Organic Industrial Base: –
The Eisenhower School’s class of 2023 OIB industry study cohort, Seminar 16, set its sights on reimagining the OIB of the future with an academic focus on the depot-level maintenance, repair, and overhaul (MRO), and modification services to sustain readiness of complex weapon systems. During the seminar’s journey, common themes were noted through several interactions with industry and government senior leaders across the MRO and sustainment enterprise -- flexibility, agility, interoperable, effective, efficient, forward projecting, and distributing to the point of need -- as key requirements for a future OIB. Seminar 16 welcomed the challenge of making this vision a reality in an OIB environment fraught with unfavorable market dynamics, aging and underfunded infrastructure, and a shrinking workforce. Accordingly, the conclusion of this report reflects the seminar’s aspiration for the creation of a new defense agency, the Defense Sustainment Agency (DSA), as a solution for mitigating the above issues and placing the U.S. on a stronger footing for prevailing in a peer conflict by 2030 and beyond.
The 2022 National Security Strategy highlights integrated deterrence as the US strategy for facing aggression posed by the People’s Republic of China (PRC), Russia, or other states and stresses the importance of integration across the government and non-military domains (the defense sustainment industrial base [DSIB]). It is Seminar 16’s view that unifying a disaggregated OIB will strengthen integration across the government and DSIB through strategic planning and execution of MRO services as a joint force. The unified approach offered by the DSA can best enable the requirements touted by senior leaders as being necessities for the future
OIB.
Analysis of the strategic environment and the OIB industry through the lens of Porter’s Five Forces and the Strategic Gameboard sets the stage for proposing the DSA as a viable construct for limiting OIB constraints through 1) Consolidating authorities and budget, 2) Improved acquisition sustainment planning, 3) Advanced technology integration, and 4) Enterprise control and management. Seminar 16 asserts that the creation of the DSA will contribute to enhanced OIB funding processes, strengthened acquisition planning, increased innovation, and refined Common Operating Picture oversight.
Alternatively, it is possible to achieve similar outcomes of the DSA by applying practices of its approach to the existing OIB enterprise (i.e., Office of the Secretary of Defense, sustainment centers, depots, and other entities that span the military Services). However, a closer examination of DSA's advantages and disadvantages presented later in the report will make the argument for why establishing the DSA is the best option for reimagining the OIB of the future and building capacity and capability to overmatch any peer competitor by 2030.
Key Takeaways:
- The OIB operates in a disadvantaged industry and struggles with modernization and adaptation.
- High bargaining power, barriers to entry, and intense competition exist among buyers, suppliers, and competitors.
- Congressional protection of the OIB's position in the MRO services market does not result in significant investments in infrastructure and technology. Additionally, the Department of Defense (DoD) faces challenges in adopting advanced technologies, and sustainment costs have
- become unaffordable.
Key Recommendations:
- Congress should establish temporary and permanent appropriations for the DSA to address funding shortfalls.
- Granting innovative authorities to the DSA, including contracting with the commercial industry and leveraging public-private partnerships, is essential.
- Congress should mandate DSA's total ownership and responsibility for OIB data systems, facilities, and equipment.
- Utilizing existing programs and implementing innovative solutions to expand defense sustainment industrial base surge capacity, strengthen the workforce, and include partners and allies to a defined extent is critical.
- Formation of DSA as a single entity enables the implementation of best practices and addresses drawbacks of a decentralized approach.
- Early integration of DSA into the acquisition process is critical for program success.
- Access to IP is crucial for competition, resilient supply chains, and reduced program costs.
Read the report →