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Wednesday, September 1, 2004

RFID: The Future of MRO Supply Chain Management

In the not-too-distant future, radio frequency identification technology may bring radical changes to the way maintenance, parts, and even tools are tracked.

Imagine an MRO world where components carry their individual cradle-to-grave histories with them. To read these histories, you would simply scan these components with RF (radio frequency) readers. As soon as the radio waves hit their antennas, these parts would automatically transmit back their vital statistics: date of manufacture, part number, hours in service, repairs and modifications, and anything else you needed to know. In addition, not only could this information be automatically logged in your company's own database, but any new data could be written back to these components, for access by the next MRO technician.

In such a world, it would be much harder for parts to go missing or be stolen. The records associated with such parts would also be highly accurate, because the number of people inputting them during the MRO cycle would be vastly reduced. On the corporate side, such parts would be easy to track, invoice against, and replace; a welcome change that would cut paperwork, human hours, and parts inventories. Meanwhile, government entities such as the FAA and NTSB would be happy, because these parts would be easy to trace in the event of accidents: no more guessing who did what after the fact.

Sound too good to be true? Well, it isn't: in fact, this is the future of MRO supply chain management thanks to a technology called RFID. Short for radio frequency identification, RFID is the same technology used by retailers for theft prevention. If someone tries to steal a shirt with an uncleared RFID tag, a reader at the door triggers an alarm as the RFID tag passes by.

Obviously, retail-sized RFID tags would be too big and cumbersome for installation inside aircraft. However, advances in RFID technology--spearheaded by the unlikely partnership of Airbus and Boeing--have resulted in practical RFID labels that have already been tested by FedEx Express. Granted, these tests have yet to include the engine area and other parts of the aircraft exposed to extreme conditions. However, the progress made to date, including a successful 90-day flying trial by FedEx Express, indicates that the future deployment of RFID tags throughout the entire aircraft is not a matter of if, but rather when.

RFID: how it works

To understand the basics of RFID technology, consider a credit card. It contains a magnetic strip upon which data is written and read using an appropriate scanning device. An RFID storage chip, which can contain up to 10 kilobits of information, works in the same way. The difference is that the data is transferred by radio waves from the RFID tag to the scanner, rather than by passing the magnetic storage medium directly against a scanning device.

There are two kinds of RFID recording devices: active and passive. An active RFID chip has access to a power source--either through an onboard battery or a connection to an external supply--and actively transmits its data. A passive RFID silicon chip doesn't have a power source; instead, it uses RF energy received from a nearby scanner to generate a transmission signal. This is why the antenna on a passive RFID is so important: it captures the RF energy that triggers the transmission and ensures that the RFID's data signal gets into the airwaves.

To date, the aviation industry has put its efforts into passive RFIDs, all built to meet the SPEC 2000 automated identification and data capture guidelines published by the Air Transport Association. It's easy to understand why passive RFIDs are the industry's preferred choice: the last thing any pilot wants is to fly an aircraft full of RF-emitting devices, all of which could interfere with the aircraft's avionics. Beyond this, the advantage of passive RFIDs is that their electronics can be squeezed into thin, label-sized wafers. Based on Electronic Product Code (EPC) protocols developed by EPCglobal (www.epcglobalinc.com), these RFIDs can either be incorporated into standard bar code labels, as is being done by Boeing. They can also be embedded directly into the metal skin of a component, an approach that is being tested by Airbus.

At present, the RFID tags being tested by Airbus and Boeing operate in the 13.56 MHz range. The advantage is that this high frequency doesn't cause interference problems with other RF users. The reason 13.56 MHz doesn't cause problems is because such RFID signals only travel 25 centimeters/one foot at best, which is also a disadvantage when you come to think about it. To read such signals, it is necessary to pass a handheld scanner directly over the RFID tag. This is why future RFID trials will be conducted at 915 MHz, said Ken Porad, program leader for Boeing Commercial Airplanes and one of the industry's top RFID experts. "Using 915 MHz in the UHF band, passive RFID signals can be received up to 25 to 30 feet away," he explained. "For airlines and MROs checking on the condition of RFID-tagged parts, this would allow their technicians to just walk past the aircraft with handheld scanners to collect the data they need."

RFID savings for MROs

At the outset of this article, we alluded to the money RFIDs could save in MRO supply chain management. Now it's time to look at the details.

According to Boeing's Porad (and verified by Airbus's Steffen) the number to take note of is $45 billion. "This is the value of the inventory sitting on MRO shelves today, as airlines and aftermarket providers try to ensure that they have the parts needed to keep their planes flying," he explained. "If we knew the life cycle and service history of the components currently in service on an ongoing basis, we could better predict when they'd need replacing. We could then stock our warehouses on a leaner just-in-time basis, which could reduce our inventory overhead by billions of dollars."

