Industrial Base Strength Necessary
For Future DOD Success
by Nancy Benecki , Defense Logistics Agency
May 19, 2023
The defense industrial base is facing
serious challenges, and now is the time to help those businesses
before it is too late, a former deputy secretary of defense said at
the Defense Logistics Agency Supply Chain Alliance Conference and
Exhibition in Richmond, Virginia.
If demands and rules become too onerous,
those businesses may decide to stop working with their government
clients, said David Norquist, president and chief executive officer
of the National Defense Industrial Association and the deputy
secretary of defense from 2019 to 2021.
A sewing machine operator stitches a Navy camouflage uniform
at a clothing manufacturer’s facility in Puerto Rico on
February 1, 2023. (Image created by USA Patriotism! from
photo by Mikia Muhammad, Defense Logistics Agency)
"Here's the bottom-line challenge we all
face: If we get this wrong and we do too little, there is a
vulnerable supply system that is compromised and weighed down when
we need it," Norquist said.
The national security
environment is changing and in turn shifting demands on the
industrial base and supply chains, he said.
"It's not an
understatement to say that getting logistics right is make-or-break.
When I was the deputy secretary of defense, we had a lot of issues
we worked on. When you looked at the challenges of the future, the
logistics challenges in both peacetime and wartime were the key
ones. And if you don't get them right, you can't execute our
national security strategy," Norquist said.
States is seeing the return of great power competition and can no
longer outpower its adversaries on size alone as it once did, he
"The United States was simply bigger than
Nazi Germany, Imperial Japan and the Soviet Union. We had a larger
economy, and we could show up late to the fight, producing volume
and eventually getting around to victory; it would just take us a
little while," he said.
China now has an economy similar to
the U.S. and a larger population.
"We're not going to be
able to do that there. And we don't possess the Chinese central
planning network, so we're not going to beat them by trying to be
better central planners and better communists than they are," he
Instead, the U.S. will have to rely on two strategic
advantages, the first being its allies and partners.
United States has an amazing group of countries that it works
alongside, either through formal alliance structures or informal
partnerships in Canada, Japan, Korea and Australia. That combination
is about half the world's [gross domestic product],"he said.
The second strategic advantage is the defense industrial base,
so long as industry understands what the government wants and
government understands what industry can do, Norquist said.
"If you have that communication and it's done right, those
advantages will position the United States to be able to deter
aggression or to prevail should a conflict be necessary," he said.
After World War II and the Cold War, the U.S. was left with
no global rivals. That's when just-in-time delivery, lower marginal
costs and fewer vendors were prioritized, which eventually made
supply chains more fragile, he said.
readiness indicators are going in the wrong direction, he added. In
1985, the U.S. had 3 million workers in the defense industry. That
number is now 1.1 million workers and remains flat, Norquist said.
March 11, 2020 - The Defense Logistics
Agency Distribution Center in San Joaquin, California,
receives hospital gown shipments procured from companies in
support of the COVID-19 pandemic. (Image
created by USA Patriotism! from photo by Annette Silva,
Defense Logistics Agency.)
He restated information about DLA's
shrinking vendor base that DLA Director Navy Vice Adm. Michelle
Skubic presented earlier that day. From 2016 to 2022, DLA lost about
22%, or 3,000 vendors, according to agency data. Small businesses
accounted for 2,300 of those losses. Overall, the Department of
Defense lost 43.1% of its small businesses in the same timeframe.
"That's not a step towards resilience; that's a warning
signal," Norquist said.
Recent global situations have
revealed other weaknesses.
"COVID has shown us how vulnerable the
supply chains can be, and the Ukraine conflict has shown us how a
high-intensity conflict between nation states is very different in
its consumption of munitions and parts than counterterrorism
operations," he said.
Communication between DOD and its
industrial base is vital, he added, and should be easy since both
share the objectives of mitigating business and operational risk.
"For national security, we need to protect against both
disruption as well as tampering. But what makes a market so powerful
is exactly what makes this challenge so hard," Norquist said.
NDIA is helping build the resiliency of the defense industrial
base through several factors, he added. It holds forums for
industry, government and academic entities to discuss issues. It
also has divisions and chapters based by region and subject matter,
and studies and educational programs to identify and advocate for
improvements to strengthen national security.
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