By Jill Gambon

Jan. 18, 2010—For years, Boeing, Northrop Grumman and other leading aerospace firms have been implementing lean-manufacturing practices to trim costs, boost efficiencies and improve inventory management. But many of the small and medium-size contract manufacturers that supply the thousands of components used to build commercial and military aircraft have lagged behind. These firms, often lacking the resources and infrastructure required to launch lean initiatives, rely instead on old-school, paper-based systems for manually managing inventory, processing orders and tracking products on the manufacturing floor.

Killdeer Mountain Manufacturing (KMM), a family-owned, 330-employee manufacturer of circuit cards, cable harnesses and other aerospace components, set out to change that. Over the past four years, the company, based in Killdeer, N.D., has overhauled its production processes and introduced a radio frequency identification system to track work in process (WIP) for its cable harness product line, which Boeing uses in the assembly of its F-15 fighter jets. The $4 million project was funded by the U.S. Air Force and developed by KMM, Boeing, the Air Force Manufacturing Technology Division, Alien Technology, Microsoft, RFID Global Solution and others.

The SCOUT program offers a clear view of KMM's inventory and manufacturing processes.

The key goal of the project—dubbed the RFID Supply Chain Optimization Universal Toolkit (SCOUT) program—was to create a clear view of KMM's inventory and manufacturing processes. "We needed supply-chain transparency in order to be hand in glove with our customers," says Kristin Hedger, the company's VP (her grandfather founded KMM in 1987). Providing up-to-the-minute information regarding the status of its products would help Boeing—one of KMM's main customers—better plan its production schedules, she explains.