The following is a copy of the February 6, 2000 "Vox Pop" article, published in the Denver Post Business Section, and written by Karl Stengel:
Recently, NASA and the Department of Defense have investigated numerous rocket launch failures. They've stated that the aerospace industry needs to have "a new way of doing business" in a climate of reduced space and defense budgets.
Unfortunately, I'm not sure they know what this really means. Many aerospace companies have simply cut their technical staffs. Many have emphasized advertising or slogans above real change. But cutting costs or increasing reliability by executive edict doesn't work. Look at the Space Shuttle. It was supposed to cut launch costs by an order of magnitude -- it didn't. It was supposed to launch twice a month -- it doesn't (every two months is more like it). NASA couldn't reconcile safety concerns with its launch schedule, and Challenger blew up. Similar problems have occurred with recent Mars probe failures. There have been numerous reports of overworked staffs, cut to the bone, putting in enormous amounts of overtime and making a lot of mistakes which weren't caught. The industry and the government stopped listening to their technical people and started listening to the spin doctors. This has to change.
To make the aerospace industry more efficient, three things need to happen. First, companies need to be able to trade off features against cost. Second, they need to add a process orientation to their product orientation. Third, organizations need to reduce management and bureaucracy.
Consider the first item. Suppose a $100 million booster launches a $50 million satellite, with a reliability of 90%. Then launch cost is $150 million, but 10% of the time you'll need another $150 million to do another launch. The expected cost is $165 million ($150 million plus ten percent of $150 million). If improving reliability to 99% will double the booster's cost, you're better off sticking with the original booster and re-launching when necessary -- otherwise the expected cost is about $250 million (one satellite plus the more expensive booster).
Also, companies need to examine not just launch costs, but maintenance and payload cost, payload weight, and payload life. In this example, if increasing satellite lifespan from five years to ten years doubles its cost, the cost of the satellite plus the original booster increases from $150 million to $200 million. But since launches then need be made only every ten years, annual cost declines, from $30 million to $20 million. Cutting satellite weight may allow use of a smaller, cheaper booster, also cutting total costs. Even if cutting satellite weight raises its ground processing costs, you might be better off going with the lighter satellite, since launch costs are so high. These are the kinds of trade-offs the aerospace industry should address (and often does, if it's allowed to).
As for process orientation: Most U.S. manufacturers, especially the auto industry, have gone through this over the past two decades, and the software industry is starting to. It's not enough to throw a design "over the wall" from design to manufacturing. Manufacturing concerns have to be considered from the beginning. And improving manufacturing becomes as important as designing a great product. Those who make something usually know the most about improving how it's made. Those who design something usually know the most about how manufacturing changes affect design. Therefore, the manufacturing and design groups have to work together. And to rapidly make feature-cost tradeoffs, and manufacturing-design tradeoffs, the engineers have to work together, not just the managers -- the higher the level of management sign-off needed, the longer it takes and the more difficult it is to get.
Finally, organizations must be leaner -- in bureaucracy and management, not just engineering. As stated above, design and manufacturing decisions need to be made at low levels, not high ones. Engineers need to spend their time making technical decisions, not dealing with cumbersome procedures and multiple levels of approval signatures.
Aerospace companies that make (or have made) these changes are in a much better position to deal with smaller budgets and shorter schedules, and still be able to produce.
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