Online Sourcing Puts Suppliers In Orbit

Suppliers whose work must perform on the Space Shuttle, the International Space Station, or other spaceflight applications depend on sourcing precision-engineered parts and components that are reliable. Products supplied to NASA have only one opportunity to do their job correctly.

Payload Systems

Inc. (PSI; Cambridge, MA) has provided science and engineering services for spaceflight and terrestrial applications since 1984. Its spaceflight systems have performed successfully without a single unrecoverable failure in orbit on more than two dozen missions of freeflyers-the Space Shuttle, the Spacelab, the International Space Station, and the Mir space station.

The company, which operates out of an 11,000 ft^sup 2^ (1022 m^sup 2^) facility with some 22 employees, has annual revenues between $5-$6 million. PSI has no purchasing department and doesn't follow large-company protocols in which engineered designs are handed off to a different department for procurement. PSI's engineers and designers work very closely with their suppliers, forging a critical, direct line of communication from engineer to supplier.

Edison Guerra, PSI mechanical engineer, explains: "We do very specific projects for the major government agencies, such as a piece of equipment or device made specifically for a NASA research goal," he says.

Projects originate with SBIRs (small business innovative research grants) that NASA posts each year. PSI submits bids on the SBIR postings, which are fixed-price contracts and generally involve one or two units, devices, or machines. Bidding on fixed-price contracts requires PSI to be cost-competitive, knowing the cost of sourced components, as well as its own in-house costs.

Guerra can't remember how he came across MfgQuote.com in 2000, but he does recall the circumstances. He was having some difficulty with a supplier who had become a little too comfortable in their relationship, and had begun to take advantage of the situation. Guerra decided he'd had enough. He began surfing the Internet and came across MfgQuote.com, an online productionlevel solution for OEMs and suppliers of engineered-toorder (ETO) components.

The MfgQuote.com site matches buyer requirements with potential suppliers possessing the right expertise, credentials, and capacity for the job being sourced. Guerra showed the site to some of the other PSI engineers and decided to give it a try.

Initially, he began using the site to broaden his supplier reach. At the time, PSI had about five suppliers. That base quickly grew to 50-60 suppliers the company has ongoing relationships with today. The site has also allowed PSI to create a supplier "tier" system, which provides a fallback position if a favorite supplier, for one reason or another, can't deliver.

Guerra says he uses MfgQuote.com any time he needs a job right away or if it's a job none of his suppliers have ever done before. Generally, he uses the site about 50% of the time. PSI has spent about $55,000 through MfgQuote, which may not appear like a large amount of money, but for a company of its size, it represents a lot of sourcing.

"For me, personally, it helped a lot because when I started here I had only a couple years experience, and not many contacts in the manufacturing world," Guerra explains. "It has helped me establish contacts and find a lot of go-to people for me to work with to get my designs made."

PSI sources primarily locally within Massachusetts, because Guerra likes to keep the local economy healthy, especially his suppliers, and he likes the idea that he can actually go out and meet with them on occasion.

Another reason is that the company is contractually bound to source most of its work domestically. "I don't think we can source more than 5% abroad," Guerra says. "Because the money comes directly from the government, we have to source where they want us to. Also, it doesn't make a difference in terms of cost, because the shipping and duties are usually so high as a percentage of the total cost of the project that it would offset any savings we might realize by sourcing abroad."

That hasn't kept PSI from sourcing abroad when absolutely necessary. Guerra cites the example of the SPHERES (Synchronized Position Hold, Engage & Reorient Experiment Satellites) project, which is a test bed for satellite constellation control and distribution systems. Work was done in conjunction with MIT. "We were unable to find an injection molder to make very professional-looking cowlings," he says. "But we were able to source through a company on MfgQuote that got the cowlings to us for a lot less than if we had to dig through a bunch of different suppliers. "

Most of the sourcing that PSI does is for machining because it probably is the least expensive process when you're making one or two of something. At the same time, Guerra admits that it's a very expensive way to go if you compare sourcing thousands of machined parts to his one or two.

"We pay a lot for our parts," he says. "It's a little bit like prototyping, except that our prototypes are the actual end product. The unit or machine that we make rarely, if ever, has a predecessor. What we do is a bit trickier than prototyping. We've got to get the unit designed, built, qualified for flight, and approved, all in one shot."

One of the areas where MfgQuote.com has really come through for PSI is in finding suppliers that specialize in processes outside of machining, for example injection molding, thermoforming, and extrusion molding, or processes that aren't generally available locally. "Where they've really made a difference is in helping us locate sheet metal companies and moldmakers," Guerra says. "These are people we would never have found on our own, let alone had an opportunity to work with."

"Sometimes, you just can't get around it; we have to have a part made with that process because it just can't be machined to the shape that we need," explains Guerra. "This is when the site becomes invaluable because we don't have relationships with the people involved in these processes."

For the kind of work that PSI does, bidding on fixed-price contracts, the MfgQuote.com site offers a good sense for how its bid will be received. "NASA tells us what they're willing to spend, and then we can tell them what we're going to give them for their money, and then we always try to give them more, above and beyond what they ask for so they're getting more bang for their buck. Everybody likes that," Guerra opines.

An example of a custom non-SBIR project that PSI is working on under a contract with Boeing Inc. (Chicago) is testing a PPRV (positive pressure relief valve) unit to ensure that the valve operates completely to spec and will not fail. "This is a very sensitive valve that actuates within ?0.05 psi [3.45 mbar], and it will vent out any excess pressure in a module that could build up due to excessive heat. If there were to be an over-pressurization in a space station module, that overpressure could stress the module's seams to the point of failure," Guerra explains.

The upside to this type of work is that each project is always custom. Each project requires significant design/engineering time, and the talent to ensure that the project fully meets or exceeds the requirements for space, weight, and functionality.

The downside is that the time consumed in specifications and the design process often results in a scramble when it comes to actually ordering parts for the devices. "We're often up against it, time-wise," he says, "When we order parts, they have to be completed very quickly, exactly to spec, and come in at a cost that won't take us over budget." Circle 450