Surging the organic industrial base (OIB) has taken on increased interest over the past few years within the Department of Defense (DoD) and the executive and legislative branches of our government. This is evident with Presidential Executive Order 13806, on Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States, and its follow-on report, along with numerous other Government Accountability Office (GAO) and DoD studies and reports. The ‘Iraq Surge’ and ‘Afghanistan Surge’ placed stressors on our defense OIB that the U.S. had not experienced in decades. These experiences—along with the 2018 National Defense Strategy’s (NDS) shift to strategic competition and peer adversaries, like China and Russia—have caused a renewed interest in understanding our nation’s ability to surge, and, more importantly, the OIB’s ability to sustain a surge.
The Joint Publications do not define the term “surge.” We can draw on historical examples in order to illustrate its meaning. The United States surged its military forces in 2007 for Operation Iraqi Freedom and 2009 for operations in Afghanistan. The face of these surges was the increase of American forces i.e. personnel and their organic unit equipment. However, the unseen or forgotten piece of these surges was the necessity for sustainment resources provided by the industrial base. The primary provider of sustainment resources is the United States’ organic industrial base composed of the services’ depots and arsenals. These depots and arsenals normally do not operate at maximum capacity in order to provide surge capabilities. As outlined in Department of Defense Publication 4151.18-H, Reserve Capacity “is retained to support the projected requirements of the Joint Chiefs of Staff contingency scenarios; but is not utilized under normal conditions.”
Each service has reviewed the state of their OIB capabilities and facilities and attempted to address gaps. For example, the Army has made deliberate efforts over the past few program objective memorandum (POM) cycles to increase the funding for both government-owned-and-operated and government-owned-and-contractor-operated facilities. Similarly, the Office of the Secretary of Defense for Cost Analysis and Program Evaluation has directed that services increase the minimum sustainment levels for their facilities; specifically, laying in funding-ramp increases throughout the Five-Year Defense Plan. Firsthand observation of Letterkenny Army Depot, Pennsylvania, Anniston Army Depot, Alabama, and the Coast Guard shipyard in Baltimore (not a DoD facility) showed the signs of operational readiness prioritization over facility sustainment. Force readiness has continued to be the top priority of the services; often at the expense of the organic industrial base.
While the DoD recognizes it needs to improve the readiness of its OIB, there are two questions that require answers to ensure the U.S. is ready to defeat its peer adversaries. In the context of surge, these are:
- What is the true capacity of each service’s OIB?
- What are the levels of surge that the nation must support?
Both questions are important to understanding the nation’s true readiness. If the DoD successfully improves the condition of its OIB, then modeling, simulation, and analysis are needed to rigorously answer the first question. The information gleaned from accurately understanding the OIB’s capacity will inform the second question. The U.S. currently does not have a framework that clearly defines surge levels that the DoD can use to determine whether the OIB can successfully meet various surge requirements. This article will present a framework that defines surge levels and the capital investment required to achieve each surge level. The proposed framework should not be accepted as the solution. Rather, it is an example to show the importance of creating surge levels.
Defining the Framework
The DoD must have a framework that defines levels of surge and can inform decisions about the OIB. Otherwise, surge will remain a generalized topic that has no tangible meaning. It is not possible for the DoD to make accurate resourcing decisions about the OIB if it cannot be connected to a quantifiable variable. Appropriating funds, without a frame-work that defines surge levels, promotes waste and the use of resources that the DoD can use for higher priorities. Legislators cannot effectively appropriate funds to resource the OIB to sustain a surge without knowing how much is necessary.
Each service’s surge levels require different allocations of resources. The final framework requires a robust analysis of all services, and their requirements outlined in the NDS to strategically defeat the nation’s adversaries.
After two decades of persistent conflict, fighting regional conflicts and terrorist organizations, the U.S. shifted its focus to great power competition, as described in the 2018 NDS. This placed an increased level of scrutiny on the nation’s ability to defeat peer and near-peer adversaries. An important component to successfully executing the NDS is the DoD’s ability to surge. Critical to surging and defeating peer and near-peer adversaries is the nation’s ability to maintain, repair, and overhaul (MRO) joint force equipment. However, providing ready forces on the battlefield has taken precedence over the health of the OIB. As a result, DoD leadership directed programmers developing the POM to prioritize operational readiness over sustainment of the MRO facilities. Similarly, OIB facilities echo a similar focus on operational readiness at the expense of facility sustainment. Consequently, these facilities require substantial funding resources to overcome years of neglect. The DoD has begun to address this issue in recent POMS and increased programming to these facilities. The current condition of OIB facilities and recent dedication of more funding to the OIB is important to highlight because the capacity of the industrial facilities can be significantly affected by their condition.
