Calcore Consulting Int.

Defense Supply Chains in a Shifting Political World!

The overall state of the economy plays a direct roll in your supply chain. It is during these times that you must be extremely watchful of all the companies you are dealing with. Be conscious of the fact that everyone is holding back with a wait-and-see attitude.

Shifting Defense Supply Chain Management

Look at the defense supply chains for example. With the new Obama administration coming into power and his stance on the Iraq war of having an exit strategy, pulling out, and reducing military spending - Aerospace & Defense supply chains are already preparing for an uncertain 2009.

Now may be a good time to start looking for some new contacts.

In an article we found on Industry Week Internet Magazine we take a closer look at A&D Supply Chain - entitled:

Aerospace & Defense Supply Chains Prepare for Uncertainty in 2009

by Michael Burkett, Vice President, AMR Research

Dec. 22. 2008 — These companies can expect increased scrutiny not only on the strategic value of programs, but also on efficient execution against cost, schedule and technical performance goals.

A&D manufacturers face uncertainty as 2009 approaches, with a new Presidential Administration and Congress soon taking hold of policy and budget decisions. Throw into the mix the current economic turmoil, and A&D manufacturers are justified in their concerns about the direction of current and future programs. These companies can expect increased scrutiny not only on the strategic value of programs, but also on efficient execution against cost, schedule and technical performance goals. Supply chain professionals must recognize the need for improved program performance and identify actions they can take to help reduce program risk.

The Obama administration is unlikely to slash defense spending in the near term, but has indicated a possible shift in priorities (emphasis added), which could bring new focus on major weapons programs like the F-35 Joint Strike Fighter and Future Combat System. A March 2008 General Accountability Office (GAO) report chastised the Department of Defense (DoD) for poor program performance, stating that cost and schedule outcomes have not improved since 2000 and the 72 programs assessed did not meet best practices essential for performance.

The GAO report also found variations in cost and schedule, with a total estimated acquisition cost growth of $295 billion in FY 2007.

The DoD and corporate executives are calling for improved program execution. Boeing CEO Jim McNerney stated in a July 11, 2008 Aviation Week article that his company didn’t have enough accountability in its program management approach and is now bolstering its importance. The director of defense procurement, acquisition policy, and strategic sourcing issued a memorandum in August 2008 to the Army that processes such as earned value management (EVM) must be used more effectively to improve program execution.

Supply chain has a role in helping to manage program risk

Supply chain professionals can proactively contribute to improvement by bringing their expertise to the table. The following are two of the top issues and suggestions on how the supply chain organization can assist.

For the rest of the article click here: Aerospace & Defense Supply Chains

Just like a recessive economy may shift the way you do business - a new Presidential Administration (in the example above) also shifts the focus of your supply chain.

Is your business being effective? Are you somewhere in that supply chain and just waiting to see what happens with the incoming administration? You may want to start preparing, and shifting your priorities now so that when things do change - you are ready. The Obama administration may not necessarily cut defense spending; however, as I outlined in the above article - there will be a likely shift in the priorities - and that will effect the entire way you do business.

Keep those things in mind as you start to close out this year and look forward into the coming year and you and your supply chain will be able to all work together and make profits.

If you have enjoyed this article or if you have comments (relating to the article) we would like to hear from you.

Supply Chain Definitions:

The management of components, manufacturing and distribution of a manufactured commodity. The supply chain management includes warehousing and tracking inventory. (California State University - Monterey Bay)

Supply Chain Model

The sequence of steps, often done in different firms and/or locations, needed to produce a final good from primary factors, starting with processing of raw materials, continuing with production of perhaps a series of intermediate inputs, and ending with final assembly and distribution. (Deardorff’s Glossary of International Economics)

A collection of activities and organizations involved in moving products (for example, raw materials) from one point (such as a manufacturer’s facility) to another (such as a customer’s distribution center). It includes the exchange of both material and associated information flows (for example, shipment notices). ( U.S. Department of Transportation - Federal Highway Administration)

We hope that this helps you to better understand the model of supply chain. Each definition chosen above talks about the whole, and at the same time highlights key points:

• Management of Components
• Sequence of Steps
• Collection of Activities.

Here is more stuff

A Timely Thought

As we go on our way with our heads in the sand or filled with non essential things like football, movies, sports, entertainer’s follies and other such nonsense, perhaps it is time to consider some important ponderings from Mr. Lee Iacocca which I support.

Remember Lee Iacocca? The man who rescued Chrysler Corporation from it’s death throes? He is now 82 years old and has a new book, and here are some excerpts.

Lee Iacocca says:

Am I the only guy in this country who’s fed up with what’s happening? Where the hell is our outrage? We should be screaming bloody murder. We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, ‘Stay the course’

Stay the course? You’ve got to be kidding. This is America, not the damned Titanic. I’ll give you a sound bit: Throw all the bums out!‘

You might think I’m getting senile, that I’ve gone off my rocker, and maybe I have. But someone has to speak up…  …I hardly recognize this country any more.

The most famous business leaders are not the innovators but the guys in handcuffs. While we’re fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving ‘pom-poms’ instead of asking hard questions. That’s not the promise of the ‘America’ my parents and yours traveled across the ocean for. I’ve had enough. How about you?

I’ll go a step further. You can’t call yourself a patriot if you’re not outraged. This is a fight I’m ready and willing to have. The Biggest ‘C’ is Crisis!

Leaders are made, not born. Leadership is forged in times of crisis. It’s easy to sit there with your feet up on the desk and talk theory. Or send someone else’s kids off to war when you’ve never seen a battlefield yourself. It’s another thing to lead when your world comes tumbling down.

On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. A Hell of a Mess. So here’s where we stand. We’re immersed in a bloody war with no plan for winning and no plan for leaving. We’re runing the biggest deficit in the history of the country. We’re losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.

But when you look around, you’ve got to ask: ‘Where have all the leaders gone?’ Where are the curious, creative, communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point.

Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We’ve spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.

Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm.

Everyone’s hunkering down, fingers crossed, hoping it doesn’t happen again. Now, that’s just crazy. Storms happen. Deal with it. Make a plan. Figure out what you’re going to do the next time.

Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when ‘The Big Three’ referred to Japanese car companies? How did this happen, and more important, what are we going to do about it?

Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.

I have news for the gang in Congress. We didn’t elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bonehead on Fox News will call them a name? Give me a break. Why don’t you guys show some spine for a change?

Had Enough?

Hey, I’m not trying to be the voice of gloom and doom here. I’m trying to light a fire. I’m speaking out because I have hope. I believe in America. In my lifetime I’ve had the privilege of living through some of America’s greatest moments. I’ve also experience some of our worst crises: the ‘Great Depression’, ‘World War II’, the ‘Korean War’, the ‘Kennedy Assassination’, the ‘Vietnam War’, the 1970’s oil crisis, and the struggles of recent years culminating with 9/11. If I’ve learned one thing, it’s this: ‘You don’t get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it’s building a better car or building a better future for our children, we all have a role to play. That’s the challenge I’m raising in this book. It’s a call to ‘Action’ for people who, like me, believe in America. It’s not too late, but it’s getting pretty close. So let’s shake off the crap and go to work. Let’s tell ‘em all we’ve had ‘enough.’

Quotes from: Where have all the Leaders Gone? by Lee Iacocca