Alice Carruth (8:06)

Thanks, Maria. Keeping the briefing to five stories is always a stretch when there's so much going on in the space industry, so we've added links to three additional stories today in the Selected Reading section of our show Notes. The first is a Reuters article on China building space alliances in Africa in response to the US Administration's aid cuts. The second is about a funding raise for Momentous. And the third is an announcement from the Space foundation on the recipients of the Space Achievement Award.

Maria Varmazas (8:33)

Thank you, Alice. Those links can be found on our website space.n2k.com and just click on today's episode title at/crew if you find this podcast useful, please do us a favor and share a five star rating and short review in your favorite podcast. Appreciate. It'll help other space professionals like you to find the show and join the T minus crew. Thank you for your support everybody. We really appreciate it.

Dave (9:11)

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Maria Varmazas (9:54)

Our guest today is Richard Turner CEO at Convergence Data. I sat down with Richard at Spacecom 2025 to discuss supply chain for aerospace and defense solutions. And I started by asking Richard about his background and how he started the company.

Richard Turner (10:12)

Well, I started as a mechanical engineer designing parts for a company. And I realized that that wasn't my calling and I wanted to be a bigger part of a business. Inevitably, I became an entrepreneur and started this company. Hard to believe 25 years ago.

Unnamed Interviewer (10:30)

What you are doing with your company is really interesting to me. And again, you were really ahead of a big, big trend. Tell me a bit about what Convergence Data does.

Richard Turner (10:38)

So we offer, I consider it a basic service, which is we basically establish catalogs of parts and products for our aerospace companies, going all the way back to the days when we started with companies like Boeing and Northrop Grumman over 20 years ago. We build catalogs of primarily electronic parts. Electronic parts are a major part of the bill of material for a lot of these A and D companies, and they're expensive. So you want to make sure you have a catalog of the preferred parts. That makes it really easy for engineers to find the right parts and for procurement to buy the right parts.

Maria Varmazas (11:10)

Right.

Richard Turner (11:11)

So we've been doing that for the last 25 years. And a and D has kind of always had the lead in this area. They've always had strong governance and.

Unnamed Interviewer (11:20)

Sorry, can you. What do you mean by that?

Richard Turner (11:22)

So aerospace and defense.

Maria Varmazas (11:24)

Okay.

Richard Turner (11:24)

Just want to make sure they're kind of pioneers for a lot of the technologies in building products, from product life cycle management to some of the work that we do. You know, they had parts catalogs before we even showed up 25 years ago. So they are the pioneers and we've kind of learned from them and built our business over the last 25 years to service other manufacturing verticals.

Maria Varmazas (11:48)

Fantastic.

Unnamed Interviewer (11:49)

So you're taking those best practices and establishing them, but in a very dynamic way.

Maria Varmazas (11:53)

It sounds like.

Unnamed Interviewer (11:54)

Especially since it's a SaaS solution, if I understand correctly.

Richard Turner (11:56)

It's a SaaS solution. Correct.

Unnamed Interviewer (11:57)

All right. So can you maybe give me a sense of the landscape of before you all entered the scene, what things were like and how you have changed things?

Richard Turner (12:05)

Well, I think the best way to look at it is a lot of the pain points we call it that these manufacturing companies have, are high costs. You know, their products are costing too much. It's taking too long to get these products to market. And a lot of it has to do with not having a governance process in place for selecting parts, making it real easy for engineers to find a preferred part, add it to their bill of material and encouraging engineers to reuse parts. And when that's not happening and you don't have governance in place, you end up with unnecessary, high cost, way too many parts, way too many suppliers.

Maria Varmazas (12:41)

Right. Procurement does not like that.

Richard Turner (12:43)

And procurement is downstream of engineering. And they inherit this mess and they're racing to onboard suppliers. They shouldn't probably be onboarding for parts they shouldn't be having to buy because there's no governance process in place. That's really the pain points that we solve for a company. So for engineering, making it easy for them to find a part, giving them the data they need, give them the search engine, adopting classification, putting these parts into their PLM system with classification, just making it easy for them to find parts so they're not introducing unnecessary parts or duplicate parts, which happens all the time. And then procurement, just giving them the information they need to find the right suppliers, set up long term agreements with suppliers, get the best pricing.

