DOD Addresses Supply Chain Resiliency
by Todd Lopez, DOD News
June 28, 2022

Even before COVID-19, the Defense Department had identified supply chain vulnerabilities for things like microelectronics. There, the onset of the pandemic exacerbated a problem the department was already aware of. But the pandemic also highlighted other areas of supply chain vulnerability in the U.S., some of which affect national security.

Deborah Rosenblum, who performs the duties of the assistant secretary of defense for industrial base policy, met on June 16, 2022 with stakeholders from across the industrial base in Texas to discuss the department's efforts to strengthen supply chain resiliency. The event, held near Fort Worth, was in partnership with the National Economic Council and the Texas A&M Engineering Experiment Station.

"We are very aware that we are facing critical shortages across a multitude of areas including microelectronics for car manufacturing and baby formula," Rosenblum said. "The last two years have revealed critical gaps in the U.S. industrial base and an overreliance on foreign manufacturing. As such, supply chain resilience has become not just an economic priority — it's not just about quality of life issues — it's become a national security imperative."

Addressing members of the Texas business community, Rosenblum outlined three areas where the industrial base can help the Defense Department, strengthen the supply chain and contribute to a more robust defense of the nation. Those three focus areas include supply chain transparency and resilience; work force development; and increased support of small businesses.

"Supply chain resiliency is a top-of-mind issue in a way it has not been for decades, and efforts are underway across the U.S. government to understand and mitigate some of our most glaring supply chain vulnerabilities," Rosenblum said.

For years, Rosenblum said, industry has focused almost exclusively on supply chain efficiency over supply chain resiliency. That laser-like focus on efficiency, she said, has created risk for both the department and the nation.

The Defense Department, she said, has prioritized five areas important to national defense where the supply lines are challenged. Those include castings and forgings; missiles and munitions; energy storage and batteries; strategic and critical materials; and microelectronics.

"The President's budget request invests directly in these high-priority, defense-critical sectors, including over $250 million dollars for strategic and critical materials and over $600 million dollars for kinetic capabilities, such as missiles and munitions," Rosenblum said.

Some of those investments, Rosenblum said, have been made in Texas, including in areas like rare earth elements and magnets as well as medical supplies like retractable syringes for vaccine and therapeutic delivery.

Right now, Congress is working to pass the Bipartisan Innovation Act, which Rosenblum said makes investments in securing the supply chains and creating efficiencies for things like semiconductors.

"The bill supports the sort of research and development that have given American businesses and workers a competitive edge against their competitors around the world," she said.

Three individuals stand shoulder-to-shoulder in front of a backdrop that says "Texas A&M Engineering Experiment Station."

Another avenue the department deems worth pursuing as a way to strengthen the supply chain is development of the workforce responsible for creating the materials and supplies the United States and Defense Department need, said Rosenblum.

"Workers are a critical component of supply chains, and make them possible," Rosenblum said. "In U.S. manufacturing, the gap between open positions and available workers is not expected to close, with an estimated 2.1 million unfilled jobs by 2030."

Through the industrial skills initiative, part of the Defense Department's Industrial Base Analysis and Sustainment program, the department has invested over $80 million in industrial workforce development and training projects since 2019, Rosenblum said.

"The intention of this initiative is to support a variety of defense weapon system development, production and sustainment needs, with a focus on skills such as welding, advanced machining, electronics, precision optics, metrology, digital/additive manufacturing and other emerging Industry 4.0 skills," she said. "These efforts will grow and strengthen the manufacturing workforce pipeline, provide skills to new workers and upskill existing workers, and improve public perception of industrial skills careers."

A final component of the department's effort to create resilient supply chains is greater investment in and support of small businesses, Rosenblum said.

"American small businesses spur innovation, represent most new entrants into the defense industrial base, and through their growth create the next generation of suppliers with increasingly diverse capabilities," she said.

Despite that, she said, the role of small businesses in the defense industrial base has shrunk by over 40% over the last decade. The department, she said, spends over $80 billion each year with small businesses. But more must be done to reverse the overall downward trend.

"Small businesses are the heart of American manufacturing and DOD is committed to seeing them succeed, prosper and remain competitive," she said. "Our goal is to increase the innovation capacity of the defense industrial base and systematically identify and mitigate pain points [of] doing business with DOD — particularly for new entrants and non-traditional players."

Rosenblum said one way larger companies might help is by participating in the department's mentor-protege program and by investing time and effort to help qualify new small businesses in their own supply chains.

"We at the department will continue to find new ways we can partner going forward to build enduring advantages as we advance America's national security and sustain America's economic future," Rosenblum said.