Outsourcing Space-bound Logistics

While browsing Instupundit, the short post "OUTSOURCING cargo transport to the space station" piqued my interest immediately, with the link taking me to an article at Popular Mechanics on outsourcing necessary freight shipments to space, titled "To cut costs, NASA plans to outsource its shipping jobs." Hey NASA, welcome to the club!

Written by Thomas D. Jones, a planetary scientist and former shuttle astronaut, the article can be broke down as follows:

It's not a glamorous mission--hauling water, food, spare parts and clean clothes to the International Space Station (ISS)--but somebody has to do it. The shuttle was the truck of choice when my crew delivered the Destiny Laboratory to the ISS in 2001. But now, with the shuttle orbiters heading for retirement by 2010, NASA wants commercial suppliers to take on the orbital shipping job, to lower costs and spur industrywide innovation.

Space will obviously offer some extremely different environmental challenges than Earth-bound shipping, and quality and safety will need to be prioritized when targeting cost reductions. But I think many cost reductions will come from simply accessing suppliers from outside the halls of NASA, which is probably paying outrageous prices on maintaining its current shuttle fleet. By contracting out, third-party logistics providers (3PL's) can reconfigure the supply chain appropriate to the task. And over time, the competition could likely result in that industrywide innovation.

The paragraph below suggests that eventually other supply chain management practices could become useful for space, such as perhaps vendor-managed inventory (VMI): 

Since ISS crews moved in six years ago, the space shuttle and Russia's unmanned Progress freighters have made deliveries. But the Columbia accident grounded the shuttle fleet for over two years, and the Progress's small capacity forced even two-man ISS crews into sometimes spartan operations. Last year, spacesuits aboard the ISS were out of commission for months waiting for spare parts.

The investment in space-bound cargo vehicles is of course not cheap:

The two companies getting NASA seed money (over $100 million each) for cargo craft are SpaceX and Rocketplane Kistler. SpaceX plans to loft its Dragon capsule atop a Falcon 9 rocket, but the smaller Falcon 1 caught fire and plunged into the Pacific last spring. With $100 million invested, the company hopes a second launch this winter will pave the way for the Falcon 9.

Rocketplane Kistler's craft, a reusable K-1 two-stage rocket, has yet to reach a launchpad. But John Herrington, director of flight operations and a former shuttle astronaut, says the K-1 will not only reach the ISS, but return cargo safely to Earth.

It seems that supply chains where the last leg will be a trip to space are upon us, and the same demands by customers on Earth will take hold in space:

Both firms plan to fly three test flights by 2010. The end of the shuttle era is upon us. But future crews won't care who delivers their cargo. They'll just want it to show up on time.