U.S. Defense Industry Under Siege—An Agenda for Change
"U.S. Defense Industry Under Seige - An Agenda for Change" reviews the current state of the U.S. defense industry, and outlines a change blueprint for industry and government to ensure that the future U.S. defense industry remains the world's premier supplier of national security capabilities.
The Financial Health of the Industry—Does the recent string of bad news reflect a passing cold or serious pneumonia?
Ten Underlying Causes—What are the fundamental reasons for the industry's poor performance?
- Declining R&D Eating the Seed Corn
- Disinvestment in Assets—Letting the Roof Leak
- Increasing Capital Intensity—Raising the Ante
- High Stake Awards—Betting the Ranch on Winning in Vegas
- Funding Instability—Driving on a Winding and Icy Road (with a back-seat driver)
- Tightened Export Controls—Cutting offYour Nose to Spite Your Face
- Customer Savings Retention—A Penny Saved Is Not a Penny Earned
- Disinvestment in People—Exodus to dot.coms
- Constrained Management Talent Pool—Limited Deep Bench Strength
- Buried in Debt—Making the Mortgage Payments from the Grocery Jar
The Rx —What proactive steps can industry and the DoD customer take to stem the erosion and create a path to a long-term sustainable industrial base
An Agenda for the Contractors
Growth
- Pursuing value-added vertical integration into services
- Building an Innovation Engine within defense
- Commercializing technology outside defense
- Forming international alliances
Operational Excellence
- Achieving lean manufacturing and rationalizing capacity
- Redefining supply chain management via e-business
- Reducing complexity through tailored business streams
- Restructuring the role of the corporate center/shared services
Management/Leadership
- Building employer of choice into HRM
- Improving Post-Merger Integration
- Using Best Practices to leapfrog performance
An Agenda for Government Policy Makers
Tone of Relationships
- Strengthening the partnership
Rules
- Stabilizing programs and funding
- Creating incentives for the industrial base to rationalize capacity
- Living with selected monopolies
- Sustaining a spirit of innovation
Processes
- Considering industrial-base issues in the acquisition process
- Understanding industry's metrics
- Streamlining the export control process
- Addressing the human resource issues
study posted July 2000
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