One area where RFID could save the airlines "$100 million a year" is in "rogue part,", Porad added. "These are parts that fail in service, yet whose faults can't be detected when put on the test bench," he explained. "`Rogue parts also refer to those that are counterfeit, unapproved, or carrying bogus certification. With each component carrying its own RFID history, it would be easy to detect and deal with such money-wasters. It would also make it much harder for people to pass off counterfeits, and for stolen parts to make their way into the system."

Other savings include faster troubleshooting and repair, said Airbus vice president Pierre Steffen. "With an RFID-tagged component, the manuals needed by the technician are stored right on the chip," he said. "The data can even tell them what tests to run and what parts to reorder should partial replacements be necessary. No longer will time be lost by scanning through paper manuals. No longer will the wrong parts be ordered, delivered, and then replaced with the right order, which also wastes time and money."

Finally, all of this data can be entered directly into an MRO's Enterprise Resource Planning (ERP) management software. In fact, SAP has already modified its Aerospace and Defense (A&D) ERP module to incorporate this data, as read through EPCglobal-compatible scanners.

"We have created a little piece of software called Auto-ID, which enables two-way communication between RFID-tagged components and SAP's supply chain management software," said Martin Elsner, field service director for SAP's A&D business unit. "With this link, SAP users can monitor and manage their supply chains down to the level of individual components, on an end-to-end, real-time basis."

Such is the power of RFID that Airbus and Boeing have teamed up to adopt and promote this technology based on the ATA's SPEC 2000 standards. In fact, the two have jointly presented "Global Aviation RFID Forums" (www.globalaviationrfidforum.com) in Atlanta and Hong Kong to educate the aviation industry about RFID and have a third forum planned for October 19-20/2004 in Munich, Germany. "When a technology as important as RFID is being developed, the big players in the market must play together," said Airbus's Steffen.

"RFID's ultimate objectives are improved safety and operational efficiency," said Boeing's Porad. "This is so important, that we all must work together for the common good."

Airbus: keeping track of tools ... and more

As futuristic as RFID sounds, Airbus has actually been using it for the past three years. However, the company's embedded RFID tags are not found inside its aircraft, but rather the very expensive servicing tools--and the shipping cases in which they travel--that Airbus leases to its MRO partners. "Having the tool's history recorded on an RFID makes it easy for us to track who has it and what condition they receive it in," said Pierre Steffen. "When the tool has been returned and is being recalibrated, the specifications recorded on the RFID can be easily compared with those being measured on the test bench, and the appropriate changes made."

All told, the efficiencies made possible by RFID have already allowed Airbus to improve the refurbishment of returned tools by up to 27 percent, said SAP's Elsner. "It used to take them typically from 19 to 25 days to prepare such tools for future leases," he said. "With RFID's help, this timeline has been cut to 16 to 19 days, on average."

Besides proving the value of RFID through its tool leasing business, Airbus has installed RFID-tagged components on 12 Airbus A320s "being flown by a major German charter airline," said Pierre Steffen. "To date, these components have collectively logged 200,000 flight hours. For all chips on all planes in all cycles, we have experienced 100% data reading accuracy. There hasn't been a single instance of RFID tag failure." Airbus is also testing RFID-equipped components in flight on the company's own A319 corporate aircraft.

Boeing and FedEx Express: testing RFID in service

With Boeing's help, FedEx Express has been flying RFID technology for more than a year. "The experiment grew out of interest in barcodes and direct part marking," explained Butch Ford, manager of FedEx Express's aircraft engineering support section. "In the first half of 2003 we were modifying a DC-10 [specifically N370FE, built in 1972 and flown by United from that year to 1994] to an MD-10. We thought it would be an excellent opportunity to test RFID technology, so we installed 40 13.56 MHz RFID-tagged components in six areas. For example, we tagged the onboard maintenance power displays on the flight deck, the first aid kits and the oxygen bottles in the cabin, and the air data inertial reference unit in the avionics bay. We also put RFID tags in the cargo compartment and wheel wells: the only areas we did not do were the engines because these tags aren't yet ready to deal with that kind of heat."

For the record, the RFID tags used by FedEx Express were Zebra Technologies (www.zebra.com) z-Ultimate labels fitted with Infineon Technologies' (www.infineon.com) 10 kB RFID inlays (combined memory chips and antennae).

After being equipped with RFID tags--and completing its conversion to an MD-10 freighter--FedEx Express N370FE returned to normal service on November 13, 2003. Over the next 90 days, the RFID tags on the aircraft were put through six different read/write tests using handheld scanners. "We wanted to see that the tags were retaining their data integrity, weren't being affected by RF fields generated by the aircraft, and that the stickers remained properly adhered to the components," Ford said. "After 90 days of flight time, we couldn't find a single problem in any of these areas. The RFID tags still worked fine."

