Executive Summary

The current state of U.S. munitions manufacturing presents some complex challenges. The United States has huge stockpiles of certain conventional munitions. Some are becoming obsolete and others are becoming unusable owing to age. There is overcapacity for manufacturing most conventional munitions, even though many of the production processes are inefficient, costly to operate, and obsolete by commercial standards. The introduction of a new munition typically requires 10 to 15 years, far longer than comparable product introductions in commercial facilities.

The usage rate of conventional munitions has dropped dramatically since the end of the Cold War, as a result of (1) reductions in the size of our armed forces; (2) significant reductions in the defense budget, particularly in munitions procurement; and (3) the introduction of precision-guided munitions. The technology used in munitions is changing rapidly, unlike the technology deployed in producing them. Munitions manufacturers are hard pressed to design, test, manufacture, deploy, and maintain new munitions in a timely, cost-effective manner. The product life cycles are shorter, so production quantities are smaller and the per-unit costs are higher, all at a time when tremendous pressures exist to decrease costs, increase quality, and deliver more rapidly. In addition, the munitions industry has undergone significant consolidation, marked by many plant closings and mergers. The skilled workforce has been reduced substantially through a combination of layoffs and retirements.

There is disagreement at the highest levels of the U.S. defense establishment regarding the nature of future potential military engagements and the role of conventional munitions in those engagements. One view foresees most future military engagements as consisting of surgical strikes with precision weapons. The opposing view is that many future military engagements will involve large ground forces involved in hand-to-hand combat using conventional (although ever-improving) weapons and munitions. The committee does not have the expertise to make a final determination on this issue. However, it believes that neither of these extreme views is likely to be correct far into the future. Until this issue is resolved, the United States should progress under the assumption that, to be prepared for the range of potential conflicts, improvements in both precision-guided and conventional munitions will be required.

Against this backdrop of conflicting views and pressures, the Army is attempting to ensure that the munitions industrial base (MIB) can fulfill its mission. One of the initiatives being undertaken is the Totally Integrated Munitions Enterprise (TIME) program, the subject of this report.



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Munitions Manufacturing: A Call for Modernization Executive Summary The current state of U.S. munitions manufacturing presents some complex challenges. The United States has huge stockpiles of certain conventional munitions. Some are becoming obsolete and others are becoming unusable owing to age. There is overcapacity for manufacturing most conventional munitions, even though many of the production processes are inefficient, costly to operate, and obsolete by commercial standards. The introduction of a new munition typically requires 10 to 15 years, far longer than comparable product introductions in commercial facilities. The usage rate of conventional munitions has dropped dramatically since the end of the Cold War, as a result of (1) reductions in the size of our armed forces; (2) significant reductions in the defense budget, particularly in munitions procurement; and (3) the introduction of precision-guided munitions. The technology used in munitions is changing rapidly, unlike the technology deployed in producing them. Munitions manufacturers are hard pressed to design, test, manufacture, deploy, and maintain new munitions in a timely, cost-effective manner. The product life cycles are shorter, so production quantities are smaller and the per-unit costs are higher, all at a time when tremendous pressures exist to decrease costs, increase quality, and deliver more rapidly. In addition, the munitions industry has undergone significant consolidation, marked by many plant closings and mergers. The skilled workforce has been reduced substantially through a combination of layoffs and retirements. There is disagreement at the highest levels of the U.S. defense establishment regarding the nature of future potential military engagements and the role of conventional munitions in those engagements. One view foresees most future military engagements as consisting of surgical strikes with precision weapons. The opposing view is that many future military engagements will involve large ground forces involved in hand-to-hand combat using conventional (although ever-improving) weapons and munitions. The committee does not have the expertise to make a final determination on this issue. However, it believes that neither of these extreme views is likely to be correct far into the future. Until this issue is resolved, the United States should progress under the assumption that, to be prepared for the range of potential conflicts, improvements in both precision-guided and conventional munitions will be required. Against this backdrop of conflicting views and pressures, the Army is attempting to ensure that the munitions industrial base (MIB) can fulfill its mission. One of the initiatives being undertaken is the Totally Integrated Munitions Enterprise (TIME) program, the subject of this report.

