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Portada No Valida PORTADA NO VALIDA PONER LA DEL WORD PORTADA NO VALIDA PONER LA DEL WORD AIRFID: RFID Solutions in the Aeronautic Sector Authors: Jose´ Mar´ıa Alvarez´ Hirado Humberto Astudillo Mendinueta Jesus´ Garrido Molinero Daniel Portela Romero Carlos Sanchez´ Cazorla Supervisor: Andres´ Guirado Perona April 12, 2010 AIRFID S.L. 2 Executive Summary Introduction Over the decades, the complexity of aeronautic programs and the fierce com- petition among major players have been such that overcost and delays have become inherent features of this industry. For this reason, the success of a company in this sector depends on two factors: costs and organisation. Given the current situation, AIRFID S.L. has decided to target this mar- ket to tackle both problems by taking advantage of the benefits of RFID technology. Opportunity Today, there are several factors that strenghten the attractiveness of entering this market: • Increasing cost-cutting trend in the aeronautic sector: RFID technology optimizes space, personnel and asset utilisation thereby in- creasing productivity and efficiency. • Recent certification of the use of RFID in this industry: Al- though it is still an emerging technology, it has already been standard- ized and deployed in many important industries. In the case of the aeronautic sector, its use on board has recently been certified, which opens the opportunity to enter not only the manufacturing process but also the maintenance of the whole life cycle of the aircrafts. • Exponential expansion of RFID: The global business of RFID is growing exponentially and is set to threefold in the next 5 years [1]. Therefore, it is a very attractive moment to create a company special- ized in RFID solutions, as the growth perspectives of the market will affect positively the performance of the company. AIRFID S.L. Business Model AIRFID offers customized RFID solutions to fulfill the tracking needs of aeronautical companies, starting with the control of tools, jigs and test sys- tems. In line with the nature of the sector, AIRFID is a "turnkey" solution with payments made against delivered milestones. A preliminary study of the potential market has been used to define 3 different modules that will be adapted according to the requirements of the different companies. These modules will offer the following services: • Improved asset control: RFID is a powerful tool to significantly re- duce search and inventory times. Once the assets to control are tagged and an asset inventory database is created, it will be possible to detect the missing items at a glance. For this purpose, workers will use hand- held devices with wireless connection to the database. Additionally, location information will be available, which will inform the user about where the tool was last read and even about which its current situation is. • Efficient Book-In and Book-Out processes: The process of book- ing in and booking out equipment from a warehouse will be made much simpler by using an RFID reader that will associate the asset and the worker, which will save time, enable a better calibration and prevent equipment losses or misuses. • Enhanced Jigs maintenance: Up to now, jigs have been controlled by the use of metal nameplates that include a limited amount of infor- mation. With RFID, maintenance information for the whole life cycle of each product will be available in seconds. • Accurate export license products control: The high tech equip- ment that is sold under an export license agreement will be easily con- trolled through the use of RFID. This will be especially useful in testing stations of final assembly lines, which need to know exactly where these devices are and where human errors can have serious implications. Industry Overview Airbus and Boeing, the world's aeronautical leaders, have already detected the benefits of using RFID and have worked on several projects in different production plants. As a matter of fact, Airbus has already distributed an RFID specification to its providers, which means that RFID technology in this industry will soon be widespread. 