DoD Addresses Supply Chain Issues Pre-and Post-Pandemic

Karen Fenstermacher, with Naval Supply Systems Command, speaks during the supply chain risk roundtable. SOLAR PHOTOGRAPHY

NATIONAL HARBOUR, Md. — The COVID pandemic has heightened consumer interest in supply chain issues. But for the Department of Defense, supply chain issues have been around for decades, panelists said at the April 5 roundtable on supply chain risks at Sea-Air. -Space.

Chris Espenshade, director of small business for the Naval Supply Systems Command, kicked off the roundtable with a review of issues affecting global supply chain resilience. Everything from big data analytics to port closures and border delays impact the supply chain, he said. Specifically, the lack of depth and competition among vendors hampers cost and quality.

“For example, today 90% of our missiles come from just three sources,” Espenshade said.

Shortages of energy, labor and raw materials are the main drivers of supply chain disruption. In particular, Espenshade said, environmental issues, climate change and natural disasters, global health and pandemic response, social unrest, trade and tariff policies, political unrest and terrorism have led to an increase in cost and price inflation.

Following President Biden’s February Executive Order 14017 on US Supply Chains, the Department of Defense is actively deepening its understanding of its supply chains and industrial base capabilities, with a holistic approach to resilience , Espenshade said.

But there are two key issues, said Kurt Wendelken, vice commander of NAVSUP.

“There are a limited number of vendors and we struggle with obsolescence daily,” he said. “Both should inform our thinking about procurement and whether cost is the right fit.”

Wendelken and Karen Fenstermacher, head of strategic initiatives for NAVSUP, emphasized the “one navy” concept when communicating with suppliers.

“The Navy is really 19 marines. We have very well trimmed stovepipes in the Navy. But we want to have one Navy voice with industry on the key challenges we face and our strategies for working together,” Fenstermacher said.

This includes creating a conversation during the acquisition process about how the Department of Defense will maintain the systems it purchases. “The acquisition policy is extremely complex and voluminous,” Fenstermacher said. “One thing that’s exciting is the low-cost framework we’ve established.”

From an industry perspective, supply chain has traditionally been viewed as a back-office function, but it is now at the forefront. “I see this as both a challenge and a great opportunity,” said Clark Dumont, senior director of global purchasing for BAE Systems.

Panelists also highlighted the importance of including small businesses in the supply chain.

“We are open for business; the money is there,” said Jimmy Smith, director of the Office of the Navy’s Department of Small Business Programs. He noted that last year the Department of Defense spent $17.1 billion on small business programs.

In particular, Smith mentioned the DoD’s Mentor-Protégé program, a partnership between large and small manufacturing companies.

“The government will give a large partner up to $3 million to help a small business partner, but in many cases I can’t find industry partners to do that,” Smith said. “I encourage you to step forward and seize this opportunity.”

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