ABI: RFID-based MRO Strategies Mean Security for Aerospace, Defense Supply Chains

December 4, 2006 // Published as a news service by IHS

According to ABI Research, the A&D radio frequency identification (RFID) market is expected to realize revenue in excess of $2B by 2011, showing particular promise in maintenance, repair and overhaul (MRO).

"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."

Analysts said 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.

Integrated supply allows the centralization of all sourcing, procurement, receiving, internal distribution and service to one supplier.

Analysts said 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," said Liard. "RFID is an enabling technology that can facilitate a shift from corrective to predictive maintenance strategies."

Source: ABI Research.