Anniston Army Depot maintains and repairs workshop-level systems such as M1 Abrams tanks and M578 ammunition transport vehicles (pictured)
The industry, perhaps, is taking on more and more tasks of servicing and supporting military ground equipment, and in this regard, a number of advantages appear. Let's evaluate the difference between private and public enterprises and services
The production and maintenance of military products is becoming more complex and expensive, the question of how to effectively maintain these weapons and equipment is becoming as important as the production itself, where all attention is paid to industrial cooperation.
However, here an internal contradiction may arise between the priorities and goals of the military and the priorities and goals of private industry. The former focus primarily on having the necessary weapons for battle, while the latter, although they are ready to meet these needs, are primarily looking for benefits from their activities.
Private armament
State-owned and operated munitions and weapons factories have been around for a very long time. For example, the British Royal Small Arms Factory Enfield opened in 1816, the American Springfield Armory was founded in 1777, and the Chilean Fabricasy Maestranzas del Ejercito (FAMAE) was established in 1811 with the aim of producing small arms and cannons.
Each of these enterprises was created with the aim of producing weapons. Often their appearance was associated with poor quality, high cost or undersupply of weapons produced by private companies. Certainly, the process of their creation was facilitated by the point of view of some governments, which was that, like shipbuilding, the production of weapons in a country is vital to ensure the country's defense.
In countries such as Italy and Germany, private arms firms are widely represented for a long time and they did not see the need for state arsenals. Examples include Beretta and Mauser, respectively. These countries relied on industry and organized close joint ties with local firms, stimulating and often actively supporting them not only at home, but also in foreign markets.
The existing US Army workshop system, which is part of the US Army Logistics Command, consists of 11 workshops and arsenals (not including 17 ammunition factories).
Although this system is currently smaller than it was in its best years during World War II, it is still quite significant. Anniston Army Depot covers an area of 65 km2, employs over 5,000 people, is the only workshop capable of repairing heavy tracked vehicles and their components, and also houses a modern small arms repair facility with an area of 23,225 square meters.
The army maintains a "coherent industrial base" of this enterprise that is unique, provides services and goods different from private industry, and needs protectionist measures. Congress not only endorsed, but also allocated funds for the development of the enterprise, motivated, at least in part, by the policy of preserving jobs and local budget.
The Brazilian Army has selected Iveco Latin America, manufacturer of VBTP Guarani 6x6, also for maintenance and logistics
Neither fish nor fowl
While a number of initiatives have allowed for greater flexibility in the interaction between public and private defense companies, nevertheless, some tensions remain between the two. This is especially evident in the current environment of cutting defense budgets.
In an interview, a defense industry spokesman described the American workshop and logistics system as “neither fish nor meat,” with both public and private industries performing the same tasks.
The Representative suggested that tooling, machine tools and manufacturing facilities are often duplicated at industrial sites. If you look at the Anniston Army Depot facility, it is difficult to notice any differences from the facilities at the BAE Systems plant in York.
There is an opinion, especially in large private companies, that a competitive advantage is created by combining and dividing contract work with army workshops and using their capacities. Critics have suggested that this is a recognition of the inherent desire of the American army to support this part of its "team."
The difficulty lies in the fact that with an insufficient amount of work for both parties, this turns out to be a kind of game of thimbles, as a result of which some private factories remain unemployed or not fully loaded. The unintended consequence of this is to further reduce the capacity of the private defense industry as firms shut down and merge.
According to Dr. Daniel Goore of the Lexington Institute, the rationale for protecting state defense enterprises not only no longer makes sense, but actually reduces the core capabilities of the national defense industry.
“The current industrial base is an artifact of a bygone era,” he said in an interview with a newspaper. "With dwindling defense budgets, laws that set aside 50% of the funds allocated to maintain workshops, or those that protect them from competition for orders, are counterproductive."
Consolidation difficulties
The consolidation of the private defense industry and the limited number of procurement programs complicate this, especially since the largest part of the work on any project and the cost is spent on the provision and maintenance of the systems rather than the purchase of the hardware itself.
Gur explained that enforcing government workshops reduces the ability to adopt and apply many commercial business practices, such as end-to-end product lifecycle support.
He stated that the current structure does not encourage companies to have a “long-term vision” of the program and does not allow them to spend more efficiently and use resources more efficiently.
