Cover Story BOEING FRONTIERS

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1 14 APRIL 2008 BOEING FRONTIERS

2 Workers at the Satellite Development Center in El Segundo, Calif., work on a Wideband Global SATCOM satellite a game-changing spacecraft for the U.S. Air Force. To the right of the WGS satellite is a scale model of Syncom, the world s first geosynchronous communications satellite. Bob Ferguson photo Help from above Have Boeing satellites helped humanity? Absolutely as demonstrated by their 2,500 years of accumulated service By Debby Arkell Inside Milestone surpassed: Boeing-built satellites recently topped 2,500 years of accumulated on-orbit service. Page 15 A primer on satellites: How do they work? What does Boeing offer? Page 17 Operational improvements: How has this business become even more successful? Through innovative management, Lean+ and tips from the best of Boeing. Page 18 The competition: What companies are going up against Boeing in this market? Page 19 Satellite teammates: Meet some of the many employees who support this business. Page 20 Harold Rosen Q&A: Boeing Frontiers talks with the founding father of today s satellites. Page 21 A surgeon in Los Angeles consults with physicians in Berlin by video conference. Driving home from work, she enjoys her favorite music via satellite radio. She accesses her car s GPS navigation system to locate a new deli and pays for take-out dinner with the swipe of a credit card. Once home she turns on the evening news, catches tomorrow s weather forecast and settles in to enjoy a live telecast of the Grammy Awards. That convenience is all thanks to satellites, those machines high in the sky that we rarely think about yet depend on daily to keep us connected and protected. Hundreds of satellites circle the globe today. One-third of the satellites in orbit are Boeingbuilt, providing commercial, military, scientific and exploratory services. The company has been a major player in the satellite business for 45 years and recently reached an industry milestone of 2,500 years of accumulated satellite on-orbit service. Manufactured at the Satellite Development Center in El Segundo, Calif., by Space and Intelligence Systems, Boeing satellites are more complex, powerful and sophisticated than ever before. Boeing is a market leader because we use cutting-edge technology in our payloads, and our commitment to program execution and quality ensure that the products we build are reliable and delivered on schedule, said Craig Cooning, vice president and general manager of S&IS. A market evolves The former Hughes Aircraft Company built Syncom, the world s first geosynchronous communications satellite, in 1963, when long-distance phone calls were costly and overseas TV broadcasts impossible (see sidebar on Page 21). Back then, a satellite the size of a desk required a ground antenna the size of a house. Today, satellites can transmit video signals to an antenna the size of a pizza pan, and customers can modify from the ground a satellite s onboard capabilities as mission requirements evolve. As satellite technology changes, so do missions, markets and customer expectations. In the 70s, customers tended to be national institutions, said Art Rosales, S&IS director, Program Services and Execution. Satellites gave developing countries a tremendous advantage and were a source of national pride. Accordingly, satellites were built primarily to meet national infrastructure needs such as telephone service. Today as a result of global privatization of industry a large part of Boeing s satellite business is for the private sector. These companies provide satellite-driven consumer services such as direct-to-home TV, mobile telephony, Internet services and digital audio radio. This shift has changed Boeing s approach to manufacturing spacecraft. Since businesses are more risk-averse and competitive than governments, Boeing has to be cost-competitive BOEING FRONTIERS APRIL

3 One of our near-term future business strategies to be able to deliver a flexible payload in a cost-effective manner, and we re working hard to bring costs down and make that a reality for our customers. Art Rosales, Space and Intelligence Systems director, Program Services and Execution Quality is critical for Boeing s satellite customers. They re paying to put a product in the sky that has to work for 15 years and can t be repaired, said Charles Toups, IDS vice president of Engineering & Mission Assurance and formerly the leader of Navigation and Communication Systems. Bob Ferguson photo in the products it offers. A customer s key priorities whether a government or a private business are quality and schedule, both strongly tied to cost. The quality of the product is the customer s overriding priority; and for our government customers in particular, mission assurance is critical, said Charles Toups, IDS vice president of Engineering & Mission Assurance. Toups has worked in the satellite business since 1982 and most recently led S&IS Navigation and Communication Systems. They re paying to put a product in the sky that has to work for 15 years and can t be repaired, so the quality of that product is paramount. We are continually focused on first-pass quality and flawless execution. Schedule is also critical. Satellite launches are huge capital outlays for our customers, so getting satellites up there on time is very important, Toups said. The faster you can build a high-quality satellite and get it launched, the better the value for the customer. Lean leads the way To meet quality, schedule and cost requirements, Lean is a big part of S&IS culture (for