A Report on Global Logistics & Supply Chain

Management in International Aviation Industry

Submitted To:
Dr. A. N. Sarkar

Prepared By:
Sweety E. Das (2k81/IB/24)
Abhinav (2k81/IB/25)
Debashish (2k81/IB/26)
Dr. Himani Singh (2k81/IB/27)
Mohd. Ameed (2k81/IB/28)
Prashant Rampuria (2k81/IB/29)
Sonal (2k81/IB/30)
Vidisha Singh (2k81/IB/31)

September 05, 2009

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 Table of Contents

Table of Contents

INTRODUCTION TO THE AVIATION INDUSTRY ............................................................................... 2

WHAT IS SUPPLY CHAIN MANAGEMENT ....................................................................................... 3
SUPPLY CHAIN MANAGEMENT PROBLEMS ................................................................................... 3
SUPPLY CHAIN BUSINESS PROCESS INTEGRATION ......................................................................... 4
COMPONENTS OF SUPPLY CHAIN MANAGEMENT INTEGRATION ................................................... 5
GLOBAL SUPPLY CHAIN MANAGEMENT ........................................................................................ 6
REPORTING STRUCTURE & SYSTEMS............................................................................................. 6
CHANGING SCENARIO IN CROSS-BORDER TRADE .......................................................................... 7
FIVE BASIC TRANSPORTATION MODE ........................................................................................... 7
COST STRUCTURE FOR THE AIR TRANSPORTATION MODE ............................................................. 8
AIRLINE INDUSTRY VALUE CHAIN ................................................................................................. 8
IMPACTS OF A WEAKENED AIRLINE INDUSTRY .............................................................................. 9
ROLE OF IT ................................................................................................................................. 10
INSTALLATION OF RFID IN AIRCRAFT .......................................................................................... 10
RFID: HOW IT WORKS? ............................................................................................................... 11
RFID SAVINGS FOR MROS ........................................................................................................... 12
AIRBUS: KEEPING TRACKS OF TOOLS .......................................................................................... 13
BOEING AND FEDEX EXPRESS: TESTING RFID IN SERVICE ............................................................. 14
WHAT’S NEXT ............................................................................................................................ 15
GOEBBELS ON SAP'S RFID STRATEGY .......................................................................................... 16
Bibliography .............................................................................................................................. 18

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INTRODUCTION TO THE AVIATION INDUSTRY
The 1884 La France, the first fully controllable airship

Although many people think of human flight as beginning with the aircraft in the early 1900s,
in fact people had been flying repeatedly for more than 100 years.

 Wright brothers’ first successful flight in Kitty Hawk in 1903.

 American Airlines in 1928 and United Airlines in 1931.

 Development of the mail system by the U.S. Postal Service helped create the airline
industry.

 Increased R&D of aircraft after World War II: World War II saw a drastic increase in
the pace of aircraft development and production. All countries involved in the war
stepped up development and production of aircraft and flight based weapon delivery
systems.

After World War II commercial aviation grew rapidly, used mostly ex-military
aircraft to transport people and cargo. This growth was accelerated by the glut of
heavy and super-heavy bomber airframes like the B-29 and Lancaster that could be
converted into commercial aircraft. The DC-3 also made for easier and longer
commercial flights. The first North American commercial jet airliner to fly was the
Avro C102 Jetliner in September 1949, shortly after the British Comet. By 1952, the
British state airline BOAC had introduced the De Havilland Comet into scheduled
service.

 Deregulation in 1978: Deregulation – Entry and exit of routes and the pricing of fares
were deregulated.Benefits:

1. The creation of new jobs and lower fares.

2. More Americans were flying so airplane load factors were up.

3. There was increased competition and a wider choice for passengers.

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WHAT IS SUPPLY CHAIN MANAGEMENT?

Supply chain management (SCM) is the management of a network of interconnected

businesses involved in the ultimate provision of product and service packages required by
end customers (Harland, 1996). Supply Chain Management spans all movement and storage
of raw materials, work-in-process inventory, and finished goods from point of origin to point
of consumption (supply chain).

The definition put forward by a U.S. professional association is that supply chain
management encompasses the planning and management of all activities involved in
sourcing, procurement, conversion, and logistics management. It also includes the crucial
components of coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third-party service providers, and customers. In essence, supply chain
management integrates supply and demand management within and across companies. More
recently, the loosely coupled, self-organizing network of businesses that cooperate to provide
product and service offerings has been called the Extended Enterprise.

