​The Pentagon is soliciting weapons system information from industry to better understand trouble spots in supply chains, as part of a broader review and war-gaming effort to discover potential failure points for defense industrial base crisis in a time of conflict. The New effort similar to scenario planning that goes on throughout the Pentagon on a regular basis will look at how various scenarios would impact the Pentagon’s ability to arm itself.

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

​Major lines of effort to strengthen Defense Industrial base outlined in the National Defense Strategy include lethality for the warfighter, strengthening alliances/ partnerships, and business reform. 

All lines of effort require a robust, and secure industrial base. Without a strong defense industry and healthy manufacturing sector, including both domestic and with foreign allies and partners, DoD cannot ensure national security. All of the current and future activities of the new Executive Order directly support National Defense Strategy priorities.

Sequestration, uncertainty of defense spending, inconsistent appropriations, uncertainty about future budgets, ambiguity in Congressional expenditures, and the effects of the Budget Control Act create market instability. Decline of manufacturing base capabilities and capacity affect the viability of suppliers, overall capacity, and capabilities available domestically.

While overall performance of DoD military technologies and weapon systems is best in world, industry has at times failed to provide systems with the promised capabilities, or only done so after following delays, increased costs, or both. It is difficult to assess the full extent of these various programme shortfalls because they can often be dealt with by DoD actions .

DoD can make available additional funding, alter requirements to avoid owning up to shortfalls, or stretch  out programmes until technical problems have been resolved. Moreover, program terminations due to acquisition difficulties can also be chosen by DoD to release funds for other uses or because products are no longer needed.
​
The original ’A Design for Maintaining Maritime Superiority’ plan called for “high velocity learning” – which encouraged the Navy acquisition community to try some new processes for designing, contracting and fielding programs on a tighter timeline. The updated Design 2.0 now expects that that learning will lead to faster and cheaper acquisition going forward.

“Embedded behind all these pretty aggressive plan was released. The elements of that are, let’s get our requirements team talking to industry earlier so that we understand, where’s the technological maturity, what can we achieve with confidence now?”

Intentions pair a drive to move faster – ditching arbitrary initial operating capability dates for an “ASAP” mentality – with a recognition that moving faster may require an iterative process that fields a good solution now and upgrades to a better one as technology matures.

“Things like the frigate, the large surface combatant – parts of that ship are going to last for the entire life of the ship: the hull of the ship, the power plant, the propulsion plant. But the rest of it is going to change very fast: the sensors and computing power and weapons even. It’s got to be designed into the ship to be able to swap that capability out quickly.

It gives us the confidence that we can converge on a pretty good hull form, build as much power into the ship as we can afford – it’s almost like memory for your computer, you’re going to use it all and want more – and then the rest of it’s designed to be rapidly upgraded through the life of the ship.

“For the frigate were going to have to converge on something that’s pretty well known right 
now. We’re not going to be able to meet that timeline and design some kind of brand new hull form. And I’ll tell you what, naval architecture’s been around for a while, so we sort of know how that works, so I’ve got a lot of confidence that we’ll get to something that will be adequate soon. Beyond that, who knows?”

“So we’ll have the naval architects working in parallel, and so as these two streams move together so something’s mature enough – they say this is really going to be a lot more capable and also we can do this with confidence in cost and schedule – then we’ll just incorporate that it. So whether that’s at the next five-year mark or whatever it turns out to be, hard to say, but we’ll keep these things going.”

A key lesson the Navy learned over the past few years about cutting cost and time from acquisition programs is paring down requirements to the bare minimum. The MQ-25A program had just two key requirements: being able to operate from an aircraft carrier, and being able to refuel other aircraft. This  model can be applied to everything from the next fighter jet to the next large surface combatant-  it is key to allowing industry to move faster and avoid unnecessary costs.

“The  approach that we want to minimise the number of hard requirements allows a tremendous amount of creativity in terms of going to meet those requirements. So what happens when we come up with reams and reams of very, very specific requirements is that … certainly has implications for the design and may box out a really creative solution if we over-specify any particular aspect of the ship, the design. And it’s for ships, aircraft, submarines, what have you. We want to really minimize the number of hard requirements, bring industry into the conversation and give them as much trade space and freedom to innovate to meet those requirements.”

“These aren’t just sort of random dates thought up on a late night. It was pretty carefully coordinated. “One of the things that’s been a persistent goal in some programs is to try and continue to buy schedule margin to add a little cushion to the already-tight timeline for the program.

“If we buy enough margin that we can deliver the thing earlier, let’s do it. Quick turnaround dates were included in Design 2.0 are included with the hope the  acquisition community and industry will be off to the races to field these new capabilities “ASAP.” There are often talks about making changes or otherwise slowing down a program, which is deemed acceptable as long as the program still meets its required IOC date.

By taking away IOC as a measure of success, the hope is that it puts all of us in a much more competitive mindset. What has emerged is a system that for whatever reason is really kind of internally focused, and is not really focused on winning in a competitive environment.

Just imagine the smartphone industry: the second smartphone that has a particular capability, that’s a significant disadvantage over the first to market. And it’s the same in military capability. So we want to make sure that we’re delivering this capability at a competitive speed. 

We are first on the water with the high capability and not the second.” 

“So by saying let’s not build in an artificial date – that may give us comfort and slow down our pace. Let’s get competitive and race this thing.

Navy building new office to ‘short-circuit’ traditional DoD acquisition system with mission to translate new technologies into actual weapons systems much more quickly than the Service can do today.

The new organization’s primary purpose will be to better connect the science and technology research that’s already being done in Navy Department research facilities with the short-term, real-world equipping needs of sailors and marines.

“We have a very strong technical base.  “But we need to better leverage it and we need to marry it up more tightly with the fleet to short-circuit the long process that involves everything we do now, from requirements definition to the budgeting process to ultimately get something into a program of record.”

Navy is going to launch into experimentation and prototyping that matters to a given threat or technology, and do it at the same time the machinery is starting up to define our budgets and requirements. 

Then by the time we get into the traditional budget cycle, we have a firm understanding of the technical possibilities, we have a much greater understanding of the costs and we can point our industrial base toward the solution. We can make progress in the interim while we’re developing the technology and then reduce the amount of time it takes on the back-end to field the ultimate solution.”

Navy is going to do more testing and prototyping of new technologies within the funding lines that pay for large programs of record such as ships and airplanes, similar to the flexibilities the Navy already has within R&D accounts.

Under the current process, it takes DoD a full year to prepare a budget, another year to argue the spending plan’s merits before Congress and another year to actually expend the money once funds are appropriated into extremely rigid buckets.

“That’s a challenge for us when we are, for example, moving through the process to buy a combat vehicle or a tactical truck. If industry or our own applied research comes up with a new transmission that can reduce our fuel consumption by 50 percent, it will be another year before program can be flexed to incorporate the new technology because of the way we identify our funding lines. If I have some flexibility, we can use the things we’re already doing through open systems architecture to at least start the process to plug that new transmission in now.”

Part of the message will be that many prototypes will fail, but that DoD needs more latitude to fail early instead of building large programs of record which rely on promised but yet-unproven technologies.

The challenge will be convincing Congress that DoD is not squandering money in the process.

“We’re going to lay out an approach that will give Congress the confidence and insight in terms of how we would increase the amount of funding we’re putting toward experimentation and prototyping. “We already have the authorities. What we need to do is persuade the Congress that it also has the oversight authority it needs to do its job.”

The military also needs more freedom to spend on technologies even when they don’t have an obvious connection to the major programs of record that make up the bulk of DoD’s acquisition funding.

“The notion of risk becomes really important when you look at technologies that are hard for us to integrate right away or that aren’t mature enough, and all too often the budget process forces us to walk away from those. “Unless those technologies are mature enough to plug in right away, it’s hard to defend the funding both internally and across the department and with Congress.”

“We need the ability to experiment in those areas and then, as we get more definition, be able to apply it directly to a program right away.”

Procurement division in any company must understand how to obtaining products and services. The procurement cycle follows specific steps for identifying a requirement or need of the company through the final step of the award of the product or contract. Responsible management of funds is vital when handling this necessary process, whether in strong or weak mission demand signal markets.

A procurement process template provides a model and a framework to work within to Save you time; ensure that you get the right solution to meet your business needs; ensure you pay the right price and avoid overlooking vital steps that may come back to bite you later. 

By using a standard procurement process, you will find that suppliers will be familiar with the steps you take. They will know what to expect and will know that they are dealing with a professional organization.
Every project is different. Some procurement projects are small and every step of a formal process may not be required. Alternatively, some projects are highly complex or regulated and a generic framework will not be appropriate or sufficient. Despite this, every procurement project follows the same broad process . The key thing to remember is to adapt the process to fit the project.

Digital procurement solutions can be a significant source of help in various stages of the procurement process. For instance, an digital procurement solution will electronically generate purchase orders, with all of the requisite information.

Also, a digital procurement solution is a critical tool when it comes to delivery and record keeping. With a digital procurement solution, all purchase orders will be sent electronically in the system to ensure delivery is completed immediately.

Finally, a digital procurement solution will catalogue every transaction in the system, ensuring your records are kept up-to-date. Those records are of critical importance for financial forecasting or process efficiency tracking.

Procurement has so many moving parts it requires constant analysis and monitoring by someone or a team within an organization. There is always more to know/more data to analyze/more forecasts to produce – all of which is a responsibility of procurement.