more on this topic, see story on Page 18). Its primary focus is not manufacturing, however; the vast majority of satellite costs are incurred in the design and development phases. S&IS is working to improve resource control with Engineering processes, getting mature, stable requirements up front so designers know what they need to do before they begin work. That helps minimize any need for redesign. Toups noted that in the past Boeing tended to begin production work on satellites too soon, which can lead to incomplete designs and expensive manufacturing issues down the line. It may sound strange to say that starting later is better, but in situations like this it can be, he said. S&IS has also created a moving line for phased-array antenna production. Since phased-array antennas have thousands of components, building them on a pulse line has meant reductions in cost and build time. A pulse line also is planned for the 12 satellites that make up the GPS IIF program, an upgrade to the original GPS system used by governments and civilians worldwide. At the end of the day, our products must be a cost-effective part of our customers business plans, Rosales said. To many, satellites are money-generating machines in the sky. Our challenge and goal in a competitive market is to give them what they want: something that s high-quality, simple to operate, and the best value for their market segment. Shaping the market Future commercial applications may include altering the use of a satellite while it s on orbit. A customer may purchase a satellite and wants its signal beamed down only over Southeast Asia, but later want the signal broadcast over India instead. The ideal end-state is for the user to be able to reprogram that pattern while the satellite is in the sky, Rosales said. We have this technology today, but it s very expensive. One of our near-term future business strategies to be able to deliver a flexible payload in a costeffective manner, and we re working hard to bring costs down and make that a reality for our customers. The government side of the satellite business also is pursuing nearly $12 billion in new opportunities, driven primarily by the Transformational Satellite Communication System (a secure communications network for the U.S. Air Force) and GPS III. We shape the market with new technologies and by working closely with customers to identify product and mission operations enhancements on existing programs. This allows us to stay on the cutting edge while also extending the viability of current products and programs, Toups said. n debra.j.arkell@boeing.com 16 APRIL 2008 BOEING FRONTIERS

4 Satellite basics Here s a primer on how these spacecraft work, what Boeing offers What is a satellite? Simply put, satellites are objects that orbit a larger object in space. They can be natural, like the moon, or man-made. Man-made satellites facilitate communication and connectivity between otherwise disparate locations or regions. Satellites have a fixed life. Art Rosales, Space and Intelligence Systems director of Program Services and Execution, said the standard life span for a commercial satellite is 15 years, and the time from order to delivery varies depending on the satellite s complexity. Rosales noted that customers begin planning their next satellite acquisition after about seven or eight years, and for a typical satellite it ordinarily takes 24 to 36 months from placing the order to launching. Boeing satellites are built by a team of employees in El Segundo, Calif., and uniquely designed to meet a customer s specific requirements. Satellites then are delivered to the customer and launched into orbit on a rocket. Satellites typically operate in one of three families of orbits defined by their altitude above the earth: low earth orbit (100 miles to 300 miles, 161 km to 483 km), medium earth orbit (6,000 miles to 12,000 miles, 9,500 km to 19,500 km), and geosynchronous earth orbit (22,300 miles, 36,000 km). In geosynchronous orbit, the satellite moves with the earth s rotation, causing it to appear suspended over a fixed spot on the earth. That makes geosynchronous orbits ideal for communications and Earth-observation applications. Once the rocket reaches the desired altitude and orientation for the mission, the satellite is released from the rocket into its initial orbit. The initial geosynchronous satellite orbit starts out as a highly elliptical orbit. Small rocket motors onboard the satellite fire periodically to help position the satellite into its final, circular orbit and help it attain the proper attitude, or orientation, relative to a horizon line or other frame of reference. Once in orbit, the satellite begins to send and receive signals. A communications satellite is equipped with multiple transponders devices that amplify and transmit signals at various frequencies. Transponders are like channels, and only so much information can go through a channel at a time. The more transponders a satellite has the more signals it can send and receive and the more antennas it can use. The transponders and antennas make up the satellite s payload. The transponder receives a signal at a specific frequency from a ground station, amplifies it, and then retransmits it back to antennas or receivers on Earth (or aircraft or other spacecraft) on a different frequency. This process of receiving, amplifying and transmitting is what enables phone calls around the world, real-time TV broadcasts of global events, and even fax or other international data transmissions. The satellite s framework, called a bus, is home to its power systems (usually solar cell arrays