US Defense Industrial Base Seeks to Build Capacity Amid Supply Chain Challenges

The US Pentagon is overhauling its acquisition, production and procurement processes to rebuild the industrial base. This comes after COVID revealed weaknesses in the supply chain and highlighted the need for greater capacity and resilience. The new approach aims to create a more modular and open systems architecture, with a focus on incentivizing new entrants and creating opportunities for smaller companies. However, implementing these changes will be challenging, and their success will depend on the government’s ability to create demand signals that allow for more competition throughout the life cycle of programs.