think again: The IBM/OAT combination relies on hardware integration provided by Dulles, Va.-based ODIN Technologies.
And RFID technology must continue to improve and come down in price. Will in-flight RFID hold up to the noise and pummeling of an aircraft? No one knows. “That’s why we’re doing the pilots,” Nizam says. Will OAT’s recent acquisition by Checkpoint Systems alter Airbus’ integration plans? “The short answer is no,” Nizam says. “Airbus represents a very strategic account for OAT. The entire management team at OAT remains committed to Airbus and has reaffirmed this commitment to Airbus since the acquisition.”
Airbus is indeed one of the manufacturing world’s biggest RFID users. But it will be a while before it spreads RFID widely into the open supply chain. “We need to be careful about feeding the hype,” Nizam says.
RFID has hit its share of general turbulence in the past eight years, with underachieving technologies, high prices, inconsistent radio frequencies, and other problems. The next eight years probably won’t progress at supersonic speed, but the ride might at least become smoother.