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How supply-chain innovation can bolster U.S. security

Taking a page from the commercial sector, military and defense organizations could fill an urgent need by investing in logistics

How supply-chain innovation can bolster U.S. security
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The mandate for military and defense organizations to invest in advancing supply chains is more urgent every day. In its 2021 National Threat Assessment of the U.S. Intelligence Community,1 the Office of the Director of National Intelligence reported, “Beijing, Moscow, Tehran, and Pyongyang have demonstrated the capability and intent to advance their interests at the expense of the United States and its allies, despite the pandemic.” The report describes the potential risk to private and public supply chains, warning that state-sponsored hackers have directed campaigns at supply chains to help nation-states target the United States and conduct operations—”espionage, sabotage, and potentially prepositioning for warfighting.”

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Cyber threats continue to pose serious risks, the report warns. “States’ increasing use of cyber operations as a tool of national power, including increasing use by militaries around the world, raises the prospect of more destructive and disruptive cyber activity. As states attempt more aggressive cyber operations, they are more likely to affect civilian populations and to embolden other states that seek similar outcomes.”

Put simply, U.S. adversaries are investing heavily in systems warfare, a strategy to disrupt,2 disable, and destroy operational systems that enable military functions. These systems depend on communications, data, and physical and digital infrastructure operating in concert. We must bolster our military’s supply-chain capabilities to protect the United States from these pressing threats.

LOGISTICS ADVANCEMENT

Yesterday’s supply-chain capabilities were linear; plan, source, make, deliver, and return were discrete processes. Now, to survive and thrive in today’s complex environment, commercial entities are embracing digital supply networks (DSNs), which are interconnected physical-digital networks that synch planning, executing, and enabling in real time. The U.S. military needs to follow suit.

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DSNs unify the innovations that commercial supply chains have pioneered. For example, capturing data always has been a key component of supply chains, but innovations such as artificial intelligence (AI) and machine learning increase data availability and integrity. Another example of innovation is the Internet of Things (IoT), which enables communication across digital and physical assets to provide a holistic view of information. By harnessing the power of these tools, data can be aggregated, mined for insights, and disseminated in real time to key decision-makers.

DSNs bring seven advancements to military and defense organizations:

  • Agility and resiliency: Quickly responding to disruptions to maintain or restore equilibrium in planning, executing, and enabling.
  • Connectivity: Communicating effectively with allies and supply-chain partners to facilitate synchronization.
  • Integrability: Networks utilizing a continuous flow of information that facilitates automation, adds value, improves workflow and analytics, and generates insights.
  • Predictability: Using advanced analytics to gain predictive power.
  • Security: Safeguarding systems and data from accidental and intentional breaches as well as ensuring information is shared only with stakeholders that have the appropriate clearance.
  • Usability: Implementing systems and software that users can operate simply and efficiently.
  • Visibility: Viewing important supply-chain information from anywhere.

Updating government systems can seem daunting, but it’s more important today than ever before to leverage data in a common way across the supply chains of all branches of the military. One strategic aspect of building DSNs is making them scalable – everything does not need to be implemented at once. Instead, leaders can decide what works best first and what can be added later. Thinking modularly enables vital improvements to be made despite budget constraints, and it can help nurture the change into permanency.

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This modular approach to building DSNs can also help prevent “random acts of digital,” when individual investments are made in technology that don’t communicate with the enterprise or serve the overall strategic purpose. In the military, a few random acts of digital can complicate data sharing and leave systems even more vulnerable to serious threats from bad actors. Teams must be intentional in moving toward a common enterprise architecture.

To keep U.S. military operations secure, the government must continue advancing its supply-chain capabilities and processes along with its weapons and equipment.

REDEFINING MILITARY SUCCESS

For U.S. military and defense organizations to maintain their leadership in the modern era, we need the visibility and agility to outlast our enemies. This will rely on effective networking, collaboration, and communication between allies and partners. Put simply: Who needs what? Who has what? Who has the capability to deliver what?

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To appreciate the power of this cooperative strategy, imagine a smart depot, a U.S. Department of Defense facility that utilizes advanced digital and physical technologies to increase repair productivity. Benefiting from a single authoritative data set, known as a digital thread,3 the smart depot can anticipate when weapons systems, subsystems, and components require maintenance; provide visibility into the complete maintenance and sustainment ecosystem; produce critical repair components on demand; and improve tracking of on-field part performance.

The smart depot leverages sensors, advanced connected technologies, and autonomous systems to dramatically improve readiness and optimize supportability. For example, think about a warfighter in need of repair on a ship. A smart depot could be a “microfactory,” which travels directly to the ship, cutting down transportation and logistics time; augmented reality can connect the tech to remote engineering support; needed parts can be produced in the microfactory via additive manufacturing; and data can be shared in real time with original equipment manufacturers (OEMs).

Further, using the digital thread, OEMs, repair part manufacturers, maintenance crews, and other supply network stakeholders can work better and more collaboratively with a common and continuously updated set of data, shared with professionals based on their clearance level.

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EMPOWERING LEADERS FOR THE SUPPLY NETWORK REVOLUTION

Successful supply-chain transformation is a balancing act: Implementing supply-chain technology is one thing, but consensus and ownership are required to fuel adoption and deliver meaningful change. These four approaches will empower supply chain and logistics professionals and embed new supply-chain capabilities into military and defense organizations:

  • Cyberharden systems: Protecting networks, sensors, and systems against cyberattacks – this includes establishing access control and providing information access only to those who need it and have the clearance to receive it.
  • Embrace innovation: Like an organism, digital supply systems and processes will continue to evolve. By embracing the innovation, U.S. military and defense organizations can unlock the true potential of advanced logistics.
  • Encourage transparency: As supply chains have evolved into supply networks, challenges and disruptions must be met collaboratively. Open communication is encouraged, enabling professionals to be proactive. To further enable agility, teams must be encouraged to communicate across organizational boundaries.
  • Reskill operations professionals: Professionals must gain the skills necessary to demonstrate digital agency, the judgment, and confidence required to navigate and be effective in unfamiliar digital environments.

The military should consider investing in commercial best practices when it comes to advanced logistics. Increasingly complex supply chains, shifting geopolitical landscapes, and technology adoption by near-peer adversaries are driving the need to enhance military and defense supply-chain capabilities. Traditional supply-chain approaches may not bring results quickly enough.

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Alan Estevez is a specialist executive, Peter Heron is a principal, and Kelly Marchese is a principal with Deloitte Consulting LLP. Learn about how Deloitte helps government unlock the potential of supply-chain management. If you would like to learn more about Deloitte’s Government & Public Services (GPS) practice, please visit our career opportunities page.

Sources: 1. Office of the Director of National Intelligence; 2. Modern War Institute at West Point; 3. MIT Sloan Management Review.
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