The benefits of digital procurement system extend to each stage of the procurement process. Stream line your purchasing and procurement processes, reduce personnel headaches, eliminate unnecessary paperwork. Now is the time to switch to a digital procurement system 

So…what are the stages in the procurement process? What are those constantly moving pieces in procurement?

As you learn/read more about the procurement enterprise, it becomes glaringly obvious that each of the factions involved in procurement has a slightly different take on the stages in the procurement process. That’s why we put together a solid list of the critical stages in the procurement process.

We find confusion in most outside reports and procurement manuals, were the procurement process is said to include inventory control and management, storage and distribution, and even disposal—all functions which are more appropriately classified as part of logistics, and even supply chain management, but not necessarily procurement.

So, in line with the above, the steps in digital procurement process are those listed below and they will be addressed in more detail in future posts. So here is a proven Step-by-Step technique enables procurement teams to successfully achieve goals of field-level service.

1.  Need Recognition

The business 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 company.

2.  Specific Need

The right product is critical for the company. Some industries have standards to help determine specifications. Part numbers help identify these for some businesses. Other industries have no point of reference. The company may have ordered the product in the past. If not, then the business must specify the necessary product by using identifiers such as color or weight.

3.  Source Options

The business needs to determine where to obtain the product. The company might have an approved vendor list. If not, the business will need to search for a supplier using purchase orders or research a variety of other sources such as magazines, the Internet or sales representatives. The company will qualify the suppliers to determine the best product for the business.

4.  Price and Terms
The business will investigate all relevant information to determine the best price and terms for the product. This will depend on if the company needs commodities readily available products or specialized materials. 

5. Purchase Order

The purchase order is used to buy materials between a buyer and seller. It specifically defines the price, specifications and terms and conditions of the product or service and any additional obligations.

6.  Delivery

The purchase order must be delivered and sometimes the specific delivery method is specified in the purchasing documents. The recipient then acknowledges receipt of the purchase order. Both parties keep a copy on file.

7.  Expediting

Expedition of the purchase order addresses the timeliness of the service or materials delivered. It becomes especially important if there are any delays. The issues most often noted include payment dates, delivery times and work completion.

8.  Receipt and Inspection of Purchases

Once the sending company delivers the product, the recipient accepts or rejects the items. Acceptance of the items obligates the company to pay for them.

9.  Invoice Approval and Payment

Three documents must match when an invoice requests payment – the invoice itself, the receiving document and the original purchase order. The agreement of these documents provides confirmation from both the receiver and supplier. Any discrepancies must be resolved before the recipient pays the bill. 

10. Record Maintenance

In the case of process review events, must maintain proper records. These include purchase records verifying any purchase order to confirm information. Purchase records reference future purchases as well.

Services are constantly struggling to find suppliers for parts on aging planes that the original manufacturers may no longer produce. In some cases, the companies that built the part have long exited the business, but requirements remain.

“Oftentimes we have parts that we can no longer get, and they’re in small numbers, so we can’t get interest in the part of an industry to build something when there’s only a small number and they have to retool or do that.” 

3D printing is playing a large role to improve logistics across the services. Advancements in 3-D printing allow the force to not worry about the supplying and ordering of parts cutting out the supply chain and reducing timelines for making parts.

In a real-world example, the service had to replace load-bearing handles on C-5 aircraft for $1,600 each. The part, however, was unavailable and HQ said it didn’t know when it would be able to get the part. Through 3D printing, the service was able to produce the part for $300 and didn’t have to wait around for it to be delivered.

Dispatcher Road trip Story illustrates important lessons about using performance measures to help ensure that a supply chain is performing well.

Dispatcher is driving on a long trip in a car that has a broken speedometer and a broken gas gauge. Dispatcher has been traveling for several hours, keeping track of the time and looking at the odometer to determine how fast Dispatcher is going. 

Dispatcher is sure the speed limits are being followed– when Dispatcher is stopped by a patrolman and given a speeding ticket. 

Slowing down, Dispatcher drives for two more hours keeping track of the time and the odometer, but once again is stopped by a patrolman and given another speeding ticket. 

During the remainder of the trip Dispatcher slows down to a speed Dispatcher now believes will avoid getting another speeding ticket.

Dispatcher drives for one more hour when the car stops all of a sudden. Dispatcher ran out of gas!

Not a very good trip, primarily because Dispatcher was missing some very important key measurement devices in the car – the speedometer and the gas gauge. 

Unlike Dispatcher, most people would be extremely reluctant to drive this car.  In a similar way, however, there are many companies that run their supply chains without a good set of measurements in place. 

Like Dispatcher, the only way they are able to find out if they are meeting their supply chain goals is after the fact, by diagnosing poor financial results, or when they lose an important customer- events similar to the speeding tickets.

Dispatcher experience teaches us several lessons on the importance of measuring supply chain performance

Measurements are important to directly controlling behavior and indirectly to performance – the speedometer reading impacts how hard or soft Dispatcher pushes on the gas pedal.

A few key measurements will go a long way toward keeping a company on track towards achieving its supply chain improvement objectives – like those on a speedometer and a gas gauge.

Seemingly relevant, but cumbersome, measurements are of little use, and
are possibly a hindrance, in helping to improve supply chain performance like the odometer in the car.

Picking the wrong measures and leaving out important ones could lead to supply chain performance degradation – like running out of gas.

Driving a supply chain based only on after-the-fact measures, like losing
an important customer or having poor financial performance is not very effective-- the way getting speeding tickets and running out of gas is an expensive way to drive a car.

Many companies use the term “scorecard” to describe the report that conveys performance information to suppliers.

No standard measurement approach exists across industries, although supply chain organizations should strive internally for some consistency, particularly with respect to the technical aspects of their systems. 

It does not make sense for every business unit or internal location to re-invent how they measure performance. The challenge today is to develop a measurement process and scorecard system that offers some flexibility to a company's internal operations while maintaining company-wide consistency. 

Consider the following examples. A consumer products company developed a scorecard to evaluate its suppliers, most of which were substantially larger than the company. It was bad enough that this scorecard was not pilot-tested and was less than professional in appearance. 

But the system failed when many larger suppliers challenged the accuracy of the company's scores, particularly when the scores were lower than those received from the suppliers' more sophisticated customers. Suffice it to say that this experience deterred the company from moving forward with its measurement objectives.

Procurement teams must take a hard look at their measurement processes long before suppliers can challenge the legitimacy of the metrics. The processes must not turn into the kind of exercise that one supplier's executive described as “they present and we rebut.” 
 
A second example highlights a variety of shortfalls that confront too many supplier measurement systems. Almost every supply chain organization has at least thought about developing a supplier scorecard system. Those that are serious about the process have most likely committed serious time, budget, and resources toward development and maintenance of systems of measurement. 

One such logistics company had a system that on the surface, appears ideal. Do senior managers need a ranking of supplier performance sorted by commodity group? Do they want a listing of the company's best or worst performing suppliers?  This, and much more, is available at the push of a button.

However, during a training session at this logistics company, an instructor asked several buyers to name one of their best performing suppliers—what the company called an elite supplier. 

The intent was to use examples of real suppliers to demonstrate the data features of the system but some buyers cites a supplier as being worthy of preferred status while others, in the same supply chain organization, indicated they would rather discontinue the relationship with that supplier? And what are the dangers of a system that awards high scores to poorly performing suppliers?

The consensus was that although the scorecard system was supported by an extensive database that allowed all kinds of rigorous analyses, the data to support the system was still collected and keyed in manually. Furthermore, many scorecard items required subjective judgments. 

On top of this, most buyers had responsibility for frequently inputting data for a large number of suppliers, a heavy burden on top of their “normal” workload. Many in attendance also agreed that the data for the scorecards was keyed in just before, and sometimes after, the cutoff date, meaning that the emphasis was hardly on the quality of the data.  Attendees also acknowledged that supplier scores were used as an indicator of a buyer's job performance. 

The group agreed that their suppliers were held to the same criteria and weights, even though not all suppliers were equally important to the company's success. Also,  internal customers or stakeholders had no way to be part of the measurement process.  

There was also some confusion about what kind of organization qualified as a supplier since some suppliers provided material from multiple locations.  Finally, no clear agreement emerged that the measurement process was contributing to higher performance. 

What are some lessons here?  Clearly, an effective scorecard system requires much more than an elaborate database that can present data in many ways. While that capability is important, technical capabilities do not guarantee system success. And scorecards should not ignore the voices of internal customers. Managers at manufacturing plants, warehouses, distribution centers, and logistics hubs are often perfectly positioned to evaluate suppliers' day-to-day performance. 

Another lesson is that scorecards often place a serious work burden on the individuals responsible for maintaining them, which often results in scorecards that are late or completed at the last minute—which raises concerns about data integrity.  Is a reliance on subjective and last-minute evaluations affecting the integrity of the scores? 

A further conclusion is that scorecard systems can result in too much averaging of data for suppliers that provide goods from more than one location. If a supplier provides goods from a dozen locations around the world, does this call for one scorecard or a dozen? If this supplier pursued certification it would apply to individual sites, not to the entire company. Furthermore, the number of suppliers and the number of shipping points are often very different figures. 

A final lesson is that scorecard systems can drive the wrong behavior. The results will be skewed—and not fit for their intended purpose—if a buyer's performance evaluation is based partly on the performance of suppliers. Worse, the performance is often being determined by scorecards responsibility for completing. 