4 MBA Aerospace EOI Seville 2010 Target market Historically, Spain has always followed in the steps of other developed coun- tries. In 2009, the growth of RFID in the European countries rose an average of 39 %, while Spain only obtained a 3% [2]. However, the economical re- covery of the forthcoming years will definitely consolidate RFID technology in Spain. Figure 1 shows that the Compound Annual Growth Rate (CAGR) of RFID sales in the next 8 years foresees a high potential market where to do business [3]. For this reason, it is important to be well positioned in this market to make profit from the future thrust of RFID in Spain. Figure 1: Evolution of the RFID revenues in Spain. In billions e The aeronautic industry of Andalusia is the second most important of Spain in terms of revenues, and it presents attractive figures of growth and new project opportunities. This, together with the lack of competitors for RFID solutions for this sector in Andalusia, make this niche market an at- tractive opportunity for a company like AIRFID. Therefore, this region has been selected as the target market, although a geographical expansion to other regions is also considered. With regard to the demand estimation of AIRFID S.L., it plans a pro- gressive entrance in the Andalusian aeronautical sector, with 2 projects in the first year and 6 in the fifth year, with an average price per project of 190.000e. During this period, the most important companies are target- ted with the strategy to expand along their supply chain once their RFID solutions are operative. 5 AIRFID S.L. Competitive Advantage Currently there are no competitors in the market of RFID in the Andalusian aeronautical sector, but it is possible that other more experienced RFID companies from other sectors may enter the market in the future. Therefore, it is key to be a ”first mover" and reach the largest amount of companies. In order to do so, AIRFID will make use of the following strengths in order to achieve a significant competitive advantage: • Knowledge of the aeronautical sector: The members of the com- pany have worked in different areas in such an important company in the Andalusian aeronautic sector as Airbus Military. Some members will take advantage from working in the Quality and Subcontracting departments, which has enabled them to build a network of contacts in the different companies in the sector. Some others have worked in Systems, Procedures and Cost Accounting, which will be helpful to understand and foresee the needs of the clients. • High technical skills: The five partners are engineers, 2 of whom are specialized in Telecommunications, 2 in Electronics and another in Materials. Moreover, their tasks in the company are perfectly adapted to their academic profile in order to make the most of the different software, hardware and new materials used. • Flexibility in the applications: The company will offer different packages to their potential clients, so that they can combine them to fulfill their requirements. In case some customization is needed, the company is prepared to react quickly due to its flexible structure and its motivation to obtain new clients. • Competitive prices: AIRFID will offer competitive prices compared to the average RFID consulting companies, as its low fixed costs struc- ture is prepared for relatively small margins as a way to enter the market. For this reason, its hourly rate is 35% lower than the average of the technical consulting companies. Once the first turnkey projects are delivered to several important aeronautical companies in the sector, other enterprises along the supply chain will request RFID services. At this point, margins will increase due to an improvement of the market perception of the quality, experience and performance of AIRFID. 6 MBA Aerospace EOI Seville 2010 Financial Highlights The activity is planned to start in July 2010. AIRFID expects to attain attractive profits once the first RFID solutions are implemented in the An- dalusian aeronautical market. The table below highlights the expected results from the first 5 years of operation. Year 1 Year 2 Year 3 Year 4 Year 5 Sales 376,511 e 634,328 e 861,036 e 1,088,585 e 1,300,289 e Op. Exp 429,427 e 626,094 e 778,576 e 957,973 e 1,157,848 e EBITDA - 52,916 e 8,234 e 82,460 e 130,612 e 142,441 e Margin - 1% 10% 12% 11% Net Profit - 43,437 e 2,820 e 59,379 e 90,058 e 99,249 e ROS - 0% 7% 8% 8% 7 AIRFID S.L. 8 Contents 1 Introduction 19 1.1 Current challenges of the aeronautic industry . 19 1.2 Mission . 20 1.3 Vision . 20 1.4 Business Model . 21 2 RFID Overview and Evolution 23 2.1 Introduction . 23 2.2 RFID Evolution . 24 2.3 Current status of RFID in Spain . 25 3 General applications for RFID 27 3.1 Inventory Control . 29 3.2 Security . 30 3.3 Container / Pallet Tracking . 31 3.4 Fleet Maintenance . 31 3.5 Equipment/Personnel Tracking in Hospitals . 32 3.6 Parking Lot Access and Control . 33 3.7 Product Tracking through Manufacturing and Assembly . 33 3.8 Supply Chain (WalMart/DoD) . 34 4 RFID in the aeronautic sector 37 4.1 RFID technology in the aeronautic sector . 37 AIRFID S.L. CONTENTS 4.2 RFID projects in Airbus . 40 4.3 RFID projects in Boeing . 41 4.4 RFID in airliners and airports . 43 5 RFID technical description 49 5.1 Fundamentals of RFID . 49 5.2 Main Components of an RFID system . 50 5.2.1 Tags and Readers . 50 5.2.2 Printers .
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