USAF SCOUT Program Adapts RFID to Small Suppliers

Radio frequency identification (RFID) technology is a well-accepted means of improving the efficiency of manufacturing operations. Data embedded in RFID “tags” attached to items that are shipped to a customer can be “read” automatically by devices at the receiving end, without even opening the crate. The computer systems that recognize the individual parts can generate electronic acceptance notifications and payments, and even indicate where, in the customer’s factory, each item should go next. Tags and tag readers can be placed at critical points within a factory to provide a manufacturer and its customer the most up-to-date picture of work in process. When integrated with methodologies such as lean manufacturing and continuous process improvement, RFID can help wring out the costs in new production and maintenance supply chains.
Major defense contractors already employ RFID in their shipping operations, as mandated by the U.S. Department of Defense (DoD). But, these firms’s smaller suppliers by and large do not employ the technology. That’s because it’s expensive: to get the best results, RFID data should be integrated into a company’s accounting and enterprise resource management systems. But enterprise software is costly, and the integration and analytic expertise to put it all in place and keep it running have limited RFID to larger companies.
If the smaller enterprises could apply RFID to their operations, however, they, and the whole defense supply chain, could benefit. A new Air Force Research Laboratory (AFRL) program is trying to help subtier suppliers take that step by developing a blueprint for small- and medium-sized enterprises, or SMEs, to use the technology to monitor activity — from receipt of piece parts to the shipping of final assemblies.
The initial beneficiary of the research will be the AFRL’s prime contractor on the approximately $4 million RFID Supply Chain Optimization Universal Toolkit program, known as RFID SCOUT. That beneficiary is Killdeer Mountain Manufacturing Inc., a 300-employee aerospace contractor in North Dakota that supplies wire harnesses, circuit card assemblies, cables and ground support equipment. Boeing is a major customer, and the SCOUT program focuses on Killdeer’s process for fabricating and shipping wire harness assemblies to Boeing’s military division. Boeing’s Phantom Works unit, a company research center with considerable expertise in advanced manufacturing techniques, is a subcontractor to Killdeer in the AFRL program.
“The SCOUT program really is trying to put together a methodology for small- and medium-sized enterprises that make up the supply chain of prime contractors to help reduce cost and enhance product visibility along the whole supply chain,” explained John Crabill, senior product engineer and program manager at AFRL’s manufacturing technology division. This subtier contributes in the neighborhood of 80 percent of the final cost of an airplane, he said. “To impact cost at the bottom line, we’ve got to get back down the supply chain to the small companies.”
The SCOUT program is trying to discover how to implement RFID in a footprint suitable to small business. Ideally, RFID — and the continuous process improvement methodology of which it is a part — will give prime contractors greater visibility into the status of their parts on suppliers’s assembly lines and suppliers will have a better understanding of the real consumption rates of their products by the primes. Although a persistent state of equilibrium is never reached because conditions are always changing, RFID technology will help align production and consumption rates. “Everybody can see and trade information back and forth along the supply chain,” Crabill said.
When a prime contractor wants to know how many widgets it should expect from “Joe’s Widget Shop” by the end of the month, for example, the contractor can look it up instantly in a database rather than calling the shop and running the information down that way, a much more time-consuming process, Crabill said.