Supply chain management can also refer to supply chain management software which
includes tools or modules used to execute supply chain transactions, manage supplier
relationships and control associated business processes.

Supply chain event management (abbreviated as SCEM) is a consideration of all possible

events and factors that can disrupt a supply chain. With SCEM possible scenarios can be
created and solutions devised.

SUPPLY CHAIN MANAGEMENT PROBLEMS

Supply chain management must address the following problems:

 Distribution Network Configuration: number, location and network missions of

suppliers, production facilities, distribution centers, warehouses, cross-docks and
customers.
 Distribution Strategy: questions of operating control (centralized, decentralized or
shared); delivery scheme, e.g., direct shipment, pool point shipping, cross docking,
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 DSD (direct store delivery), closed loop shipping; mode of transportation, e.g., motor
carrier, including truckload, LTL, parcel; railroad; intermodal transport, including
TOFC (trailer on flatcar) and COFC (container on flatcar); ocean freight; airfreight;
replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g.,
owner-operated, private carrier, common carrier, contract carrier, or 3PL).
 Trade-Offs in Logistical Activities: The above activities must be well coordinated in
order to achieve the lowest total logistics cost. Trade-offs may increase the total cost
if only one of the activities is optimized. For example, full truckload (FTL) rates are
more economical on a cost per pallet basis than less than truckload (LTL) shipments.
If, however, a full truckload of a product is ordered to reduce transportation costs,
there will be an increase in inventory holding costs which may increase total logistics
costs. It is therefore imperative to take a systems approach when planning logistical
activities. These trade-offs are key to developing the most efficient and effective
Logistics and SCM strategy.
 Information: Integration of processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory, transportation, potential
collaboration, etc.
 Inventory Management: Quantity and location of inventory, including raw
materials, work-in-progress (WIP) and finished goods.
 Cash-Flow: Arranging the payment terms and methodologies for exchanging funds
across entities within the supply chain. The way the supply chain is designed has
significant implications on companies' working capital, and can have important
consequences especially for leveraged and distressed companies.

Supply chain execution means managing and coordinating the movement of materials,
information and funds across the supply chain. The flow is bi-directional.

SUPPLY CHAIN BUSINESS PROCESS INTEGRATION

Successful SCM requires a change from managing individual functions to integrating

activities into key supply chain processes. An example scenario: the purchasing department
places orders as requirements become known. The marketing department, responding to
customer demand, communicates with several distributors and retailers as it attempts to

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determine ways to satisfy this demand. Information shared between supply chain partners can
only be fully leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers and
suppliers, joint product development, common systems and shared information. According to
Lambert and Cooper (2000), operating an integrated supply chain requires a continuous
information flow. However, in many companies, management has reached the conclusion that
optimizing the product flows cannot be accomplished without implementing a process
approach to the business. The key supply chain processes stated by Lambert (2004) [5] are:

 Customer relationship management

 Customer service management
 Demand management
 Order fulfillment
 Manufacturing flow management
 Supplier relationship management
 Product development and commercialization
 Returns management

COMPONENTS OF SUPPLY CHAIN MANAGEMENT INTEGRATION

The management components of SCM

The SCM components are the third element of the four-square circulation framework. The
level of integration and management of a business process link is a function of the number
and level, ranging from low to high, of components added to the link (Ellram and Cooper,
1990; Houlihan, 1985). Consequently, adding more management components or increasing
the level of each component can increase the level of integration of the business process link.
The literature on business process re-engineering buyer-supplier relationships,and SCM
suggests various possible components that must receive managerial attention when managing
supply relationships. Lambert and Cooper (2000) identified the following components:

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  Planning and control
 Work structure
 Organization structure
 Product flow facility structure
 Information flow facility structure
 Management methods
 Power and leadership structure
 Risk and reward structure
 Culture and attitude

GLOBAL SUPPLY CHAIN MANAGEMENT

Corporate controlling for global value chain

Suppliers Sub-Assembly Final Assembly Distribution Centers Customers

As manufacturing becomes more efficient (or is outsourced), companies look for ways to
reduce costs

As we can recognize from the developing of supply chain management theory, it is more and
more involved in globalization and multi-country supply chains. This poses challenges not
only on the supply chain level (quantity oriented) but also on the value chain level (value
oriented.) Supply and value chain trends are as following:

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  Globalization
 Increased cross border sourcing
 Collaboration for parts of value chain with low-cost providers
 Shared service centers for logistical and administrative functions
 Increasingly global operations, whidch require increasingly global coordination and
planning to achieve global optimums
 Complex problems involve also midsized companies to an increasing degree

CHANGING SCENARIO IN CROSS-BORDER TRADE

The aerospace industry is undergoing a fundamental transformation in its development,

manufacture, and distribution of leading-edge commercial and military systems. Discussing
ways to control costs, improve quality, accelerate time to market, and transform operations
into a high-velocity enterprise is at the core if i2’s services and solutions for the aerospace
industry.

