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RFID to the Rescue: Boeing Uses RFID to Reduce Costs

This guest article from AMR Research's Kevin Reale looks at how Boeing's supply chain has expanded in scope and geography for the manufacture of the upcoming 787 Dreamliner and how RFID is being deployed to manage the resulting complexities.
Jun 14, 2006This article was originally published by RFID Update.

June 14, 2006—Competitive pressures in the commercial aircraft business has Boeing rethinking the systems, processes, and technology it uses to manage its service and manufacturing supply chains, as well as its servicing line replacement units (LRUs). An LRU is a component that can be replaced by a mechanic while the aircraft is parked at the passenger terminal. Boeing's next-generation airliner, the 787 Dreamliner, is one of the most advanced aircraft Boeing will have ever delivered.

The changing needs of tomorrow's aircraft

The events of September 11, 2001, shifted Boeing's focus from making large fast jetliners, like the 747x and Sonic Cruiser that move large quantities of passengers fast, to making aircraft that are highly efficient in transporting people point-to-point (as opposed to the traditional hub-and-spoke method). The new 787 will be constructed mainly from carbon-fiber-reinforced plastic and light-weight metals like titanium and aluminum to reduce overall weight and improve its fuel efficiency.

The materials used to improve its fuel efficiency are not the only unique thing about the 787; it is also one of the first aircraft that leverages a supply chain model that closely represents an automotive original equipment manufacturer (OEM). Over 80% of the aircraft depends on external trading partners to design and manufacturer major modules and systems. Compare that with prior Boeing aircraft where only 51% was supplied by outside parties. Over 43 key suppliers on three continents design and manufacturer these systems and modules and transport them to Boeing's Renton, Washington, manufacturing facility for final assembly on its moving production line.

Managing the complexities of outsourced supply

Managing this new global supply chain introduces requirements for traceability. Boeing and its supply base have decided to use RFID as the technology to help track parts from manufacture to installation and beyond to maintenance and repair. The large-memory RFID tags will be capable of providing a complete history of individual aircraft parts. As tagged components move through the supply chain, information can be added, deleted, or read by stationary or mobile RFID readers. RFID reader-enabled mobile computers allow the reading of part information without having a direct line of site as is typically required by other ID tracing technologies like barcodes.

Boeing initially identified 1,750 mission critical 787 parts to identify and track with RFID tags. These parts were chosen either because of their cost or because they had the potential for frequent maintenance and/or replacement (hence the title of this article, "RFID to the Rescue").

RFID will enable Boeing's customers to reduce costs associated with managing LRUs and service part inventories, as well as enabling Boeing itself to manage its manufacturing and logistics costs by improving traceability of components through the supply chain. For example, today most of Boeing's LRUs carry barcode identification labels, sometimes located on the back of units. If a mechanic needs to check the cockpit to see which one of three computers needs to be repaired, he has to get on his back, a flashlight in one hand and a mirror in the other, to search for the particular serial number in question. RFID will allow him to walk into the cockpit with a handheld RFID reader and locate the computer in question with a couple of clicks. Other examples include monitoring levels of oxygen without having to look at individual gauges on oxygen tanks or identifying quantities of life jackets without taking physical counts.

Banding together to save the woes of the industry

What makes this use of RFID unique is the participation of Boeing's suppliers. Boeing is not mandating the use of the tags with its suppliers; rather, it's a voluntary program. Boeing is working hard to communicate the importance of reducing the costs associated with in-service LRU problems and improving supply chain efficiencies through increased accuracy of information exchanged between customers and suppliers -- with hopes that all will want to implement measures such as this to aide the struggling airline industry.
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