SCOUT Program

The SCOUT program includes three phases, extended through a four-year period. Phase 1, now completed, involved manufacturing and “RFID-readiness” assessments, RFID hardware and software implementation, and a demonstration of electronic tracking between Killdeer and Boeing. (Microsoft, a partner in the program, used Killdeer as a major beta test site for the latest release of its BizTalk server.) In Phase 2, Killdeer is pushing RFID from the shipping door back into its manufacturing process, providing visibility into the status of current work. The Phase 2 final demo later this year will show that Boeing can “see” where the parts are in the process at Killdeer, according to AFRL. In the final phase Killdeer will receive more information on Boeing’s consumption. Other partners on the program are Alien Technology, a maker of RFID chips, and Intel.
Boeing, one of Killdeer’s major customers and a longtime practitioner of lean manufacturing, helped Killdeer with initial assessments and “has done a lot of coaching,” said Scott Martin, a manager with Boeing Phantom Works. Phase 3, the final phase of the SCOUT program, plans to focus on parts for Boeing’s F-15 aircraft.
“We’re trying to improve efficiency and gain visibility into the supply network,” Martin said. “If we can optimize [Killdeer’s] production facility and capabilities, it benefits both our production aircraft as well as maintenance and modification.” The next step will be pushing these principles out to Boeing’s suppliers, Martin said and on the military side of Boeing, these number a “couple hundred.” Boeing also is working with Microsoft to bring sensor data into computer systems automatically.
Boeing’s primary focus is efficiency and visibility. “As you outsource some of your fabrication and small assembly work, you lower your overhead costs tremendously but lose some of our efficiency and visibility,” Martin said. “You don’t always know where your products are flowing.” The SCOUT program is building in that “visibility capability” into its toolkit, he said. “We see it as gaining some of the efficiency back with the benefits of outsourcing.”

Step By Step

Integrating RFID into one’s manufacturing process means going back to the basics. First, Killdeer had to establish a baseline, documenting the steps involved in producing specific parts. The company then used these “value stream maps” to start improving process flows.
At about that same time, Killdeer started working with RFID tags. These devices first were used in the shipping area, so that when a delivery truck picks up a package, an advanced shipping notice is generated and is automatically sent to Boeing. The notice contains information such as purchase orders and part numbers. In the exercise concluding Phase 1, Boeing received the advance notification, took delivery of the shipment, and ran it by an RFID reader which automatically generated a return message.
As the program proceeds, more RFID readers and tags will be placed in the Killdeer factory. These will be used to identify key steps, including when components such as wires, connectors and termini are gathered together before assembly begins. Killdeer also plans to use tags to identify when a product moves from the factory floor to the shipping area. And RFID could be used to identify when a unit enters the inspection area, said Killdeer Vice President Dan Hedger. He hopes to eventually cut as much as 28 percent of manufacturing cost.

Boeing’s Role

By the end of Phase 3 in 2009, AFRL plans to have a “full-up” RFID system running at Killdeer. Although Boeing’s internal use of the technology is outside the scope of the SCOUT program, it is obviously complementary to the effort. “They have to be developing their ability to use the data,” Crabill said.
Boeing is doing just that. In Phase 3 the company plans to make the SCOUT activity part of its mainstream e-commerce portal, a system known as Exostar. Boeing also plans to give Killdeer real-time visibility into its actual (rather than scheduled) consumption and changes, Martin said, “so they can level-load their work environment,” matching their production to Boeing’s consumption.
This more timely information could enable Killdeer to shave a month or two off its production planning, Martin estimated. If a supplier can see when a customer actually uses a product, the company will have a better “trigger” to schedule its production. They can avoid making too many items, minimizing excess inventory and inventory hold time.
Boeing envisions Phase 3 as a pilot program involving a “particular factory cell” partitioned off with sensors around it to collect data and show consumption at the point of use. “The pilot will be a downscaled version of what we expect to go into production with eventually,” Martin said. He sees the SCOUT approach as an element in the “bigger picture” of “network-enabled manufacturing.” This concept is more than e-commerce, Martin explained. “It’s taking data right from the shop floor and communicating that data to the [appropriate] system without the operator having to key it in. It basically gets the correct data to the operator and then records the data that’s required.”

Deliverables

The program’s finale won’t be a product, but a report that will describe the decisions made along the way in implementing RFID. It will document the steps that Killdeer went through, so that other small- and medium-sized businesses, if they are interested, can replicate them. The report will be available for public release.
Although the SCOUT program is a long way from completion, there have already been some benefits. The initial analysis, for example, revealed an inefficiency related to product flow and transportation. A product that was started in one factory was then transported 30 miles to another plant before work on it continued. So there was a gap while the initial products accumulated before they were moved to the second factory. “That was a kind of stop and start,” Crabill said, “plus you have the cost of all that work in process piling up.” As a result of the analysis, Killdeer moved the process all into one factory. This allows the end product to be made faster and reduces the cost of material, Crabill said. There can be just enough in process to keep up with just-in-time delivery.