The conflict of interest is obvious. While most everyone at the company may agree that supplier measurement can be a good thing, it is also evident that the system in place is far from ideal.

Most buyers say continuous improvement in an organization relies on performance “measuring, measuring, and measuring again.” Once a company’s road map for change is laid out, it can develop a set of performance metrics or key performance indicators to ensure that it knows when it is meeting its objectives. Such organizations should choose a limited number of metrics and align executive to management-level measures.

Supply chain performance measurement efforts have been conducted to address the following questions:

1. Why is performance measurement important?

2. What general approaches are available to measure supply chains?

3. What advice can be followed when selecting performance measures?

4. What methods are available for setting performance targets?

5. What are application vendors doing to support performance
measurement?

6. What initial steps should a company execute to get started?

7. Why Is Performance Measurement Important?

8. How does measurement affects supply chain behavior?

9. How does supply chain behavior impact performance?

10. How does performance measurement provides means to assess if supply chain has improved?

​Navy has a large backlog of surface ship maintenance it is trying to dig out of; that’s not new. And while the sea service and ship repair industry are making some progress in cutting back on administrative and other burdens that slow down maintenance availabilities,  contractors are so backed up that the Navy has received zero bids for several recent maintenance availabilities.

Couple the limited space with delays due to poor planning, material not showing up on time, expanding work package scope and more, the waterfront has the potential to create a lot of headaches for ships in repair and the fleet operators planning to deploy them.

There is “no shortage of work to do” to improve on-time figures.

We have outlined barriers Navy and industry face to achieving on-time delivery of ships out of maintenance, as well as several solutions we’re trying to put into play to make the situation on the waterfront more tenable to maintainers and operators.

Our potential to be successful” is determined well before a maintenance availability even starts. When planning products and drawings aren’t completed on time, when items are added to the work scope late, and when materials don’t show up at the repair yard a month ahead of the start of work, the potential to be successful is greatly diminished.

Navy is trying to do better planning on its part, and ensure the yards are doing the same, to increase that chance of being successful.

Must create a well-defined scope of work, that is finalized early, planned appropriately and has good work specifications. To support that, Navy has acknowledged that it is awarding contracts too close to the start of work and now allowing enough time for planning.

“We have lots of data, and we use that data as we’re evaluating progress toward starting an avail. We have not come across an availability yet” that has fully met the goal of having material on hand on time. Sometimes industry thinks it’s okay if the material arrives ahead of need, and sometimes the Navy simply awards contracts too late to support on-time arrival of material.

Another planning effort has to do with assumptions for how long the work should take: “you’re not going to make your schedules if you start out with availability durations that are unrealistic.

“So we went and took a look at how long we were scheduling availabilities for, took a look at the model we used to estimate those availability durations, and we found some areas that probably weren’t giving us very good estimates.”

An Availability Duration Scorecard was created, which took into consideration port capacities and other current data to more accurately predict how long work would take and therefore to help the fleet commanders level-load the ports, rather than creating a backup of ships waiting to get work done.

The scorecard initiative was meant to get after better on-time delivery and creating predictable workloads for repair yards, as wells as efforts to contain growth in the scope of work packages, as primary ways to boost low on-time delivery rates.

Once the availabilities begin, Navy has a lot of requirements that bog repair workers down, further contributing to delays in the work and lengthier availabilities. A hard look at quality assurance checkpoints in particular highlighted to Navy leaders that redundancies and bureaucratic requirements were getting in the way of getting ships fixed up and returned back to the fleet for operations.

After asking industry what requirements they’d like to see nixed, they want a reduction in quality assurance rules. That was “a little far a leap for folks from a risk perspective,” but by working together compromised on a list of quality assurance  checkpoints that represented a 50-percent reduction from previous requirements.

“We think, based on just how long these checkpoints take, it potentially – again, potential, because we haven’t realized anything – it could save a few weeks give or take several days. For the company to be doing blast and paint or something like that under the hull, to stop, to do a four-hour checkpoint callout … there’s a lot of impact to the schedule in wait time that that creates.”

“What we noticed when we started going through it was, there was a lot of duplication of effort already in what we were doing, so that was pretty easy. We really pulled back on  non-critical coded areas, we took a lot of risk in cutting back checkpoints … on non-critically coded areas.

“So there’s a lot more work we can still do there. We have chiseled away at the low-hanging fruit.”

“It’s less about capacity. There’s enough capacity if we just are smarter and more willing to look for that path to yes. Tandem docking is a great idea industry pitched to the Navy and that “we’re transparent and willing to work with anything that they’re interested in trying.”

There was some risk but not as much as one might think: both ships would have to be undocked at the same time, so a delay in one would delay both, but these two particular warships were chosen because the docking portion of their work scopes were almost identical. 

The ships may diverge in the work they need done once the under-hull portion is completed in the dry dock, but they should remain on similar timelines in the dry dock as long as something “extreme” doesn’t happen.

Tandem docking helps increase the capacity of the waterfront. There’s all kinds of ways to leverage that capacity with innovative thinking and the willingness to find a path to yes.

Other innovative ideas aimed at shortening the duration of the availabilities – and therefore making better use of available capacity – are coming from industry partners who are constantly looking for better and more efficient ways to pull shafting, do paint and blast work and more.

A top priority on the Navy side – was improving the relationship between Navy and industry. When I came into the job there was a lot of tension and finger-pointing happening, and we’ve sought to “build a stronger partnership and how we work together to solve problems.”

There is certainly room for improvement on the Navy and contractor side – and an imperative to improve, with operational pressures on the surface fleet increasing when more ships are stuck in port waiting for maintenance. 

Navy does not want for ships will go out on deployment with material deficiencies, so the repair industry must figure out how to get the full scope of work conducted in a shorter timeline without sacrificing quality and safety.
Innovative ideas like tandem docking help, and new technologies and processes that shave days or weeks off of availabilities help. But systematic challenges remain that the Navy/industry team will have to continue to tackle in the long-term.

“The scope of the work is getting much more complex, and that’s challenged some of our industry base. “There’s an excess of work in the port. We are routinely seeing no bids on work, especially on some of the continuous and emergent maintenance availabilities. No one has the capacity.

Workload is excessive and industry will have to look at growing their workforce in particular trade skills to keep up. “We have to get to the point where we’re providing industry incentives to go and hire the people and retain the work force.

There are times industry is limited in taking on work because they don’t have enough welders – specifically aluminum welders – so the Navy needs to prove it can provide stable and predictable workloads over the long-term.

Some contractors are pitching the Pentagon on a new idea for reducing the cost of Naval Fleet: sign an extended multi-year maintenance deal instead of negotiating a new contract every year. There’s also a performance-based twist: industry has to provide enough spare parts to keep the fleet battle-ready.

Navy and industry often negotiate new deals every year to maintain the fleet and negotiations often take most of the year and by the time a contract is signed, it’s time to begin negotiating the next one.

“It’s a commitment on industry’s part to a long-term deal and it would bring along the partners as well as the supply chain and allow us all to establish long-term arrangements with our vendor base.

If there is a multi-year deal industry could bank on having a certain level of money coming into their activities and be able to work long-term arrangements with the vendor base, everybody benefits from that.” 

Industry is proposing that DoD transition to a performance-based logistics approach in which contractors are incentivized to reduce costs. Traditional sustainment concepts measure inputs, whereas performance-based logistics measures success in terms of outputs—in this case, readiness and affordability.

DoD and industry need to negotiate ground rules governing how performance-based logistics would be implemented. Following the pattern used in other performance-based arrangements, including those between prime contractors has with its own suppliers will be sufficient time to earn back its up-front investment. 

Transitioning to long-term increments would eliminate the current practice of annual negotiations for sustainment, a process that results in considerable price variability from year to year. 

By migrating to a system of only one negotiation for a multi-year, DoD would get a more predictable outcome in terms of cost and performance. It would also shift most of the execution risk to industry, which is a common feature of all performance-based logistics contracts.

Industry has the position that both sides will do better with the long-term deal, which will allow us to lock in longer-lead parts contracts and assure its suppliers of steady work at known prices.

Capability and affordability are usually traded off against each other in Pentagon arrangements for supporting combat systems, so leaders want to know why contractor thinks it can simultaneously increase readiness and decrease costs. 

The short answer is examination of the processes surrounding the sustainment function identifying numerous ways in which money can be saved without sacrificing readiness. These include reducing manpower and material costs, improving inventory control, automating tasks and predicting with greater accuracy when maintenance actions will be required.

Industry sees this new performance-based logistics deal as an opportunity to stand behind the product from the sustainment perspective.
​
1.  What is a product support arrangement? 

Product support” and “product support arrangement” is defined as: Product support — the package of support functions required to field and maintain the readiness and operational capability of major weapon systems, subsystems, and components, including all functions related to weapon system readiness. Product support arrangement — a contract, order, or any type of other contractual arrangement for the performance of sustainment or logistics support required for major weapon systems, subsystems, or components.

2. What attributes indicate equipment might be good candidates for a performance based logistics arrangement? 

Every system, sub-system and component that requires maintenance, repair or overhaul subsequent to entry into the inventory should be evaluated to determine whether or not performance based logistics support might be appropriate. Many, but not all systems, sub-systems and components are good  candidates. Attributes indicating to be appropriate include when equipment has reached a level of maturity that potential sustainment providers can reasonably approximate failures Attributes indicating equipment might not be good candidate for a performance based logistics arrangement to include highly complex or new technology equipment entering the inventory where failure rates are completely unpredictable and equipment exiting the inventory after of deploying contract 

3.  How does a program office determine the cost savings/avoidance associated with a performance based logistics  arrangement?
 
