Will Supply Risk Be the US Military’s Downfall?

IDG News Service recently published a fascinating summary of supply risk in today's US defense supply chain, looking at a range of vulnerabilities posed by a lack of visibility and traceability into lower tier suppliers and the global nature of the military supply chain. The article, based on a study by Guardian Six Consulting, suggests that “a wide range of military products and raw materials, including steel armor plates, lithium-ion batteries and night-vision goggles … [as well as] counterfeit and faulty commercial, off-the-shelf (COTS) semiconductors and telecom equipment made outside the U.S. are also hurting the U.S. military's ability to do its job.”

Part of the challenge, of course, is that supply chains in part or in whole have moved offshore. Examples include: “Semiconductors are used in several military systems, including missiles and rockets, helicopters and fighter jets, radar systems, and computers … [whose US market share overall] …  has decreased from nearly 50 percent in 1980 to 15 percent in 2012.” As the authors of the report suggest, “the presence of foreign-supplied counterfeit and defective microchips in both commercial and military products is also a widely acknowledged challenge.”

There’s also the potential of malware being inserted into a range of devices that could be used “to intercept or interrupt the transmission of sensitive information … [or] potentially disrupt or disable the entire Internet by manipulating routers and switches." The article quotes a handful of various experts (including the authors) who offer up conflicting solutions for dealing with the challenge. This includes providing domestic sourcing preference (to US companies), based on one opinion. But another pundit suggests that “government agencies should focus more on quality issues and risks in their supply chains than on the origin country of the parts … [and] agencies should look at whether equipment is coming from a trusted vendor."

Like the wars the US military has recently fought, the answers to the challenge are not black and white – nor is there universal agreement on strategy, let alone the specific tactics to remedy the lack of visibility and trust in the global US military extended supply chain. This is a topic we’ll continue to revisit on Spend Matters from time-to-time as well as something we’ll be double-clicking on more frequently in a new site we’re involved with that will be launching this summer. Stay tuned!

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