Realizing that after-sales service has the highest profitable potential, for example, has allowed companies to offer a more competitive upfront price with the knowledge that they can offset the revenue in servicing and securing a product throughout its life, along with upgrades and related parts. This is simply not a viable approach to US defense procurement policies, as logistics are largely superficial. “The current procurement and workshop system of the US Department of Defense is increasingly moving away from the realities of a changing industrial and technological world,” said Gur.
In the United States, state-owned military factories, such as Anniston, had modest production capacity until, with the outbreak of World War II, the huge demand for military products served as an impetus for their rapid development.
Incompatibility issues
Many of the revolutionary processes adopted in the past decades and common commercial practices are difficult to apply in a segmented defense system.
Management practices such as just-on-schedule orders and deliveries, consolidated service management, and process centralization are largely incompatible with the existing system. This is compounded by the dwindling number of major defense programs and the smaller number of companies participating in them.
As Gur noted, the reality today is that the US defense market (and to some extent the global one) is no longer a free market. A limited number of companies own major defense development and procurement programs. He questioned whether the US defense industry would be able to solve its problems, being de facto mainly an arsenal system.
For countries with less developed private industries, following the British privatization path is difficult, especially in the production of heavy weapons. As a result, government-owned companies or military-led service and logistics facilities can often be found in countries such as Brazil and Chile.
The Chilean company FAMAE, although originally founded for the production of ammunition and small arms, currently provides high-level repair, modernization and maintenance of military equipment and combat support equipment for the ground forces.
Imported systems
Many of them are imported systems, such as the German MBT Leopard, BMP Marder and anti-aircraft gun Gepard. All these systems have a high level of complexity from a technological point of view.
For these machines, FAMAE has contracted directly with OEMs for technical support and domestic cooperation. A spokesman for Krauss-Maffei Wegmann (KMW) noted that this scheme works well for both sides, as it builds on the existing infrastructure and FAMAE capacity to meet the needs of the army across the country.
This can significantly reduce the cost of creating new products and at the same time use local human resources with extensive experience and qualifications.
The Brazilian army has traditionally sought to service its own ground combat equipment. This was partly due to inadequate skills and a limited production base. As a result, the army has established its own repair and maintenance facilities.
A notable exception was the significant commercial success of Engasa in the 70s and 80s when it released the Cascavel, Urutu and Astros platforms. During that period, the company established itself not only as a developer and manufacturer of modern combat vehicles, but also as a technical support center. However, the loss of government support and key Middle Eastern contracts due to the first war in Iraq put the firm on the brink of bankruptcy and delayed the promising development of a local defense industry for ground systems that could meet national needs.
As for artillery and combat vehicles, here the activity of the army workshops was mainly to support the material part in working order.
A source in the Brazilian army involved in ground systems programs explained that in the past, cost was often a decisive factor in the choice of logistics. As a result, the army report for 2008 refers to the problem of the general combat readiness of large quantities of equipment.
Moving to private
In the UK, the involvement of state and military enterprises in the development, production and support of weapons has a long history. Organizations such as the Royal Ordnance Factories (ROF) and the Defense Support Group (DSG) were formerly part of the Department of Defense. However, with the advent of a new philosophy, budgetary complexities, and a smaller military force in the late 1970s, things began to change.
In the late 1980s, ROF was removed from the structure of the Ministry of Defense and privatized. It was ultimately bought by British Aerospace (now BAE Systems) in 1987, while DSG, which dates back to 1856 as a state-owned enterprise, continued to maintain and repair major military equipment and maintain a fleet of ground vehicles. … However, in December 2014, the Department of Defense announced that DSG had been purchased by Babcock International for $ 207.2 million. Babcock was then awarded a 10-year contract with billions of dollars of potential to maintain, repair and store current military vehicles and light weapons.
Defense and Technology Secretary Philip Dunne said: “This deal with Babcock will provide DSG with a sustainable long-term foundation and enable the maintenance and repair reforms that the Army is counting on. Babcock will provide cutting edge technology and fleet management expertise to optimize machine availability … at the best cost to the taxpayer."
This will transfer the logistics of the British army's ground systems to the private sector and completely end the era of direct government.
Alteration
The return of government support to the military and a commitment to build a local defense industry as part of a long-term national economic plan is changing things. The emphasis of the National Defense Strategy is on enhancing the combat capabilities of the Brazilian Armed Forces.