Maria Varmazas (13:28)

Yes.

Richard Turner (13:29)

And you know, and just make their job easier versus onboarding unnecessary parts, ending up with high costing suppliers, suppliers they probably didn't want to onboard. It kind of snowballs as you get downstream of where the new parts are created.

Unnamed Interviewer (13:45)

Yeah. It's a really interesting place to be right now, especially where you all are. You must have a very, really complex view of where the market is going right now, especially given, I mean, it's surrounding us right now, how much the industry is just ballooning and how much demand there is for all sorts of specialized parts. And I mean, and on these very challenging timelines.

Maria Varmazas (14:07)

Yeah, go ahead.

Richard Turner (14:07)

If you look at all the companies that are here at the spacecom conference here in Orlando, they're mainly suppliers that provide highly advanced machine parts. So that's good and bad. I mean, for the OEMs, for the blue origins, the SpaceX is they want to make sure that the parts they're building are the right parts.

Maria Varmazas (14:28)

Right? Yeah.

Richard Turner (14:28)

And could they have reused a part versus issuing a custom part that I know they're spending a lot of money for? Some of our customers spend over $2,000 for a single washer because the procurement doesn't have the ability to check the price because they can't find similar washers from similar suppliers.

Maria Varmazas (14:43)

Wow. Yeah.

Richard Turner (14:44)

And that's why the rockets are costing so much to build. It's a race to space to build those rockets and they're creating unnecessary parts. There's no governance process in place. So it's concerning for, especially for these space companies. They're really startups compared to like a Boeing and Northrop.

Maria Varmazas (15:02)

Right.

Richard Turner (15:02)

They've grown fast and they build their products really fast and they probably have parts they shouldn't be ordering because they're working so quickly.

Maria Varmazas (15:10)

Yeah.

Richard Turner (15:11)

So by putting a governance process in place and slowing them down, getting them to reuse parts, that's going to save them a lot. When it gets to procurement, when it gets to supply chain, when it gets to releasing that rocket, there should be a lot less quality issues because, you know, you've got parts that have high quality from preferred suppliers. That's the big issue. I see right now a lot of the space companies.

Unnamed Interviewer (15:32)

I'm wondering about barriers, especially for a lot of these smaller, not necessarily the suppliers, but for the smaller startups, I mean, raising capital is expensive, extraordinarily difficult. This is not a cheap business to be in. It's got high risk.

Maria Varmazas (15:45)

I'm wondering if you have advice or.

Unnamed Interviewer (15:47)

I mean, you sort of touched on a little bit, but for the, for those smaller startups that are really trying to make their way into the industry.

Richard Turner (15:52)

Yeah, you know, I think for the OEMs working with the startups, they want to make sure they do a risk analysis and make sure that they can truly produce the products and deliver against the quality.

Maria Varmazas (16:03)

Yes.

Richard Turner (16:03)

And when you have lots of suppliers, and a lot of these are startups, they probably don't meet a lot of those requirements and they find out, unfortunately, the hard way, and that delays rockets from being built and launched. So that's a concerning issue. And I think if they had less parts to manage, this issue would be smaller.

Unnamed Interviewer (16:23)

Reducing complexity.

Richard Turner (16:24)

Yeah, reducing complexity, exactly.

Maria Varmazas (16:26)

Absolutely.

Unnamed Interviewer (16:27)

Given that your company's been around for 25 years, what changes have you seen in the industry in that time? Especially as it pertains to basically everything you've been mentioning about procurement and supply.

Richard Turner (16:40)

Yeah, I mean, interestingly enough, a lot of the issues that we saw 25 years ago still exist today, which is kind of sad because companies don't see the governance process around introducing parts as being sexy. They just see the software tools that engineers use to design parts as being really cool. They need to make sure that they have these other governance tools in place to keep costs down. And I think that's starting to become more recognized, especially by the larger AMD companies. So I think the trend is that eventually the blue origins, the SpaceXs, are going to follow suit and recognize that they need to invest more and up front to make sure they're introducing the right parts to their rockets, you know, so I Think that's the big trend I'm seeing.

Unnamed Interviewer (17:26)

That's interesting that you mentioned that. That's been present for all this time. And yet, gosh, is it a cultural issue between like engineering first versus a procurement versus engineering mentality?

