Interesting questions on the future of the space industry supply chain

The space industry supply chain is undergoing a massive transition with suppliers changing their strategies and investments to fit into the newspace race. What looked like a landscape of a few prominent small satellite manufacturers a decade ago has now transformed into tens of companies entering the market. For example, we at satsearch.co made a simple infographic of suppliers who have flown or plan to flow satellites below <250kg and found more than 75 of them worldwide. We've witnessed 5000+ users using satsearch.co on a monthly basis and based on our experiences there are some interesting questions ahead for the space industry in terms of the supply chain.

Of course, there are hundreds of other component manufacturers in Tier-2/3/4 who are affected by the strategies and the overall direction which these satellite manufacturers, as well as satellite-based service providers who build their own spacecraft (e.g. Planet, Spire, etc.) head towards. Based on some of our own experiences at satsearch.co, here are some interesting questions relevant to the future of the space industry supply chain.

1. How strong will the commoditisation of the space industry be?

The one thing that suppliers in the space industry are not used to is commoditisation which typically drives the costs to the bottom. Commoditisation is especially relevant when a satellite-based service provider is looking for the best cost-to-performance for the satellite fleet so that the service provider can provide a lower cost to the end-user. Are you as a supplier thinking if commoditisation will affect you?

2. Can commoditisation and pushing technology boundaries go hand in hand?

Many suppliers believe that they are pushing technology boundaries and creating niches for themselves which differentiate them from others in a very prominent way and are not really interested in thinking of a strategy to address commoditisation. Will pushing technology boundaries and commoditisation go hand in hand or they are adverse to each other? This question is really interesting and important for the ability of the suppliers focussing on technology niches to continue being relevant.

3. Will transparency see a transformation in the space industry?

10 years ago, almost all the suppliers in the space industry needed Non-Disclosure Agreements (NDAs) to provide CAD models, ICDs, lead times, prices and in many cases even datasheets/full specifications. Today, several suppliers do this openly and this is a sign of the information availability transformation happening in the space industry. Many of the suppliers who have opened up a lot of this information have benefitted immensely over the last decade. There is still a lot of information missing including transparent heritage information and practices such as pushing paper-products (putting out datasheets of products that don't exist but are marketed to get a feel for their traction). How far will the suppliers go in terms of transparency of information they are providing in the next decade?

4. Will suppliers emerging out of new geographies start getting a bigger share of the business?

One of the most interesting change in the supply chain in the last decade has been the emergence of suppliers from new geographies which possibly have not a rich heritage or governments having very active space programs. If you were a supplier from the US, prominent Western European countries or places like Japan, there was a mark of trust attached to coming out this geography due to the strong heritage of the space programs in these geographies. We are now witnessing the emergence of suppliers out of geographies such as Asia, Africa and Latin America and are trying to compete for a share of the global business. Some of these suppliers have seen their books filled with over 90% of their orders coming outside their country of origin. The lower cost for a similar performance is one of the key selling points of these suppliers. Can the traditional geography-based branding still stand as a moat against the global emergence of new suppliers in new geographies or will it be simply cost-to-performance?

5. Is there a case for platform economy/marketplaces in the space industry supply chain?

Full disclosure: We at satsearch.co obviously believe that there is a case for a marketplace or platform economy based models in the space industry. In our case, we simply add internet/digital as a channel of customer acquisition to suppliers with over 5000 engineers using satsearch on a monthly basis to search for components, subsystems, services etc. However, we now see many other such marketplace or platform economy based models emerge including HOSTmi which is targeting Platform-as-a-Service (PaaS) with a marketplace that is looking to standardize the processes efficiently hooking up more payloads with flight opportunities, TriasRnD emerging as a matchmaking platform for test and engineering services, Arlula creating a marketplace for underutilised satellites, Infostellar providing a cloud-based software platform that connects satellite operators with antenna owners. Is there a future for platform economy models/marketplaces in the space industry? An interesting insight from our experience has been to have seen several suppliers in the industry battle with legacy arrangements. We see a lot of legacy suppliers locked in geography-based reseller/distributor models which don't allow them to use internet/digital as an effective tool to integrate their business into.

Whatever be your role, be it a business executive, thought leader, engineer or an academic, we'd love to have your comments on these questions. Of course, this is only a subset of the questions that need to be asked and answered. Feel free to add more questions and insights based on your experiences!