Through a Business Case Assessment costs associated with the scope of effort are tracked and the period of performance identified for proposed performance based logistics arrangement. Estimated costs are compared to the current product support solution costs for the same operational outcome to make a determination of anticipated costs for the sustainment options. Undefinitized Contract Actions should not be used in evaluating savings of a performance based logistics  arrangement since contract terms, specifications, or price are not agreed upon before performance is begun under the action. 

4.  What practices and procedures could negatively impact successful performance based logistics implementation? 

Performance based logistics  arrangements are negatively impacted by too many metrics “informational” metrics that are not part of product support responsibility but consume their resources to track, and metrics that work counter to one another Micromanaging workers to the point that it impacts their ability to perform.

5.  What is the appropriate performance based logistics  contract length? 

The performance based logistics  arrangement must be long enough for the provider to recover any investments made to improve their product and/or streamline their processes to meet requirements and give them time to identify issues impacting reliability or improve processes, design the fix, field the improved subsystem or implement the improved processes, and recover the investment. Less complex subsystems and components or arrangements that require less investment to improve may have shorter arrangements. 

6. What should be considered when selecting performance incentives? 

Considerations for selecting performance incentives include ensuring incentives are built upon performance objectives/standards and are realistic, measurable, and attainable also aligning incentives with the effort and contract value and structuring incentives for largest overall impact and avoiding any unintended consequences, while providing value for achieving mission Being careful what you ask for, since you will likely get it and may not be able to afford it – or may not have really needed or wanted it. 

7.  What are the key considerations of performance measurement?

It is essential to translate performance outcomes specified by Warfighter into performance metrics in the arrangement. These metrics must be appropriate for the delegated level of responsibility and outcome assigned to product support provider with measureable unit and time frame. The differences between the top-level performance outcome and the metric included in the arrangement are included below. A Performance Outcome is Requirement typically stated by customer while a performance Measure: is typically a number e.g., “miles per gallon” and “cost per mile”  and a performance Metric is a measure with unit and conditions e.g., “average # miles in traffic” 

8.   What constitutes a good performance metric? 

Good performance metrics should be: Key to achieving and improving performance Linked to system-level objective Appropriate to scope and responsibility Reflective of processes that contractor has control of Specific to a unit of measure Specific to an acceptable range or threshold, able to motivate desired long-term behavior and understood and accepted easy to collect data and verify Readily assessed Able to provide timely feedback.

9. Can performance thresholds be used? 

Thresholds must be established in all cases. Sometimes thresholds and objectives may be used with incentives to deliver the higher performance level: Measurement during a period of Time like number of assets from the depot each period, percentage not mission capable supply Improvement over multiple periods, product improve quality targets period, process eg, increase efficiency and reduce support cost from previous period.

10.  Can these top-level life cycle sustainment outcome metrics be put on contract or should tailored lower-tier metrics be used? 

Top-level sustainment outcome metrics and/or lower-tier metrics can be put on contract. One of the most critical elements of a performance based logistics  strategy is the tailoring of metrics to the operational role of the system and ensuring link of the metrics with the scope of responsibility of the support provider. The platform level and specifics of the arrangement will dictate whether to use top-level outcome metrics, lower-tier metrics or both. 

​Transformational AI-driven generative design will earn its place in product design toolboxes the same way any now-ubiquitous tools have: by proving its worth in making products faster to design, higher in quality and performance, and best fit to the optimal means of production. 

AI-based generative design is no replacement for a product designer or engineer. Instead, think of it more as a right-hand man — or better put, a right-hand team — with countless hours to spend on each task. It allows designers the means to explore options far more exhaustively than they otherwise ever could, make effective decisions more quickly and earlier in the process, and eventually implement a design — from concept all the way to manufacturing. 

Workshop is a vehicle for exploring, testing, and proving an AI-driven tool to generate physical designs. Implementing a divergent design flow, Workshop builds off the traditional flow: define, create, explore visualize, analyze and fabricate. Where that flow departs from the norm is in who — or rather, what — is performing or assisting in those development stages, and the extent of that assistance.

With Workshop, engineers and designers specify design goals, along with parameters such as mass, volume, and engineering constraints, as well as materials and manufacturing processes available for production. 

All that data gets crunched by AI deep computational networks to create a model it concludes is the optimal balance of the given constraints. More typically, the network will generate many versions, creating tens, hundreds, or even thousands of variants, all of which balance those constraints in slightly different ways.

The computational network proposes options, along with the data to indicate how well that option meets various goals and constraints, but the designer remains the guide of that process, making the key decisions and tradeoffs. Effectively, you tell your team what you’re trying to accomplish and what the limitations are, and that team reports back, “You said you wanted to do this, so here’s the avenue you should probably pursue.”

Workshop delivers that ability for a designer to set objectives and constraints, include limits on geometry, material type and amount, and production methods. With generative design at the fingertips, a designer can then quickly create and integrate hundreds of options, each presenting a different degree of adherence to the constraints given.

This raises a great question: How can the user avoid being overwhelmed by a potentially large number of similar-looking designs, and instead focus effectively on the one or few best suited to the set goals and priorities? 

To make all those generative design results easier to consume, Workshop includes filters that let you sort designs using the most relevant and important info up front. Filters let you navigate, compare, and contrast the tens or hundreds of options by the degree to which those designs meet the goals and constraints. Filter by strength, mass, cost, manufacturing type, or stiffness, for example, to narrow in on and eventually identify the best option to pursue.

Arriving at the right model, or at least the best one to explore first, shouldn’t end at  creating a conceptual, stand-alone structural representation. Rather, the key is to also allow the means to bridge the gap from that machine-generated model to engineering verification and styling, and eventually on to getting it manufactured. 

Some simple outputs are of limited value; it yields an interesting shape, but one that can’t serve any use beyond the visual. A productive workflow needs that geometry embedded with all the rich data sets needed to directly feed into simulation, verification, rendering, and on to prototype and manufacturing. 

If the machine integration produced just a shell of geometry, the designer might have to re-create the whole thing manually. Bridging the gap from synthesis to the rest of the workflow was a key design goal for Workshop generative design functionality, and its implementation is unique in the way it automates the integrated design in a complete, usable, and editable format ready for verification, re-design, and ultimately, physical creation.

A generative design–based workflow should seamlessly culminate in a manufacturable model, be it for prototype or volume production. Workshop  generative design considers the constraints and capabilities of the manufacturing process and materials available. 

The model is particularly relevant in the context of additive methods like 3D printing, especially now given recent advancements in printing with metal. Such methods allow for shapes and structure that conventional manufacturing methods can’t achieve, making it essential for the user to provide generative design guidance on which methods are available or preferred.

But you can’t ask or expect end users to navigate the appropriate performance, features, virtual machine types, or determine when use cases might best for generative design or any other workloads headed to execution space. 

As you might guess, Workshop hides the processing wizard behind the curtain so the user doesn’t have to be concerned with how it gets done. Based on the model and constraints, Workshop assesses the workload at hand, “right-sizes” it to the appropriate machine instances, and when complete, hands it back to you inside the application.

Over time, machine learning will permeate virtually every corner of computing technology and applications. Of that, the majority of us have little doubt. In design computing, uses have already popped up to significantly improve the performance of existing 3D graphics and rendering that professionals require. But most certainly, these uses represent but the tip of the iceberg, and the real impact will come in more revolutionary applications.

The demands and workloads product design represent make it fertile ground for AI infiltration. Expect machine learning advancements to both leverage and transform the existing tried-and-true design/verify/iterate/manufacture workflow. 

Most of the possibilities we’ve likely not yet imagined, but the same would likely have been said ten years ago for generative design, an approach that offers compelling, undeniable appeal. Combine that with its natural pairing with virtual workstations, and we should see momentum increase for both approaches.

It’s time to pay close attention to what AI offers for product design computing — assisting in design creation itself, leveraging the technology to streamline workflows, improving end products, cutting costs, and shortening time to markets. Your competition likely has.

New developments in generative design can help companies make better decisions about part design by including manufacturability as a key value. Milling, for example, not an additive process, might come up as the better choice for making a complex part.

New generative design applications enables engineers to see results that meet requirements for strength, mass and other properties, including manufacturability. In this case, the design for a lander leg was limited to possibilities producible on a five-axis machining center.

The latest generation of generative design technology includes new ways to set design boundaries and to constrain the algorithms to more quickly identify designs meeting predetermined manufacturability requirements, including requirements defining particular manufacturing processes. 

More than just a geometry modeling tool, generative design has become a manufacturing process selection tool as well, along with a tool for making best use of various manufacturing processes available. 

Generative design is less and less a tool strictly associated with additive manufacturing.  Multi-axis machining might be the best choice, as it turns out, even for a very elaborate part, when certain constraints are in place.

But what is “generative design”? Generative design is a relatively new approach that uses machine intelligence algorithms that solve problems the way the human brain does but much faster and more powerful network computing to generate a broad set of design possibilities that fit within the performance requirements set by engineers. 

