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Creating an RFID-Enabled Company

RFID data could give managers and executives insights into what is really happening within their company, so they can make informed decisions.
By Mark Roberti
Apr 01, 2011—In our Jan./Feb. 2011 cover story, RFID: The Key to Knowledge, RFID Journal revealed some unexpected insights companies gain from the radio frequency identification data they collect. The article, by contributing editor John Edwards, concludes that the real value of RFID may be in telling companies about the things they don't realize they don't know ("unknown unknowns," in the words of former U.S. Secretary of State Donald Rumsfeld).

Airbus and a handful of other companies that understand RFID's real value are attempting to eliminate the unknown unknowns by trying to know everything. Perfect information is, of course, unattainable, and things that happen outside a company—a new product from a competitor, shifting weather patterns, a natural disaster in a key market or production area—can affect what happens inside the company.

Illustration: MaryLB | iStockphoto
But Airbus believes it can eliminate waste and improve efficiencies across its entire value chain—from suppliers to customers—by using RFID to achieve "visibility and measurability." It is moving away from collecting some information manually to collecting a lot of information digitally, with RFID. It is going to what Carlo Nizam, head of value-chain visibility at Airbus, calls the "digital, fly-by-wire value chain."

What does that mean? Nizam uses the analogy of air-traffic controllers to explain: By relying on radar to track airplanes' locations and identities, air-traffic controllers know exactly where every plane is in the sky, and receive automatic warnings when planes fly too close to each other or dip below a certain altitude. Similarly, Airbus is deploying RFID strategically to automatically collect data regarding where aircraft parts, tools, jigs, vehicles and other items are at any given time.

Airbus started by tagging parts for critical assets. The RFID data it collected enabled the company to measure and eventually streamline common business processes, which led to cost savings and improvements in product quality. Now, Airbus is deploying these streamlined business processes, designed at one location, across other manufacturing and supply-chain facilities. Managers can make decisions related to RFID-enabled operations based on real insights rather than gut instincts or best guesses.
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