The tradition of the Department of Defense is to define a weapon system end item, then fund that end item and the supplier base through the tiers — the prime contractor is the lead systems integrator and defines its teaming arrangement through the tiers, and the Department doesn’t really have too much insight into that supplier base.
… In the 90s, the Air Force was asking for hypersonic wind tunnels to do these tests, and that was an enabling tool that got shifted because it wasn’t a priority, and now 20-30 years later, it becomes a big priority. And so funding the upstream production process through enabling tools will actually allow for more discovery, different types of ideas to arise, and it builds in excess capital such that you can surge and you don’t have this lean business efficiency where you have the minimum amount of capital required in order to service the end items the Department is asking for.
That was me on a recent episode of Government Matters, “Preparing the US industrial base for mobilization.” I’m glad Francis caught onto the theme of “make industrial mobilization cool again!” He said he didn’t remember it ever being cool. I said it was during World War II and the Korea War — but I suspect he’s right that it was never cool at all. Still, I’m sure people were glad about inventoried machine tools when Korea broke out.
Here’s what I’m pondering as a trade-off for industrial mobilization: the extent to which you pay for excess capital vs. pay for excess innovation. For example, a common thought is to stockpile machine tools and keep “warm” production lines for the stuff the DoD uses today. That allows industry to ramp up output of proven systems should an emergency occur.
But then the more you pay for readiness of that force structure, the less on the margin is available for change and innovation. Maybe, the force structure that has been prepped for scaling is completely the wrong composition. Or innovations in production were foregone. So there’s some kind of benefit to being first to marrying new technologies and CONOPS that can be called a policy of industrial mobilization.
I guess what this could look like is — whatever amount of funds should be reprioritized for mobilization could go directly into R&D for next generation manufacturing rather than “slack” in today’s manufacturing. If a conflict with China or Russia does accelerate first in the gray or proxy zones, then there will be some years lead time (more like a WWII than a WWI).
Having a more dynamic business ecosystem also allows the DoD to maintain optionality in what it scales because the companies involved have that experience. It would be unprecedented for Lockheed to scale output 5 fold in a couple years. It would not be unprecedented for an ecosystem of smaller firms to all start scaling at that speed. I guess, it’s happened in the 90s dot-com boom and then in the 2010s cloud/mobile boom. It would be interesting if a government investment boom could fuel something similar.
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