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Munitions Manufacturing: A Call for Modernization TIME assumes that munitions production during peacetime will be conducted primarily in “organic” facilities—that is, in government-owned/government-operated (GOGO) and government-owned/contractor-operated (GOCO) dedicated munitions factories. Current Department of Defense (DoD) policy is to maintain a munitions stockpile sufficient to supply U.S. and allied forces engaged in two near-simultaneous major regional conflicts. Following conflicts, the munitions stockpile is to be replenished by (1) increasing production at dedicated organic munitions factories, and (2) subcontracting the remaining required production to qualified commercial firms by means of contracts that allow their facilities to be converted from civilian work to munitions manufacturing. A key assumption of the TIME program is that rapid replenishment can be accomplished by transferring technology and processes to commercial firms via electronic communications networks. Thus, it is envisioned that a virtual munitions enterprise can be rapidly formed and activated using advanced information and communications technologies. STATEMENT OF TASK The Army asked the National Research Council (NRC) to evaluate the TIME program and make recommendations for future directions. Specifically, the committee was asked to (1) review the goals, objectives, and activities that currently constitute the TIME program, including those related to manufacturing process controls, the integration of operations and business processes, and site-to-site communications; (2) develop a coherent description of the elements and activities of the TIME program and the manner in which they interact; (3) benchmark the TIME program against pertinent state-of-the-art best practices for enterprise architecture and functions such as enterprise management, supply chain management, communications, production design and development, process and machine controls, and shop floor controls; (4) evaluate the extent to which these activities address the manufacturing recommendations and challenges identified in two recent NRC reports, Visionary Manufacturing Challenges for 2020 (NRC 1998) and Defense Manufacturing in 2010 and Beyond (NRC 1999); (5) identify needs for further development and recommend adjustments to the TIME program, including policy changes, to enable the program to successfully address the challenges of munitions development and manufacturing; and (6) identify potential applications for TIME approaches and technologies within the Army, the DoD, and commercial facilities. MAIN FINDINGS This and previous studies, including those from the National Defense University (NDU) (NDU, 1996, 1997, 1998), have identified a number of major problems in the GOGO and GOCO MIB in the United States:

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Munitions Manufacturing: A Call for Modernization Widespread obsolescence of manufacturing equipment and processes; Weak quality control of processes; Scarcity of machine tool numerical controllers; Outdated, inefficient, and costly product realization processes (sequential versus concurrent); Failure to use information and communications technologies; Minimal use of computer-aided design (CAD), computer-aided manufacturing (CAM), and computer-aided engineering (CAE), including modeling and simulation; Paucity of up-to-date skills and knowledge on the part of the workforce; Lack of a modern supply chain management concept for the munitions enterprise; Absence of life-cycle cost considerations; and Failure to explicitly address environmental concerns. These problems have developed over a long period of time. Their seriousness is now becoming apparent as the Army struggles to deal with the new realities described earlier. The committee’s major findings relative to the TIME program are as follows: TIME was created as the result of a congressionally directed initiative, or plus-up, rather than through the DoD/Army budget. Thus, ownership, accountability, and funding for the program have been outside the normal DoD/Army/Manufacturing Technology program (ManTech) chain of command. While this funding indicates the interest of Congress in munitions modernization and much of the TIME program addresses critical problems, the program appears to have been driven too much by contractor interests and desires and too little by the need to solve the most critical problems of the MIB. Based on the information provided to the committee, no financial justification was done on either the overall TIME program or the individual subprojects. Such analysis is the main tool used by private industry to prioritize development projects. The funding for TIME can support only limited technology demonstrations. Considerably greater funding will be required to accomplish a broad-based modernization program. The TIME program suffers because it was apparently not the result of a strategic planning process as practiced in commercial facilities. The absence of formally stated mission, goals, objectives, and metrics made it difficult to see the total program in context and to assess its progress.

