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Is the increase in munitions and military maintenance spending translating into more business for smaller shops?

AndyF

Stainless
Joined
Nov 3, 2003
Location
Phelps, NY, USA
I'm reading a lot about how the military is significantly increasing spending on consumables like ammunition and spare parts. For people running smaller shops who are farther down the food chain as subcontractors or subbing for subcontractors, have you seen increases in RFQ's yet or an increase in business?

 
In my area there is some large scale high tech military production- Boeing, although most of their defense work is either in Southern California or Missouri. But they have a long and complicated process to become a sub. We have a few Boeing subs in my county, but trends are long term. The largest civilian employer in my county is Janicki, and they do a lot of defense and black work, but they dint sub out a lot. I know they got a big chunk of the $1.6 billion B21 bomber job recently. The big surge now, though, is in artillery ammunition, mostly made in 2 or 3 government plants, and missiles and rockets. Those are in places like Arkansas, Missouri, Arizona, Florida, and Cali. Usually again longterm contracts with shops with dedicated production equipment, and security clearances. My electrician hade to wait several months for security checks before he could wire up VMCs in parts of janicki facilities, so its not like they are jobbig out to subs on 2 week notice.
 
This will be interesting to follow. My conviction is that the ability of 1940's America to product Materiel is what won WW2, and our strength in that area is much diminished. And that's a major concern for me.
It would not be like that if factories were being blessed by bombs.

If you are so concerned then do not purchase any Chinese products.
Help save America....
 
. For people running smaller shops who are farther down the food chain as subcontractors or subbing for subcontractors, have you seen increases in RFQ's yet or an increase in business?
Don't expect this to happen except very, very slightly. If you are not already an established vendor in the military supply chains, the best you are going to see is a 3rd- or 4th-hand effect. The majority of shops that do military or aerospace work, do only military or aerospace work. So you are not even going to have the opportunity to pick up civilian work the mil shops will be leaving on the table. The whole ecosystem is different.
 
My conviction is that the ability of 1940's America to product Materiel is what won WW2, and our strength in that area is much diminished. And that's a major concern for me.
I basically agree with that, and would add four things.
1) While trucking on the Interstate Highway system is more versatile and flexible than the 1940's railroads, I'm a bit dubious that today we could support the transport of the same volume of bulk raw materials and heavy finished goods as we did 60 years ago, and I know we can't do it as fuel-efficiently. And it's clear we can't simply "go back" to the rail system, which has been largely dismantled and refocused on large repetitive shipments. I read about a decade ago that over 50% of the manufacturing plants that take full coils of steel (the sort of thing where one coil is a full flatbed trailer load) have no functioning rail spur.
2) The pandemic rubbed our noses in the vulnerability of just-in-time logistics. And if we weren't paying attention, the ammunition consumption of the war in Ukraine has reinforced that lesson. To fight a high-intensity conflict, you require either a massive stockpile of finished goods or a massive surge capacity to produce, which we are not willing to pay for. And "let's take 18 months to build a new facility" does not constitute a massive surge capacity. I would argue that "let's take 6 months to convert an existing auto plant" does not qualify, either.
3) The US did not get into WW2 at the start. That gave logistic and military planners a lot of valuable lead time, and they did a lot of coordination with civilian manufacturers and logistics companies before we got into the war.
4) Today's US public dimly remembers gas and food rationing during the war, mostly through movies and books. But use and distribution of many key industrial materials were centrally controlled by the US government during the war. I.e., there was such a thing as the "Vanadium Control Board" (among many similar committees), which had a major influence over what alloys of steel were produced. Makers of household goods (washers, dryers, sewing machines, etc) switched over to arms manufacturing. If we tried to do any such thing today, the country would collapse under the weight of all the lawsuits filed. Stockholders would sue to force companies to keep making profitable goods. Companies would sue to prevent the government from exerting tyrannical control over the previously free market. Citizen groups would sue about the limitation of civil liberties and ability to buy whatever the Hell they wanted to buy.
 
I basically agree with that, and would add four things.
1) While trucking on the Interstate Highway system is more versatile and flexible than the 1940's railroads, I'm a bit dubious that today we could support the transport of the same volume of bulk raw materials and heavy finished goods as we did 60 years ago, and I know we can't do it as fuel-efficiently. And it's clear we can't simply "go back" to the rail system, which has been largely dismantled and refocused on large repetitive shipments. I read about a decade ago that over 50% of the manufacturing plants that take full coils of steel (the sort of thing where one coil is a full flatbed trailer load) have no functioning rail spur.
2) The pandemic rubbed our noses in the vulnerability of just-in-time logistics. And if we weren't paying attention, the ammunition consumption of the war in Ukraine has reinforced that lesson. To fight a high-intensity conflict, you require either a massive stockpile of finished goods or a massive surge capacity to produce, which we are not willing to pay for. And "let's take 18 months to build a new facility" does not constitute a massive surge capacity. I would argue that "let's take 6 months to convert an existing auto plant" does not qualify, either.
3) The US did not get into WW2 at the start. That gave logistic and military planners a lot of valuable lead time, and they did a lot of coordination with civilian manufacturers and logistics companies before we got into the war.
4) Today's US public dimly remembers gas and food rationing during the war, mostly through movies and books. But use and distribution of many key industrial materials were centrally controlled by the US government during the war. I.e., there was such a thing as the "Vanadium Control Board" (among many similar committees), which had a major influence over what alloys of steel were produced. Makers of household goods (washers, dryers, sewing machines, etc) switched over to arms manufacturing. If we tried to do any such thing today, the country would collapse under the weight of all the lawsuits filed. Stockholders would sue to force companies to keep making profitable goods. Companies would sue to prevent the government from exerting tyrannical control over the previously free market. Citizen groups would sue about the limitation of civil liberties and ability to buy whatever the Hell they wanted to buy.
Just remember, we do have the largest rail system in the world
 
I got a tour of a drone factory a month ago. CEO told me they're expecting a significant uptick in volume through 2024.
 
The strategy with drones is to deploy 10 cheap decoys to every armed one.........a producer here making cardboard drones is sending 1000 a week to Ukraine.
"Corvo Precision Payload Delivery System".......'cardboard drone' sounds so cheesy.
.........wonder if it requires 'milspec' cardboard and rubber bands?
 
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The pandemic rubbed our noses in the vulnerability of just-in-time logistics.
We're seeing a move towards the opposite of JIT crap.

I think lots of our stuff is being stockpiled buy the users. No evidence, just a feeling.

When you use smaller sized suppliers, they can change direction very quickly. I think the big guys are using this to their advantage. Again, no evidence just an observation.

You're mileage may vary.
 
We're seeing a move towards the opposite of JIT crap.

I think lots of our stuff is being stockpiled buy the users. No evidence, just a feeling.

When you use smaller sized suppliers, they can change direction very quickly. I think the big guys are using this to their advantage. Again, no evidence just an observation.

You're mileage may vary.
Not military related but since the pandemic I know of some examples where businesses are building up more stock, orders are bigger and re-ordering is earlier. Not having stock is often more expensive than not having any stock to sell, I myself have increased batch sizes for that very reason, but as a one man shop rebuilding the stock levels than pandemic buying wiped out is a slow process.
 
We do some subcontracting work for a couple of the defense contractors, but we have seen the opposite lately. when the war first started last year we saw an uptick, but now we are having fewer orders than before.
 








 
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