Pandemic, changing industry affecting satellite manufacturer supply chains

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NATIONAL HARBOR, Md. — The pandemic and resulting supply chain issues have forced satellite manufacturers to adopt new approaches, some of which they plan to maintain in a post-pandemic world.

Shortages of chips and other electronics have had wide-ranging effects on the economy, affecting sectors from consumer electronics to automobiles. Space systems have also felt the effects of those supply chain disruptions, manufacturers said during a panel discussion at the Satellite 2021 conference here Sept. 8.

Those companies say they have little influence with suppliers based on demand alone. “Space is dwarfed, in terms of volume, compared to the car industry or anything else,” said Jean Marc Nasr, executive vice president and head of space systems at Airbus.

Instead, companies say they’re working more closely with suppliers, and at earlier phases of programs, to ensure they will get the components they need on schedule. It’s also caused companies to reconsider make-versus-buy decisions, in some cases moving more work in-house.

However, companies are also deciding to work with other suppliers, in some cases other major manufacturers. Frank DeMauro, vice president and general manager of tactical space systems at Northrop Grumman, noted his company has significant capabilities to develop power electronics for spacecraft, but decided to go to Airbus for those components for the HALO module for NASA’s lunar Gateway. “That was the best solution we could offer our customer,” he said.

However, pandemic-related disruptions to the supply chain are not the only issue manufacturers are facing. The types and numbers of satellites they produce have forced them to reexamine the suppliers they work.

“As we move into this networked world, with all-digital software-defined satellites, our supply base is changing,” said Ryan Reid, president of Boeing Commercial Satellite Systems International. “It introduces new dimensions to the supply chain and partnerships.”

Constellations had new pressure on the supply chain. “When you do a constellation, the relationship with the supply chain is even more important, because you have to have a stable relationship over a long period of time,” said Nasr. Airbus is part of the OneWeb Satellites joint venture producing satellites for the OneWeb constellation. “We have to be very close to our suppliers.”

By and large, though, manufacturers played down impacts on the supply chain caused by the pandemic or other changes in the market. “We’ve had strategic approaches on the supply base for a long time,” said Chris Johnson, senior vice president of space at Maxar Technologies. “COVID has probably modified that slightly because of the market response, but as we look at what our growth opportunities of the future looks like, we’re engaged in conversations with the supply base.”

The pandemic has altered other ways of doing business among satellite manufacturers, some of which will persist after it ends. Much of that has revolved around hiring and retaining employees, including remote work and bigger roles in projects.

“The two key words have been agility and flexibility,” said Emmanuel Terrasse, vice president of Thales Alenia Space. “It’s needed to respond to an uncertain world, and to the human resource challenges. Our younger teams want agile ways of working. They don’t want the traditional way with strong management controlling everything.”

Brent Abbott, chief executive of smallsat manufacturer NanoAvionics U.S., said offering flexibility to employees had paid dividends. “They’ve put in more hours and they’re happy about it.”