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ULA | Virtual Vertical Integration

Bringing L3 & ULA Into Partnership

ULA was having an increasingly difficult time competing with the upcoming SpaceX launch vehicles. 

This assignment was to build a joint approach between ULA and L3 that would provide a technically sound basis for reducing costs to 50% of our baseline, while retaining the safety and performance of the long-standing Atlas V and Delta IV rockets.

By the time the project was complete, ULA and L3Harris signed a $1B deal based in part on Tim's foundational strategy, Virtual Vertical Integration (VVI).

This approach became part of the Phase Zero briefings to all L3 divisions for the following year.

The existing Atlas V and Delta IV rockets, the new Vulcan rocket, future space equipment such as Orbiter Maneuvering Vehicles (OMV's), and specialty payloads were all on the line.

  • SpaceX had come into the market at roughly 30% of ULA's cost, but without the safety or trust of NASA. 

  • SpaceX was working its way up the safety curve, AND starting to win launches on the NASA Launch Services (NLS II) contract. 

  • ULA had become so embattled in layers of bureaucracy that even simple interactions with suppliers could take months, and more complex investigations and changes were excessively expensive.

  • ULA's existing processes had been in place for so long, it was proving culturally difficult to make changes in operations more along the lines of L3's.

A joint team of ULA and L3 leaders descended upon the challenge in a number of ways, including program management approaches, material consolidation and reduction, and more.

What was SpaceX doing that ULA could replicate to get cost down, without giving up their quality and safety?  How could L3 make that happen?

For Tim's part in this story, it was the creation of the concept and implementation plan for Virtual Vertical Integration.  

We needed to strengthen an already time-tested bond with ULA to build the benefits of a single integrated company to operate more like SpaceX, a huge metamorphosis from what was currently a traditional Prime/Contractor relationship. 

We would work to build shared financial objectives, shared agreements on IP that would allow a Win-Win, and a new inter-company operating systems to better leverage IT systems, databases, planning, and teamwork.  Scroll down to see specific examples and the results!

Not only would this increase content and sales on existing Atlas and Delta rockets, it would extend L3's reach into the ULA Vulcan rocket, Obiter Maneuvering Vehicles (OMV'), and specialty payloads.  It would create a bond between ULA and L3 that would be very difficult for others to replicate, and create the confidence on both sides of the partnership to trust and build a shared destiny that could remain competitive.

Build a Long-Term Partnership

We already had so much shared content that we had an informal partnership.  But without a formal commitment, there were some things we just couldn't do that a vertically integrated company could.

We had to hammer out an agreement so both parties could move forward with confidence. 

Create Shared Financial Objectives

Rethink our financial approach.  Less, "ULA needs to compete all avionics or it won't get a good price."  More, "ULA needs a single company to handle all avionics at a known fixed markup so we can get the total costs down."

We had to rethink our shared objectives using a different paradigm to reap real savings.

Place All Avionics Under L3

ULA had to manage many avionics vendors, which all competed in the same market against each other and for the same limited supply of components at low volumes.  Real savings would only be possible with higher volume buys.

We had to consolidate all avionics under L3 to meet ULA's overarching cost targets and still be attractive to L3 at lower margins.

Rethink What's "Allowed"

IT Security and Legal both have real reasons to isolate from other companies.  To get the gains of vertical integration, we were going to have to change the rules of engagement.

We had to reevaluate our business norms and ask, what could be shared?  What risks should we be willing to take to get the synergies and cost reductions?

Strategically Share Intellectual Property

Without a clear roadmap on how each company would develop, own and protect IP, the likelihood we could fully leverage all IP to our shared gains was unlikely.

We had to develop a shared strategy that would give ULA the price targets at volume it needed to compete with SpaceX by allowing L3 to reuse the IP to support other potential customers' needs.

React to Problems Faster

ULA had historically been very paternal on all decisions of consequence.  But this came with the consequence of long cycle times between companies for even simple challenges.  To increase velocity, ULA would have to give up some control.

We had to agree to place more responsibility within L3, while simultaneously raising the skill level of Systems Engineering on ULA products.

Share Calendars and Contact Information

The simplest of things can have disproportionate impacts!  Not knowing Free/Busy information for the cross-company team can delay meetings for weeks.  Not knowing an email can make it difficult to even get started.

We had to find a way to share calendar and contact information so teams could plan, meet, and move on at the same rate as a single vertical company.

Build Shared Automated Workflows

ULA had its process workflows, and L3 had theirs.  But all of the waste was in the handoffs!  Emails, phone calls, and meetings were no substitute for vertically integrated workflows in a tool built for that purpose.  To operate as if we were one big company, we needed the right tools.

We had to build a single workflow tool that could move process states along regardless of whether the owner was a ULA or L3 employee, with common status and email notifications.

Create Shared File Repositories

ULA had an online solution for sharing files, but from L3's perspective, it was a web-based access that required an extensive login, authentication, and manual download of files.

We had to build a shared location that both L3 and ULA could access the same files natively, using any of their engineering tools, without manually syncing or downloading.

Share Engineering Databases

Allowing open access to the rocket's detailed designs outside ULA - at scale - had never been done.  But it was limiting L3's optimizations velocity to meet ULA needs.

We had to build enough trust, and a solid business case, so that ULA would want L3 to have that level of access.

Create a Shared Collaboration Site

Both companies had internal Content Management Systems (CMS).  But neither could natively access the others.  In the age of SharePoint and Team Center and Slack, how could these two DoD firms safely collaborate in real-time?

We had to find a shared space where we could run our engineering, CI projects, and dashboards as one integrated team.

Create "Middleware" Between our ERP Systems

Enterprise Resource Planning (ERP) systems are the core Operating System of a business.  ULA and L3 had different, completely isolated systems.  How could we connect ULA's build needs to automatically create demands in L3's system?

We had to build middleware between ULA's and L3's ERP systems to automate the flow.



In 2017 ULA publicly announced that L3 Technologies (now L3Harris Technologies) would be the sole beneficiary of a $1B, 10-year avionics contract! 

Tim wasn't just "on board" during this event.   He was driving the strategy for the GM of Space Avionics, building the briefs, creating the pitches for both CEO's, and driving the changes.

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