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U.S. Manufacturers Need Access to Metals
President Obama’s recent announcement of a Department of Defense funded metals manufacturing institute is a nod to the criticality of raw materials to national security at a time of growing resource nationalism amongst mineral-rich nations.

The $148 million Lightweight and Modern Metals Manufacturing Innovation (LM3I) Institute — also backed by major defense manufacturers like Boeing and Lockheed Martin — will focus on the light-weighting of metals crucial to defense and aerospace applications, with the ultimate goal of making U.S. military equipment more efficient, deft and adaptable to the rapidly changing landscape of combat. It could also spur action on an issue that not only threatens our national security, but countless domestic industries including automakers, high tech innovators and U.S. manufacturers: foreign mineral import reliance.

The LM3I Institute hopes to make the U.S. more competitive and secure by expanding domestic markets for products made with metals such as copper, platinum, gold, molybdenum, palladium and nickel to lighten vehicles for the military and consumers alike in order to improve performance and fuel efficiency. Lighter vehicles result in fewer emissions and costs while being able to carry larger loads and travel farther distances. And lighter military vehicles can withstand carrying heavy weapons while still being easily transportable.

The innovations pursued by LM3I Institute are just the latest use of minerals and metals to create and improve countless technologies that protect our troops abroad and support homeland security. Each year, the DoD acquires nearly 750,000 tons of minerals used in an array of defense and military applications to keep our nation safe and combat ready. Molybdenum, for example, is a key component in the manufacturing of armor plating. Minerals such as nickel, titanium and zinc are found in military aircraft like the Boeing EA-18G Growler — the United States’ most advanced electronic warfare aircraft. The Navy’s air warfare division just requested 22 more EA-18G Growlers in order to reduce the duration of military missions and bring our troops home quickly and safely.

Unfortunately, it’s increasingly becoming a zero-sum game to procure these minerals as demand soars and the United States’ access to these resources is put in jeopardy. According to a recent report by Brig. Gen. John Adams for the Alliance for American Manufacturing, “The increased demand for minerals has encouraged resource nationalism, where countries seek to exert greater control over the extraction and processing of key elements … exposing the United States to potential supply disruptions and other risks.” Top mineral producers like Indonesia, China, and South Africa have all recently moved to limit foreign mineral exports in order to bolster their own industry and economies. Demand and competition for these vital minerals will continue to rise as the world’s population surges and millions join the middle class in fast-rising economies around the world. 

The United States is particularly threatened by this growing global trend, as the nation remains 100 percent import dependent on foreign sources for 19 key minerals and metals, and more than 50 percent reliant for another 22. Many of these same minerals were flagged in the DoD’s 2013 “Strategic and Critical Materials Report,” which documented shortages of 23 minerals crucial to national security. 

Our growing reliance on foreign minerals is particularly disappointing as the United States is home to a rich $6.2 trillion mineral reserves base — a tremendous resource kept at arm’s length due to a duplicative and outdated permitting process for new mineral mines. With this process — congested by unnecessary delays and redundancies at the local, state and federal levels — it can take up to 10 years to secure approval to mine for minerals. Large mining countries such as Australia and Canada, with comparably stringent environmental standards, approve mine permits in just two years. No wonder private consultants rank the United States dead last — tied with Papua New Guinea — for permit efficiency. The result drives mining investment overseas, dropping the U.S. share of global metals mining investments by 13 percent over the past decade and triggering increased reliance on mineral imports.

Fortunately, policymakers are catching up to their colleagues in the Pentagon and have begun to realize the threat of mineral supply constraints. Last year, the House passed the “Strategic and Critical Minerals Production Act of 2013,” which would streamline the mineral permitting process and help establish a secure domestic mineral supply chain for manufacturers and our military. This bill upholds strict environmental protections and helps prepare our national defense for a changing world.

For the United States, a stable and robust mineral supply is, and will continue to be, a strong pillar supporting our national defense and domestic industries. Allies and competitors alike have enacted policies to address mineral security, and it’s time for the United States to do the same. A reformed permitting process for mineral mines is a long-overdue first step.

Hal Quinn
President and CEO,
National Mining Association

How to Fix Defense Acquisition
The Armed Services Committees of the Senate and House of Representatives asked industry for input on the Defense Department acquisition system.  Three areas need to change: The acquisition process, the acquisition organization and the requirements generation process.

Any honest analysis of DoD acquisition over the last 20 years can only conclude that successful programs are rare, if you define success as meeting the war fighter’s needs on time and within budget. The reality is the acquisition system is failing the war fighter while simultaneously cheating taxpayers out of their investment in national security. 

There will be failures in acquisition regardless of the legislative framework, management controls or oversight methodology constructed. Development at the edge of technology is inherently risky. Failure in acquisition is not necessarily bad. Taking a long time to fail is definitely bad. This is what the acquisition system is delivering today, long lead time failure.

