RFID-based MRO Strategies Spell Efficiency, Security for A&D Supply Chains

Aerospace and defense companies looking to radio frequency ID technologies for improvements in maintenance, repair and overhaul operations

New York — November 10, 2006 — Aerospace and defense companies are increasingly looking for ways to gain competitive advantage through the enhanced management of supply chains and assets, and they increasingly are turning to radio frequency identification (RFID) technologies, according to a new report from ABI Research.

In particular, A&D companies are looking to expand the use of RFID to manage maintenance, repair and overhaul (MRO) operations in their manufacturing environments, ABI reports in the new study, "The RFID Aerospace & Defense Market."

"MRO supply chain is about safety and security, as well as efficiency," said ABI Research Director Michael Liard. "A&D companies have evolved a new supply chain equation: 'maintenance strategy' plus 'supply-side strategy' equals '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 linkages 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, ABI reported.

In addition, 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."

ABI projects that by 2011 the A&D RFID market will realize revenue in excess of $2 billion. More information on the report is available on the ABI Web site.