As a result, several army procurement programs were launched. In addition, the rapid development of the economy in recent years, private investment and the growing technical skills of the workforce have seriously transformed the country.
For example, Brazil has become a major manufacturer of commercial trucks. The army uses them in order to maximize the potential of the existing system for providing its equipment. The initiative to involve Iveco in the development and production of a new Brazilian armored vehicle was part of a broader plan. VBTP Guarani is manufactured by Iveco Latin America, which has built its own plant in Brazil.
The challenge is how to maintain and expand these private defense capabilities, in particular by providing sufficient orders and generating sustainable revenues.
Commercial car manufacturing firms generate revenue from both product sales and after-sales services. The use of government facilities in this role takes away this source of profit. Concerns about the loss of private companies have prompted a rethinking of the previous approach to government procurement, at least for some systems.
While the army continues to pursue its own projects to modernize legacy systems, such as repairing the M113 tracked armored personnel carriers at the Curitiba plant, it also enters into service and maintenance contracts with manufacturers of some newly deployed systems. Even as part of the work on the M113 armored personnel carrier, kits and initial training provided by BAE Systems are used.
In addition, the Brazilian army decided that the new VBTP Guarani 6x6 vehicles would be serviced by the manufacturer itself. This will enable Iveco to leverage commercial procurement practices and streamline the procurement of spare parts to significantly improve procurement efficiency. It will also facilitate the creation of a local service base.
Global positioning
Brazil's acquisition of the more modern Leopard 1A5 MBT, which began in 2009, and Gepard 35-mm anti-aircraft missile systems in 2012, allowed the creation of a wide and comprehensive logistics capacity, as well as a network of KMW service stations available to the Brazilian army.
The company's capabilities on the ground are very broad, as it has experience in providing full lifecycle support for the German Bundeswehr, from development to deployment of its machines. Thus, working with the army, using and working with the private defense sector to support and provide all levels, has helped the industry to provide these services to foreign customers as well.
The training and logistics company KMW do Brasil Sistemas Militares in Santa Maria has joined similar logistics structures in Greece, Mexico, the Netherlands, Singapore and Turkey.
In Brazil, the military is also able to take immediate advantage of the local training, tooling, workflow and parts supply network; they can use all the experience gained over the years of operating the system.
An added advantage is that the aggregate investment of private industry creates a local manufacturing base that can attract contracts from other armies in the region. The example of the Guarani machine from the Iveco Latin America company, which may also be purchased by Argentina, can be cited as proof.
Private industry support
The reliance on industry to provide most of the end-to-end services for the entire life of the product is most typical in countries where the existing modern defense industry exceeds the state industrial base, such as in the case of Italy, Germany and Sweden.
The close cooperation between the military and private industry in Germany has a rich history dating back to before the unification of the country, and the army has benefited greatly from this kind of cooperation.
The integration of industrial partners and the military encompasses everything from development and development to field procurement, overhauls and enhancements to performance and capabilities.
There are dedicated efforts to promote and support the exchange of experience, innovation and opportunities among companies. This could include not only large defense companies such as Rheinmetall and KMW, but also smaller but nevertheless dynamic firms such as Flensburger Fahrzeugbaugesellschaft (FFG).
FFG Sales Manager Thorsten Peter said that “our cooperation with the German army began in 1963, when it was looking for a reliable industrial partner in Northern Germany for the repair of tracked vehicles. And in the end she found us."
The FFG company used its experience not only in the repair of the M113, but also in the modernization and implementation of specialized projects for the Marder BMP, Leopard MBT and other vehicles for Australia, Canada, Chile, Denmark, Germany, Lithuania, Norway and Poland.
The Japanese Ground Self-Defense Forces are also using a similar model of engaging OEMs to create a workshop-level logistics support system. Most of the country's ground vehicles are either locally made or licensed.
Japan's Defense Attaché to the United States said the Japanese Self-Defense Forces are actively working with industry to meet their ground-based weapons needs.
Due to the limited number of systems required by the military and the legally limited capacity to scale up through export, the ability to use the existing commercial infrastructure for design, production, maintenance and logistics is seen as fundamental.
Duplication of this is undesirable and not justified. On the contrary, benefits can be gained from the development of integrated support methods and fleet management technologies, which are being actively implemented not only by heavyweights of the Japanese industry - Komatsu, Japan Steel Works, Mitsubishi Heavy Industries, but also by other smaller commercial firms.
