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People are using the Internet more and more every day—for entertainment, education, and commerce. That’s why we launched HughesNet® Gen4 broadband service—to deliver our customers higher-speed Internet access and more choices than ever before. Powered by our EchoStar® XVII satellite with JUPITER™ high-throughput technology, the new service in just a few months has triggered increased subscriber growth in what is already the fastest-growing business at Hughes. Meeting the added demand for this next generation of consumer terminals and ground segment support in a short timeframe presented the Hughes manufacturing organization with some significant challenges and called for a truly massive effort.
Launched by Arianespace on July 5, 2012, the EchoStar XVII satellite was built by Space Systems/Loral based on the Hughes-designed JUPITER technology platform; but it was up to the manufacturing team to build the new system gateways and customer terminals—on time and within budget. Nearly two years ago we began planning for prototype production and setting up the needed supply chains. I’m happy to report that we successfully met the tight schedule requirement to build, test, and deploy 14 gateways throughout the U.S. and two in Canada in time for service launch on October 1, and to ramp up annual production of the new HT1000 terminal to over 400,000 units. All of this meant increasing our staffing by over 50 percent and shifting into peak production mode, quickly moving to a 24 x 7 schedule, running three shifts a day, seven days a week. Nearly 80 percent of the terminals we build today are for use with HughesNet Gen4 service on the EchoStar XVII satellite.
To successfully accomplish such a major project requires a high degree of flexibility. I consider Hughes manufacturing as a service organization—here to build product from prototype to mass production. We look at Hughes engineering and business groups as our customers, and our job is to meet their requirements. If they want more or less product, we figure out how to do it—with minimum schedule and cost impact. If they need something tomorrow that we don’t have today, we figure out how to build it. This is our commitment to them and our company.
Since one of our key functions is to support engineering with new product introductions, every part of the manufacturing organization supports engineering in some way. The two teams are “joined at the hip” in terms of the level of cooperation and teamwork. This partnership makes the transition from development to production much smoother for everyone—from design engineers, procurement personnel, and planning staff, to manufacturing program managers and operators on the shop floor. It also facilitates the process, allowing our engineering staff easy access to prototypes as they are being built and helping us to build in quality at the design stage.
The importance of quality is paramount, and we go to great lengths to ensure that the components that go into our products are of the highest quality and that our products are rigorously tested before they leave the facility.
No less important than quality of the product is how responsive we are to changing customer and business demands. We achieve this objective by blending in-house manufacturing and outsourcing to optimize cost, schedule, and technical performance. All final assembly of Hughes-designed products is conducted at the Shady Grove facility in Gaithersburg, Maryland with some outside sub-assembly in China, Taiwan, and Europe.
The blended manufacturing strategy allows us to expand or contract manufacturing capacity in very short order. This is one of our key strengths, enabling our businesses to react to changes in demand and thus be better able to respond to changing customer needs. That’s why we have been able to meet the high market demand for HughesNet Gen4.
Looking forward, as demand for rich media content continues to grow and people continue to find new uses for broadband, Hughes products and services will experience significant growth in sales. The manufacturing team stands ready for any challenge—whether it’s ramping up production, quickly turning around new design prototypes, modifying existing products, shipping products anywhere across the globe, or providing customers with after-sales warranty and logistics support. We never say no.