STRATEGIC LONG-TERM
PARTICIPATION BY DOD IN ITS
MANUFACTURING USA INSTITUTES

Committee on Strategic Long-Term Participation by DoD in
Its Manufacturing Innovation Institutes

National Materials and Manufacturing Board

Division on Engineering and Physical Sciences

A Consensus Study Report of

THE NATIONAL ACADEMIES PRESS
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www.nap.edu

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This study was supported by Contract SB134117CQ0017/1333ND18FNB490281 with CMRC/National Institute of Standards and Technology. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of any organization or agency that provided support for the project.

International Standard Book Number-13: 978-0-309-49138-9
International Standard Book Number-10: 0-309-49138-X
Digital Object Identifier: https://doi.org/10.17226/25417

Cover: Complexity is free, not only in the 3D-fractal on the cover or in additive manufacturing, but complexity is also assured in the relationship between manufacturing and innovation. Wherever manufacturing takes place it spurs innovation; that in turn creates new opportunities for manufacturing in a complex never-ending spiral. Back cover: Start doing, stop doing, and continue doing are key ingredients of this effort. Simple and important actions, but with complex outcomes. Compare with Conway’s Game of Life, where cells are started, stopped, or continued according to four simple rules but yet attain a complexity that is astonishing. Graphic artist: Erik Svedberg.

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Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2019. Strategic Long-Term Participation by DoD in Its Manufacturing USA Institutes. Washington, DC: The National Academies Press. doi: https://doi.org/10.17226/25417.

COMMITTEE ON STRATEGIC LONG-TERM PARTICIPATION BY DOD IN ITS MANUFACTURING INNOVATION INSTITUTES

THERESA KOTANCHEK, Evolved Analytics, LLC, Co-Chair

EDWARD MORRIS, Consequence Consulting, LLC, Co-Chair

WILLIAM B. BONVILLIAN, Massachusetts Institute of Technology

THOMAS M. DONNELLAN, Applied Research Laboratory, Pennsylvania State University

SUSAN HELPER, Case Western Reserve University

MICK MAHER, Maher & Associates, LLC

MICHAEL McGRATH, Independent Consultant

POL SPANOS, NAE,¹ Rice University

BEN WANG, Georgia Institute of Technology

STEVEN J. ZINKLE, NAE, University of Tennessee, Knoxville

Staff

ERIK SVEDBERG, Senior Program Officer, National Materials and Manufacturing Board (NMMB), Study Director

JAMES LANCASTER, Director, NMMB and the Board on Physics and Astronomy (BPA)

NEERAJ P. GORKHALY, Associate Program Officer, NMMB

HEATHER LOZOWSKI, Financial Associate, NMMB

BETH DOLAN, Financial Associate, NMMB and BPA

JOSEPH PALMER, Senior Project Assistant, NMMB

JULIA KOTLER, Research Assistant, Division on Engineering and Physical Sciences

___________________

¹ Member, National Academy of Engineering.

NATIONAL MATERIALS AND MANUFACTURING BOARD

BEN WANG, Georgia Institute of Technology, Chair

THERESA KOTANCHEK, Evolved Analytics, LLC, Vice Chair

RODNEY C. ADKINS, NAE,¹ IBM Corporate Strategy (retired)

CRAIG ARNOLD, Princeton University

JIM C.I. CHANG, National Cheng Kung University, Tainan, Taiwan

THOMAS M. DONNELLAN, Applied Research Laboratory, Pennsylvania State University

STEPHEN FORREST, NAS²/NAE, University of Michigan

ERICA FUCHS, Carnegie Mellon University

DAVID C. LARBALESTIER, NAE, Florida State University

MICK MAHER, Maher & Associates, LLC

ROBERT MILLER, NAE, IBM Almaden Research Center

EDWARD MORRIS, Consequence Consulting, LLC

NICHOLAS A. PEPPAS, NAE/NAM,³ University of Texas, Austin

GREGORY TASSEY, University of Washington

TRESA M. POLLOCK, NAE, University of California, Santa Barbara

HAYDN WADLEY, University of Virginia

STEVEN J. ZINKLE, NAE, University of Tennessee, Knoxville

Staff

JAMES LANCASTER, Director

ERIK SVEDBERG, Senior Program Officer

NEERAJ P. GORKHALY, Associate Program Officer

HEATHER LOZOWSKI, Financial Associate

BETH DOLAN, Financial Associate

JOSEPH PALMER, Senior Project Assistant

AMISHA JINANDRA, Research Associate

___________________

¹ Member, National Academy of Engineering.

² Member, National Academy of Sciences.

³ Member, National Academy of Medicine.

Preface

Over the past 6 years, 14 Manufacturing USA institutes have been established—8 by the Department of Defense (DoD), 5 by the Department of Energy (DOE), and 1 by the Department of Commerce (DOC).