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Munitions Manufacturing: A Call for Modernization A disproportionate amount of TIME funds and effort (see Table 1–2) has been directed at development of the Open Modular Architecture Controller (OMAC). Substantial additional investment remains before the OMAC will have sufficient capability to return any of the investment in it. Although some of its potential capabilities may someday benefit the munitions industry, no compelling needs or substantial returns on further investment were presented to the committee. The Army’s organic (GOGO and GOCO) munitions manufacturing enterprise is plagued by fundamental machinery and process problems that must be addressed in the near term. Substantial modernization is needed if the nation’s war fighting requirements are to be met. The government-run facilities have almost no CAD/CAM capability, the lack of which calls into serious question the Army’s ability to transfer technology and processes to commercial dual-use facilities for stockpile replenishment. This technology transfer is the key tenet of the TIME program. Much of the design and process data for conventional munitions exists on paper drawings or is not documented at all. Some of these data have been scanned into electronic databases, but in most organic facilities the capability to access and use these databases is limited or nonexistent. Given the relatively neglected state of its organic munitions manufacturing enterprise, the Army would benefit substantially from the rapid implementation of stand-alone, commercial off-the-shelf (COTS) CAD/CAM systems, appropriate databases, and adequate communications networks. The Army has yet to begin to take advantage of techniques such as information-based supply chain management that are used in commercial industry to reduce obsolete inventories and increase the responsiveness of original equipment manufacturers and suppliers to changing customer needs. The TIME program is attempting a very large enterprise integration effort. It is the committee’s opinion, based on its experience with similar endeavors, that significant increases in funding would be required to meet the objectives of the program. Modernizing the munitions industry presents a complex problem that includes a combination of management, political, economic, and cultural, or people, issues, not just technical issues. Yet the TIME program was set up to focus almost exclusively on the technical aspects of the problem.

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Munitions Manufacturing: A Call for Modernization MAIN CONCLUSIONS Specific conclusions are embedded in the chapters of this report. The main conclusions pertinent to the committee’s charge are collected here and presented in aggregate form. The problems that the TIME program addresses are very real and very urgent. The U.S. MIB is largely obsolete, expensive to operate, inflexible, and slow in its responsiveness to changing requirements. Many of the fundamental elements required to support the DoD munitions replenishment policy are not adequate or not in place. Thus, the committee is concerned about the Army’s ability to support two near-simultaneous regional conflicts with the needed quantity of conventional and advanced munitions. This concern has been expressed in other studies that dealt with this issue (NDU, 1996, 1997, 1998). The DoD/Army have not followed the accepted commercial business practice of investing continuously to keep their munitions manufacturing infrastructure (facilities, equipment, and workforce) reasonably up-to-date. The method of funding TIME—namely, through a direct congressional appropriation—has meant that DoD is not involved in planning and managing the program. The committee perceives that DoD and the Army command have neither assumed ownership of the TIME program, nor demonstrated budgeting commitment to it. The TIME concept does not appear to have been well communicated within the Army, and the committee is concerned that the Army has not accepted TIME as part of its munitions enterprise. TIME needs strong support from DoD and the Army leadership to be successful. The TIME program’s objectives are ambitious based on the program’s funding history. The heavy focus of the TIME program on the OMAC has consumed resources needed for other important dimensions of TIME. The committee is not aware of any munitions manufacturing need (as opposed to hoped-for higher-performance control technologies) that cannot be adequately addressed by today’s COTS controllers. The TIME program is to be commended for its focus on demonstration projects as a means of trying out complex integrated enterprise systems in a real-life setting and identifying potential problems prior to full implementation and use. The integrated munitions enterprise will be especially vulnerable to unanticipated failures because it will consist of a large number of disparate and evolving systems. Because the parts used primarily by dual-use suppliers may rarely be exercised in conjunction with other

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Munitions Manufacturing: A Call for Modernization parts of the integrated munitions enterprise, a comprehensive program of validation is essential. The TIME program is deficient in three important areas: (1) workforce issues, (2) environmental concerns, and (3) life-cycle cost considerations. The committee believes that the TIME program is developing an approach to an integrated enterprise that may offer potential for other DoD manufacturing enterprises, particularly if the main recommendations of this report are adopted. MAIN RECOMMENDATIONS Specific detailed recommendations are embedded in the chapters of this report. Presented here are the committee’s main recommendations to managers of the TIME program and to the Department of the Army. Budgetary and Management Issues The TIME program should be reconstituted and built into a DoD/Army initiative to be pursued over the next decade. It should be adequately and consistently funded through the formal DoD and Army chain of command, not through funding that cannot be counted on to continue. As part of its reconstitution, TIME needs to develop a long-term strategic modernization plan that conforms to DoD plans and munitions industry needs and clearly shows ownership, responsibility, and accountability. TIME needs to reset its direction and objectives by taking a bottom-up approach to both new product introduction and replenishment capacity management. It then needs to develop short-term implementation plans with measurable goals and objectives. Furthermore, it should establish A clear statement of vision, mission, and goals and communicate this information throughout the Department of the Army, and A leadership structure that will clearly identify the responsibility of each organization and participant for the realization of the TIME vision and that will monitor progress toward the program’s goals. An essential element of the long-term strategic planning effort should be an evaluation of reasonable alternatives for the manufacture of conventional munitions. For example, with the shifting emphasis to precision-guided munitions (PGMs) and the development of the PGMs industrial base, it is possible that that base could also handle the conventional munitions requirements.