With generative design technology, users can simultaneously generate and explore hundreds or even thousands of manufacturing-ready solutions based on product constraints and requirements such as strength, cost and materials. Manufacturers can leverage real-time performance data and smart manufacturing processes to accelerate the delivery of innovative new products to market.

Rapidly evaluating thousands of design possibilities yields more than the optimum ones to consider. It also sparks engineers  imagination. Users are reporting that applying the application helps them “come up with something we hadn’t thought of,” including ideas for new additive-manufacturing technology and the practical capabilities of existing, at-hand technology such as machining.

Generative design applications includes new capabilities that sort through design possibilities that reflect manufacturability considerations. This enables engineers to compare how different manufacturing processes influence how easily, quickly and cost-effectively components can be produced. 

Formerly, generative design applications most often pointed to possibilities that were producible only by means of additive manufacturing processes, because the resulting organic, nature-like forms that were commonly created did not lend themselves well to processes such as machining, casting or fabrication. 

By applying constraints that sort design possibilities according to limits that favor selected processes, design options can be evaluated in a new light. The results can be surprising and significant in terms of the importance of generative design applications as a decision-making tool.

A custom version of the generative design applcation was developed to solve for multiple manufacturing constraints at once. The goal was to design lightweight components that could meet the car’s aerodynamic performance requirements yet be producible with existing subtractive manufacturing equipment such as a machining center. One test part, an aluminum lower wishbone suspension arm, exemplified the potential for applying manufacturability constraints in generative-design studies.

Generative design’s strong association with 3D printing or additive manufacturing will give way to a broader appreciation of it as a tool to discern the value of other manufacturing processes. A key benefit of generative design, over and above improvements in component performance characteristics, is how rapidly new designs can be iterated. 

Generative design enables manufacturers to make trade-off decisions that balance market requirements, product capabilities and considerations for cost, quality and manufacturers can arrive at these decisions working in a unified, integrated platform that includes a 3D mechanical design and simulation application.

Using generative design technology, the engineers can stipulate manufacturing processes, define design requirements and materials, and then leverage the power of computing. Clearly, generative design should not be of interest primarily to manufacturers with a strictly additive mindset. As manufacturers acquire new options for making parts, they must also acquire the means to make the best decisions about applying these options.

Finally, a Metal Additive Manufacturing System That’s Built for Production

For more than a century, weight reduction for automotive parts—when sought at all—has been an incremental process. Lightweighting a single part by 40 percent is unheard of. The same can be said for consolidating the bracket’s eight assembly components into one piece. 3D-printed engine fuel nozzles are the most famous example of an assembly consolidation made possible by AM. 

Success is achieved not only through faster printers, but through a reimagined digital workflow. It’s possible the time its engineers perfect a new process flow between generative design, setup for additive manufacturing and simulation testing—a process being refining right now- the value proposition and throughput capacity for metal AM will enable mass production.

It’s  only a matter of time before generative design and additive manufacturing are the primary technologies driving these lightweighting efforts. Using the seat bracket as an example, by tradition we would start with the last version’s model, maybe tweak it a little bit and come up with two or three design iterations. We might achieve a five percent mass saving and make it a little stronger.” 

But generative design entails a different kind of approach. It involves not modeling geometry directly, but setting inputs around constraints so application can propose the geometry. This starts with the “hard points” for the bracket design, the regions of the part where material is necessary and needs to conform to specific requirements. “Areas where the bracket attaches to the floor, for instance, or where the seat buckle attaches to the bracket. “So you set those hard points and say, ‘we have to have material here, in this shape, on the entire side, and that attachment point has to be this big.’”

Static load requirements are then programmed where those hard points attach to other parts or assemblies. Engineers then input data for the surrounding components, such as the floor, the seat and the plastic trim bezel that covers part of the bracket. These are the keep-out zones, the areas where the application knows that material is not allowed. Finally, designers input data regarding the additive setup itself, primarily around build orientation, support structures, and any extra material that might be needed to enable postprocessing such as five-axis machining.

Throughout all of these steps, engineers can manipulate materials to test for performance across each new iteration. “You're not getting rid of the engineer in this process.  “What you're doing is giving the engineer a broader design space and more options to consider. In the traditional design scenario, maybe we iterate from the last version of that seat bracket and maybe we get two or three different iterations to choose from. 

Using generative design for the seat bracket, we asked ourselves what the most important criteria was. We could’ve chosen stiffness, but we said our number one priority is to get the lowest mass that we could test in our simulation model—because it’s got to still pass our requirements when we run into through crash simulations and other tests.”.

“What we’re doing now is taking example designs and running these designs through a new workflow. So we set up the generative part, create the first generative outcome, then we optimize this outcome for an additive manufacturing process. We then take that back and run nonlinear or crash simulations on these parts.” 

“We don't have to speculate. “It is already there. The only thing holding us back, at least for the most part, is the efficiency of the process to get there. Until now the design and simulation processes have taken a long time.

They have  involved a lot of manual work by the engineer. While additive is still evolving, the application needs to adapt and shape the process. But we're engineers. We can do it.”

1. “How long have you been using the application?”

2. “How often do you access the application?”

3. “When accessed, how much time do you spend in the application?”

4. “How are you using the application during deployments?”

5. “What features of the application do you routinely use?”

6. “How do you rate usability/accessibility of the application?”

7. “What reports do you routinely use in the application?”

8. “Do you still need to produce local reports with the application?”

9. “Have you ever used the application to brief readiness from site?”
​
10.“Would you say the application saves you time?”

​Data-driven manufacturing is discussed widely these days, and the hype is creating some confusion and misrepresentations in the market. Often discussed in all-or-nothing terms, and replete with generalizations, many companies are not clear about the value that digitalization will bring to their operations. 

Since every manufacturing company has different equipment, processes, and day-to-day challenges, some of the promises are difficult to evaluate. An investment in digital technology without a clear path to success is not strategic, and it is critical that you know what you are going to do with the data you collect before you start a project.

That said, no one questions that basing decisions on accurate and timely data—as opposed to best guesses or perceptions—is optimal in business. Actionable data leads to better decision-making and greater efficiency, ultimately increasing productivity and reducing costs.

Machine monitoring is a common entry point to data-driven manufacturing since operational data can be collected and analyzed from almost any kind of equipment, including legacy equipment, through sensors. 

A digital sensor can provide metrics on machine availability, cycle times, production counts, program execution, and more, enabling manufacturers to see important production patterns.  Most machine-monitoring applications today comes with customizable dashboards and reporting features, making it easy to visualize the data you need.

Workshop collects data on operational performance, part quality, equipment condition, and operator efficiency; puts it in context it; and prepares it for analysis. Real-time dashboards show shop floor operations and status of machines. More efficient operations tie directly to success.

Likewise, data can be collected on temperature, pressure, vibration levels, and other aspects of equipment function, providing information on degradation and warnings of impending failures. This area of data analysis enables more proactive, predictive maintenance and reduces unexpected downtime. Predictive maintenance is especially valuable in high-volume production environments.

In low volume, high-value precision manufacturing environments such as aerospace and markets, operations will not become more productive by measuring cycle time and utilization metrics in the same way as in a high-volume production environment. 

Likewise, when manufacturing high-value products with long cycle times or with many manual steps, it is more strategic to focus on optimizing processes. In these environments, process efficiency is the goal, and if a problem in a process is detected early, it results in greater efficiency and cost savings.

In some manufacturing environments, the variability of each machine’s functionality makes it a harder process to measure and evaluate quantitatively. Machines are highly complex and multi-process, and they produce a huge variety, variance, and volatility of data, which is a challenge for analytics programs. 

A huge number of rules must be customized given so many scenarios. Each process has its own set of analytics, and it is hard to measure the true productivity of a machine given this variability.

Another starting point in digitizing information can be making information and knowledge you already have more accessible by capturing and digitizing existing “shop knowledge.” 

Through intelligent tagging of this unstructured information, you are creating digital documentation that is easily accessible by everyone in your manufacturing operation. A digital knowledge base of complex assembly processes or implementation of complex processes is a very valuable asset in many companies.

Even though any company can benefit from digitizing information and knowledge and making it accessible, machine monitoring is not the starting point for everyone. Many companies with complex manufacturing processes and high-value products can benefit from documenting processes and making these readily searchable and accessible on the plant floor.”

When you are evaluating whether to digitalize equipment, you may face more limited budget resources and therefore have more at stake if they make the wrong decisions. The cost of digitalizing goes beyond application tools and sensors and includes customization, communications infrastructure, and ongoing or in-house network support.

“Your best approach is to be strategic; make small, incremental changes, and wait for success from the first project before embarking on the next. It is better to think in terms of continuous improvement instead of a one-time transformation. Collect data on a problematic part or piece of equipment, and apply lessons learned from the first project to your next.”

If you have a limited budget, a cost-effective approach to getting started is to use open-source code to develop your own pilot applications. One such example is an open-source blockchain code that companies can use to build apps to easily automate their quality control documentation requirements, saving time and money.

Workshop has a core underlying goal of providing Digital tools for developers to make it easy to build and deploy blockchain systems. “With it, you can create a Digital ledger—an immutable historical record of assets, including machines and parts—that can all be backward-traceable.

Digital Innovation is a key element of future readiness. It is essential to preserving and expanding military competitive advantage in the face of near-peer competition and asymmetric threats. 