FIVE BASIC TRANSPORTATION MODES

1. Pipeline
2. Water
3. Air
4. Rail
5. Highway
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COST STRUCTURE FOR THE AIR TRANSPORTATION MODE

As compared to other modes of transportation air as mode of transportation has many

advantages-

• Low fixed costs (aircraft and freight handling equipment)

• Highest variable costs (e.g., labor, fuel, maintenance)
• Very fast; used for transporting high value and/or high perishability product over
short to medium distances.

Traditional supply chains in the aerospace and defense industry are evolving at an accelerated
pace. Variability is becoming a critical business driver across all of its market segments. In
addition, due to the push for increased cost effectiveness, industry players are globalizing

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their supply chains and working with partners from all over the world. Today’s A&D supply
chains are characterized by the need to manufacture increasingly complex equipment and
systems, ongoing pressure to reduce costs, extended product life cycles, requirements for
optimized asset utilization, turn-key support services, and ongoing requirements from
regulatory and safety agencies.

To meet the many challenges that emerged as a result of these new industry dynamics,
aerospace and defense companies have increasingly relied on automation and technology
enhancements - designed to work on removing business “silos,” improving collaboration and
fueling gains in productivity. In addition, companies have embarked on initiatives focused on
reducing costs through improving procurement processes.

While the technology advances of the past 10 years have enabled aerospace and defense
companies to overcome some of its challenges, the industry is ready for the next major leap
in productivity. This major leap in productivity will come from improvements in cross-
functional processes that leverage a common set of services and data standards wherever
possible.

IMPACTS OF A WEAKENED AIRLINE INDUSTRY

The weakened airline industry impacts following:

1. Suppliers: like- Aircraft, Engines, Electronics, Computers, Chemicals

It results in lower sales

2. Services: like- Insurance, Financing, Distribution, Telecom, Maintenance, Fuel

It results in lower sales

3. Passengers: like- Business Travelers, Leisure Travelers

It results in decreased productivity and weaker relationships.

4. Travel & Tourism: like- Travel Agents, Tourist Attractions, Conferences and
Conventions, Hotels, Restaurants, Retailers
It results in low revenues.

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THE ROLE OF IT

 IT creates applications that provide strategic advantages to companies

 IT is a competitive weapon
 IT supports strategic change, e.g, re-engineering
 IT networks with business partners
 IT provides cost reduction
 IT provides competitive business intelligence

INSTALLATION OF RFID IN AIRCRAFT

The Future of MRO Supply Chain Management

In the not-too-distant future, radio frequency identification technology may bring radical
changes to the way maintenance, parts, and even tools are tracked.

Imagine an MRO world where components carry their individual cradle-to-grave histories
with them. To read these histories, you would simply scan these components with RF (radio
frequency) readers. As soon as the radio waves hit their antennas, these parts would
automatically transmit back their vital statistics: date of manufacture, part number, hours in
service, repairs and modifications, and anything else you needed to know. In addition, not
only could this information be automatically logged in your company's own database, but any
new data could be written back to these components, for access by the next MRO technician.

In such a world, it would be much harder for parts to go missing or be stolen. The records
associated with such parts would also be highly accurate, because the number of people
inputting them during the MRO cycle would be vastly reduced. On the corporate side, such
parts would be easy to track, invoice against, and replace; a welcome change that would cut
paperwork, human hours, and parts inventories. Meanwhile, government entities such as the
FAA and NTSB would be happy, because these parts would be easy to trace in the event of
accidents: no more guessing who did what after the fact.

Sound too good to be true? Well, it isn't: in fact, this is the future of MRO supply chain
management thanks to a technology called RFID. Short for radio frequency identification,
RFID is the same technology used by retailers for theft prevention. If someone tries to steal a

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shirt with an uncleared RFID tag, a reader at the door triggers an alarm as the RFID tag
passes by.

