By Scott Chase
A celebrated warrior, in the heat of action, once cried, "Damn the torpedoes, full speed ahead." Substitute "financials" for torpedoes and much the same sentiment can be heard these days in the high bays and clean rooms of the world's principal commercial satellite manufacturers Alcatel Space, Boeing Satellite Systems, EADS Astrium, Lockheed Martin Commercial Space Systems, Orbital Sciences Corporation and Space Systems/Loral.
While many would have been shell-shocked by the barrage of bad news and the plunging profitability the industry has suffered of late, down in the trenches commanders and troops are sizing up opposing forces and preparing to do battle for what many see as potentially a stronger and certainly a more exacting world market for new commercial spacecraft. A summary of expectations from key spacecraft manufacturers is that global demand will support 12 to 15 new satellite orders per year, trending up toward 20 per year as the decade closes. The split between new orders and replacement satellites will remain fairly even and stable.
Where there is a bit of a difference is in how the market will shake out in terms of spacecraft size, capacity and capability. The big players see more big satellites, and the smaller players see continued room for their specialized offerings.
"During the recent few years the supply of commercial communications satellite transponders has far exceeded the demand," says OSC subsidiary Orbital Communications International President Alia Atia. "As a result of this glut, transponder lease prices dropped significantly, compared to the prices in the 1990s. One of the major reasons for this problem has been the premise that, due to economies of scale, larger, more powerful satellites (with payload power of 6 to 15 kW, launch mass of 3 to 5 tons and 30 to 80 active transponders) are more economical and more profitable, because the price per transponder on orbit is lower than for small satellites."
Most satellite manufacturers, Atia argues, reinforced this premise and kept growing their products, thus perpetuating the capacity glut operators now face.
"While economy of scale produces lower cost per transponder on orbit, it is not necessarily the correct metric satellite operators should use in business planning," says Atia. "A more useful metric would be the cost per revenue producing transponder. With lessons learned from the recent past, the trend today is shifting toward small to medium satellites, with modest numbers of transponders. There are certain applications and orbital slots that will require large satellites and demand for those will continue, but the percentage of small to medium satellites will increase to something like 15 to 20 percent of the total market," added Atia
Flight Heritage and Proven Systems
A recurring theme for the satellite manufacturers has been reliability. A decade ago all of the majors were engaged in a battle of one-upmanship, each proclaiming the virtues of this technology or that manufacturing process. Factories of the future were springing up all over the place. At some point in the equation, eyes moved off the ball on quality control and mission performance and the price was paid.
But the times are changing: "Manufacturers are placing a renewed emphasis on flight heritage and are taking a more conservative approach to new technologies," explains Panamsat Engineering Senior Vice President Bridget Neville. "There is," she continues, "greater understanding that it takes more than a few months of in-orbit time to consider technology flight 'proven,' and that having sufficient data to have high confidence in a design is a powerful advantage in the marketplace.
"Our industry depends on the advances of new technology, but you don't want to give a potentially valuable new design a black eye by flying it before it has been thoroughly analyzed and tested on the ground and can operate reliably once in orbit."
A case in point comes from BSS President David Ryan: "Last year marked the success of our return to quality initiatives, with key milestones achieved in our factory. We continue to evaluate our processes for improvement opportunities and implement lean manufacturing and Boeing program management best practices."
Late last year BSS achieved the Software Engineering Institute's Capability Maturity Model Integration (CMMI) Level 5 ranking. "Only a few companies worldwide," Ryan notes, "have passed the test against this benchmark." In addition, he adds, an independent auditor for the International Standards Organization recommended BSS for ISO 9001 certification, a key metric of the company's overall quality improvement plan.
"Taken together, these events speak volumes about the efforts we are making to put continuous improvement programs in place to meet our customers' schedule, cost and technical requirements," Ryan concludes. "We are pursuing AS9100 certification and expect an audit for that certification."
Echoing these sentiments, LMCSS President Ted Gavrilis says, "Our continuous improvement measures, combined with a strong market share in 2003, have solidified our position in a relatively flat market.
"We believe that the manufacturers are now realizing that the faster, better, cheaper philosophy was perhaps flawed," says Intelsat Chief Executive Officer Conny Kullman. "Satellites are not automobiles and you cannot treat them as if they were commodities production. They can't be recalled!"
Corner-cutting in design, analysis or testing, Kullman adds, did come back to plague the manufacturers every time shortcuts were taken. Most satellite manufacturers have now created a "Flight Assurance" department. This department relies on technical experts that are not part of the satellite project team or the design office and provide an independent assessment of satellite quality during all key program reviews.
With All That, Is Enough Being Done?
The operators, having been in many cases "twice bit," seem reassured that satellite manufacturers are serious about quality control, phased introduction of new technologies, appropriate on-ground testing and other procedures.
"Satellite manufacturers have clearly taken a step back during the recent slow-down in satellite orders to closely review their product offering and manufacturing processes, with a view to ensure that they are closely aligned to forecasted satellite requirements," says Romain Bausch, chief executive officer and president of SES Astra. "Some manufacturers, such as LMCSS, have actively embedded the principles of Six Sigma into their operations to ensure that if anomalies occur during production or in orbit that the root cause is clearly understood and where possible, permanently eliminated."
C. Patrick DeWitt, president of SS/L, says, "SS/L plans to continue implementing both proven technologies and technological advances as the mission requires. The 1,300 bus and SS/L payloads have evolved throughout 15 years in an incremental and methodical fashion. Only when a new or increased mission requirement demands it, will SS/L undertake insertion of new technology. And when a new or upgraded technology is required, SS/L will step up the internal investment and meticulous planning necessary for success."
This approach, DeWitt, claims, "has been well demonstrated in major strides in technology insertion throughout the past five years with Lithium-Ion batteries, ion propulsion, a super high-power bus and spotbeam designs. The result is good positioning to enable new services, such as mobile TV, HDTV and high data-rate broadband."
Alcatel Space President Pascale Sourisse brings a different perspective, focusing on applications as the technology driver. "On the broadcast side," she explains, "key success factors are local [and] specific coverage (local-into-local channels, ethnic programming), cost of bit per second (more channels in the same bandwidth), available bandwidth capacity (Ku-band shortage over the United States), and security (anti-jamming/piracy). Alcatel Space develops the corresponding technologies--multi-beam or shaped coverage antennas, wideband, high-power transponders/channels and Ka-band anti-jamming systems.
"On the broadband access side, key success factors are cost of bit per second, cost of infrastructure and connectivity," Sourisse says. To address these, "Alcatel Space develops improved transponder usage efficiency, low-cost terminals, using open standards (DVB-S2, DVB-RCS) in partnership with consumer electronics manufacturers, and on-board processing to provide mission flexibility."
So far, so good . . .
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