that convert solar energy into electricity), batteries for the times the satellite goes into the earth s shadow, attitude control systems, temperature control systems and more. Earth stations communicate with computers on the satellite to monitor these systems. Boeing currently designs and builds two satellite product lines the 702 and the 601. The Boeing 702 Satellite is the world s most powerful commercial satellite. It offers up to 18,000 watts of power and can deliver any communications frequency customers request via more than 100 transponders. Currently more than 20 Boeing 702 satellites have been built or are on order. Major customers include Thuraya, Hughes Network Systems, XM Satellite Radio, and the U.S. Air Force. The Boeing 601 series of satellites is smaller and less powerful than the 702. With more than 80 units ordered, the Boeing 601 is the top-selling spacecraft line. The satellite s basic configuration features as many as 48 transponders and offers up to 4,800 watts. A higherpower version, the Boeing 601HP, features as many as 60 transponders and uses additional technologies to provide up to 10,000 watts. Major customers include AsiaSat, DIRECTV, SES Astra, Intelsat, National Oceanic and Atmospheric Administration, U.S. Navy and MEASAT (Malaysia East Asia Satellite). Debby Arkell Solar Panels Antenna BOEING FRONTIERS APRIL

5 Lean By Bill Seil on me More and more, Boeing businesses, to be successful, are leveraging best practices and ideas from teammates across the company. The satellite manufacturing unit of Boeing Space and Intelligence Systems in El Segundo, Calif., is one example. Its journey on its return to profitability and progress in cost containment over the past five years can be attributed to many factors. But high on this list are an innovative management team, use of the Lean+ companywide growth and productivity initiative, and eliciting help from colleagues across Boeing. The success of the El Segundo team is an excellent example of leveraging the best of Boeing, said Bill Schnettgoecke, vice president and leader of the Boeing Lean+ initiative. They began by taking Lean+ approaches used by Commercial Airplanes in a high-production-rate environment (jetliners) and applying them in a low-production-rate environment (satellites). They blended in the right portions of Lean concepts (such as Six Sigma and Theory of Constraints) and transformed their culture into one of employee engagement. The formula worked, and they delivered results. That s what Lean+ is all about. Satellite manufacturing team leverages the best from all around Boeing Eliminating traveled work In any manufacturing facility, the ultimate goal is to eliminate traveled work open or incomplete items that continue down the manufacturing line yet require additional work. The metrics at the S&IS satellite factory underscore the benefits of Lean+, continuous improvement, and other initiatives. For example, incomplete or open qualifications and unit returns for additional rework have gone to zero. The cost of repair, rework and scrap is down 73 percent. On-time delivery of engineering products has improved from 65 percent five years ago to 95 percent at the end of 2007, an improvement of 46 percent. On-time delivery of electronic units has reached 97 percent. S&IS also conducts an annual Lean Manufacturing Assessment, and has consistently exceeded its goal. For 2007, the goal for the S&IS satellite factory was to increase the score from the previous 2.45 to It achieved a final score of 3.09, meaning that it beat its score-growth goal by 42 percent. The improvements are measurable, quantifiable, and significant. S&IS began its Lean journey in Charles Toups, then S&IS vice president of Engineering and Operations, was familiar with the extensive work BCA had been doing to bring Lean principles and other efficiency measures to its operations. Toups, now vice president, Engineering & Mission Assurance for Integrated Defense Systems, attended Renton [Wash.] Engineering s Gemba Day, where teams discussed how they had applied Lean principles. He also toured 737 assembly lines, saw examples of Value Stream Mapping and met with other Lean experts. Soon, Lean personnel from the Puget Sound region began traveling to El Segundo to lead workshops and get a closer look at the challenges the satellite business was facing. Assistance also came from Boeing rotorcraft operations in Mesa, Ariz., and Philadelphia, which were applying Lean to their operations. S&IS also networked with programs within IDS. In some cases, best practices learned elsewhere could be applied directly to satellite manufacturing. In other cases, ideas from around the company inspired the El Segundo team to develop its own continuousimprovement approaches. Steve Holt (left), a Commercial Airplanes process engineer, and Benny Leppert, a BCA liaison engineer, have been leading Lean workshops in El Segundo, Calif., for several years to support Boeing s satellite business. The pair is at the 777 moving line in Everett, Wash. Gail Hanusa photo 18 APRIL 2008 BOEING FRONTIERS