A theme running through the National Defense Strategy—and subordinate strategies like the Artificial Intelligence Strategy—is that preserving and expanding our military advantage depends on our ability to deliver digital technology faster than our adversaries and the agility of our enterprise to adapt our way of fighting to the potential advantages of innovative technology. 

The Department will evaluate opportunities for digital innovation, pursuing those deemed most suitable to address military problems and including those likely to deliver leap-ahead capabilities.

The global threat landscape is constantly evolving and remaining competitive and modernsing our digital environment for great power competition is imperative for the Department of Defense.

We must act now to secure our future.

This Digital Modernisation Strategy is the cornerstone for advancing our digital environment to afford the Joint Force a competitive advantage in the modern battlespace.

Our approach is simple. We will increase technological capabilities across the Department and strengthen overall adoption of enterprise systems to expand the competitive space in the digital arena. 

The Digital Modernisation Strategy provides a roadmap to support implementation of the National Defense Strategy achieved through five strategic initiatives: innovation for advantage, process optimisation, resilient network security, and building talented command control and communication teams.

This approach will enable increased lethality for the Joint warfighter, empower new partnerships that will drive mission success, and implement new reforms enacted to improve capabilities across the digital enterprise.

The strategy also highlights two important elements that will create an enduring and outcome driven digital strategy. First, it articulates an enterprise view of the future where more common foundational technology is delivered across the DoD Components. Secondly, the strategy calls for a Management System that drives outcomes through a metric driven approach, tied to technology budgets and standards.

As we modernise our digital infrastructure across the Department, we must recognise now more than ever the importance of collaboration with our industry partners. The Services, and the Joint Warfighting community is expected to take the intent and guidance in this strategy and drive implementation to achieve results in support of our mission to Defend the Nation.

The future DoD digital environment will provide seamless, agile, resilient, transparent and secure infrastructure and services that advance DoD information superiority and simplify information sharing with mission partners. In accomplishing this, the future environment will leverage a number of innovative technologies that promise to provide increased effectiveness, efficiency, and security.

This management system will enable continual, comprehensive Department-wide digital modernization in a common, coordinated way. Furthermore, it will accelerate transition to foundational enterprise capabilities and services, freeing DoD Components to focus on their mission-unique capabilities and services.

Combined with policy and governance changes, it will shift the Department from an “opt-in” approach to enterprise services. Leveraging commonalities among DoD Component, the many overlapping and duplicative systems, programs, projects, services, capabilities, operations, and governance constructs in the Department will be more effectively linked, consolidated, and integrated.

Benefits of this shift will include:

1. Increase speed and reduced duplication of effort

2. Increase return on investment

3. Consistent, standardised enterprise architectures

4. Support faster fielding of new capabilities, interoperability, usability

5. Increase budget transparency for expenditures 

6. Convergence of Component network infrastructure 

7. Reduce complexity and cost 

8. Eliminates fielding of unnecessary capabilities/services 

9. Reducing program overhead 
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10. Enterprise acquisition/licensing 

​DoD finds itself at an important juncture with an opportunity to make a revolutionary improvement to meet warfighter needs.  By leveraging broader acquisition process and oversight changes within the functional capabilities construct, DoD is positioned to increase the efficiency, speed, and effectiveness of technology insertion from all defense industry participants into programs.  

With an updated industrial base strategy, DoD can address the Gap between technology innovation and product acquisition in a new and effective way by leveraging top-level, capabilities-based perspective of leaders to affect broad, high-impact insertions of technology to benefit the warfighter.

Weapons Systems programs are never static so it is important to continually assure that all programs enabling given functional capabilities are linked to these capability goals—and able to adapt to functional capability changes.  

An integrated, capabilities-based approach to program acquisition and associated oversight processes will not only improve DoD decision making, but also offers an enterprise-level view of a much broader expanse of the programs that collectively enable the desired warfighting capabilities.  

By making decisions across functional and operational capability areas, program tradeoffs will be linked and prioritized with an increased understanding of relationships among programs by the broader acquisition structure.  

Changes in acquisition oversight processes are at least as important as assuring that program managers’ acquisition strategies and management techniques provide context to the functional capabilities of individual programs.

Many examples exist of technology products enabling capabilities needed by the warfighter, many with potential value across the military services.  What is lacking is a senior leadership mechanism to rapidly identify, adapt, and acquire innovative, near production-ready technologies for programs of record.  

An updated industrial base plan will provide this capability—and improve the responsiveness of the acquisition system to operational needs. Using a warfighting capabilities-based assessment, the updated strategy identifies technologies which enable the functional concept and provides an assessment of the industrial base for a prioritized subset of those technologies. 

To help create the plan, the Pentagon will release a questionnaire to the defense industry to try and gather information about potential weak spots. The questionnaire will go out with help from trade associations and major industry players. “We’re finalizing a very targeted request, and it’s a  request where we give industry an opportunity to provide some information to help us do this analysis.”

Weapons systems program shortfalls are sometimes masked because deficits in industrial base performance can often be dealt with by DoD actions such as making additional funding available, altering requirements to avoid acknowledging shortfalls, or stretching out programs until technical problems have been resolved.

Moreover, program terminations — the most glaring manifestation of acquisition difficulties — can also be chosen by DoD to release funds for other uses or because products are no longer needed.

The dominant criticism of the weapons and systems produced by the defense industry is that programs either cost too much to start with, or their costs increase during development and production.

Many assessments of industrial base performance have identified a number of causes, including overly optimistic bidding in proposals, errors in engineering and management, DoD changes in requirements, and complexity of advanced military capabilities that “stretch the boundaries” of proven technology.

Many cost increases in systems don't come from technology challenges, but from the management challenges. For example, within a single large program the complexity of managing suppliers includes more than simple contracts specifying products and delivery dates.

It now involves assigning to suppliers major portions of development and production, which entails concern about the suppliers’ long term fiscal condition, their ties to other firms, international linkages, and whether the suppliers’ engineers, design processes, manufacturing facilities, workforce, and sub-component providers are capable of performing according to the requirements set forth in the contract.

Dated business and procurement practices create challenges working with DoD, including contracting regulations, policies, barriers to entry, qualification challenges, programmatic changes, and other problems, leading to adverse effects on supplier ability to retain workforce with capability to innovate, manufacture, and sustain the Defense Industrial Base..

DoD lack of long-term perspective has hurt us in key areas by causing talented people to quit the field and take jobs they know will last. Private industry has to live “quarter to quarter” on its price/earnings ratio and return on investment figures but government can take a longer perspective. But government often doesn’t, “It’s very non-linear, very hard to trace” an initial investment in research to a new working product many political  cycles later and that makes R&D a hard sell to Congress.

Especially concerning 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.

Once you have identified your list of targeted industrial base resources to be profiled, you are ready to begin creating  a risk profile for each one. The idea is for the resource owner to rate the resource importance to the organisation from an information-security perspective and relative to all other assets in the organisation. 

The profile tracks information at a business and function level and is not necessarily specific to implementation decisions. For example, if you are designing a new system, you should know what types of data will be processed and what the basic functions being performed will be before you decide on technologies or placement in DoD field network. 

When you are designing your profile questionnaire, it is important to note that not every question needs to be used in the calculation of the risk sensitivity. Some questions are meant to capture other pertinent information about the resource for reporting purposes and do not directly contribute to the risk-sensitivity score. 

For example, you may ask a question about where in the industrial complex systems are hosted. The answer to this question doesn't affect the sensitivity of the asset, but you may want to prioritise assessments of third-party hosted systems because of increased risk exposure, and the answer to this item will give you the desired information about which systems are hosted internally versus externally. 

You may also want to ask a couple of high-level questions about whether basic security controls are in place for example, roles-based access, and asset tracking. The answers to these questions will help you to focus your efforts on resources that don't meet the most basic security control requirements. 

Similarly, you may want to ask if the system uses a common or central infrastructure for authentication and authorisation or logging to eliminate the need for assessing those areas any further. Systems using one-off solutions for these core security services may have more potential for risk exposure. 

Factors do not change the sensitivity of the resource, but they can help with prioritisation. For example, whether or not a vulnerability test has been performed on the resource does not affect its sensitivity, but this knowledge is important for identifying resources that may have undiscovered vulnerabilities that are readily exploitable. 

You will often find yourself trying to choose between several high-sensitivity resources to assess, and these other factors can help you decide which ones to focus on first.

The industrial base risk profile questionnaire should include several questions about the resource to help determine the sensitivity and criticality of the application in comparison to others. It is essential to evaluate a resource's sensitivity on a relative scale. 

Start by identifying the resource that is most crucial to the organisation, and use this as a reference point. This is important because the tendency is to rate resources too high. If you end up with all resources being rated as high sensitivity and none as moderate or low, then the scale becomes worthless.

You may not have defined the specifics of how the functions will be performed, but having business and functional requirements defined is enough to complete the security risk profile.

As part of the challenge of attracting new innovative suppliers to the defense industrial base, DoD has also begun developing a concept for an Industrial Base Technology Solutions Watch List to address the imperfections of the on-ramps available to companies that have leading-edge, producible technologies relevant to programs of record.  

Program managers are intently focused on cost, schedule, and performance, so they may resist inserting innovative products that could impact program execution.  As a result, innovative technologies often remain underutilized.  There are other reasons technologies remain on the sidelines.  

