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August 25, 2005

Lockheed Martin launches major internal RFID pilots

Giant US defense contractor Lockheed Martin Corp recently launched two major RFID pilots within the internal supply chains of its aeronautic and maritime business units, ComputerWire has learned.

By CBR Staff Writer

Lockheed is waiting to finalize agreements with several major US-based RFID equipment suppliers that have partnered with Lockheed before it officially announces the pilots, said Denton Clark, Lockheed auto ID technology manager. The announcement is likely within about two weeks, he said.

It has take more than a year to plan the RFID pilots, each of which will handle many thousands of RFID tags within the segments of Lockheed’s internal defense-equipment supply chain.

Even though just two business segments within Lockheed will be RFID transformed, given the sheer size of the company, they both are significant. Lockheed had $35.5bn in sales last year, mostly from the US Department of Defense and Intelligence. The Bethesda, Maryland-based company has 939 facilities in 45 US states, as well as operations in 56 countries abroad.

The two pilots, which Denton calls pre-implementations, are of varying complexity.

One of the pilots would use ultra high-frequency EPCGlobal Generation 2 RFID technology, which the International Standards Organization is expected to ratify early next year as the global RFID tech standard. Gen 2 has several advantages over earlier EPC Class 0 and Class 1 standards, such as a disabling feature, security password and better performance that enables a greater volume of RFID tags to be read simultaneously per second.

Clark would not disclose whether it is the aeronautic or maritime pilot that would use Gen 2. The maritime pilot, however, is the most likely for Gen 2 because it’s a more involved supply chain that feeds directly back into the DoD’s own RFID-mandated chain.

The Lockheed maritime pilot is an in-depot operation that would RFID tag and track certain military ship parts made by the company. The supply chain begins with broken or faulty parts being sent back to the company for repair.

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First, the boxes of parts arrive at Lockheed’s F condition (or failed) facility where they will be RFID tagged. The packages are then transported to a repair facility and then onto a packaging facility. From there, they either are delivered back to the government, which means they then re-enter the DoD’s supply chain, or are moved into a Lockheed repaired condition inventory facility, where they are housed usually for several months before getting shipped back to the government.

The reason we selected [this unit’s supply chain] is because it’s a good example of a microcosm of a complete supply chain, Clark said. It’s an interesting one because it’s going to show the entire cycle and then … [Lockheed would either] store it or give it back to government that already has RFID mandates.

In both pilots, the RFID tags would be housed in swing-tag envelopes attached to Lockheed product packaging for two main reasons: to attach tags to certain metal parts would require product redesign; and tagged airplane or ship parts, once installed, could not be detectible because the craft’s shell and other parts would block the tags from being read at current RFID frequencies.

Clark said there are no plans for ship or airplane parts to be directly tagged with RFID in the near future.

Currently, Lockheed product packaging is labeled with UID, or unique identification, numbers, which the US Department of Defense has mandated for its suppliers. Lockheed also has been an early adopter of Data Matrix, a two-dimensional barcode that looks a bit like a postage stamp with scribble, which are able to house far more information than traditional barcodes.

Some products will continue to be Data Matrix barcode labeled because it is the best application in certain circumstances, Clark said.

Lockheed’s second aeronautic pilot tracks products for military aircraft, ranging from fighter jets to utility planes, using RFID. The products are tagged at a receipt facility, where they then move to an inventory warehouse, then to a so-called kitting facility, where parts are assembled into production kits. Finally, they move to the production floor.

With both projects, Lockheed is aiming to increase its inventory accuracy by 100%, which means being able to locate a part in any of its massive warehouses. Another RFID advantage would asset visibility, or tracking a part’s progress as it moves within its internal supply chain.

Another goal for RFID within Lockheed is increased velocity, or time efficiency, of its supply chain by 25%. This is especially important when receiving inventory, to move it out of the receiving facility quickly. Generally we get it off within hours, but sometimes it can take a day. By tracking this, inventory process adjustments become easier.

The company also hopes to reduce its manual in-transit transaction time by one-third. Every time parts are moved they currently have to be scanned with a barcode reader. RFID can read numerous tags simultaneously and automatically as they pass by an RFID reader. Because not all parts can be RFID tagged but require UID barcodes instead, Lockheed cannot completely reduce all manual transaction time.

We’re on a very aggressive schedule, Clark said, but it would likely take a few years for it to achieve these goals because of the complexities within its pilots.

Enabling RFID through the entire company would take even longer, he said. When you start to change the supply chain like this, it’s really a major effort, Clark said. You have to be very careful how you do it.

The company’s RFID strategy is being built to be scalable so that implementation may spread throughout the company without disruption to operations.

Since 2001, Lockheed has been working on horizontal passive RFID integration with the goal of consistent RFID implementation across the company.

The catalyst for horizontal enterprise applications was specifications from the RFID standards body EPCGlobal, which has enabled interoperable RFID applications, Clark said. Before those standards, RFID applications were highly customized.

I’m very comfortable with the standards, Clark said.

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