RFID-based Strategies for Aerospace and Defense Supply Chains
Aerospace and defense companies are increasingly looking for ways to gain competitive advantage through the enhanced management of supply chains and assets. By 2011, the A&D Radio Frequency Identification (RFID) market is expected to realize revenue in excess of $2 B. One area that shows particular promise for the use of RFID in an A&D manufacturing environment is “MRO”: maintenance, repair and overhaul. “MRO supply chain is about safety and security, as well as efficiency,” says ABI Research director Michael Liard. “A&D companies have evolved a new supply chain equation: maintenance strategy + supply side strategy = supply chain strategy. RFID can fulfill many MRO event requirements by enabling real-time track-and-trace and unique identification.” Given the one-off equipment maintenance and supply chain management focus of most A&D organizations, an integrated MRO supply chain strategy with linkage between in-line equipment performance and supplier capability is critical. An integrated MRO supply chain can improve service performance in a manufacturer’s storeroom by simplifying inventory, purchasing, and other business processes. Integrated supply allows the centralization of all sourcing, procurement, receiving, internal distribution and service to one supplier. The full benefit of integrated supply is achieved when all MRO supply chain functions are outsourced, thereby allowing a plant to better focus on its core competencies. “Integrated MRO strategies based on RFID tagging can deliver marked efficiencies to the processes of locating parts, tools and materials, and to producing the significant amounts of documentation required to meet regulations in the aerospace and defense industry,” notes Liard. “RFID is an enabling technology that can facilitate a shift from corrective to predictive maintenance strategies.” The new ABI Research study, “The RFID Aerospace and Defense Market,” provides an assessment of the opportunities business benefits of RFID in A&D markets. It forms part of the company’s RFID Research Service, which includes research reports, research briefs, market data, on-line databases, ABI insights and analyst inquiry support.