MIT and the HaughtonMars Project

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National Aeronautics and Space Administration
SUPPLY CHAIN MANAGEMENT ANALYSIS FOR SPACE
EXPLORATION
Michael Galluzzi NASA ESMD and Ted
Bujewski AEROSPACE CORP. October 29, 2008 NASA
Headquarters 300 E Street SW Washington DC
20024-3210
www.nasa.gov
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NASA Industrial Base Transition

• NASA Human Space Flight (HSF) Industrial Base
• 1,200 Active Tier 2 Suppliers
• NASA 2007 HSF Obligations were 7.8B
• 4 of the Aerospace Industry
• 20 of the Space Sector
• Future NASA HSF Manifest lower than e.g. SSP

• U.S. Aerospace Industry
• Total deliveries estimated to hit 199B
• Space sector sales will increase a modest 1.6
  percent, or 605 million, to 39.2 billion over
  the next year

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• NASA Exploration System Mission Directorate
  (ESMD) Supply Chain issues
• Impact on Industrial Base (IB) from Human Space
  Flight time gap
• Ensuring supplier capabilities
• Current SCM capabilities are not adequate to
  support the Constellation ConOps / Manifest
• Spares are not an option
• A dynamic interplanetary and integrated supply
  chain is needed for Lunar
• Processes must be flexible and agile in order to
  adjust to
  economic, legislative, and technological shifts
• Lack of government supply chain insight hinders
  ability
  to manage program risk
• Government needs to ensure effective supply chain
  management
• An ESMD Supply Chain Management implementation is
  a solution
• Reduces Costs of late TRL non-recurring and
  recurring indirect operations sustainment
• Minimizes Risks to safety, cost, schedule and IB
  viability
• (given current budget and activity projections
  assuming 2.2 inflation matched by like budget
  increases)

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Why Supply Chain Management (SCM)?

• Reduces Cost
• (SCM impacts 90 of a Programs recurring cost)
• Manufacturing processes vs- material flow focus
• Reduces proliferation
• Part number and procurement duplication
• Number of qualified suppliers needed
• Cost of holding Inventory
• Reduces unit and overhead cost with larger buys
• Integrated end-to-end,
• Embeds Technology Insertion
• JIT practices (Pay-as-you-go)
• Focused on Product Lifecycle Management
• Enables collaborative forecast demand planning
• Supports changing hardware TRL

• Background
• What is Supply Chain Management?
• The integration of materials and information
  amongst
• Centers and Programs, suppliers, other govt.
  agencies,
• and international partners to plan, execute, and
  operate space
• programs with a common spare and repair
  philosophy in
• order to minimize system-wide life-cycle costs
  and risks
• while satisfying program level requirements
• How is SCM different from Logistics?
• Embeds Technology Insertion in the Process
• Production Processes vs- Material flow focus
• Integrated end-to-end
• Greater supply base situational awareness
• Focused on product life cycle management

• Reduces Schedule Risks
• (Suppliers account for 75 of Space RD)
• Greater supply base situational awareness
• Identifies risk of capability loss
• 5 year gap for 1500 Shuttle active suppliers
• Manufacturing Processes vs- Material flow focus
• Maps supplier capabilities to future requirements
• Integrated end-to-end
• Embeds technology insertion
• Allows for more flexible design characteristics
• Improves manufacturing readiness levels

• Improves Reliability/Quality
• (Supplier health impacts reliability/quality)
• End-to-end integration,
• Embeds Technology Insertion
• Improves cross-program impact assessments
• Cross Program/Agency DMSMS mitigation
• Manufacturing Processes vs- Material flow focus
• Enables supplier stability/viability forecasting
• Greater supply base situational awareness
• Increases ability to address counterfeit parts
• Increases ability to identify problem suppliers
  in a timely manner

