Can building the factory around software cut defense costs by half?

We certainly don’t think we will be disrupting Lockheed Martin or Boeing. So, buying like a 747, for example, 70% of the cost of that thing is actually spent in the supply chain (not spent on Boeing’s wing). If we make that 50% more efficient, then that should flow to the government on defense contracts with its customers.

 

Literally if you take an F-16 fleet, we should be able to using Hadrian’s infrastructure make 200 of those things for the cost of 100. Because most of that cost is actually just sourced via Lockheed into the supply chain — it’s like a giant iceberg.

 

I would say at least 50% of the cost of all those components are just raw, brutal inefficiencies because things are on paper or spreadsheets and not automated by itself… What people rarely understand about aerospace and defense manufacturing is that most of it’s DNC machining and most of the inefficiencies are actually in software land, not in assembly lines or hardware land.

That was Chris Power, CEO of Hadrian, on the Just Raised podcast. He describes how the approach was, rather than sell enterprise software to manufacturers, build the factory around the software. The co-location of software and manufacturing knowledge is critical. They created huge spreadsheets of every engineering and administrative effort and applied automation to reduce time by 80 or 90 percent. The vision is an API where you can send your CAD file and get the components or even system in the mail.

Here’s Chris again, this time on Build the Future podcast:

The reason why the F-16 fleet is at 60 percent readiness is because half the birds can’t get parts. If you track that all the way back, it’s because the engine housing got sole sourced to some 30-person business in Iowa twenty years ago and that company has a 20-week lead time and doesn’t have the capital or efficiencies to produce many more of those.

 

The worst example is the stealth bomber which literally, the business that used to make key parts of the stealth bomber went out of business and retired. There are no digital files of those components anywhere. So the Air Force literally has a contract RFP out today so you can reverse engineer that part and recreate that component.

 

Another example of this… one of the SpaceX anomalies when one of the early rockets blew up was because of supply chain fraud.