Streamlining Production at SpaceX

A supply chain challenge

SpaceX, a private company founded in 2002 by Elon Musk, designs, manufactures, and launches advanced rockets and spacecraft. In 2015, the company brought onboard an MIT Leaders for Global Operations (LGO) alumnus, Kurt Campbell, to tackle its burgeoning supply chain issues. He in turn hired Elizabeth Sondecker, LGO ’16, who decided to engage an LGO team to help solve production delays believed to be caused by poor forecasting of when needed parts would be available.

Providing systems perspective  

The LGO program assembled a team of students with deep technical expertise in aeronautics and astronautics, including a doctoral student from MIT’s AeroAstro department. The team interviewed key members of the company’s receiving operations group and walked through the entire receiving flow to gain a systems perspective of SpaceX’s operations. They also gathered and analyzed data to develop a deeper understanding of supplier variability. The team discovered that while the company did have supply issues, it also had inefficiencies in its own operations that were delaying production. By applying lean principles and 5S methods that they had learned in their MIT coursework, they produced a forecasting model that tracked supplier performance, and a list of recommended improvements to SpaceX’s shipping and receiving operations.

Continuing connection

The team’s point person at the company called the students’ analysis “extremely valuable” and noted that the project “provided quantifiable insight into supplier behavior.” SpaceX was quick to implement both the model and the improved management system and has since continued to engage with LGO by participating in its seminar series, recruiting on campus, and seeking to participate in another Sloan Action Learning project.