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The Modern Evolution of Supply Chain Management
Management Focused on
Enterprises features
Supply Chain
Post World War II 1960 Cost Management
MRP 1980 Integrated Logistics MRPII 1990
SCM WMS MES ERP PDM Outsourcing
Supplier integration DMSMS APS SLEP
Six Sigma PLM Collaborative Planning 2000
Integrated SCM e-SCM CRM e-Procurement
e-Fulfillment RT-SCM SC CEM SCM MS
IMN Supplier City

• Inventory Control, PHST
• Total Cost Management
• Logistics Centralization
• Customer Service
• Operations Optimization
• Logistics Planning
• ILS with external functions
• Supply Chain strategic planning
• Strategic, Tactical Ops Supply Chain Management
• Collaboration Integration
• Strategic Alliances
• Adopting new Technologies
• e.g. extranets, Applying lean concepts

• Low logistics management authority
• Decentralized logistics operations
• Higher logistics mgt. authority
• Enhanced logistics functional integrity
• Centralized logistics operations
• Computer applications
• Integrated logistics functions
• Supply chain planning
• Total Quality Management (TQM)
• Just-In-Time (JIT)
• Supply chain networking
• Benchmarking
• Reengineering
• Integration of SCM and TQM
• Internet applications

• Many Suppliers
• Low level of trust
• Weak and long-term relationships
• Few Suppliers
• High level of trust
• Cooperative relationship
• Long-term relationships

Mass Mfg
Lean
92
94
96
98
Agile/Virtual
03
06
Legend PLM Product Life Cycle Management SCM
Supply Chain Management ILS Integrated
Logistics Support PLM Product Life cycle
Management ERP Enterprise Resource Planning
APS Advanced Planning and Scheduling MES
Manufacturing Execution System WMS Warehouse
Management System SC-CEM Supply Chain
Collaboration Events Mgt. RT-SCM Real Time
Supply Chain Management
PDM Product Data Management PHST Packaging,
Handling, Storage, Transportation DMSMS
Diminishing Manufacturing Sources PLM Product
Life cycle Management CRM Customer Relationship
Management
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The Value Proposition

• Nearly 75 of the system operations and
  sustaining recurring indirect costs are
  influenced or determined during system design.
  Forrester Research
• The vast majority of Space Shuttle operations
  costs are indirect recurring
• Non-recurring indirect costs associated with
  sustainment and space systems support cost
  reductions of upwards to 35 can be achieved by
  integrating the material and information flow
  SAP
• Example As a result of poor low demand planning.
  Average electronic obsolescence cost mitigation
  for minor and major engineering cost is 100K to
  400K DMEA / ARINC
• By improving asset management the Aerospace
  Industry can realize a reduction of up to 18 of
  recurring cost SAP
• 35 of an Aerospace support contractors spare
  parts inventory are duplicate with a carrying
  cost ranging from 4,500 to 23,000 per line
  item Aberdeen Group
• Without supplier / industrial base integration
  and information sharing, only 40 to 50 of
  shipments will be delivered on time MIT Lean
  Aerospace Initiative Study

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Are we locked into business as usual? How dynamic
is the future state?
Present State Linear, push manual practice
Future State Circular, self-renewing process
Demand
Supply
10 is what we seeresults and all that other
processing stuff where the time and money is90
what we dont see
10 Direct Visible overlap of operations
Shaping demand Embedded technology
insertion Probabilistic planning optimization
Accepting demand New technology an
exception Deterministic optimization
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ESMD SCM Initiatives

• Current Projects and Activities by NASA ESMD
• Assessment of Supply Chain Management software
  applications and processes
• Product Lifecycle Management
• Supplier Relationship Management
• Product Data Management
• Enterprise and Material Resource Planning
• Operability Simulation and Modeling
• Supplier Economic Indicator Model
• Supplier Mapping to include assets, data and
  organizations
• Integrated Manufacturing Network / Space
  Commerce Network
• Expected results
• Lower Lifecycle Costs
• Collaborative Forecast Demand Planning
• Process embedded Technology Insertion
• Enhanced Long-term Operability
• Coordinated obsolescence mitigation
• Minimize proliferation of process and parts
• Supplier liquidity

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The Future Supply Chain of Human Space Flight