10,000 Tags: RFID Takes To the Skies

David C. Wyld Contributing Editor

Airbus's newest jet, the double-decker A380, slated to enter regular service next year, carries over 10,000 parts that have been tagged with RFID chips.

On January 18, the political and business leaders of the European Union, along with aviation executives from all over the world, gathered in Toulouse, France for the unveiling of the world's largest and newest passenger jet.

The double-decker Airbus A380 will typically seat 555 passengers, with a maximum capacity reaching 840. The jet is longer, taller, and wider than the aging stalwart of high-capacity intercontinental passenger jets, the Boeing 747, with a wingspan that is almost 25% greater than its rival.

British Prime Minister Tony Blair praised the A380 as "the most exciting new aircraft in the world, a symbol of economic strength and technical innovation." When the "Superjumbo" A380 successfully completed its first test flight on April 27, French President Jacques Chirac hailed the inaugural flight as a "total success," and one which would mark "a new page of aeronautical history."

RFID is a big part of the technological breakthroughs that Airbus has integrated into the new aircraft.

Indeed, when the first A380 enters regular service next year, the plane will be outfitted with over ten thousand parts tagged with RFID chips. Airbus is also planning on utilizing a similar number of tagged parts on its A400M military transport aircraft and the planned A350 passenger jet.

Likewise, Boeing will be integrating RFID tags with a significant number of the over six million parts that will make up the company's 7E7 Dreamliner (recently rechristened the "787"), a smaller commercial jet which is being marketed for its maximized fuel efficiency and lower operational costs. Boeing's new jet is slated for flight in 2007.

What has led both of the world's leading large aircraft manufacturers to turn to RFID parts labeling?

The truth is that the handling of airplane parts over the years has been a highly inaccurate — and costly — process, both for the airlines that fly the aircraft and for their manufacturers. Consider that the world's airlines have an estimated $45 billion in spare parts. However, this sizeable investment actually works against the airlines' financial and operational health, as much of the spares inventory is not cataloged and unnecessary. In fact, the poor state of airlines' parts stockpile means that the average aircraft mechanic spends up to 70% of his or her time simply trying to locate the correct spare part for the job.

The root of the problem is that most airlines around the globe currently use hand-written maintenance logs as their initial record-keeping inputs.

Of course, mistakes are made, both in the initial recording of information and in the transcription of the mechanics' handwriting into the electronic record. In fact, Boeing's studies on the accuracy of these transcriptions shows that 1 in every 30 keystrokes is made in error.

Such poor-quality information slows down maintenance operations and adds extra cost throughout the aircraft parts supply chain.

Airbus estimates that 70% of the purchase orders that the firm receives for replacement parts from air carriers and servicing firms have incorrect part information. According to Airbus' vice president Pierre Steffan, this inaccuracy costs his firm approximately $400 million annually.

Additionally, there are severe problems in airline maintenance with the use of counterfeit and unapproved parts. Each year, in the U.S. alone, the Federal Aviation Administration (FAA) issues well over $100 million in fines to carriers who are found to have made use of such non-airworthy replacement parts.

Thus, for reasons of economics, efficiency, and most of all, passenger safety, airline maintenance operations stand to be literally reinvented over the next few years. To their credit, the two oligopolistic competitors in the commercial aircraft industry are cooperating to issue a joint standard for the tagging of aircraft parts, which will be finalized in 2005.

Automatic identification technology in commercial aviation promises to be a winning proposition for Airbus and Boeing, as well as for their suppliers (as approximately three quarters of their supplier base is common) and airline customers alike. This is squarely because RFID technologies promise to deliver heretofore unattainable visibility and accuracy in tracking the recognition, authenticity, history, and even the performance of an airplane's key components.

Across the aviation industry, the business case for deploying RFID is perhaps more robust and clear than in any other segment of the economy, as it will:

• accelerate the production process
• improve and streamline maintenance functions
• decrease aircraft downtime
• produce higher spares availability while reducing spares inventory, and enhance passenger safety.

Boeing and Airbus are developing joint standards that they will utilize for their operations.

