Fraters Libertas

It's All About Supply Chain Management These Days

It is a rare and gratifying occasion when I come across a news story that I can easily relate to my job. Phil Carter at Intel Dump has been following the story of the shortage of body armor for US troops in Iraq and in his
latest update he details some of the causes behind the problem:

The macro-economic reason for this problem is the overall trend since the fall of the Berlin Wall towards consolidation in the defense industry. (See this survey of the defence industry by The Economist) Small specialized contractors have either gone out of business or been swallowed up by larger contractors, and for most major end items, there remains one contractor capable of making that item. The same is true for smaller items, such as SAPIs and HMMWV tires and Bradley tracks. When the Pentagon wants to procure a bunch of these right away, it can't, because the defense industry has downsized and consolidated itself to the point of maximum efficiency, and it can't respond quickly enough to meet this wartime demand with its peacetime production lines.

The implications of this macro-economic trend cannot be understated. I think this is an area of strategic risk for the American government, and it probably hobbles our current national strategy of pre-emptive action. Our military cannot perform well in war after war if it does have the procurement and logistics base to support it. We have nearly spent our post-Cold War stockages of spare parts in a number of areas, and so far, the defense industry has not shifted to a wartime footing to replace these things (except for some items like JDAM bombs). There's an old maxim that "Amateurs study tactics; professionals study logistics." In this case, I think our pre-emptive strategy may contain an element of amateurism, in that it ignores logistical realities that are now beginning to show across our force.

Sole source suppliers? Inability to meet demand surges? Parts shortages? Now you're speaking my language.

Next time you're talking to someone at a cocktail party and they mention that they work in supply chain management (or are a material planning manager as I happen to be) and your eyes start to glaze over and you glance around the room thinking, "Wasn't that guy over there an architect?", just remember Phil's words of wisdom. We're the pros who make sure people get what they need, when they need it. Ask a soldier in Iraq without body armor just how important that can be.