Virgin Atlantic Airways Ltd. prides itself on being different, forward-thinking and fun. But in its airline maintenance and engineering division, fun is the last adjective on the list.
More important is the task of making sure the right parts make it to the right place, on time and working perfectly.
Virgin Atlantic, based in London, has its parts supply chain and distribution center business processes down to a science. But with looming RFID (radio-frequency identification) technology deadlines from such heavyweight manufacturers as The Boeing Co. and Airbus S.A.S., Virgin decided to take a proactive approach with the untested technology, by implementing a pilot program. The goal was to test the technology and find potential efficiencies in the supply chain from its channel partners and suppliers.
“Suppliers said that clearly this was a technology we could work with, but we werent exactly convinced of that,” said Mark Butler, Virgin systems implementation manager. “We wanted to understand what we could use RFID for and to have it work in our environments. We also wanted to generate some questions—what we would need to ask suppliers and how it would integrate with other systems. This is very much a trial of technology rather than any business benefit.”
Butler said he and his team had been aware of RFID technology for about 2.5 years, but they really started looking for specific information about a year ago.
“The reason for the pilot was due to the fact that we were aware of this new technology, this emerging technology,” said Butler. “Id seen a lot about it in the press, and we felt it was appropriate to get a better understanding of what it could do for us as a business. Ive seen lots of information but not any answers of whether this was a technology we could use.”
Using the implementation methodologies, workshops and consulting services from Tata Consultancy Services, a division of Tata Sons Ltd., and technology from Oracle Corp., Virgin began the task of determining how best to approach the RFID pilot program. With the help of TCS, which takes a business process approach to RFID testing and implementation, Virgin determined that rather than trying to find a business case to rationalize the technology, it would focus on optimizing a single process.
Virgin is looking at the supply chain process from the point where parts enter the Virgin warehouse from suppliers and manufacturers to the point where they enter the inspection area and, from there to binning, storage and dispatch.
“We are tracking three things with tags: parts, location identifiers on bins and users within the warehouse, so we can identify who is doing what and who is supposed to be doing what,” said Bhuwan Agrawal, RFID solutions consultant for TCS. “These are the processes we will measure and develop specific metrics for, which we will use to measure benefits.”
“Virgin has taken the right approach of taking a business process, identifying [where RFID could be of use from] end-to-end,” Agrawal said. “The difference with Virgin is that this is not a compliance-driven initiative. Theres nobody saying Virgin needs to comply with [a specific] mandate, so compliance is not really a motive.”
TCS does have a specific goal for its RFID practice, according to Agrawal.
“We are interested in helping customers and partners understand how RFID can help and improve business processes,” Agrawal said. “We think RFID is a destructive process—it really gives customers across industries the opportunity to relook at business processes. There are not a lot of opportunities like this to look at supply chain processes.”
The process is such that as a part arrives at the stores door, it goes through a three-stage receiving process to confirm that the parts have arrived at the facility, that the quantity of parts is accurate and that the parts are in good condition. From receiving, the parts move to an inspection process and then out to store shelves to be issued to aircraft engineers for maintenance.
For Virgin the objective of the pilot is to determine how RFID will work in the supply chain and what sort of process benefits it will add. From TCS perspective, the process is threefold. Agrawals objective is to help Virgin understand how RFID will work in the supply chain, what sort of process benefits it could bring and how it will help improve supply chain visibility.
“Virgin will take ownership of the 8380 [Airbus newest aircraft] in 2007, and it will have 10,000 RFID tags on airplane parts that are coming from manufacturers. Thats where RFID becomes part of the supply chain,” said Agrawal. “You have to be able to take advantage of that. You have to be interested in it.”
Asking, Integrating, Answering RFID
TCS, based in Mumbai, India, is supporting Virgin with hardware and the associated RFID infrastructure, consisting of Oracles Fusion Middleware and associated applications. TCS has performed interface development between Virgins existing Ultramain Systems Inc. integrated maintenance and logistics software engineering management system, Oracle applications and the handheld devices.
By linking with the Ultramain software, the system is translating data into usable information, according to Agrawal.
“Oracle is providing the Oracle Sensor Edge Server,” said Nigel Woodland, RFID director for Oracle UK. “What this will do is validate the reads that are coming from the readers, so when goods are tagged and then moved around the store, the location of those goods and the status of the goods is then available.”
That information—part of the unique identifier of tagged goods—goes into a database. If products are moved around the store, the data is read through readers and fed back into the Sensor Edge Server, which makes sure the reads are valid and therefore worthy of being stored in the database. Intelligence reports will be provided to give management a view of whats happening in the store.
The next step is to move the data into Virgins back-end applications for further alerting, routing and analysis.
“You would collate the data in the database—as in the trial at Virgin. You can move directly to the database using alerts, and then it can be directed into applications or into a portal,” said Woodland. “Or, alternatively, you can use application integration for database alerts.”
At this point in the pilot program, Virgin is going with a loose coupling to the Ultramain engineering management system. If the pilot proves successful and an implementation is carried out companywide, there would be much tighter integration with Virgins main processing system.
“Any RFID implementation will give business value only if its linked back to the business systems,” said TCS Agrawal. “Its translating data into systems. You can constantly be reading tags, but what is information that is valuable to the company? Thats what you want to capture upstream. If it is valuable, you want to make sure you have it captured in the right place at the right time because it really impacts the business process. So when we link back to Virgins engineering system, it ensures Virgin will have the right alerts and triggers that it will need.”
The decision to run the pilot with TCS and Oracle was an easy one for Virgin, Butler said.
“We are an Oracle user, and from the TCS point of view, they are our IT outsource company,” said Butler. “So it was a natural choice. We wanted this to be low-risk. We didnt want to invest a lot in something we werent sure we were going to roll out further with implementation. And Oracle was proactive in finding an airline [partner].”
The three teams worked together to determine a process plan that would be a natural fit for RFID technology. They physically mapped out the decided-upon supply chain process and then mapped the process through the physical environment to help clarify the steps—a very important part of the overall process, according to Butler.
“We had to get an understanding of what we had as a business and make sure that was translated to the people developing the solution, that they really understood what we needed,” Butler said. “That was quite useful.”
With the hardware and software infrastructure implementation nearly complete (it was slated for completion at the end of September), Virgin will undergo 12 weeks of testing and data gathering. At the end of that process, it will start crunching the numbers—and the data, Butler said.
“Then well be able to quantify and identify the benefit areas—what … the areas of improvement [are], from a process perspective, from a pilot perspective and then the next level,” said TCS Agrawal.
As for Virgins Butler, he said he is looking for process improvements before deploying the pilot RFID implementation. He said he wants to see quicker movement of goods through the stores, traceability of components, and actual uses for the RFID-generated data—or the ability to store and record the data.
“The thoughts are that we could contain a component history that travels from us to the supplier,” said Butler. “Its still early days, but what were finding is the technology is working. And were answering the right questions.”
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