Carlo Nizam, the head of Airbus‘ Value-Chain Visibility and Auto-ID Program, sent me a copy of the January 2011 issue of Fast 47, the airplane manufacturer’s in-house magazine. The issue features articles about how Airbus is pioneering the use of fiber-optic cables instead of copper wire (to reduce weight and increase bandwidth) and trajectory management in order to reduce fuel consumption. The magazine also includes a story entitled “Radio Frequency Identification: Airbus Business Radar,” detailing the company’s use of RFID.
RFID Journal has written extensively about Airbus’ use of the technology (see Airbus Installs RTLS for Large-Component Assembly and Airbus’ Grand Plans for RFID). But as the manufacturer continues to define best practices for RFID-enabling a company, it’s worth examining how the firm views its RFID initiative.
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The article points out that Airbus first began looking into RFID in 2000, as part of its Nonstop Innovation program. “By 2006, there were 15 projects across Airbus, each looking at promising new benefits enabled by RFID,” the story reports. “However, it was clear that to maximize the benefits across the company, a coordinated approach was needed to avoid duplication of activities to maximize synergies.”
In 2007, Airbus launched its Value Chain Visibility program, a companywide initiative to increase visibility across an aircraft’s life cycle, using a collection of automatic-identification technologies, including RFID. (The term “value chain” refers to the entire supply chain, from suppliers to customers.) A dedicated cross-functional team was set up to develop Airbus’ strategy, consolidate and prioritize activities, and develop best practices that could be used across the company. The team is lead by Nizam. Paul-Antoine Calandreau manages projects dealing with airline customers, and Jamil Khalil focuses on sourcing and coordinating projects with other companies in the EADS group, which includes Airbus.
“The more visibility a company has into its operations,” the article says, “the more measurability and control it can have on its processes, which in turn helps improve those processes, which translates into savings and quality improvements.”
The article compares RFID to the use of radar to manage airplanes landing at airports—an analogy Nizam frequently uses when speaking at RFID Journal events. But instead of utilizing real-time data about the identity and location of airplanes, Airbus is employing RFID and other technologies as a kind of “business radar” that lets managers see what is going on digitally, automatically and in real time. The information enables managers to optimize processes and make the right decisions faster.
Why extend the benefits beyond Airbus’ four walls to partners in the value chain?
“Airbus considers the value chain to effectively be ‘profits in motion,'” the article explains. “These profits are not limited to any one particular function, but are spread all along it. The same being true for costs. Costs arise from waste that does not distinguish itself between functions, nor limit itself to company boundaries. So Airbus is focusing on the big life-cycle picture in order to make the big savings and develop an approach that maximizes benefit to all actors across the value chain.”
So far, Airbus has deployed almost 20 industrial projects, including several that improve warehouse logistics and tool management and track work-in-process. “All these projects, without exception, have shown very strong financial benefits on the order of millions of Euros per year, with payback periods in most cases of less than one year,” the article states. “The tangible benefits induced by the higher level of automation include a reduction in inventory and capital assets, and improved productivity and quality.”
When I launched RFID Journal a decade ago, this is what I envisioned—companies using the technology to track and manage what had previously been impossible to track and manage. Airbus will likely be the first truly RFID-enabled company. It’s not there yet, but it is well ahead of most businesses in developing and executing a strategy that will lead to major cost reductions and quality improvements.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark’s opinions, visit the RFID Journal Blog, the Editor’s Note archive or RFID Connect.