1. Do not meet programs managers’ funding priorities and not in the program’s scope as originally envisioned

2. Are “cutting room floor” technologies from losing bids difficult to assimilate in programs 

3. Are not completely aligned with current producibility requirements
 
4. Lack capability to compete effectively with potential adversaries

5. Not always clear if systems are completely resident in a common technology generation
 
6. Systems don’t always lead by a technology generation or order of magnitude better performance in key attributes

7. Slow response when an immediate/projected industrial base deficiency is identified
 
8. Don’t identify warfighting capability leadership goals and stakeholder support/validation

9. Slow to determine and prioritize associated technology maturity
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10. Not enough assessment of industrial base competition associated with innovative technologies

​DoD traditionally relied on a largely defense-unique industrial base comprised of many suppliers and technology leaders. In the future, DoD must increasingly access outside marketplaces, and compete with other business segments for technology, investment, and worker capital.

There is a need to shift to Time Certain Development and make “schedule” a Key Performance Parameter. Developmental programs must change their focus to deliver useful military capability within a specified time by making time the focus of the up front requirement statement. 

Capabilities could be upgraded over time as technologies mature and operational requirements become clearer. Time Certain Development differs from prior attempts at valuing time to market, such as slow acquisition progress and spiral development in that a maximum number of years is mandated, the start and end dates are defined, and the driving factors like requirements, budget, source selection, etc. are revamped to support it.

While endorsement of Time Certain Development does not explicitly mention increasing the frequency of new programme starts, too long of time from Milestone A to production decision certainly implies the likelihood of new starts occurring more often than they have in recent decades. 

The prospect of programme termination, should it fail to deliver on time, would also contribute to shorter development times and more frequent new starts. Shifting from cost-based to time-based metrics has other advantages. Time is easier to understand than cost and less subject to tricky ways of presenting costs. 

A time-based approach to acquisition offers other advantages. Greater uncertainty about where the next fight may be, and where conflicts are to take place, is likely to be a dominant feature of the future security scenarios for decades to come. In such circumstances, committing to lengthy acquisition programmes risks fielding systems whose utility has been eroded by changes in capabilities and operational concepts 

Lengthy acquisitions drive up programme costs and puts numbers ultimately procured in jeopardy  due to growth in unit costs, and, because the new systems arrive later than expected, aging systems have to be retained in operational service longer than planned. 

A time-based approach, if properly implemented, would mitigate these problems. In addition, by enabling DoD to field new systems more often than in the recent past, the force structure should, at any point in time, contain a richer mix of advanced systems, thereby making it more difficult for opponents to counter field capabilities. 

Time-based acquisitions could also benefit the defense industrial base in several ways. While development times and the length of production runs would tend to decrease, more frequent new starts would benefit design teams and make losing a given competition less of a threat to a company survival, whether in specific product lines or the defense business in general. 

DoD programme managers and contractor executives alike might well be more resistant to endless requirements changes because acceptance would endanger meeting schedule. Possible policies like banning major modifications during the first year after programme award might also reduce the amount of competition on both sides regarding requirements, budgets, and bids. 

Studies of the defense industrial base indicate that major concerns exist about sustaining sufficient competition within the industrial base to encourage innovation and constrain costs.  We are looking at ways to help keep the supply chain active, trying to replicate the open-mission systems approach to encourage competition among competitors and increase the number of companies that can develop for that system.

Some observers are concerned that not having competition throughout the life of a program means giving up the most effective means of controlling costs. Others believe that competition at least through prototype is critical to avoiding major developmental and production risks. Many are also concerned that dysfunctional competitive behavior is occurring because of the small number of major new programs. 

For example, companies that have lost the competition for a major program have grown more inclined to contest the award and, as a result, delay the start of a program important to military effectiveness.

DoD would conduct a “deep dive” to find the “true cost” of the weapons systems. The effort would focus on delayering the supply chain and incentivizing second-tier suppliers onward to invest their own money to make production more efficient.

Its naïve to think that that’s not going to take a lot of time just to look through the information, but it’s a great aspiration. Prime contractors have come to an agreement allowing the company to make economic order quantity buys with an understanding of how it would recover the funding when the block buy contract is finalized. allow us to save a significant amount in savings, just by allowing our supply chain to aggregate their buy” 

DoD is focusing on category management — a purchasing strategy that eliminates redundancies and streamlines processes. Every dollar we spend on something that we didn’t need to spend it on is one less dollar we have to spend somewhere else. So, that’s a major focus across everything we do.”

But the uncertainty of the defense budget presents a challenge to daily planning. One of the challenges we have is that in our business, sometimes the risk we accept we don’t see for years afterwards because it just takes a little bit longer for it to happen. New programs or initiatives are most vulnerable when anticipated funding fails to materialize. One of our goals is moving more dollars into funding for research and development. 

Large companies, some of our big weapons system primes we’ve been in some stakeholder meetings and they say ‘we came to the institutes first because there was money, and if DoD is going to put money somewhere we’ll go see what’s going on. But we’re staying because of the connections and we’re getting access to our supply chain like never before. It’s really catalyzed conversations and organizational relationships, and is addressing technology problems like we’ve never seen before.

DoD adoption of time-based acquisitions would incentivise more companies to remain in the defense industry by offering new business opportunities more frequently than in the past, and would possibly attract commercial companies to the defense market. 

“There are hundreds of projects that are in the queue that just need to have the time and energy put in. We got to a point where we ran out of money, but we didn’t run out of projects. So, we just took all the projects that were left over and we dropped them in the hopper at the beginning. Many suppliers say they have independently funded new cost-saving technologies and processes, even without Blueprint for Affordability money.

1. Reorient oversight and compliance practices from existing transactional approach to one that operates on a systemic basis

Utilize risk-based, materiality-driven approaches to auditing with increased reliance on approved contractor business systems and existing corporate financial oversight requirements e.g. quarterly/annual reporting to the maximum extent possible. 

2. Streamlining acquisition process by tailoring oversight requirements to risk

These requirements should leverage systemic controls as much as possible. Also, DoD should establish cutoff dates for the submission of cost and pricing data, institute firm timelines for audit products and remove barriers to the utilization of long term agreements. DoD should reinforce its broad goal to reduce the time between solicitation release and contract award with specific performance metrics in areas such as timeliness of  audits and the time it takes to definitize undefinitized contractual actions. 

3. Establish an overarching DoD strategy for Intellectual Property

DoD needs a strategic approach to IP that fully considers acquisition practices, contractor business models and sustainment priorities. 

4.  Support and protect industry R&D efforts

The merit of each R&D project should be determined by its intent rather than its outcome, bearing no consequence for later contract offers. DoD should leverage existing incentives in the defense marketplace and focus solely on setting and communicating demand signals. 

5. Unleash industry investment through contract terms and financing

DoD should immediately implement ongoing regulatory cases that promote performance-based payments over progress payments and incentivize DoD to swiftly definitize undefinitized contractual actions. Further, longer term contracts, in lieu of short periods of performance to increase generic competition, are needed to incentivise desired levels of industry investment. Competition is a means to acheive greater performance; competition for the sake of competition is counterproductive. 

6.  Promote mechanisms for DoD-industry communication throughout the lifecycle

Specifically, DoD should focus on the sharing of long-term technology roadmaps, threat information and opportunities for industry exchanges with operator communities. 

7. Monitor and address the impact of commercial trade agreements and policies on the defense industrial base 
DoD must have a voice in relevant reviews and decisions as a representative of the defense industrial base.

8. Utilize standards-based approaches and appropriate acquisition models to leverage new technologies 

Static, regulation-based approaches will serve as a barrier to acquiring new technologies. Acquisition-as-a-service models and adoption of commercial standards in areas such as network security  are examples of how this should be done. 

9. Set clear guidance on responsibility for resiliency of key capabilities 

Maintaining surge personnel, plant and facilities in case of conflict comes at a cost. DoD needs to develop clear guidance on how considerations for resiliency and for critical defense capabilities like hardened microelectronics, should be incorporated in source selection. 

10. Incorporate workforce considerations into acquisition strategies and contracting decisions 
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Failing to do so increases costs to DoD and undermines industry resiliency and capacity to meet urgent needs. Companies lack the resources to go beyond local initiatives to fulfill their specific needs. DoD should support industry partners through messaging and stakeholder affairs efforts to highlight the ingenuity of defense workforce and available opportunities. Utilize the industrial base assessment as an opportunity to garner support for funding training programs and initiatives. Similarly, industry has a responsibility to continually promote and foster programs in support of training education and development separate businesses in a company. 

​DoD acquisition system is largely rooted in processes created decades ago, with an oversight regime oriented towards reducing cost. Today’s security environment features threats in every domain from a variety of actors and decreasing cycle times for technologies dispersed across the globe. If America is to compete, our acquisition system must be driven by national security objectives, not limit them. We must begin to value speed and innovation over cost.

Lengthy timelines from solicitation release to contract award drives costs for DoD and industry, and has significant implications for supply chain competitiveness/condition. Industry incurs costs to maintain inactive personnel, plant and equipment, and DoD may need to award bridge contracts or find additional sources of goods and services to fill customer needs. 

In industry. these costs reverberate down the supply chain, where they are magnified for lower tier suppliers that cannot afford to absorb these costs – driving companies not to bid or exit from the defense marketplace altogether. These delays are especially frustrating in the case of sole source awards, follow on awards and for commercial items and services where the terms, conditions and price are clear-cut. 

Poorly-communicated contract requirements and transactional oversight requirements that devalue speed and customer satisfaction are leading causes of delays. DoD has the capacity and authority to improve these processes. All that is left is implementation and execution. 

