America’s “increasingly brittle industrial base” may not be able to sustain our forces in a protracted war. It’s a problem a lot of people are wrestling with. Focus is on peer competitor conventional threats that would really stress all the different vectors of the industrial base.
That suggests a radically different model for military logistics. Instead of manufacturing “iron mountains” of supplies in the US, then shipping them overseas, stockpiling them behind the battlefront, and finally distributing them to combat units – creating targets for enemy strikes all along the way – those units could have 3D printers to make their own spare parts and potentially even food and ammunition.
The supply lines would still have to provide raw feedstock of various kinds, but that’s much simpler than delivering thousands of different parts to the right place at the right time.
“We’re looking for industrial base risks, and those risks include foreign dependency, sole source, single source, at-risk suppliers, suppliers that may not be looking to stay in the market there are specific concerns about mining companies that DoD fails to “move the needle on” but which are vital to maintaining a technological edge.
Especially worrying are the single points of failure, the chokepoints in the supplier base where a single small firm, often struggling to get by, is the only maker of some critical spare part. There’s little profit to be made on such components because they’re only needed in small numbers – at least until something goes badly wrong, like an accident or a war. By contrast, our adversaries are willing to subsidize production of such key components, not to mention long-shot research that might one day yield some future weapon.
While there have been a few specific studies done, looking at munitions or certain materials, a broad look has not been conducted in many years, “To do this, to look at how the industrial base will be stressed, could be stressed under specific operations will give DoD information it doesn’t currently have much of.
Pentagon used to do scenario planning for the industrial base, but that practice has faltered as staff sizes changed and priorities shifted elsewhere of what would happen in scenario if a key manufacturing plant was hit by a tornado. More modern scenarios could include what happens if a specialized company decides to exit the defense market.
The defense industrial base has been hollowing out and consolidating for decades, leaving defense acquisition officials with numerous single points of failure in their supply chains. In many instances, only one company, out of nearly 80,000 in the defense industrial base, is able to perform sensitive technology work for the Pentagon. For example, there is just one company in the United States that can repair propellers for Navy submarines —a single point of failure. The same is true of producers of flat panel displays for military aircraft.
Order establishes a policy for prioritizing industrial base resilience as well as a comprehensive review of the base’s health. Must view defense industrial base as a whole — it is composed of more than just the traditional defense sector. In this way, the executive order could kick-start an effort to bring together all elements of national power to ensure American national security. But the measure isn’t perfect. It needs to be calibrated to ensure national security leaders have complete visibility into a diverse industrial base with secure supply chains.
Ordered review would identify the raw materials and manufacturing capabilities that are essential to U.S. national security, as well as highlight contingencies that may be disrupting critical supply chains that support national security needs. America’s manufacturing resilience has always been one of its greatest strengths, but modern product suppliers face many complex challenges.
The Pentagon’s ability to procure goods critical to the common defense will be hampered by an inability to obtain commercial sub-components indirectly related to national security. Order’s assessment will provide visibility into these sub-component suppliers; only then can the government make informed procurement decisions across the entire manufacturing base.
Large firms that build major defense programs should be prepared to embracing nontraditional, commercial suppliers. In recent years, smaller defense corporations have won an increasingly large share of the Pentagon’s research and development budget, often by converting commercial technologies into military applications. This is an opportunity for heritage defense firms to proactively engage both small R&D contractors and nontraditional suppliers alike to ensure defense-critical technologies are seamlessly incorporated into their supply chains.
The new frontiers of technology are great, but war still requires old-fashioned industrial might to build ships, tanks, planes, and missiles. “There’s some advanced manufacturing stuff that’s pretty aggressive where we are world leaders, where we’re pretty dynamic. “but where we really struggle is in heavy industry. The conventional wisdom for so many years has been that we’ve moved past this industrial age manufacturing economy – but a great deal of what we do is 20th century industrial warfare.”