Obviously, retail-sized RFID tags would be too big and cumbersome for installation inside
aircraft. However, advances in RFID technology--spearheaded by the unlikely partnership of
Airbus and Boeing--have resulted in practical RFID labels that have already been tested by
FedEx Express. Granted, these tests have yet to include the engine area and other parts of the
aircraft exposed to extreme conditions. However, the progress made to date, including a
successful 90-day flying trial by FedEx Express, indicates that the future deployment of
RFID tags throughout the entire aircraft is not a matter of if, but rather when.

RFID: HOW IT WORKS

To understand the basics of RFID technology, consider a credit card. It contains a magnetic
strip upon which data is written and read using an appropriate scanning device. An RFID
storage chip, which can contain up to 10 kilobits of information, works in the same way. The
difference is that the data is transferred by radio waves from the RFID tag to the scanner,
rather than by passing the magnetic storage medium directly against a scanning device.

There are two kinds of RFID recording devices: active and passive. An active RFID chip has
access to a power source--either through an onboard battery or a connection to an external
supply--and actively transmits its data. A passive RFID silicon chip doesn't have a power
source; instead, it uses RF energy received from a nearby scanner to generate a transmission
signal. This is why the antenna on a passive RFID is so important: it captures the RF energy
that triggers the transmission and ensures that the RFID's data signal gets into the airwaves.

To date, the aviation industry has put its efforts into passive RFIDs, all built to meet the
SPEC 2000 automated identification and data capture guidelines published by the Air
Transport Association. It's easy to understand why passive RFIDs are the industry's preferred
choice: the last thing any pilot wants is to fly an aircraft full of RF-emitting devices, all of
which could interfere with the aircraft's avionics. Beyond this, the advantage of passive
RFIDs is that their electronics can be squeezed into thin, label-sized wafers. Based on
Electronic Product Code (EPC) protocols developed by EPCglobal (www.epcglobalinc.com),
these RFIDs can either be incorporated into standard bar code labels, as is being done by
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Boeing. They can also be embedded directly into the metal skin of a component, an approach
that is being tested by Airbus.

At present, the RFID tags being tested by Airbus and Boeing operate in the 13.56 MHz range.
The advantage is that this high frequency doesn't cause interference problems with other RF
users. The reason 13.56 MHz doesn't cause problems is because such RFID signals only
travel 25 centimeters/one foot at best, which is also a disadvantage when you come to think
about it. To read such signals, it is necessary to pass a handheld scanner directly over the
RFID tag. This is why future RFID trials will be conducted at 915 MHz, said Ken Porad,
program leader for Boeing Commercial Airplanes and one of the industry's top RFID experts.
"Using 915 MHz in the UHF band, passive RFID signals can be received up to 25 to 30 feet
away," he explained. "For airlines and MROs checking on the condition of RFID-tagged
parts, this would allow their technicians to just walk past the aircraft with handheld scanners
to collect the data they need."

RFID SAVINGS FOR MROS

At the outset of this article, we alluded to the money RFIDs could save in MRO supply chain
management. Now it's time to look at the details.

According to Boeing's Porad (and verified by Airbus's Steffen) the number to take note of is
$45 billion. "This is the value of the inventory sitting on MRO shelves today, as airlines and
aftermarket providers try to ensure that they have the parts needed to keep their planes
flying," he explained. "If we knew the life cycle and service history of the components
currently in service on an ongoing basis, we could better predict when they'd need replacing.
We could then stock our warehouses on a leaner just-in-time basis, which could reduce our
inventory overhead by billions of dollars."

One area where RFID could save the airlines "$100 million a year" is in "rogue part,", Porad
added. "These are parts that fail in service, yet whose faults can't be detected when put on the
test bench," he explained. "`Rogue parts also refer to those that are counterfeit, unapproved,
or carrying bogus certification. With each component carrying its own RFID history, it would
be easy to detect and deal with such money-wasters. It would also make it much harder for
people to pass off counterfeits, and for stolen parts to make their way into the system."
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Other savings include faster troubleshooting and repair, said Airbus vice president Pierre
Steffen. "With an RFID-tagged component, the manuals needed by the technician are stored
right on the chip," he said. "The data can even tell them what tests to run and what parts to
reorder should partial replacements be necessary. No longer will time be lost by scanning
through paper manuals. No longer will the wrong parts be ordered, delivered, and then
replaced with the right order, which also wastes time and mon

Finally, all of this data can be entered directly into an MRO's Enterprise Resource Planning
(ERP) management software. In fact, SAP has already modified its Aerospace and Defense
(A&D) ERP module to incorporate this data, as read through EPCglobal-compatible
scanners.