To date, more than $3 billion has been invested in establishing and operating the Manufacturing USA institutes, with the three federal agencies committing a total of $1 billion for the first 5 years of each institute, and industry and other nonfederal resources providing the remaining $2 billion. DoD has invested $600 million directly in its eight Manufacturing USA institutes with the understanding that the initial federal investment included (1) one-time, start-up funding to establish the institutes within a period of 5 to 7 years and (2) a government share of core funding. As the institutes reach year five, continued engagement by the federal government is being assessed. DoD has special authorities and resources and therefore can address optimal sustainability approaches in manners different from institutes funded by other agencies.

As a result, the National Materials and Manufacturing Board was asked by the National Institute of Standards and Technology and DoD to complete a fast-track study to review the role of DoD’s investment in establishing its eight institutes as public–private partnerships and its engagement with each institute after each has matured beyond the start-up period. The sponsors requested that the prepublication version of this report be delivered within 7 months of the task order award, with the final report to be delivered 2 months thereafter.

As requested, the Committee on Strategic Long-Term Participation by DoD in Its Manufacturing Innovation Institutes assessed the effectiveness of the DoD Manu-

facturing USA institutes and best ongoing roles for the federal government to ensure optimal benefit to U.S. competitiveness. This report presents options that the study committee developed, based on a workshop, that DoD could consider in developing its long-term role with existing and potential future DoD Manufacturing USA innovation institutes. Chapter 5 contains key study committee findings regarding the five goals in the current DoD Manufacturing USA Strategy,¹ followed by four specific recommendations. Topics recommended by the committee for a follow-on study are described in Chapter 6. The Afterword (Chapter 7) provides the committee’s rationale for DoD’s continued engagement with manufacturing innovation institutes.

This report represents the consensus of the committee on the optimal long-term role of DoD with its Manufacturing USA institutes and its recommendations for follow-on topics to be addressed in a second study.

We thank the committee members for their exceptional efforts in preparing this report. In executing its charge, the committee met 14 times from November 8, 2018, to February 1, 2019. The committee also heard from a broad spectrum of stakeholders from DoD, DOC, DOE, industry (small, medium-size, and large), academia, the manufacturing innovation institutes, and other agencies. The committee thanks the following guest speakers and panelists at its meetings, who added to the members’ understanding of successful public–private partnerships:

We and the committee thank the director of the National Materials and Manufacturing Board, James Lancaster, the study director, Erik Svedberg, and their entire staff for their help and guidance in performing this fast-track project.

Theresa Kotanchek and Ed Morris, Co-Chairs
Committee on Strategic Long-Term Participation of DoD in Its Manufacturing Innovation Institutes

___________________

¹ U.S. Department of Defense, 2017, Department of Defense Manufacturing USA Strategy, Version Date: September 8, Director DoD Manufacturing Technology Program, OUSD(R&E) Strategic Technology Protection and Exploitation.

Acknowledgment of Reviewers

This Consensus Study Report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies of Sciences, Engineering, and Medicine in making each published report as sound as possible and to ensure that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.

We thank the following individuals for their review of this report:

___________________

¹ Member, National Academy of Engineering.

² Member, National Academy of Sciences.

Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations of this report nor did they see the final draft before its release. The review of this report was overseen by Maxine L. Savitz, NAE, Honeywell Inc. (retired). She was responsible for making certain that an independent examination of this report was carried out in accordance with the standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the authoring committee and the National Academies.

Contents

EXECUTIVE SUMMARY

1 DOD MANUFACTURING USA INSTITUTES: BACKGROUND AND STUDY DESIGN

Business Models Used to Stand Up and Operate the DoD Institutes

DoD Manufacturing USA Strategy

Design of This Study

2 LESSONS LEARNED AND OPERATING CHANGES TO CONSIDER

Value Proposition by Stakeholder Group

Stakeholder Perspectives on Current Operations

Stakeholder Perspectives on Improvements

3 ALTERNATE PUBLIC–PRIVATE PARTNERSHIP OPTIONS

4 DOD LONG-TERM MANUFACTURING INSTITUTES’ STRATEGY: BUSINESS MODEL OPTIONS AND IMPLICATIONS

Option A: Current Model with Planned Reduction in DoD Support for Core Activities

Option B: Current Model with Improvements to Processes, Offerings, and Value-Based Core Funding

Option C: Transition to DoD Customer Model

Option D: Transfer Core Responsibilities to the National Program Office at NIST

Option E: No Core Funding of Institutes Beyond Initial Investment

5 COMMITTEE FINDINGS AND RECOMMENDATIONS

Findings

Recommendations

6 FOLLOW-ON CONSENSUS STUDY

Potential Topics

Proposed Method and Timeline

7 AFTERWORD—RATIONALE FOR CONTINUED ENGAGEMENT WITH THE INSTITUTES

APPENDIXES

A Statement of Task

B Institutes’ Offerings Value Proposition Rankings by Stakeholder

C Summary of Potential Improvements to the DoD Institutes’ Offerings

D Summary of Potential Improvements Related to the DoD Institutes’ Strategy Goals

E Committee Member Biographical Information

F Acronyms

G Other Resource Documents

H Workshop Agenda and Participant List