The institutes are investing in what we call industrial commons. It’s a technology challenge that needs to be overcome, in order to get some capability. The applications are super wide. If we can figure out how to transmit information by light, look at the applications -- It’s not just defense, its commercial. So all these institutes, we address a space that is going to change the world, not just DoD.
Balanced and logical” approach is needed. Delayering the supply chain too much could compound risks at a critical time when primes are ramping up its production rate, and disruptions could potentially result in delayed weapons systems deliveries. Must be careful on how we allocate the work so that we don’t increase the risk. Its taken long time for supply chain put into place so products that we need can be built.
“It’s more than just buying something these companies need to integrate and manage their supply chain, and if we’re not careful, we could end up disrupting that and it could potentially increase the cost of the products and services. Or worse, we don’t get a part delivered, and now the customer doesn’t get an airplane. parts must be delivered directly to the line site in sequence, eliminating inefficiencies such as time and labor spent retrieving parts from warehouses.
Defense manufacturers are mirroring commercial manufacturers’ assembly lines to become more efficient and cut costs in an increasingly crowded armored vehicle manufacturing industry. Parts are delivered directly to the line site in sequence, eliminating inefficiencies such as time and labor spent retrieving parts from warehouses. Typical commercial automotive plant has each vehicle move down the production line. The parts go to a fixed station, and the vehicle progresses down the line and the parts are built upon the vehicle as it goes.
So what’s the key to getting rid of those bottlenecks? It’s in our interest to develop capabilities so that we don’t have the supply chain or the inventory tied up in many months’ worth of shipping volumes. For producers, that means greater access to suppliers, which will increase efficiency and build new capabilities. It was difficult to convince and bring trained workers to the floor to operate machines as assemblers, technicians and others was new for us. But it has grown very quickly and has a compounding effect on product delivery. It’s a snowball effect.
“Part offsets is formed by enabling qualified partners to do all of the long-term logistics support – providing the maintenance, servicing, spare parts, as well as the ongoing training for the user. That gives the user the confidence that they really do have a product with support base formed. “So by using innovative manufacturing processes, introducing best-practice commercial practices, it allows us to be really competitive with our marketspace.
Challenges in building Industrial capacity are major factor in making sure industrial partners have sufficient heads up so that they can fulfill whatever requirement are identified by our partners and get it to them as quickly as possible.”
Responsible use of funds is vital when handling contract process, whatever the demand signal. Following a proven step-by-step purchasing technique will help management successfully achieve its goals.
DoD must know it needs a new product, whether from internal or external sources. The product may be one that needs to be reordered, or it may be a new item for the organisation
Field level operators identify a buying need & must ask the Purchasing Office to identify sources, develop procurement descriptions or specifications, obtain quotes from potential suppliers, and share the information with the department.
The very first step in any purchase order process is identifying a need. For the purposes of this example the need is 1000 parts in order to complete a mission. The need has arisen because DoD has received a new order from field agents requiring some materiel for the mission.
DoD may identify that there is a need to update equipment stock require business service to be then defined and specified. DoD must understand what the fundamental business requirement is. At this point, it is important to understand the difference between a requirement and a solution.
For example, the business requirement is to source some equipment to help to get information published on DoD interfaces. An item to publish information on the interface is a solution – not a requirement. The requirement is to be able to publish information on the network. It may be that an outsourced solution is a better option.
DoD must firstly identify timeline & key dates estimated in the need for a new product. It could be sourced from either internal or external sources. DoD may need to reorder a product or it could be a new item completely. It is important to identify the need for a product so the process can be dealt with efficiently and effectively through the procurement sequence
Now DoD must specify how much and when you want the products or services delivered. Finding the right product or mission for DoD is a highly important step in the sequence. There are often standards put in place to determine the specifications required, while others have no point of reference to look upon.
There is the possibility that the DoD has ordered the product in the past but if not, then they must specify which product they want using identifying factors such as packaging and weight. Having specifications in place will make this process easier. Then there is the need for researching surge scenarios scoping out the positioning of a product will identify potential competitors to supply service.