Both firms are building upon their experience using RFID tagging for proprietary tools and equipment and internal parts operations that have been ongoing for five years or more. They are also actively educating their suppliers and customers about automatic identification technologies, and their potential applications and benefits.

Airbus and Boeing have agreed to use the Air Transport Association's (ATA) SPEC2000 e-business specification as the basis for their directive, as this trade group's standard has been modified to include guidelines for automatic identification and data capture.

SPEC2000 spells out how individual RFID tags need to be constructed, using parts numbers, serial numbers, and manufacturer codes.

The ATA standard specifies the use of ISO 15693 passive, read-write tags, operating at 13.56-MHz. It is likely that the U.S. Federal Aviation Administration (FAA) and other civil aviation authorities in Europe and Asia will follow on with their own guidelines for RFID tagging on passenger aircraft sometime in 2005.

Both Airbus and Boeing believe that RFID tagging of component parts will greatly speed the aircraft assembly process.

According to Ken Porad, program manager for Boeing's Automated Identification Program, the company's new 787 will have far more of its assembly being performed by suppliers, rather than inside Boeing's mammoth four-wall assembly operations. In fact, fully 35% of plane will be built in Japan.

According to Porad, Boeing will be able to reduce its on-site assembly time for each aircraft from the four to six weeks it commonly takes today for aircraft such as the 737 and 777 to just 72 hours for the 787 when it begins full-scale production in 2008.

The one area in which Airbus and Boeing seem to be diverging is in deciding which of the tens of thousands of parts on an aircraft will be tagged.

According to Daryl Remily, deputy program manager for Boeing's Auto-ID program, the company's decisions in this area for the 787 project will be based on several factors, including:

• the cost of a part
• a part's criticality in aircraft operations, and
• the relative ease of a part's repair and/or replacement.

Says Jen Heitmann, a senior manager with Airbus, the consortium believes that because of the high metal content of aircraft, plastic and other composite parts in the cabin will be easier to tag.

For example, the firm plans to place passive labels on passenger seats and life vests in the A380. With these in place, a flight attendant or maintenance person could sweep down the aisles of the plane with a hand-held reader to verify that each seat had the required life jacket in place.

Airbus is also looking to tag removable parts and critical parts that have short life-cycles, such as the plane's brakes, which typically must be overhauled after every 1,000 landings.

What about the existing airline fleet? Airbus and Boeing both strongly recommend that airlines consider adding RFID labels to their critical spares inventory. With over 12,000 Boeing airliners and 3,500 Airbus jets in service today, the market for tagging these legacy aircraft will be sizeable.

For Boeing's part, the company plans on advising airlines and maintenance service firms to retrofit key components with labels that will be human-, two-dimensional bar code-, and RFID-readable, with all three technologies employed on a single label.

Vital from Boeing's standpoint is that the labels be readable in all areas of the world where an aircraft may travel and change ownership hands during its lifetime. In this way, there will not be a potentially dangerous communications gap between airlines that are early adopters of auto-ID technologies and firms that may be located in areas of the world that are laggards in adopting the new technology.

Airbus and Boeing both stand to reap huge gains in their operating efficiencies from the adoption of an industry standard for using automatic identification in their production processes. They also will experience savings in their parts supply operations.

While there may be an industry standard for smart labeling, how smart the two firms are in making the technology work for them will play a large role in the value propositions they can offer to their airline customers around the world.

Thus, it will be interesting to see how successful both companies will ultimately be in actually leveraging RFID throughout their operations and their forward and backward supply chains, as this will make a significant difference in both their overall efficiency and profitability, and the success of their massively expensive new product launches.

David C. Wyld (dwyld@selu.edu) is the Louis H. Mayfield Professor of Management at Southeastern Louisiana University in Hammond, La., where he also directs the College of Business & Technology's Strategic e-Commerce Initiative. He is a leading academic voice in the area of RFID technology, writing and speaking on the implications of automatic identification technologies for organizations across a wide variety of industries, and for the public sector as well. He is presently authoring a monograph on RFID technology for public sector executives for the IBM Endowment for the Business of Government, and writing a book on the subject, A Manager's Guide to RFID, for Cambridge University Press.