With this success under its belt, the next goal of FedEx Express is to test 915 MHz RFID-tagged components in service. As with the 13.56 MHz tests, the RFID tags will be located on an in-service aircraft. The advantage is that this aircraft will readable "using a scanner up to 25 to 30 feet away," said Butch Ford. "Imagine it: we'll be able to check the status of these parts without even seeing them, by just walking through the aircraft with a UHF scanner."

What's next

The FedEx Express RFID tests are due to be mirrored by Delta Air Lines, said the RFID Journal (www.rfidjournal.com). It wrote that Boeing and Delta will be installing and testing both 13.56 MHz and 915 MHz RFID tags on eight Delta twin engine jets on the company's Atlanta-Jacksonville route. For each airplane, 30 RFID tags will be tested on noncore rotating engine components in one of its two Pratt and Whitney 2037 engines. "FedEx Express has proven there are no interference issues," Delta general manager of material services Marty Kangiser is quoted as saying in a June 14, 2004 RFID Journal report. "We'd like to do the same thing for engine parts."

Does this mean that RFID technology is about to break into the MRO supply chain? Not quite yet, cautions Airbus' Pierre Steffen. "It's too early to say when RFID parts will become standard to the industry," he said.

Still, the very real progress made in RFID inflight testing, and the joint cooperation between Airbus and Boeing to promote this new technology, bodes extremely well for the entire aviation industry. In fact, RFID technology looks so promising--and so necessary--that one can imagine MRO managers ten years from now looking back to 2004, wondering how the aviation industry ever survived without it.

Goebbels on SAP's RFID strategy

SAP vice president aerospace and defense offered these insights on SAP's view of RFID technology applied to the aviation aerospace industry.

1. Is RFID a key strategic direction for SAP?

Back in 1998 SAP first initiated RFID research in SAP's corporate research center and in 2001, SAP joined the Auto-ID Center as a founder-member and as one of the first enterprise application software vendors. RFID processes will enable SAP to drive further advantage from the benefits our customers are already receiving from their existing IT investments. One major piece of the RFID puzzle for Aerospace and Defense (A&D) companies is the automization and capitalization of the efficient supply chain management processes. When it comes to the domain of MRO, we also believe that RFID will become a key tool/enabler for compliance.

2. Do SAP A&D customers want RFID info?

Absolutely. We have several prominent customers--both in A&D manufacturing and in A&D MRO--who are prototyping/installing RFID solutions with SAP. We are currently also in discussions with airline MRO organizations to launch their first RFID projects.

3. What about RFID speed of adoption?

For RFID solutions to succeed in this industry, it is of vital importance that the technology is driven by all the key players in the A&D ecosystem. A success factor for the entire industry is the gathering of as much information as possible. This will translate into maximum technological advantage.

As the U.S. defense organizations will make RFID mandatory, we believe that RFID compliance will naturally catch on quicker than other technologies. The A&D industry is all about very expensive products and assets. In the A&D arena, the price for the RFID tags is comparatively negligible. Another pro-RFID factor is the fact that the A&D industry is one of the most regulated. Considering all these factors, I am confident that this technology will be adopted sooner rather than later.

As far as the obstacles for fast adoption go, in my opinion they comprise: a) the fact that the standardization process must lead the way and b) the physical complexity of using tags and readers in the A&D setting comprising lots of metals, etc. and c) frequency regulations that are controlled on a country-by-country level.

4. Are there greater opportunities for aerospace RFID in manufacturing or maintenance?

The technology will obviously assume its greatest potential if the entire community supports it. Relevant to both segments, with regards to the material supply process, one can provide inventory visibility, tracking parts/kits from goods receipt up/down to the goods-issue area. Monitoring sensitive components, tracking materials through the assembly process, tracking parts by serial number is driving visibility of the whole end-to-end business process. Two other important processes relevant to both OEMs and MRO-type organizations are those of order fulfilment and the asset lifecycle management. The inventory process is just a part of the entire end-to-end process, like order fulfilment

Another considerable area of opportunity is that of using RFID tags for the tool-tracking process. Many businesses hire out equipment and tools to other companies. When receiving them back, it is extremely useful to be able to ascertain who rented the tool, the duration of the loan, the duration of utilization etc. This can end up in triggering vital maintenance follow-up activities such as sending the tool back to the warehouse or directly to calibration.

For more information:

EPCglobal: (www.epcglobalinc.com)

Global Aviation RFID Forums: (www.globalaviationrfidforum.com)

Infineon Technologies (www.infineon.com)

The RFID Journal: (www.rfidjournal.com)

SAP: (www.sap.com)

Zebra Technologies: (www.zebra.com)

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