Smartcuts: The Breakthrough Power of Lateral Thinking

by Shane Snow

Musk figured a first-class noticer could build those components himself—a generic acetaminophen to Boeing’s Tylenol—and perhaps even improve upon them. Musk built a factory designed to input aluminum and spit out rocket parts. Rather than paying NASA prices for engine nozzles and manifolds and heat shields, SpaceX manufactured its own at a fraction of the cost. The happy side-benefit of this was greater control over inventory, as aerospace delivery times for parts from manufacturers were notoriously bad. Next, Musk sought simplification. He reduced complexity by making the various stages of his rocket the same diameter, with the same engines. Whereas most rockets used fuel tanks of diminishing fatness (the Shuttle, for example, had two small boosters and one big booster, which required different tools, parts, and procedures to build and maintain), Falcon’s two stages could be built with the same jigs and tooling, the same electronics, and the same engineers. The strategy lowered costs, says Musk, “by at least a factor of two, and perhaps as much as three or four compared to similar vehicles elsewhere. This came despite the conventional wisdom in the space industry, academia, etc., that rocket costs couldn’t be reduced by more than a few percent.”