The Need for a Strategy of Resilience in Defense Supply Chains for 2025/2026
Defense and Aerospace supply chains are in high demand right now. Rising global tensions are a primary driver of the renewed increase in defense spending. The demand for advanced defense equipment is on the up, and the industry is in the spotlight.
After years of focusing on cost savings and process efficiency, global defense budgets are seeing significant growth. Despite this, procurement processes remain complex, varying by country, and any one failure can reverberate across supply chains on a global scale.
With constant political shifts motivating nations to reassess strategies, triggering significant transformation across the industry landscape, it is clear that changes cannot be avoided, progress is needed.
Time to Change
Global events and their knock-on effects have shown the importance of end-to-end value chain planning and integrated supply chains, rather than the traditional individualistic approach.
Rapid technological advancement within defense manufacturing, combined with the need for upskilling staff to work with these technologies, results in a critical need to address the gaps between what your supply chain requires and its capabilities.
This is an opportunity that needs meeting head on; Defense supply chains need a clear vision for the future and a shift away from the traditional position of cost-reduction and continuous efficiency gains. The goal is to not only enable new success through collaboration (both internally and externally), building on what works, and changing what doesn't, but to implement a strategy of resilience better able to maintain output within the 'new normal'.
The business need to align the workforce with long-term resilience planning, allowing talent to manage these new and rapidly changing technologies and complex operations, is a top priority for the industry.
From investing in tech and implementing new services to shifting the supply chain perspective, in this blog, we share six key considerations for optimizing Defense and Aerospace supply chains, encouraging a much-needed strategy for resilience.
Component vs. Whole-System Approach
Collaboration.
No doubt Collaboration is a word you've heard and seen a lot of as the industry discusses how exactly to maximize resilience and efficiency, but since a compartmentalized approach has been used traditionally when attempting to improve supply chain performance, it's no surprise this concept of communication between teams and systems is now a key focus.
However, collaboration isn't just about communication. It's about taking a whole system approach driven by a clear purpose. Ambiguity can be a challenge for supply chains… a whole-system approach takes key steps to remove this. Rather than changes being focused on unclear targets of 'improvement', the whole system should be targeted towards metrics related to real supply chain production including speed, volume, and accuracy.
Change isn't simple. It's one thing to say that a whole-system approach is needed, it's another to change everything simultaneously and overhaul the entire supply chain, but change doesn't have to happen this way. Instead, changing individual elements within the chain, with the knowledge that you're working towards a collaborative direction and joint purpose, is the first step.
Securing Supply
Scarcity can arise in supply chains at any time. This could be due to a global event, a failure in external supply chains, the climate threat, and more. Securing supply has never been a more critical and perhaps difficult job, especially for the Defense industry, where scarcity isn't an option.
Securing supply for a modern supply chain in Defense and Aerospace is critical to keep operations running smoothly and at capacity – it is a multifaceted task that involves several different areas for consideration and optimization:
- Innovation: finding alternatives to the supply your project needs can be the make or break between a flexible, resilient supply chain, and one that halts production in the face of supplier failures.
- Reducing consumption: the focus of a modern supply chain shouldn't be the traditional cost-saving approach, but this doesn't mean that reducing consumption can't be a consideration. Evaluating your supply chain to identify areas of overconsumption can provide oversight into the functions that could optimize their processes and consumption.
- Exploiting recycling: in situations of scarcity recycling can be your best friend. Not only are you saving valuable limited resources, but you might already have exactly what you need at your disposal.
- Investing in critical suppliers: if your supply chain has a small number of critical suppliers which are difficult to replace, then investing in their work, helping them to identify risks and optimize is as much your friend as optimizing your own supply chain – because it IS your supply chain. Investment doesn't have to end at the borders of your projects; can it go further?
- Training procurement staff: the ability to recognize risks and analyze ahead is extremely valuable in supply chains. A risk-aware and future-forward team should be a priority for Defense and Aerospace supply chains who thrive with a forward-thinking workforce.
Digital Twins
Digital twins – the virtual representations of physical systems, replicas if you will – utilized for performance optimization and schedule maintenance, are a significant opportunity for Defense and Aerospace to grab with both hands.
Created using real-time data, digital twins are a dynamic method for monitoring, analyzing, and modelling. A perfect playground for laying out 'what if' scenarios and preparing for just that. Digital Twins provide supply chain professionals with a full model of their processes. This in-depth level of digital representation by altering various parameters and decision-making, can assist real-time in finding the best outcomes.
Planning under the often uncertain environment that Defense supply chains operate under requires a level of clarity that Digital Twins can alleviate.
The phrase 'if only I had a crystal ball…' comes to mind. Consider digital twins a glimpse into the crystal ball of supply chain scenarios.
Skill Dynamics' own course on this very subject explores how AI-powered digital twins can transform supply chain management by providing real-time insights, predictive capabilities, and optimization.
Artificial Intelligence
Naturally, supply chains in Defense and Aerospace have some of the most complex requirements, delivery networks, and materials. These factors are interdependent. Subsequently, instability reaches further.
Understanding uncertainty is critical to mitigating this and making the most of current changes in the Defense and Aerospace industries, especially when the stakes of uncertainty management are so high.
Interoperability is key, and one of the most effective ways to ensure this is via centralized AI governance.
A unified AI-powered system not only assists in preventing duplicate functionalities but with streamlining processes to reduce costs, time delays, and more:
- Automation of tools such as supplier risk assessments help identify errors and protect supply chains from mistakes
- AI-driven demand planning reduces guesswork with inventory management
- Service reliability is improved with less room for human errors
- Predictive analytics reduce reactive ordering – a priority for defense supply chains looking to get ahead of the game
3D Printing
Another revolutionary piece of technology for Defense supply chains is 3D printing. By allowing for on-demand and localized production of needed parts and tools, the reliance on external providers and logistics is minimized. This is a significant opportunity for global supply chains with numerous vulnerabilities.
Obsolete and complex tools for production in these industries are no longer so hard to come by with the use of 3D printing, improving operational readiness and lead times when waiting for replacement parts is unaffordable and unsustainable – one of Defense's biggest continual challenges.
3D printing for military uses is becoming more common, with the global military 3D printing market projected to grow significantly. Driven by speedy adoption, the 3D printing revolution is critical to more resilient supply chains.
LLP Solutions
For the Defense and Aerospace supply chains that are becoming increasingly global, the role of Lead Logistics Providers (LLPs), also known as Fourth-Party Logistics (4PL), has become a key consideration. With oversight of an entire supply chain, LLPs act as a single point of contact, managing and directing all aspects (such as multiple logistics providers) within the supply chain.
The oversight provided by LLPs allows for strategic insight, integration across providers, and optimization.
We Can Help
Structural changes and implementation of new systems comes with the need to train your workforce. Optimize your teams' knowledge and performance.
Peruse Skill Dynamics' course catalogs for our Supply Chain, Procurement, and Trade Compliance Academies and discover how our personalized learning journeys work.