We have provided specific examples of challenges industry faces from the risk averse behavior of acquisition workforce and recommendations to support initiatives to improve the acquisition workforce. Some examples of this behavior include: imposing requirements and flow downs that are inappropriate given the contract type; reviews of prime contractor commercial item determinations for their subcontractors even if they have an approved purchasing system.

Without an experienced, trained and empowered acquisition workforce, efforts to improve the defense acquisition system will have been a waste of time. Risk aversion within the workforce is a symptom of an acquisition process buffeted by competing interest groups within Congress, and the imposition over decades of well-intentioned oversight meant to reduce risk in one or another part of the process. 

Unfortunately, these piecemeal actions are usually taken without full consideration of systemic impacts, leading to insular, duplicative and non-value-added processes divorced from overall program performance. Such process-based and transactional approaches have driven a culture of risk avoidance rather than risk mitigation, with detrimental impacts on speed, lethality and innovation. 

Regulatory Reform Task Forces have been created within each agency to review all regulations and more rigorous standards have been installed for dispensing new regulations. These initiatives provide DoD the opportunity to unleash enormous innovation, flexibility and speed in the procurement of vital defense capabilities. 

Blanket regulatory requirements and reviews have created a bottleneck of regulatory cases that has stymied the implementation of key reform efforts. DoD should identify which acquisition regulations are necessary to fulfill its mission in support of national defense – and eliminate those that do not – to reduce regulatory burdens.

New technologies will enable new concepts of operations and capability for warfighters and improved business operations within DoD. Understanding the potential and dangers of new technology and its rapid pace of development, will require dynamic, risk-informed management and acquisition practices. 

1. Robust Budgets

We have found studies provided further details on the impact of the Budget Control Act BCA and the defense drawdown on the industrial base. Specific supplier portfolios saw even more drastic cuts or experienced whipsaw effects. While information and conclusions below the prime contractor level are difficult to obtain, indicators show that the detrimental impact of budget cuts have been felt throughout the supply chain and are magnified for businesses with less capacity and diversification. 

The consequences of decreased defense spending from the defense drawdown and BCA were compounded by the manner in which they were done – through overall spending cuts rather than informed investments and tradeoffs to achieve savings. DoD delayed modernization in favor of incremental upgrades to existing systems; decreased readiness by deferring maintenance; and cut force structure. In response to this behavior, industry has been forced to value short term efficiency and cost savings over long-term investment and resilience. Now, with an agreement for increased defense spending, DoD must rebuild readiness and force structure and make down payments on previously deferred modernization efforts, all at the same time. 

2. Stable Appropriations

The breakdown in regular order within the Congressional budget process has made these conditions even worse. Although lapses in appropriations and use of continuing resolutions CR are not new, and have been more disruptive to DoD than other agencies because uniqueness of DoD purchases.

About half of DoD budget is typically spent on the purchase of goods and services, with significant portions dedicated to large, capital-intensive and multi-year programs. CRs and shutdowns have resulted in outright waste, disrupted major programs at key milestones and driven inefficient spending practices at DoD by decreasing time to obligate new funds. These effects have had demonstrable impacts on the industrial base, which are magnified at lower tiers of the supply chain. 

3. Balanced Funding 

Along with aggregate defense spending cuts, there have also been disproportionate reductions to DoD Research, Development, Test and Evaluation RDT&E and Procurement accounts, which by experience are most vulnerable to cuts. While early-R&D efforts were largely preserved as a portion of overall R&D spending, the period saw disproportionately greater cuts to later-stage R&D from budget constraints, program delays and program cancellations. Critical workforce talent in design and systems engineering within the industrial base cannot be maintained without sufficient RDT&E funding and new starts.

Defense spending is not a spigot you turn on and off … you need to keep money flowing in a predictable way so you can plan for the next war. ”Cuts to RDT&E shrink the pipeline for new programs, so even with a short-term budget agreement in place, DoD needs several more years of robust, balanced and stable budgets to recover from BCA cuts

4. Changing behavior of contracting process

The clearest validation for this priority is that DoD has repeatedly and successfully pursued efforts to circumvent its own acquisition system and behavior norms by creating specialized or rapid acquisition offices. These offices are still governed by the rules of the road, yet can leverage other transaction authorities and streamlined oversight structures. There is a need for special authorities to fulfill urgent operational needs; however, our national defense will be best served by streamlining the entire acquisition system. This requires a concerted reform effort and enduring commitment from Congress and DoD to apply lessons learned from streamlined acquisition structures and procedures throughout the entire system.

DoD and Congress also need to consider the compounding effect on the industrial base and supply chain of budget austerity and cost-based acquisition policies. Some acquisition practices aimed at controlling cost have merely established non-valued-added bureaucratic requirements, tied up cash flow, erected barriers to commercial technology and investment, and imposed a de facto lowest price, technically acceptable environment. Each of these trends serve to restrict the competitiveness of the supply base, crowd out and tie up resources for investment in R&D, personnel and facilities, and discourage new entrants and independently-funded technologies from being offered to DoD. 

5. Improved DoD-industry dialogue to encourage innovation

DoD  must optimize relationships with industry to drive higher performance and to identify benefits of proactive DoD communications with industry, including to establish policies and business practices that promote the long-term viability and competitiveness of the industrial base supporting defense.” We have attempted to correct popular misconceptions about communications with industry within the acquisition process. Communication must be a two-way street. Both parties should be held accountable for approaching engagements with openness and taking follow-on actions. Communication is also critical for DoD to understand the implications on innovation and the industrial base of their acquisition strategies and contracting procedures for specific procurements. 

6. Intellectual Property and Investment in Innovation
 
Properly valuing and rewarding intellectual property is crucial to incentivizing industry investment and accessing new suppliers at the prime and subcontractor-level. DoD requirements for technical data and  rights to tools, acquisition strategies and product support strategies often run counter to overarching DoD policies on innovation, such as blanket requests by DoD for de facto lowest price, technically acceptable source selection through evaluation criteria rewarding offerors who are more willing to part with their and their subcontractors technical data rights. Rogue contract clauses requiring technical data may not be the best way to bring new technology to DoD. 

 Industry incentives for investment in R&D is correlated with their ability to protect the rights to data and tools produced and their return on investment from goods and services sold using that IP. Too often DoD does not clearly communicate with industry what technical data is needed for a program and why it is needed – rather relying on blanket requests that serve neither party well. 

DoD needs to establish an overarching strategy for IP that ensures its workforce is asking for the right IP for the right reasons based on a program’s acquisition strategy and sustainment considerations. This strategy also needs to take into consideration how new acquisition strategies and approaches to IP impact industrial base incentives to innovate and their overall business model. With the introduction of additive manufacturing and other new technologies, this strategy will be more and more valuable. 

7. Line up defense and commercial trade policies to support industrial base condition 

Too often the ramifications of commercial trade policies and practices for national defense are not fully considered and understood. Major contractors rely on a global supply chain, and their suppliers rely on domestic and foreign sales. Actions taken on commercial trade issues affect the competitiveness and resiliency of defense industry. Purpose of defense trade is to strengthen alliances and attract new partners and has benefit of strengthening the industrial base and enabling DoD to leverage greater economies of scale. The defense sector faces a fragmented interagency review process for potential sales and technology release, and lacks the advocacy and support foreign governments provide to their domestic industries. These issues undermine security cooperation objectives and the competitiveness of the industrial base. 

8. Adapting business processes by embracing digital transformation

Digital transformation extends far beyond weapon systems and networks and will revolutionize business processes and operations for DoD and its supporting industrial base. With this expansive and disruptive potential, new policy and political challenges will need to be identified and addressed. For instance, a future environment in which the DoD logistics and sustainment enterprise can utilize additive manufacturing to produce spare parts on demand, use big data to inform preventative maintenance, and equip maintainers supported by powered exoskeletal suits and augmented virtual reality headsets to instruct repairs, will revolutionize infrastructure and human capital requirements and the supporting industrial base. 

9.  Fostering innovation technology and processes

Despite attention from DoD leadership on commercial technology and innovation hubs, the fact remains that critical defense-unique technologies and applications are essential for the most advanced military capabilities require defense-unique investment and solutions and a resilient and innovative supply base. Some programs require intensive investment in foundries and infrastructure – especially test facilities – that cannot be recouped outside of DoD. In these areas industry will largely rely on R&D funds, which support industrial base condition and national security objectives by enabling industry to take risk on defense-unique solutions. DoD should remove any barriers that directly or indirectly limit industry ability to flexibly utilize R&D and earn sufficient returns on those investments.

10. Invest more in all levels of training to develop critical skills

Just as defense spending has shown signs of increases and several major programs are coming into fruition, there is an impending wave of retirements in industry. Hiring is not able to keep pace with the rate of retirement, industry will be unable to leverage the knowledge and experience of its existing workforce to train and educate the next generation of workers. This is especially true in specialized disciplines requiring both on-the-job training and years to achieve subject matter expertise. 
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A deficit of new programs, and gaps in production between major programs, pose further challenges. For example, some ship builders would require workforce increases to ramp up and sustain higher production rates, while others require additional capital investment in infrastructure. Conversely, if production rates are slowed or gapped, hot production lines and supply chains quickly turn cold and result in decreased production learning, loss of skilled workers, significantly increased cost and longer production schedules