6 Kevin Naya, S&IS director, Lean+, said networking within the Boeing enterprise has been invaluable. Its diverse range of programs create a wealth of experience. And unlike benchmarking with other companies, there are fewer concerns about discussing proprietary information. The S&IS team members and their BCA colleagues faced several challenges in sharing Lean+ ideas. Some involved differences in technology and terminology, and there was the tremendous difference between their two product lines satellites and commercial airplanes. In addition, while jetliner manufacturing involves a steady flow of airplanes on the production line, only a few identical satellites are produced at the same time. Still, the basic principles of Lean+ applied. Louis Kesselman, manager, Space Systems Design, S&IS, recognized this in early 2006 when a major new commercial satellite program was starting. Kesselman benchmarked a number of Boeing programs and found some great ideas. As a result, the El Segundo team has successfully leveraged a BCA Lean+ systems-engineering tool called SLATE/FI, which enables systems engineers to find requirement errors earlier in the design. This began an ongoing Lean+ collaboration that soon extended into other projects. Also seeking Following are short profiles of some of the world s other satellite manufacturers. Note: this summary is not intended to be all-inclusive. EADS Astrium: EADS Astrium is a subsidiary of the European Aeronautic, Defence and Space Company. Astrium Satellites, one of EADS Astrium s three business units, has produced telecommunications satellites for operators including Eutelsat and Inmarsat, and for other missions. Lockheed Martin: Lockheed Martin s Space Systems and Technologies division provides space systems capabilities to commercial and governmental customers worldwide. Its payloads include communications and space-science instruments. Raytheon: Raytheon Space and Airborne Systems group is one of seven of Raytheon s businesses. The group supports military, intelligence and civil customers. Space Systems/Loral: Space Systems/Loral, a subsidiary of Loral Space and Communications, designs, manufactures and integrates geostationary satellites and satellite systems. Thales Alenia Space: A joint-venture between Thales and Finmeccanica, Thales Alenia Space s satellite payloads can support telecommunications, defense, navigation, Earth observation and other science and observation missions. Debby Arkell A foundation to build on Steve Holt, a process engineer in Configuration and Engineering Analysis, Commercial Airplanes, said he first met Toups when Holt was giving a presentation at Renton Engineering s Gemba Day. This led to Holt traveling to El Segundo to lead a two-day class in Critical Chain Project Management, a Lean+ tool. Holt and his colleagues continued to offer advice on Lean+ issues. Soon, it became an information exchange. It was wonderful fun; I had a great time with them, Holt said. We gave them a foundation to build on. Then, to develop their own expertise, they brought in their own consultants. They were able to come up to speed very quickly, and we began to learn from each other. Holt noted he now shares the pride of the satellite group each time they win a new contract. Two other BCA employees who traveled to El Segundo at that time were Benny Leppert, an associate technical fellow and liaison engineer, and Kevin Sweeney, a Lean Design/Build consultant. They led workshops covering Lean processes, including a tool called Design for Manufacturing, Assembly and Test (also known as Lean Design). They have since led multiple workshops using the Lean Design/Build Roadmap methodology, a series of Lean+ tools that have played an important role in the the sky Shown is an artist s conception of a Lockheed Martin A2100 satellite. Lockheed Martin graphic 787 Payloads Validation Center. S&IS employees have traveled to Puget Sound to benchmark the center and the way the roadmap is used. John Herrold, a systems engineer in System Integration Process and Tools, part of BCA Engineering, has made multiple trips to El Segundo with other members of the BCA team to provide Lean+ training and project support to Kesselman s team. It s a two-way street that has proven to be mutually beneficial, Herrold said. In addition to assisting other programs, we can leverage what we learn from them and bring new Lean+ ideas back to Commercial Airplanes. Our management is very supportive of this type of collaboration. Dayde McLaughlin, deputy director of the Lean+ initiative, added that the initiative will soon be offering additional opportunities for employees to network and share Lean+ ideas. These will include enterprise standardized training that will encourage the use of common learning and Lean+ terminology throughout the company. The Lean+ initiative also is upgrading its Web site with new collaboration tools, including blogs and wikis. As the S&IS satellite business continues its Lean+ journey, it will keep drawing from the wide experience of the Boeing enterprise. The S&IS successes serve as a dramatic example of the value of information sharing and how leveraging best practices can open new paths to success. n william.j.seil@boeing.com BOEING FRONTIERS APRIL

7 Reaching for the sky Two thousand five hundred years of on-orbit service by Boeing satellites is an unprecedented accomplishment. And Space and Intelligence Systems employees are responsible for making that milestone a reality. Featured here are just a few of the talented teammates who have contributed to this success. Job title and description: Subcontracts manager in S&IS Supplier Management & Procurement. I negotiate and prepare contracts with our suppliers for satellite hardware and I maintain supplier ratings and monitor their performance. Years at Boeing: 5 The impact of satellites: The development of satellites has increased our communication capabilities across the globe, creating enhanced networks and changing the way we connect. Satellites also have given us the opportunity to expand our scientific research and increase our space mission accomplishments. They are vital in ensuring the success of our national