Measuring OIB Capacity
As stipulated above, understanding the level of surge that the OIB can sustain is directly tied to its capacity. Therefore, before defining a framework to determine surge levels, a brief summary of how the OIB currently measures its capacity is necessary.
The seminal document that defines how the DoD should measure the capacity of its OIB is DoD Directive 4151.18-H, Maintenance of Military Materiel. It defines capacity using direct labor hours (DLH) and calculates it by multiplying the number of work positions by the percentage of time the work positions are available by the number of productive work hours in a year. It uses 95% for availability and 1,615 for productive work hours per year. Finally, it adds the DLHs the depot field teams provide to calculate total capacity for a specific depot, DoD uses DLHs to fund MRO facilities. For example, a 2017 GAO report included figure 1 for the services’ executed workloads expressed in DLH.
Unfortunately, neither the DoD Directive 4151.18-H or the GAO report provide the OIB’s capacity. DLHs may be an effective method for DoD to convey its yearly budgetary requirements, but it is not an effective measure of capacity. Using a historical perspective, World War II producers did not use man hours to calculate production capacity. The next section will recommend more robust methods to determine the OIB capacity.
Determining OIB Capacity
A challenge the OIB faces is answering whether it can support a surge. This is a two-part problem. First, the OIB must know its true capacity in order to know how much more support it can provide above its current output. The U.S. Air Force Materiel Command (AFMC) Surge Contingency Plan 70 is the best unclassified example to quantify surge capacity. It links assessing baseline and surge capacities to “relevant war plans.” It also directs the creation of surge plans that include “plant capacity, manpower, repair parts, carcasses, and other production factors.” However, anecdotal evidence indicates that some MRO facilities do not have quantified and documented surge plans. In most cases, responses were rough estimates of what might be possible.
The common response from both government and private MRO providers was, “How much more do you want/need?” The answer requires the DoD to quantify the surge level that the OIB must support. Throughout the OIB industry study’s engagements, individuals—including both government and private MRO leadership—used surge colloquially to mean “more.” It always meant more, but how much more has never been defined.
This is similar to what occurred during World War II. In the face of having to mobilize, Bill Knudsen—one of the architects of U.S. mobilization—asked Army generals what they needed. They were unable to quantify their needs in a manner that industry could produce. Extending the Bill Knudsen example, DoD leadership must establish a framework that quantifies the levels of surge, which will enable the OIB to determine their ability to sustain each level.
In order for the DoD to accurately understand the capacity of its OIB, it must conduct a rigorous analysis at each of the 17 government-owned MRO facilities. This analysis must go beyond the method prescribed in DoD Directive 4151.18-H, which calculates DLHs. As stated before, DLHs provide an effective method to develop yearly budgets for the MRO facilities but fall short of measuring their capacity. Conversely, the AFMC Plan 70 better articulates the necessary steps in order to calculate true capacity because it goes beyond manpower and includes “plant capacity and other production factors.” The author recommends two addendums beyond Plan 70.
The first recommendation is for the DoD to extend a single policy, similar to Plan 70, that directs the services how to measure their facility capacities. The DoD needs a common methodology across the MRO facilities to ensure compliance but also to ensure oversight at the DoD, executive branch, and legislative branch levels.
In addition to a service policy alignment, the DoD should conduct a multi-factor production study at each MRO facility. Calculating capacity based on DLHs alone is not sufficient. As Arthur Herman points out in Freedom’s Force, “machine tools are the heart of the industrial process.” Extending this to the current reality, MRO facilities must account for the capacity of their machine tools, and other fixed capital and material production factors. Specifically, the facilities should leverage computer-aided modeling and simulation used in capacity requirements planning software. These tools allow modeling of complex systems and their interactions. They take advantage of queuing theory that incorporates resources such as machines, manpower, material utilization factors, wait times, mean arrival, and service rates. Moreover, these systems allow both sensitivity analysis and managers to run excursions. Ultimately if the U.S. wants to truly understand its OIB capacity, it needs to utilize powerful modeling and simulation tools built for answering manufacturing capacity problems. Doing so, the DoD will be in a better position to answer the true OIB capacity.
The second recommendation is for the DoD to define surge levels. If it does not define surge levels, the OIB will be unable to determine if it can support nor will it know the costs associated with increasing capacity to achieve specified surge levels. In order to define surge levels, the DoD needs to direct each service to establish a baseline. From that baseline, the services can then set increasing levels of surge. Couple the increasing surge levels with the knowledge gained from modeling and simulating the capacity of each OIB facility, and the DoD can then identify the capacity gaps. Once the OIBs identify their capacity gaps, they can determine the resources needed and the costs to mitigate or resolve the gaps. Figure 2 provides an illustrative example pairing surge levels with associated costs.