"We have created a little piece of software called Auto-ID, which enables two-way
communication between RFID-tagged components and SAP's supply chain management
software," said Martin Elsner, field service director for SAP's A&D business unit. "With this
link, SAP users can monitor and manage their supply chains down to the level of individual
components, on an end-to-end, real-time basis."

Such is the power of RFID that Airbus and Boeing have teamed up to adopt and promote this
technology based on the ATA's SPEC 2000 standards. In fact, the two have jointly presented
"Global Aviation RFID Forums" (www.globalaviationrfidforum.com) in Atlanta and Hong
Kong to educate the aviation industry about RFID and have a third forum planned for
October 19-20/2004 in Munich, Germany. "When a technology as important as RFID is being
developed, the big players in the market must play together," said Airbus's Steffen.

"RFID's ultimate objectives are improved safety and operational efficiency," said Boeing's
Porad. "This is so important, that we all must work together for the common good."

AIRBUS: KEEPING TRACK OF TOOLS ... AND MORE

As futuristic as RFID sounds, Airbus has actually been using it for the past three years.
However, the company's embedded RFID tags are not found inside its aircraft, but rather the
very expensive servicing tools--and the shipping cases in which they travel--that Airbus
leases to its MRO partners. "Having the tool's history recorded on an RFID makes it easy for

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us to track who has it and what condition they receive it in," said Pierre Steffen. "When the
tool has been returned and is being recalibrated, the specifications recorded on the RFID can
be easily compared with those being measured on the test bench, and the appropriate changes
made."

All told, the efficiencies made possible by RFID have already allowed Airbus to improve the
refurbishment of returned tools by up to 27 percent, said SAP's Elsner. "It used to take them
typically from 19 to 25 days to prepare such tools for future leases," he said. "With RFID's
help, this timeline has been cut to 16 to 19 days, on average."

Besides proving the value of RFID through its tool leasing business, Airbus has installed
RFID-tagged components on 12 Airbus A320s "being flown by a major German charter
airline," said Pierre Steffen. "To date, these components have collectively logged 200,000
flight hours. For all chips on all planes in all cycles, we have experienced 100% data reading
accuracy. There hasn't been a single instance of RFID tag failure." Airbus is also testing
RFID-equipped components in flight on the company's own A319 corporate aircraft.

BOEING AND FEDEX EXPRESS: TESTING RFID IN SERVICE

With Boeing's help, FedEx Express has been flying RFID technology for more than a year.
"The experiment grew out of interest in barcodes and direct part marking," explained Butch
Ford, manager of FedEx Express's aircraft engineering support section. "In the first half of
2003 we were modifying a DC-10 [specifically N370FE, built in 1972 and flown by United
from that year to 1994] to an MD-10. We thought it would be an excellent opportunity to test
RFID technology, so we installed 40 13.56 MHz RFID-tagged components in six areas. For
example, we tagged the onboard maintenance power displays on the flight deck, the first aid
kits and the oxygen bottles in the cabin, and the air data inertial reference unit in the avionics
bay. We also put RFID tags in the cargo compartment and wheel wells: the only areas we did
not do were the engines because these tags aren't yet ready to deal with that kind of heat."

For the record, the RFID tags used by FedEx Express were Zebra Technologies
(www.zebra.com) z-Ultimate labels fitted with Infineon Technologies' (www.infineon.com)
10 kB RFID inlays (combined memory chips and antennae).

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After being equipped with RFID tags--and completing its conversion to an MD-10 freighter--
FedEx Express N370FE returned to normal service on November 13, 2003. Over the next 90
days, the RFID tags on the aircraft were put through six different read/write tests using
handheld scanners. "We wanted to see that the tags were retaining their data integrity, weren't
being affected by RF fields generated by the aircraft, and that the stickers remained properly
adhered to the components," Ford said. "After 90 days of flight time, we couldn't find a single
problem in any of these areas. The RFID tags still worked fine."

With this success under its belt, the next goal of FedEx Express is to test 915 MHz RFID-
tagged components in service. As with the 13.56 MHz tests, the RFID tags will be located on
an in-service aircraft. The advantage is that this aircraft will readable "using a scanner up to
25 to 30 feet away," said Butch Ford. "Imagine it: we'll be able to check the status of these
parts without even seeing them, by just walking through the aircraft with a UHF scanner."

