Notes from a fireside chat on manufacturing stability in the defense surge

I’ve sat in a lot of rooms where a supply chain leader tells me their biggest issue is a struggling supplier. Usually, they’re wrong. Usually, the real damage happened before that supplier ever missed a date, in the way the leader’s own organization was planning, communicating, and, frankly, panicking.

That was the thread running through a conversation I hosted recently with Catalant consultants Ash Ateshkadi and Arvind Chawan, both of whom have spent decades inside aerospace and defense supply chain operations, on the factory floor and in the executive suite. The resulting webinar, Beyond the War Room: Manufacturing Stability in a Defense Surge, is based on a simple premise: that the industrial base is quietly falling behind. I went to Ash and Arvind to investigate why and what the organizations that are actually holding their commitments are doing differently.

What I got was less a diagnosis of the supply base and more a diagnosis of the customer. Here are a few of the highlights.

Why is this defense industrial base surge different from past cycles?

Every few years, someone declares a defense surge, and executives who’ve been through a few of these cycles can be forgiven for treating the label with some skepticism. 

What makes this one structurally different is concentration. Aerospace, defense, and energy are all expanding demand at the same time, competing for the same narrow band of suppliers capable of holding tight tolerances, delivering the product quality those programs require, or producing specialized forgings and castings. In past cycles, when one sector slowed, another had spare capacity to absorb the overflow. But that cushion has largely disappeared, and now, two divisions of the same customer can end up bidding against each other for capacity on the exact same supplier line, over the exact same precision components.

The constraint here is the industrial base’s physical ability to absorb the demand. Ash pointed out that warnings about exactly this vulnerability go back decades, and the base has only gotten smaller since. That’s the uncomfortable part for executives building a plan around this surge: the system isn’t recovering from the squeeze. It’s holding. And holding is not a strategy an organization can build a delivery commitment on.

What’s the real cause of aerospace supply chain delays right now?

The reframe that stuck with me most from the conversation was what Ash called a “dual-use collision” — the same forging cell, heat treat line, or specialty material supporting a defense program and a commercial aerospace program in the same week, with no spare capacity sitting in reserve to absorb the collision. Priority-allocation tools can reorder who gets served first when that happens, but they cannot manufacture another furnace, another qualified operator, or another source of constrained raw material. They redistribute the pain, but they don’t remove it.

What that produces, according to both Ash and Arvind, is a quiet erosion of confidence in commit dates, even when the underlying demand and funding are entirely real. And that erosion shows up first in behavior, not in the numbers. Buyers stop buying and start expediting, and that habit climbs the org chart faster than most executives realize, showing up at the director and VP level well before anyone flags it as a structural issue. Every hot list generated on the customer side lands on the supplier as noise, and the supplier absorbs that noise as an unplanned changeover or a schedule jump that never gets counted against the plan they’re still being held to.

That gap between what leadership believes is happening and what’s actually happening on the floor is where Ash and Arvind’s sharpest distinction comes in.

Supply chain recovery vs. supply chain control: What’s the difference?

Every operations, supply chain, or procurement leader in this industry needs to be able to differentiate clearly between a supplier recovery problem and a supply chain control problem. Getting that diagnosis wrong is expensive in a way that compounds.

A supplier recovery problem is a supplier late against a plan that’s still achievable. The fix is straightforward: build a recovery plan and pull them back to the date. A supply control problem is different in kind, not just degree. It means your organization is no longer producing a signal your team believes, and no amount of supplier-side intervention will fix a problem that originates on your side of the relationship. Ash’s test for telling the two apart is disarmingly simple: ask who owns the commit date on your most critical part. If multiple people answer, or nobody does, you’re managing a control problem, not a supplier problem — and pressure will only get you more meetings, not a better date.

Ash shared an example of running exactly this diagnostic at a major aerospace and defense company. He found that the company wasn’t managing a string of supplier failures. It was two-plus years behind its own growth trajectory because plans had been set above real capacity and nobody had gone back to reset them against reality. This type of problem is all too common.

Arvind offered the mirror image from the supplier side of a comparable relationship: a forging and machining shop running at just 37% equipment effectiveness. The low effectiveness was driven largely by noise and constant replanning from their customers. Fixing changeovers and scheduling logic on the shop floor got that number to 51% in just 12 weeks. Recovery made the supplier better. But control is about making the signal better. The supplier needed both, but only the second one addressed why the schedule kept slipping in the first place.

What other capability gaps impact defense production?

Two more ideas from the conversation highlight capability gaps that rarely show up until they’ve already caused damage.

The first is visibility. A dashboard full of red and green status lights isn’t visibility if nobody has actually verified the data feeding it, and both Ash and Arvind pushed hard against the assumption that a clean-looking dashboard means an organization understands its own supply base. Ash described building what he calls a data truth table on one engagement — sorting every capacity figure into known, believed, disputed, or missing. Only a third of the entire supply base had a number anyone had actually confirmed on the floor. The rest was belief, dressed up in a system that made it look like fact, and the aggregate metrics were hiding the gap the whole time because buyers were quietly adjusting purchase order dates to keep the numbers looking healthy.

The second is human capacity, which both experts agreed gets evaluated last on most leadership teams, precisely because it’s the hardest thing to evaluate. Rather than headcount, this is about whether the people managing your critical supplier relationships have the judgment to tell a recoverable capacity gap from a supplier that is quietly failing — two situations that look identical on a status report and require opposite responses. That judgment takes years to build, and leaders who wait to discover this gap under pressure are, by definition, discovering it too late.

Where should supply chain leaders start?

The advice that closed the conversation was refreshingly unglamorous, and it’s the part I’d encourage any executive reading this to act on directly rather than filing away for a future planning cycle. That is to skip the six-month data initiative because the next decommit wave will land before that analysis is finished, and a perfect model delivered too late is worth less than a directionally correct one delivered now.

Instead, build one fact pack for your top suppliers that explicitly separates what you know from what you’re assuming, then rank the gaps by real business risk and act on the highest ones immediately. The value in that exercise, according to both Ash and Arvind, is uncovering explicitly how much of your own schedule was assumption dressed up as a commitment. And once leadership sees that gap clearly, restoring control becomes a far more tractable problem than it looked from inside the war room.

This recap only scratches the surface of our discussion. The full fireside chat covers additional ground, including a candid exchange on where AI strengthens supply chain visibility in a surge environment and where it simply helps leaders make the wrong call faster. View the conversation by clicking through below.

If these challenges sound familiar and you’d like to talk through what this looks like inside your own organization, get in touch.