Getting the right product is critical for DoD. Some units have standards to help determine specifications. Part numbers help identify these for some field groups. DoD may have ordered the product in the past. If not, then units must specify the necessary product by using identifiers such as lethality or weight.
By using a standard procurement process, you will find that suppliers will be familiar & keep up to date with the requirements steps you take including specification for key quality or performance standards.
The next step in the process is finding out where the product can be obtained. DoD may use a list of approved suppliers to find somewhere that can source the product. If this is not the case, then the business will have to find a supplier using purchase orders or research other sources using sales representatives. The company will then develop a strategy and follow through with the supplier that gives the best product or service for the business, to fulfill their need.
DoD must determine where to obtain the product. possibly with an approved vendor list. If not, DoD must search for a supplier using purchase orders or research a variety of other sources to qualify the suppliers to determine the best product for the mission.
Suppliers need to be identified. This will be the role of procurement, who will be the key personnel who will be able to make the final purchase, based on the requisition note.
The procurement section can deal with this by looking at their list of approved suppliers to see if any of them can accommodate their requirements, or they may approach specific suppliers who produce the parts required and go through a process of seeking information from the suppliers, to elicit who best can meet their needs.
In this instance it would be reasonable for procurement simply to go to their approved suppliers, because the parts are needed relatively urgently to complete supply process, so to some extent, time is of the essence. This flexibility ensures that DoD can meet their needs efficiently and effectively.
Buyers may already know which supplier to buy the item from that is being requested. If not, request for quote process may be initiated to identify a supplier, price and lead time.
Process must ensure suppliers must be given a fair amount of time to respond, answer any clarification questions, use the evaluation panel to evaluate responses against stated criteria & document evaluation process/recommendation to select successful supplier report.
Repetitive orders usually have set suppliers, although it does no harm to review the options sometimes. Other orders will either need to go out to tender or there will be a choice of suppliers.
After researching the market and establishing your procurement approach, you need to evaluate the solutions available. Your criteria for comparing different solutions and suppliers are critical. Weight the key criteria heavily and don’t attach too much importance to aspects that will have little impact on the solution.
Supplier must show how organisation can add value. Can you give us even more than we are asking for? How is your offering better than your competitors' offering? Show that you offer good value for money. Make sure you submit on time.
The business will then move on to determining the best price and terms for the product they require. This often depends on the needs of the company, the products they already have in stock or specialised materials they require.
Following the process, it is normally recommended for the business to look at several different suppliers before making a final decision. It is important for the company to look around to see if they can find a good deal for the products they require. Researching different brands will allow them to find the best deal and terms that match the product or service they are looking to acquire.
Even when you have selected a supplier it is important that detailed negotiations are undertaken. This is not just about price. Think in terms of Total Cost of Ownership. A cheap product is not so cheap if the carriage costs are huge or if the maintenance contract is not going to support future missions.
The basic procurement cycle consists of ten steps, depending on the complexity of the buy and organizational policies. At a bare minimum, it consists of an order eg requisition or purchase order, an invoice-- for example one with the receipt, and payment. For high-dollar purchases, the process will generally also include authorization and reconciliation of the invoice.
In a leading procurement organization, every step will be completed, although many will be completed automatically for low-dollar or non-strategic purchases by the digital system using defined rules in the workflow engine.
While these are the basic steps in the purchasing process all companies are different – some will wish to automate as much as possible replacing paper forms with electronic messages- others may have complex approval rules – despite these variations however the fundamentals remain the same.
1. Identify need to update the inventory or stock for service/product.
2. Specify how much and when you want the products or services delivered.
3. Write the purchase order or requisition orders submit to authority for purchase
4. With a large order that will be put out to tender it could be multi staged.
5. Repetitive orders usually have set suppliers but review options sometimes.
6. Identify scenarios where orders need to go out to tender or there will be a choice of suppliers.
7. Some suppliers will be contracted with master agreement with set price/ terms for defined period.
8, Order is placed and becomes a contract between the business and supplier
9. Order Received/Inspected when goods are delivered and entered into the inventory.
10. Update purchasing ledger and stock records