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SpaceX Companys Procurement Strategy
The industry of space exploration in the U.S. has always been dominated by NASA, the government agency responsible for operating in the sphere of aeronautics, yet, the emergence of SpaceX changed the status quo. The company, led by entrepreneur Elon Musk has proved over a short period of time that it can build reliable spacecraft and rockets, which then can safely transport goods and people to orbiting. The companys procurement process is also different from that of its government counterpart since it is more flexible and does not have to follow strict rules.
SpaceX is a vertically-integrated company that engages in all aspects of the creation of its products, namely, it designs, manufactures, and launches its spacecraft. Yet, despite the fact that the company is keen on making the majority of the parts for its rockets in-house, it still requires certain materials and electronics which SpaceX can purchase from suppliers. The company does not openly disclose its contractors, but according to the seaport data, SpaceX utilizes external assistance in at least three spheres. The first one is aluminum components which SpaceX receives from Constellium SE and uses to build its spacecraft (Constellium, 2019). Another area is fuel and handling systems, the company buys these products from Arianespace since it is more cost-efficient (Rogers, 2018). Finally, SpaceX also acquires tooling equipment from Kobe Steel to produce its own parts.
NASA is SpaceXs main government counterpart in the aerospace industry, and the procurement processes of the companies are different. NASA relies on SpaceX in terms of space transportation and generally has to abide by more rules than the private company. In order to source a necessary component, it has to initiate a request for proposal procedure to attract potential suppliers ( The Procurement, n.d.). SpaceX, on the other hand, does not have to follow such strict rules and is more flexible in choosing contractors.
SpaceX is one of the first private companies in the aerospace industry and has already shown that it is capable of being competitive. Its procurement process is limited only to the components and materials which are necessary for manufacturing its spacecraft. Its primary government counterpart is NASA which is not as flexible as SpaceX in terms of procurement and has to introduce requests for proposals to source the needed products or services.
References
Constellium. (2019). Business and sustainability performance report 2018. Web.
Rogers, C. (2020). SpaceXs journey to ISS still needs Earths industrial supply chain. S&P Global.
The Procurement Process. (n.d.). National Aeronautics and Space Administration.
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