Airbus has signed a multimillion-dollar, multi-year deal to use RFID technology to streamline its supply chain and manufacturing operations.
The aircraft maker is partnering with IBM and OatSystems to provide the radio frequency identification (RFID) technology for the project, which has been in a pilot phase for more than a year. Based in Toulouse, Airbus has 16 manufacturing and assembly sites in Europe.
"We found the need for more information about how the business is performing," said Carlo K Nizam, head of value chain visibility and RFID at Airbus, which produces about half of the world's jet airliners.
"Think airports for a moment. Imagine you want to track the movement of your aircraft with paper and phones and people on the airfield. That process would be quite difficult," Nizam said.
"We use radar to track it automatically. It should be no different for a company. RFID helps us adopt the same principle. It's our business radar that lets us see what's going on faster and in real time so we can make the right decisions faster."
Using software and RFID technology from IBM and OatSystems, Airbus is focused on automating its supply chain and manufacturing operations.
Nizam noted that RFID tags are not being used for supplier-provided parts yet. At this point, Airbus is tagging shipping containers, paperwork orders, shipping labels and production tooling.
He would not say how much Airbus is spending on the project, but added that the company will be saving in the order of "millions of euros per year." The savings come from avoiding work disruptions caused by not having the right parts on hand, improved productivity, automated data entry and reducing inventory.
"We're looking to optimise our processes, in terms of how much inventory we hold," Nizam said. "Sometimes we might need to increase inventory and sometimes we'll need to decrease it. But to do either, you need to know what you require."
Knowing how many parts they will need at any given time will make manufacturing and assembly that much more efficient. And that is critical for a company the size of Airbus, said Martin Wildberger, vice president of sensor solutions at IBM.
"They have a bulging order book," Wildberger noted. " With the new 380 and the new 350s, they're looking at doubling their production rate. They need to improve the way they're running their operations ... The reality is you don't want to stop the manufacturing process.
"Before, they'd have excess inventory on hand. Now Airbus uses this technology to dramatically reduce the amount of excess inventory they need to have because they're more efficient."
The RFID system Airbus is using runs on IBM infrastructure, including the WebSphere Premises Server and the Business Process Management portfolio. Airbus is also using OATSystems' business applications, including the OAT Foundation Suite, Asset Tracking and Work-in-Process solutions.
"We want to reduce the cost of gathering information and increase the level and scope of the information we have," Nizam said.
"To make business savings, the only way to do it is through process improvements. To improve a process, you need to be able to measure it. To have measurability, you need information ... That's what we're doing."