WHAT'S NEXT

The FedEx Express RFID tests are due to be mirrored by Delta Air Lines, said the RFID
Journal (www.rfidjournal.com). It wrote that Boeing and Delta will be installing and testing
both 13.56 MHz and 915 MHz RFID tags on eight Delta twin engine jets on the company's
Atlanta-Jacksonville route. For each airplane, 30 RFID tags will be tested on noncore rotating
engine components in one of its two Pratt and Whitney 2037 engines. "FedEx Express has
proven there are no interference issues," Delta general manager of material services Marty
Kangiser is quoted as saying in a June 14, 2004 RFID Journal report. "We'd like to do the
same thing for engine parts."

Does this mean that RFID technology is about to break into the MRO supply chain? Not quite
yet, cautions Airbus' Pierre Steffen. "It's too early to say when RFID parts will become
standard to the industry," he said.

Still, the very real progress made in RFID inflight testing, and the joint cooperation between
Airbus and Boeing to promote this new technology, bodes extremely well for the entire
aviation industry. In fact, RFID technology looks so promising--and so necessary--that one
can imagine MRO managers ten years from now looking back to 2004, wondering how the
aviation industry ever survived without it.
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GOEBBELS ON SAP'S RFID STRATEGY

SAP vice president aerospace and defense offered these insights on SAP's view of RFID
technology applied to the aviation aerospace industry.

1. Is RFID a key strategic direction for SAP?

Back in 1998 SAP first initiated RFID research in SAP's corporate research center and in
2001, SAP joined the Auto-ID Center as a founder-member and as one of the first enterprise
application software vendors. RFID processes will enable SAP to drive further advantage
from the benefits our customers are already receiving from their existing IT investments. One
major piece of the RFID puzzle for Aerospace and Defense (A&D) companies is the
automization and capitalization of the efficient supply chain management processes. When it
comes to the domain of MRO, we also believe that RFID will become a key tool/enabler for
compliance.

2. Do SAP A&D customers want RFID info?

Absolutely. We have several prominent customers--both in A&D manufacturing and in A&D

MRO--who are prototyping/installing RFID solutions with SAP. We are currently also in
discussions with airline MRO organizations to launch their first RFID projects.

3. What about RFID speed of adoption?

For RFID solutions to succeed in this industry, it is of vital importance that the technology is
driven by all the key players in the A&D ecosystem. A success factor for the entire industry
is the gathering of as much information as possible. This will translate into maximum
technological advantage.

As the U.S. defense organizations will make RFID mandatory, we believe that RFID
compliance will naturally catch on quicker than other technologies. The A&D industry is all
about very expensive products and assets. In the A&D arena, the price for the RFID tags is
comparatively negligible. Another pro-RFID factor is the fact that the A&D industry is one of
the most regulated. Considering all these factors, I am confident that this technology will be
adopted sooner rather than later.

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As far as the obstacles for fast adoption go, in my opinion they comprise: a) the fact that the
standardization process must lead the way and b) the physical complexity of using tags and
readers in the A&D setting comprising lots of metals, etc. and c) frequency regulations that
are controlled on a country-by-country level.

4. Are there greater opportunities for aerospace RFID in manufacturing or maintenance?

The technology will obviously assume its greatest potential if the entire community supports
it. Relevant to both segments, with regards to the material supply process, one can provide
inventory visibility, tracking parts/kits from goods receipt up/down to the goods-issue area.
Monitoring sensitive components, tracking materials through the assembly process, tracking
parts by serial number is driving visibility of the whole end-to-end business process. Two
other important processes relevant to both OEMs and MRO-type organizations are those of
order fulfilment and the asset lifecycle management. The inventory process is just a part of
the entire end-to-end process, like order fulfilment

Another considerable area of opportunity is that of using RFID tags for the tool-tracking
process. Many businesses hire out equipment and tools to other companies. When receiving
them back, it is extremely useful to be able to ascertain who rented the tool, the duration of
the loan, the duration of utilization etc. This can end up in triggering vital maintenance
follow-up activities such as sending the tool back to the warehouse or directly to calibration.

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 Bibliography

Reference Site

http://www.boeing.com/news/releases/1999/news_release_990922b.html as retrieved on 1st

September, 2009

http://www.touchbriefings.com/ - Pdf: New Developments in Purchasing and Supply Chain

Strategies for the Aviation Industry - A report by D r Jorg Rissiek & Joachim Kresse las
retrieved on 1st September, 2009

http://en.wikipedia.org/wiki/Supply_chain_management as retrieved on 1st September, 2009

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