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Munitions Manufacturing: A Call for Modernization The TIME program should regularly review its goals and objectives, as well as its technology path for achieving those objectives so that it can avail itself of the latest appropriate, well-proven COTS technologies. When a long-term strategic plan for TIME has been developed, after the Army has assumed ownership of TIME, and as the TIME program moves toward the implementation phase, substantial additional funding should be made available. The committee agrees with DoD’s strategy for achieving greater efficiency in munitions procurement by privatizing a substantial portion of the MIB. Accordingly, the committee recommends that the Army transfer production requirements to the private sector wherever possible, limiting the resources needed to upgrade or replace production equipment and systems in GOGO/GOCO facilities that have become obsolete. For those requirements that must remain in the organic base, the Army should upgrade its production equipment and processes to make them compatible with those currently in use by commercial facilities, so that outsourcing for stockpile replenishment becomes a viable option. Technical and Program Approaches The Army should follow the practice of acquiring state-of-the-market, commercially available technologies whenever possible. It should not engage in developing cutting-edge technologies in areas that are not defense-unique. The Army should also do as follows: Continue the process of benchmarking against commercial industry. Continue the process of demonstration projects for the transfer of technological capability. Implement CAD/CAM/CAE systems and appropriate employee training. Prioritize needs and opportunities in conformance with the architecture and begin to implement the pieces having the highest paybacks, as determined by cost-benefit analyses and strategic military needs. Include detailed contingencies for unforeseen disruptions in routine munitions production caused by the introduction of new technologies. Develop a human resource plan that parallels the technology plans and enterprise architecture of the TIME program.

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Munitions Manufacturing: A Call for Modernization TIME should divest itself of further development of the OMAC and proceed immediately to transfer such work, as is, to commercial developers. TIME should consider the use of OMACs only when they are available as well-proven commercial products and only if they exceed the performance of other commercial controllers. TIME should be working diligently to identify and implement the latest commercially proven technologies in conformance with a completed enterprise architecture plan. The essential strategic element in developing and integrating the enterprise architecture is integrated design and manufacturing. The Army should contract with commercial process control experts to implement modern COTS control technologies on energetics process equipment in GOGO and GOCO munitions manufacturing facilities. The Army should immediately begin to implement COTS CAD/CAM/CAE systems in the munitions industry. The TIME program should investigate and implement COTS packages that enable effective communication between a wide variety of CAD and CAM systems. In accordance with the architecture proposed by TIME, the entire acquisition process, from ordering munitions to paying for them, should be automated and integrated into one loosely coupled, unified enterprise system. The TIME program should capitalize on opportunities for cost and inventory reduction that may be available through use of proven commercial industry techniques for integration of supply chains. The Army should follow the current industrial practice of developing long-term mutually beneficial relationships with both routine munitions suppliers and its replenishment suppliers. It should also take advantage of changes in government procurement regulations to optimize the performance of its munitions supply chains, especially when needed for replenishment. Issues associated with the environmental impact of the production, storage, demilitarization, disposal, and recycling of munitions should play a key role in the TIME program’s long-range plans. TIME should work closely with other DoD programs that are working toward cleaner, greener, armed forces and addressing issues of health and safety. Special Recommendation It is strongly recommended that the Army Materiel Command establish a standing peer review committee to provide oversight and guidance to the TIME program. The committee should report to Army managers at a level with both budget development authority for the TIME program and overall responsibility for

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Munitions Manufacturing: A Call for Modernization management of munitions. The committee should conduct an annual review of the TIME program, assess progress, and provide guidance on future directions. The committee should consist of expert representatives from industry, particularly the controls industry, and academia.