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The U.S. Industrial Base Is Not Prepared for a Possible Conflict with China (features.csis.org)
submitted 7 months ago by yogthos@lemmy.ml to c/news@hexbear.net
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[-] marxisthayaca@hexbear.net 24 points 7 months ago* (last edited 7 months ago)

The Need for Predictable Orders

Defense companies are generally unwilling to take financial risks without contracts—including multiyear contracts—in place.

It is not a sound business decision to build more munitions or weapons systems without a clear demand signal and financial commitments. This risk aversion is compounded if companies make additional capital investments—especially investments for facilities, infrastructure, and tooling.

As one DoD study concluded:

“Producers benefited from steady or predictable orders, so the DoD’s inconsistent procurement and concurrent production ramps (both increases and decreases) exacerbate the challenges suppliers face across the [defense industrial base].”

I guess, we'll really have to worry when the DoD starts putting in 5-year contracts in place.

Edit:

Consequently, it is important to buy munitions smarter to take advantage of scale and market power. Examples include advanced procurement, multiyear procurement, and economic order quantity processes.

[-] DefinitelyNotAPhone@hexbear.net 13 points 7 months ago

Capitalism is so efficient it even creates just-in-time manufacturing for its armies! What could go wrong?

this post was submitted on 07 Mar 2024
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