The acquisition system has become a Gordian knot, lacking any logic or sensible construct. If programs are successful today, they are successful in spite of the current acquisition process, not because of it. Why has this happened? Large organizations tend to solve problems by adding complexity — complexity to the process, complexity to the organization, and complexity to reporting. This is rarely the right solution. 

The goal of the acquisition process cannot be the elimination of failure. That has been the goal in the past, which has resulted in constant fiddling with the system, the net result being a process which is overwhelming, complex and difficult to understand; full of caveats, exemptions and waivers; made up of users which immediately and universally try to subvert it; and a huge burden of reports, plans and analysis — most never read.

The advice on reforming this process is do not to attempt to reform it. Start over from a clean sheet of paper and create a radically simplified system.

The acquisition process is defined by DODD 5000.01 “The Defense Acquisition System” and DODI 5000.02, “Operation of the Defense Acquisition System.” Some of the requirements in these documents are driven by legislation, some by policy. DODD 5000.01 is good as is. DODI 5000.02 needs to be radically simplified and rewritten from a clean start. Some principles to follow in rewriting this new process are to keep it simple and easy to understand, and to make it generally applicable, regardless of program size or type.

It should be an overarching framework, not the dictation of every step in a developmental program. It should ensure ruthless, honest and independent oversight. And oversight means oversight. Don’t micromanage.

The reporting burden should be small, but extremely important. The process can not be a substitute for good judgment, good training and common sense.

Lastly, hire good program managers, train them effectively and then rely on their judgment.

A simplified acquisition process should be five phases, seven technical reviews, three decision points and one independent operational test. This process should apply to all programs regardless of type or size. The only variation from program to program is the level of approval and oversight, and the point at which they enter the lifecycle. 

Next, the current acquisition organization is a confusing mass of duplication, parallel management structures and dotted line relationships lacking clear chains of command and responsibility. This “organizational spaghetti” isn’t conducive to providing cutting edge products on time and within budget. Our war fighters deserve an acquisition organization backing them up that looks like it was designed on purpose. 

The acquisition organization needs to be radically simplified with clear lines of authority and accountability. Disband the disparate service-specific acquisition organizations and reorganize them under a single Defense Department organization.

As for the requirements process, the Defense Department relies almost exclusively on a “requirements pull” methodology which works like this: War-fighters identify a capability gap and propose a system to correct this gap —  a new heavy bomber, a new armored vehicle, a new IT system, whatever.  They create a bullet list of design requirements for this new system, which the acquisition process attempts to deliver. Failure to deliver even a single requirement may result in the failure of the program. 

The problem with the “requirements pull” methodology is that it doesn’t work. Look to any sector — consumer product, automotive, aerospace, IT, medical, etc. — and you will rarely find innovative products resulting from a bulleted list of customer requirements. The Model T, the SR-71, the iPhone, Google, the M16 rifle — only one of these transformational products was developed from a focus group or bulleted list of requirements. 

The reason innovative products don’t come from a requirements pull methodology is twofold. First, end users can only describe what they need in terms of what they already know. They can explain how to improve an existing product or describe existing problems or deficiencies, but they cannot, as a group, conceive of innovative solutions to those problems. 

We remember the names of innovators like Henry Ford, Kelly Johnson, Steve Jobs and Gene Stoner because they are so exceptional.

Second, product development is a series of many-dimensional tradeoffs. Add armor to increase survivability, and you increase weight, reduce speed and reduce maneuverability. Add vertical take-off to a fighter, you increase weight and complexity and reduce reliability. Every additional requirement adds capability, but it also causes a subtraction in capability somewhere else.  There is no free lunch, only a series of tradeoffs.

The subtractions are usually unseen during requirements generation and only obvious during product design, development and use. These tradeoffs easily run into thousands of connections which cannot be easily understood with a bulleted list of requirements. Therefore we typically end up with a long complex list of requirements which cannot be resolved. The goal should be only to add requirements that add significantly more than they subtract.  This is why a small simple set of requirements is usually more successful than a long complex list of requirements; the tradeoffs are easier to assess and deal with when there are a few simple requirements.

There are two independent variables with respect to increased requirements: time and money.  You can always add more requirements if you are willing to add time and cost.  Hence, this is why most DoD projects are over cost and schedule because of an ill-fated attempt to trade these variables for more capability.

The bottom line, requirements must be restrained.  This restraint can’t be invoked legislatively or with policy. You must eliminate time and cost as an independent variable.

Every project which is 15 percent over budget, or 15 percent past schedule should be automatically canceled. This can’t be an idle threat; this must be adhered to vigorously. Once project managers know this is a hard rule and will be enforced, discipline in requirements generation will occur organically. As a side benefit, programs will more realistically estimate true time and cost.

Systems are effective based on the totality of what they bring to the mission. Therefore no single requirement ought to be sacrosanct. If a program is unable to deliver 100 percent of every requirement that alone should not result in failure. The war fighter must assess the total capability and determine if the system can fulfill his needs.

Jeff Windham
Bettendorf, Iowa

Topics: Defense Department, DOD Budget, DOD Policy, Manufacturing, Procurement, Acquisition Reform, Defense Department

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