Airbus-Track part

Airplane builder Airbus has ordered a new software system that is designed to help it better track the supply of parts and cut its production and maintenance costs, technology providers International Business Machines Corp. (IBM) and OATSystems Inc. said Thursday.

The system will enable Airbus to automatically track airplane parts being delivered from suppliers around the world using radio-frequency identification, or RFID, technology. RFID tags store details of the components or shipping containers they are attached to and transmits this data using radio waves.

In theory Toulouse, France, based Airbus would be alerted automatically whenever a supplier ships a part and could be informed when the wrong part is delivered.

Airplane makers like Airbus and Boeing Co. (BA) have huge numbers of suppliers and are increasingly having large sub-systems assembled elsewhere in the world before being flown in to the final assembly lines.

In an interview, IBM vice president for RFID solutions Martin Wildberger said Airbus is under pressure to improve its manufacturing efficiencies given its huge airplane order backlog and the impact of the weak dollar.

Airbus, which is a unit of European Aeronautic Defence & Space Co. NV ( 5730.FR), sells airplanes in dollars but has much of its cost-base denominated in euros. The company is currently pushing through a major cost-cutting program known as Power8.

Specific financial details aren't being disclosed although IBM and OATSystems said it was a "multi-million dollar" project.