Richard Turner (17:36)

I think you hit the nail on the head. Engineering and procurement, they typically don't work together.

Unnamed Interviewer (17:40)

No, no, they do not.

Richard Turner (17:41)

When it comes to things like purchased parts, really, especially the high spend. Like for space companies, it's valves, where they spend billions on valves. And if you get engineering and procurement working together, managing those categories and determining what is an acceptable valve and working together on managing the spend on those categories, they're going to be a lot more successful. But today it's engineer designs apart throws it over the wall to procurement. There's no discussion.

Unnamed Interviewer (18:06)

It's adversarial at best.

Maria Varmazas (18:07)

In many cases they're not working together.

Richard Turner (18:09)

So they've got it. I think from an organizational perspective, getting them working together, managing, we see that in our more advanced manufacturing companies. Those groups work together more closely.

Unnamed Interviewer (18:19)

I'm very curious, when you're speaking to fellow C level executives, what is the message that you want them to understand? Because I feel like when you're talking to a CEO, it's a different message than a team of engineers about this.

Richard Turner (18:34)

So for a CEO, the biggest expense for a manufacturing company is a direct material expense and it's the parts they put into their products. They have a recurring expenditure. They're not like indirectly where you buy them once they're going into your product and they're going in in high volumes and that's your highest cost as a manufacturing company. So it's important that they have engineering and procurement working together kind of managing that cost. Otherwise they're not going to achieve the margins they want to achieve. They're not going to get products out the door at the rate they want to go and do. The higher up we get in the company, the more they understand our value proposition. When we come in at a lower level with engineering, they're like, why do we need to worry about this? It's not our problem. We're probably talking to the wrong people because it's the people downstream of engineering that inherit the problem. It's more of a like an operations issue that needs to be addressed.

Maria Varmazas (19:40)

We'll be right back.

Dave (19:46)

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Maria Varmazas (21:06)

Welcome back. Let's take a moment to appreciate one of the many, many hard workers at NOAA. NOAA's Deep Space Climate Observatory, which is often better known by its acronym, dscovr, for about a decade now has been Earth's silent guardian against solar storms. DSCOVR watches what's going on in space weather for us 1 million miles away at Lagrange Point 1. It monitors and sends early warnings of coronal mass ejections and geomagnetic storms that could knock out power grids, disrupt GPS and interfere with other satellites, something that, by the way, we've all been particularly concerned about in the last year or so as we've been approaching or are now at the 11 year solar maximum. You probably remember May 2024, when many of us saw beautiful aurora in places that we normally wouldn't, nice photos and all that. It was all thanks to the strongest solar storm in 21 years, and DSCOVR saw it coming. It detected the storm's shockwave as solar wind speeds doubled to 1.5 million miles an hour in just 20 seconds, allowing forecasters to issue timely warnings. Not bad for a spacecraft that has long outlived its original mission. But even workhorses retire eventually, and I know some of you listening who've been pulled out of retirement might relate to this. Dscovr, though, is still running well past its expected lifetime and doing great. That said, NOAA's Next Generation Space weather sentinels, starting with the Space Weather follow on Lagrange1, are scheduled to launch in the second half of this year and will take up the reins on tracking solar storms in anticipation of DSCOVR being put out to pasture. But for now, DSCOVR seems fit as a fiddle, keeping watch for us and remaining a steadfast lookout protecting our modern world from the sun's temperamental outbursts. So thank you noaa, and thank you, Discover. That's it for T minus for February 12, 2025, brought to you by N2K CyberWire. For additional resources from today's report, check out our show notes@spare.n2k.com we'd love to know what you think of this podcast. You can email us@space2k.com or submit the survey in the Show Notes. Your feedback ensures we deliver the information that keeps you a step ahead in the rapidly changing space industry. N2K strategic workforce intelligence optimizes the value of your biggest investment your people. We make you smarter about your team while making your team smarter. N2K Senior Producer is Alice Carruth. Our producer is Liz Stokes. We're mixed by Elliot Peltzman and Trey Hester with original music by Elliot Peltzman. Our executive producer is Jennifer Ibin. Peter Kilpe is our publisher and I am your host, Maria Varmazas. Thanks for listening. We will see you tomorrow.

Dave (24:02)

T minus.