security. Rosy Rodriguez Job title and description: Wideband Global Satcom Flight Ops Products Integrated Product Team Lead for S&IS El Segundo in California. Our team is responsible for the successful delivery of flight products to the Boeing Mission Control Center and U.S. Air Force Customer Operations Center, including satellite databases, operations procedures, simulators and several other products needed to launch and maintain the bus/platform portion of WGS satellites. Years at Boeing: 8 Helping Boeing be a satellite-technology leader: Boeing s satellite engineers are some of the best in the industry and have a strong desire to develop cutting-edge technologies. The combination of my people, project management and engineering skills, as well as my commitment to team member engagement, is my unique quality. Applying it ensures that we continue to have high-impact teams whose value is far greater than the sum of their parts. Kaiana Carter Eric Watts Job title and description: Chief engineer for the GPS IIF Satellite Program. I m responsible for the technical integrity of Global Positioning System satellites ensuring they function correctly and meet all mission requirements. Years at Boeing: 18 Proudest satellite moment: My favorite satellite dream is one that motivates me every day: the upcoming launch of the first GPS IIF satellite, where I stand with my team and watch our vehicle head to space and we revel in the satisfaction of transforming an idea into a reality. Debby Arkell Bob Ferguson photos 20 APRIL 2008 BOEING FRONTIERS

8 A proud founding father Harold Rosen, Syncom s inventor, discusses the past, future of satellites I recently talked to Harold Rosen on the telephone a long-distance call made possible because of his initiative. Literally. Not because he chose to pick up the phone and dial, but because he is the inventor of geosynchronous communications satellites the satellite systems we use today to communicate and transmit data around the world instantly. Syncom, the world s first geostationary communications satellite, was borne of Rosen s ingenuity. Launched in 1963 when Rosen was an employee of Hughes Aircraft Company (now part of Boeing), it enabled the first overseas phone call between heads of state and brought TV programming to the United States from the other side of the planet. His soft-spoken, unassuming voice belies decades of technological innovation and know-how that many of us likely will never understand. Rosen retired in 1993 and currently consults with Boeing on new satellite designs and to lend his expertise in problem investigation. Following is an excerpt from my conversation with Rosen. Q: What was the genesis of the first geosynchronous communication satellite? A: The story of Syncom began at Hughes with the cancellation of one of our department s biggest projects an advanced radar for an interceptor that was being designed to counter a fleet of high-speed Soviet bombers and with the launch of Sputnik, the world s first artificial satellite. My department head challenged me to find a new project that would capitalize on some of our radar technology. I conferred with two colleagues, and both independently suggested to me the new project be a communication satellite. Both pointed out the then-sad state of international communications. Telephony was hard to schedule and expensive, and transoceanic television was impossible. This excited me. I began to learn all I could about what appeared to be an important and relevant field, and our work got under way. Q: What was Syncom s biggest challenge? A: Once I was convinced we had a practical, viable design, the biggest challenge was to get the internal and external support we needed for the project: getting the company to support the idea by funding a prototype and generating national support for its launch and service. Upper management was cautious, so the project did not initially receive the support needed to develop and demonstrate a satellite prototype. (Former Hughes executive) John Rubel is the one that really made things happen. He was the one who worked behind the scenes in Washington, D.C., with both the Department of Defense and NASA personnel to get us the external support we needed. Q: Did you have any idea how your invention would change the world? A: I m not surprised how important satellites have become to our lives today. Early Bird, the first commercial satellite, derived from Syncom, was a gigantic leap forward. That satellite had the capacity of all communications cables that had been laid to date. Technology has increased rapidly since then, and there s been a cumulative effect. Now retired, Harold Rosen continues in an advisory role with Boeing. Behind Rosen is a photo of him taken during the 1960s, when he was displaying the Syncom satellite prototype. Bob Ferguson photo Q: What s your proudest moment in your Hughes/Boeing career? A: When I viewed the first broadcast of the opening ceremonies of the 1964 Summer Olympics [which was] in Tokyo the first continuous transoceanic television broadcast. I was at the NBC studios in Burbank (Calif.) when I saw the programming, broadcast via satellite. At the end of such a struggle it was a moment where I was really proud. Q: What might the future have in store? A: I see the pace of satellite innovation slowing down. I believe there s a limit to what we can do and there s definitely a limit on the bandwidth and orbit slots available to us. The hot new area is the Internet. That technology hasn t even reached its adolescence, whereas satellite technology is much more mature. Debby Arkell BOEING FRONTIERS APRIL