New provisioning model
In many industrial plants, embedded computers, GPS and wireless networks are already transforming the maintenance, repair, and logistics of machinery and equipment.
Centralized automatic systems using condition monitoring and proactive replacement of modules and components have already been tested by many commercial structures. They are revolutionizing business practices and increasing efficiency while reducing cost.
There are clear advantages of using these methods in the maintenance and provision of military equipment, when the first priority is the guaranteed readiness of the materiel for battle. This is further facilitated by the increased use of commercial systems in military applications.
In fact, despite the differences between military and commercial, which are still obvious and lying on the surface, they actually disappear at the level of subsystems and components. Some armies are seeking to exploit these trends in order to obtain alternative routes that can meet their service and logistics needs.
Canada is one example of this. Its army is moving to increase the responsibility of the contractor for the availability of equipment. The Army, following a successful Air Force initiative, includes maintenance and spare parts as a separate clause in the overall procurement contract.
The contract for the purchase of TAPV machines also includes maintenance and logistics to be provided by Textron Canada.
Australia's Land 400 program to replace existing light armored systems will also sign lifelong maintenance and support contracts.
Provision of TAPV machine
In a recent contract for the purchase of Tactical Armored Patrol Vehicle (TAPV) tactical patrol armored vehicles, the contractor must provide logistical support for the fleet of these vehicles for five years, with options for the next 20 years.
The criterion for this support is to guarantee a certain combat readiness of the vehicles. The contractor must maintain the established baselines and will be rewarded for higher levels of availability.
This approach boils down to adopting management and predictive maintenance practices that have proven successful in the commercial vehicle fleet. It also reduces the army's need for supporting infrastructure, much of which the contractor could have locally. The ability to obtain maintenance and procurement jobs over the life of the machinery is a major incentive for contractors to invest in efficiency that will directly benefit end users.
Textron Systems, which received a $ 475.4 million contract for 500 TAPVs, was also awarded another contract for maintenance, repairs and parts during the first five years of operation.
Neil Rutter, General Manager of Textron Systems Canada, said in an interview: "We remain committed to working with our Department of Defense and our partners in Canada to manufacture and supply the TAPV fleet."
Close cooperation
Textron Systems sees this as a collaborative effort with equipment operators in the Canadian Army. Its stated approach is to forge close cooperation and dialogue between the company and the military, as well as service personnel.
OEMs will have all the capabilities of a fully integrated database that records each system and its status. This approach allows you to anticipate the necessary support and spare parts in advance rather than react to an already accomplished breakdown. Equally important, it enables the identification, preparation, proposal and implementation of technical solutions and improvements as the need arises. It is likely that these capabilities could realistically allow predicting and correcting malfunctions before they happen.
Apparently, the rest of the armies are watching this model work. The AIF begins its Land 400 program to replace the Australian Light Armored Vehicle and M113AS4.
In early 2015, in an official statement from the Australian Department of Defense on the details of this program, it was said that lifelong support for the entire fleet will also be provided in accordance with an additional contract concluded with the selected vehicle supplier. Over 700 vehicles are expected to be purchased under this program, which will be deployed in 2020.
Neither Canada nor Australia has a solid defense industry, although both seek to stimulate the creation of local military logistics capabilities.
Consequently, their approach of providing the contractor with a contract for both production and technical support involves taking on a long-term commitment and, as a result, receiving a permanent income, and this in turn allows the local industry to plan the necessary investments. This is something that a single contract for the purchase of equipment cannot provide.
For the future
Just as military equipment and its production process are influenced by developments in private industry, it seems that the maintenance and technical support of military equipment could also undergo significant changes due to the development of commercial structures.
Comprehensive service and life-cycle upgrades based on commercial principles are well suited to meet the challenges of downsized armed forces, various combat missions and the rapid response increasingly typical of modern military operations.
Meanwhile, the reduction in both the need for ground weapons and defense budgets should serve as an incentive to obtain more efficient and cost-effective ways of providing maintenance and logistics.
The question remains, however, how highly traditional structures will, or even be able to adapt in order to accept the new methods, processes and relationships needed to achieve the proposed benefits.
It is clear that private industry, even where state-owned enterprises are preferred, is taking on a wider range of responsibilities for servicing and supporting ground equipment. How far this goes will depend more on the political factors in each country than on the economy and the benefits to the soldier.
