Supply Chain Huddle | No. 2
The supply chain news on our radar this month: defense production capacity woes, underutilized open source data, and a near-miss financial crisis
The BlueVoyant Government Solutions team is constantly reading (and listening) to the latest news and insights on supply chain risk management in the U.S. Department of Defense (DoD) and broader Defense Industrial Base (DIB). Every month, we invite you to take a peek at some of the headlines and soundbites that got us talking around the watercooler the most, and how we’re approaching our work in the DoD as a result.
From Rockets to Ball Bearings, Pentagon Struggles to Feed War Machine
by Eric Lipton for The New York Times, 24 March 2023
What happened: We can now add ‘market consolidation’ to the long list of supply chain woes making it increasingly difficult to meet surging demands for weapons systems and components. Military officials frustrated by delayed deliveries and limited options for alternative suppliers are calling on government and business leaders to double down on defense production before we find ourselves under-equipped for a large-scale conflict.
Why it matters: Besides the two elephants in the room – Russia and China – this article covered how it won’t be quick or easy to rebuild our defense production capacity. It will require lots of investment and incentives from Congress and loads of patience from corporate leaders and their shareholders who will need to shift their business mindset towards long-term national security goals.
Our take: While we applaud the attention to this issue, we’re afraid that we’re only beginning to scratch the surface on the real problem. Our post Cold War-era defense transformation not only meant less DIB suppliers and production facilities, but also far more complex, global supply chains. The layers of foreign dependencies, especially for raw materials and lower-tier components, are especially difficult to untangle and even less responsive to DoD directives and incentives that traditionally target prime contractors. In short, we could be looking at a much bigger industrial base overhaul beyond the scope of the DoD alone. (But don’t just take our word for it – we suggest giving our colleague and Vice President of Product Andrew Daly a follow on LinkedIn for more on this topic.)
Former CIA Officer Kristin Wood on the Production, Delivery and Value of Analysis
Intelligence Matters Podcast Hosted by Michael Morell, 8 March 2023
What happened: In this episode, former Central Intelligence Agency (CIA) Officer Kristin Wood joined former CIA Deputy Director Michael Morell for a conversation about the current inflection point we’re facing with open source data. Thanks to the Internet and social media, there are plenty of national security applications for publicly available information (PAI) and commercially available information (CAI) – but we’re only just beginning to actualize its value.
Why it matters: Wood argues that the Intelligence Community (IC) still has progress to make in effectively utilizing open source information to combat adversarial threats. Some of the main challenges Wood identifies include integration with classified data streams, acquisition speed and implementation at scale, as well as the IC’s tendency to run on their classified information expertise. However, the ramifications of not building open source expertise is clear: it’s no longer only intelligence officers and military officials who have access to information that is important to national security – we are now in a world where private organizations also have the data and tools to produce remarkable analysis and insights.
Our take: Seeing as we built our supply chain risk management platform on open source data, Wood and Morell were certainly preaching to the BlueVoyant Government Solutions choir in this episode. And while it’s obvious that PAI and CAI are important, the combination of open source data with human-machine teaming enables us to connect the dots and compile real-time analysis in an unprecedented way.
Pentagon Mobilized to Support Tech Startups After Bank Failure
by Marcus Weisgerber and Patrick Tucker for DefenseOne, 15 March 2023
What happened: In the midst of the Silicon Valley Bank (SVB) failure, Pentagon officials working with technology startups got worried. The bank’s collapse raised immediate questions surrounding funding, work stoppages, and supply chain disruptions, and left officials scrambling for solutions to support companies working on national security-related projects. Fortunately, the resounding sigh of relief came quickly as the Treasury Department stepped in to protect depositors in the nick of time.
Why it matters: SVB collapsing? Bad news bears. But also… maybe there’s a silver lining? According to Michael Madsen, acting Director of the Defense Innovation Unit (DIU), the fallout of SVB will give the DoD an interesting opportunity “to really get serious about growing that connective tissue between the national security enterprise and the commercial capital markets…and show that we're good and sophisticated partners.” It also gives the DoD a chance to fill that space in the start-up ecosystem to encourage research and development surrounding innovative tech – an absolute necessity when assessing the competitive arena with China and Russia.
Our take: The SVB collapse had so many high-risk event alarm bells ringing: fragile economic markets, bankruptcy, IP theft, work stoppages, reputational damage, and more. Undoubtedly, the DoD should look to dual-use technologies to accelerate our national security objectives, especially when it comes to things like artificial intelligence, cybersecurity, and automation. However, working with commercial technology doesn’t come without risk. An integrated view of those emerging risk events – across the entire digital and physical supply chain – are essential to ensuring mission readiness and our competitive edge.
Central Command’s Big Technology Bets
War On The Rocks Podcast hosted by Ryan Evans, 21 March 2023
What happened: Schuyler Moore, Chief Technology Officer for US Central Command (CENTCOM), joined host Ryan Evans to discuss CENTCOM’s approach to testing and developing technology in partnership with the private sector. In addition to highlighting the importance of a strong two-way relationship between the DoD and industry, the conversation also touched on technology challenges like data sharing and data fusion, and the current policies related to those issues that impact the entire agency.
Why it matters: As Moore notes, the DoD needs to be a ‘good customer’ for commercial technology companies with national security applications. That means defining end user problems clearly, pushing for adoption, and providing feedback that brings innovative ideas to the table.
Our take: Getting new capabilities in the hands of defense professionals early and often is something all programs across the DoD should strive for. A company can create fantastic tech, but without prioritizing the context in which it will be used, that tech will never reach its full potential. It’s also important to note that each phase of the technology adoption lifecycle carries its own amount of risk. As DoD customers increasingly work with commercial technology partners to bring new capabilities to the field faster, that risk adjudication and prioritization process becomes especially important. In our own work, we make sure we’re continuously tailoring risk schemas to make sure our customers have access to risk information that’s prioritized, validated, and verifiable – so they can take action on high-risk events with the data they need ASAP.
More March headlines not to miss:
AIR FORCE | Defense One: Air Force Abandons New F-35 Engine in Favor of Upgrades
AIR FORCE | Defense One: The Air Force Is Rebuilding Its Pacific Plans Around the B-21
AUKUS | Defense News: Congress lays groundwork for AUKUS export control reform
AUKUS | Semafor: The US mulls opening Pacific defense pact with Britain and Australia to more countries
CYBER | Vice: Ransomware Group Claims Hack of Amazon's Ring
DIB | War on the Rocks: Munitions Return To A Place Of Prominence In National Security
DOD | Breaking Defense: ‘Up our game’: The Pentagon’s 3 strategies to shore up munitions stockpiles
DOD | Defense One: Here's the Pentagon's New Plan to Woo and Retain Cyber Workers
DOD | Washington Post: Pentagon is pressed on worsening recruiting shortfalls
NAVY | CBS News: Is the Navy ready? How the U.S. is preparing amid a naval buildup in China
NAVY | Defense News: Why the US Navy’s budget plan creates uncertainty for shipbuilders
NAVY | Defense One: Fewer Than 1/3 of Navy’s Amphibious Ships Are Ready to Deploy
SPACE FORCE | Defense News: Space Force’s $30 billion budget request focuses on development
WHITE HOUSE | Reuters: Biden invokes Defense Production Act for printed circuit board production
Want to tune into our next huddle instead? Every month, the BlueVoyant Government Solutions team huddles up live to discuss the latest supply chain risk events impacting the U.S. Department of Defense and Defense Industrial Base. Subscribe here to get on the list and receive the next huddle recording as soon as it drops.