Establishing a Baseline
Critical to this framework is establishing the baseline. The NDS should guide the services in determining their baseline. Each service would use its NDS pacing threat as the foundation for its baseline. For example, the Army would select the operational plan (OPLAN) that places the most demand on its OIB to support the successful execution of that OPLAN. The resources needed to maintain the Army’s readiness during peacetime to successfully execute that OPLAN would serve
as both the baseline force and baseline cost. This framework pro-poses using OPLANs as the basis for the baseline, and congressional staffers similarly use OPLANs for such analysis. They stated OPLANs were the lens they used to determine military readiness. Using this as the framework’s baseline, the services can then expand on their baselines for increasing levels of surge.
Figure 3 shows equal increments of increased surge from the baseline. However, the increments do not have to be equal. X1 could represent 25% more than the baseline and X2 could be a 100% increase, rather
than 50%. Additionally, the frame-work does not have to be limited to four levels. Moreover, for each level of surge, it is important to define the criteria for that specific surge level. A recommended methodology to define the levels is:
- X1: Global engagement force plus peer OPLAN ready force
- X2: Limited regional adversary operation plus peer OPLAN ready force
- X3: Major regional adversary operation plus peer OPLAN deter force
- X4: Peer OPLAN execution plus regional adversaries deter force
- MOB: Mobilization
The first level of surge, X1, is the baseline plus a service’s current global engagement not specifically tied to generating readiness for the OPLAN ready force. This is an important first level because it highlights the costs associated with maintaining the OPLAN ready force in addition to current global engagements. The nation’s global engagements often use readiness needed for the OPLAN force. This ultimately increases the costs to maintain the OPLAN ready force. In addition to X1, it is important to highlight a nuance between X2 and X3. The OPLAN force is significantly different. Due to X3 being a major regional operation, it may be infeasible to maintain an OPLAN force ready to successfully execute the OPLAN. As a result, rather than an OPLAN ready force, it is only an OPLAN deter force. This is a situation where more granularity may be needed, thus requiring more defined surge levels. Lastly, DoD needs to con-duct analysis to determine where the potential line between surge and mobilization occurs. This is not a definitive or quantified value, but a range of criteria that would indicate mobilization is necessary. While the x-axis is challenging to define, the y-axis is exceedingly more complex and difficult.
In order to determine the y-axis, the DoD could apply two layered analytical approaches. The first layer would use modeling and simulation to quantify the OIB’s current capacity and capacity gaps, and determine what is needed to successfully support each surge level. The second layer requires another set of models and simulations. The DoD could use their combat simulations to run the operational scenarios associated with each surge level. These operational scenarios provide unit and weapons system attrition rates over time. They also provide the OIB the MRO demand that each surge level generates. Knowing the current capacity, needed capacity, capacity gaps, and the resources necessary to mitigate these gaps allows the DoD to produce cost estimates for the y-axis associated with the surge levels on the x-axis. Having the data and analysis to generate the service surge-level graphic would provide strategic decision-making information for the DoD and national leadership.
Force readiness, as in unit readiness, is critical. Units ready to fight without an industrial base to sustain them are potentially more dangerous than units not ready to deploy. Having a high state of readiness enables national leadership to employ forces more quickly; once employed, the inability to fully sustain them would be devastating. If the DoD wants to truly understand its OIB capacity, with respect to its ability to surge, it must take an aggressive approach to determining that capacity. Additionally, the DoD must leverage a framework, like the one presented here, in order to establish surge levels.
With this information, the DoD and the nation can make informed discussions on the OIB, its ability to meet baseline requirements, and the costs of increasing levels of surge. The speed of future conflict will not allow the time needed to ready the nation to mobilize as it did during World War II. As a result, the nation must know its current OIB capacity and the resources, capital investment, and time necessary to support specified levels of surge. Failing to do so could mean the difference between winning and losing a war against a peer or near-peer adversary.
Col. Chris Bachmann is currently serving as the senior military assistant to the Director of Cost Assessment and Program Evaluation. Prior to graduating from the National Defense University in June 2020, he served as a program integrator in the Army’s Program Evaluation and Analysis directorate, Deputy Chief of Staff, G-8, Headquarters, Department of the Army. He has a master’s degree in Engineering Systems from Massachusetts Institute of Technology.
This article was published in the October-December 2020 issue of Army Sustainment.