Meeting high-volume demand in the space industry
For many space suppliers, playing a key role in a rapidly scaling supply chain is a serious target. For some, it’s actually the central pillar of their business case (for better or for worse).
And in today’s industry it is a genuine possibility. Whether you want to be a critical subsystem provider for a large Earth Observation (EO) constellation, provide high-volume satcom capabilities in a big defense contract, or develop hundreds of bespoke parts to go on a commercial space station. The opportunities are certainly out there.
But not every major initiative is going to work out. And, in those that do, there can obviously only be a few winners across the supply chain at each level.
Many large companies are vertically integrated (though there is always a debate over whether this is the best approach) and sensitive programs will usually limit or lock in suppliers to ensure greater control. These factors also restrict third-party opportunities.
So, as a supplier, what can you do to maximize your chances of success in meeting high-volume demand?
And how do you actually decide when and how to scale up production?
Here are a few ideas, based on purchasing conversations and projects we’ve supported for hundreds of mission teams across the world.
It all starts with the potential demand
Obviously, there’s no point in putting together a real plan to scale production if you don’t know whether the demand for it exists (or will emerge) in the first place. And getting this information isn’t easy.
Let’s assume the basics are in place; you have a proven, high-quality product with heritage and some commercial interest, and you have a level of capacity and stability to investigate scaling up.
With these things in place, if you think that the time is right to invest in increasing production capabilities because you believe there is real demand there – you first need to test that assumption. Here are some ways you can do that:
Assess the macro market – while trends in the overall industry don’t mean too much for individual suppliers, they are a useful barometer for public perception, basic investor sentiment, and, potentially, end-user opportunities. Understanding the broader industry environment in which you’re operating should be a given of course – just make sure this is part of the strategy conversation.
Take Project Kuiper for example - Starlink is so far ahead yet Amazon clearly sees the strategic importance of pushing forward with the initiative.
Understand broad agency and program direction – national space agencies still control huge budgets and have a major impact on the direction of development in space (Artemis is a great example of this). Ensure you factor in how agency programs could affect your specific area over the short- to medium-term.
Hold target customer conversations – your major high-volume prospects are the most critical source of intel. If they are talking publicly about scaling up, and these aims seem to align with the wider direction of the industry and relevant national programs, that’s a good start. If you know they also have access to the capital to achieve it, that’s even better.
But ideally, you’re going to want to actively engage with them on this topic to find out the real objectives and plans. Here are a few ways to open these conversations:
Your aim in all this should be to assess how serious they really are about scaling up, and try and judge whether you think they can actually achieve it.
There’s a lot of fluff and blind optimism in the space industry. But there are also serious teams, with big budgets, working hard to build next-generation solutions.
You need to find out which type of organization you’re talking to!
Get the best information you can (and we can help you with this at satsearch) but understand that this is all about minimizing risk, not eliminating it entirely. Then the next task will be to plan out exactly what steps to follow in order to take the risk!
Ramping up manufacturing
If you have done your intel on the industry, assessed your specific area of the market, spoken to existing and potential customers about their plans, and determined that there is a major opportunity to meet genuine high-volume demand – then you map out how you can scale your production levels to do so.
This is a huge topic and approaches will vary significantly depending on the category of technology or service your produce. But let’s look at some elements that are common across most areas.
The end-to-end system
Ensure that you look at your operation holistically to consider how it would work with a 10X (or greater) increase in production volumes. It isn’t just about increasing manufacturing capacity in your facilities; you also need to consider:
Run scenarios to stress test the overall production system and ensure that you’re considering how to ensure output quantity and quality in different situations.
Limiting non-recurring engineering (NRE)
If you can standardize certain aspects of your technology, you can reduce the amount of engineer time each unit takes up. This will enable you to create a production line for core units, which can be optimized over time.
This is an obvious point but it is usually easier said than done. It may require upskilling staff, investing in new equipment, and/or altering materials or production methods for some parts and components.
And while the potentially efficiency benefits are clear, there are trade-offs in this process. If you alter too much, the system may need to be tested in-orbit again to reclaim flight heritage, for example.
Kaizen in the production operation
Once the new production line is fully embedded, operational improvements shouldn’t end. The principle of kaizen is well-known in production management in other industries, and there is no reason why its fundamentals can’t be applied to the space industry.
The initial aim should be to build a simple data capture and analysis system that will enable you to track the efficiency of discrete production elements and processes. This will let you see, for example, where materials or partially-built systems are building up, so you can better allocate resources or adjust the approach.
As things progress, and you build up process knowledge by performing manufacturing operations multiple times, opportunities for improvement will open up. You’ll need to build a culture of continuous improvement internally so that staff proactively identify these opportunities and are receptive to changes in processes.
Staffing the factory
Scaling up requires investments in people as well as technology. Ensure that you have a plan in place to deal with the extra strain on hiring, HR, and all the other back office processes that are needed to help employees thrive.
And in all of this, ensure that you’re embedding the culture and performance expectations of both new and existing staff.
Retaining agility and versatility
Standardization, NRE reduction, and a culture of continuous improvement will enable you to develop a high throughput production system for core technologies. But you still need to understand where new innovation would fit in.
Customer requirements will change and better solutions will come to market. So ensure that incorporating these changes can be done as seamlessly as possible while continually improving your production performance.
Your buyer and supplier relationships will be crucial in this. If you’re proactive about understanding the changes in your customer plans and expectations, and evolving supply chain limitations and opportunities, well in advance – you can stay ahead.
Next let’s dive deeper into these supply chain questions specifically, as this is where the real pitfalls might lie in ramping up your production levels over time.
Scaling your own supply chain
Obviously, to scale up your own production you need to scale up your supply chain so you can acquire the materials, components, systems, and services that you need on a suitable timescale.
This is a major challenge and should again be approached at a system-level. Here are some suggestions to make this process easier:
Ultimately, scaling your supply chain efficiently and cost-effectively will come down to the strength of your personal relationships with suppliers.
At satsearch we've carefully built up an extensive supplier contact network over many years that enables us to support any company looking to scale production - so please let us know how we can help you at any stage of this process.
Conclusion
Once you that feel that plans to scale up your systems, processes, staff, and supply chain are all in a good state, it is a good idea to invite your target customers to your facilities to share your capabilities with them.
Ideally you will have developed your scaling strategy with their input and engagement, so the site visit is a natural next step and won't be a major surprise on their side.
Think about how you can make this visit a valuable, positive experience, but don’t hide anything either. Remember that you are likely to be hosting people who are, or were once, engineers too and they will be genuinely interested in how you do things.
Focus these visits on demonstrating that you truly have the capability to scale production and have planned out your approach to doing so from every angle: people, processes, technology, supply chain, financing, relationships etc. etc.
Finally, consider in all of this the two major benefits that operating in a high production mode brings: money and knowledge.
Money is obvious - as long as you build a profitable production system, making and selling technology at significantly higher volumes is a great way to grow your company.
But the knowledge aspect might be even more valuable in the long-term. Producing a set of products for a handful of customers means that you should be able to collect a huge amount of useful data relatively easily.
From testing and qualification, through all stages of operations, and to eventual de-orbiting or obsolescence - the information you can collect on how your products perform is gold.
This can put you far ahead of competitors who focus on serving many small clients for one time only - collecting little operational data, with too many confounding variables, on which to base future investments into innovation.
Best of luck if you're scaling up production to go after these challenging, but significant, rewards.
And let satsearch know if you need any help.
Ad astra!