options for maintaining a robust, adequate and efficient industrial base: free market vs. controlled...
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February 23, 2005 Copyright: The University Group, Inc. 3 A Systems Approach – Lessons Learned and Options The question isn’t, “Should we have a free market driven industrial policy or a controlled competitive one?” it must be taken the in context of “How do we assist the United States in remaining strong so we can be concerned with ‘the peace of the entire world…’ and remain a superpower…?”TRANSCRIPT
Options for Maintaining a Robust, Adequate and Options for Maintaining a Robust, Adequate and Efficient Industrial Base:Efficient Industrial Base:
Free Market vs. Free Market vs. Controlled Competition ModelsControlled Competition Models
A Systems ApproachA Systems Approach
The Heritage FoundationThe Heritage FoundationWashington, D.C.Washington, D.C.
Sheila R. Ronis, Ph.D.Sheila R. Ronis, Ph.D.PresidentPresident
The University Group, Inc.The University Group, Inc.
February 23, 2005February 23, 2005
February 23, 2005February 23, 2005 Copyright: The University Group, Inc.Copyright: The University Group, Inc. 22
A Systems ApproachA Systems Approach
“We are now concerned with the peace of the entire world,
And the peace can only be maintained by the strong.”
- General George C. Marshall
February 23, 2005February 23, 2005 Copyright: The University Group, Inc.Copyright: The University Group, Inc. 33
A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
The question isn’t, The question isn’t, ““Should we have a free market driven Should we have a free market driven
industrial policy or a controlled industrial policy or a controlled competitive one?” it must be taken the in competitive one?” it must be taken the in context of context of
““How do we assist the United States in How do we assist the United States in remaining strong so we can be concerned remaining strong so we can be concerned with ‘the peace of the entire world…’ and with ‘the peace of the entire world…’ and remain a superpower…?”remain a superpower…?”
February 23, 2005February 23, 2005 Copyright: The University Group, Inc.Copyright: The University Group, Inc. 44
A Systems ApproachA Systems Approach U.S. military industrial base is a U.S. military industrial base is a
subsystem of the overall industrial subsystem of the overall industrial base systembase system
U.S. industrial base is a subsystem of U.S. industrial base is a subsystem of overall economyoverall economy
U.S. economy is a subsystem of the U.S. economy is a subsystem of the global economyglobal economy
Systems are hierarchical…Systems are hierarchical…
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A Systems ApproachA Systems Approach
Military Industrial Base
U.S. Industrial Base
Global Industrial Base
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A Systems ApproachA Systems Approach U.S. military industrial base system is also a U.S. military industrial base system is also a
component of the overall National Military component of the overall National Military StrategyStrategy
The National Military Strategy is a component of The National Military Strategy is a component of the overall National Security Strategythe overall National Security Strategy
The National Security Strategy is a subsystem of The National Security Strategy is a subsystem of the U.S. National Strategy that includes all the U.S. National Strategy that includes all elements of national power; foreign policy and elements of national power; foreign policy and diplomacy, global security structures that the U.S. diplomacy, global security structures that the U.S. is a party to, trade policies, etc…is a party to, trade policies, etc…
Systems are hierarchical…Systems are hierarchical…
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A Systems ApproachA Systems Approach
National Military Strategy
National Security Strategy
U.S. National Global Strategy
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A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
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A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
February 23, 2005February 23, 2005 Copyright: The University Group, Inc.Copyright: The University Group, Inc. 1010
A Systems ApproachA Systems Approach Globalocalization System CharacteristicsGlobalocalization System Characteristics
• Non-linearNon-linear• Complex adaptive system – continuously adapting to Complex adaptive system – continuously adapting to
environment through environment through knowledge and learningknowledge and learning• Very “messy” in the Russell Ackoff senseVery “messy” in the Russell Ackoff sense• All real world systems are openAll real world systems are open• Only as strong as their weakest linkOnly as strong as their weakest link• Cannot control or manage, but can influence Cannot control or manage, but can influence • Must have an aim….Must have an aim….
The only way to influence is to understand the unique The only way to influence is to understand the unique system capabilities and issues…and act on that system capabilities and issues…and act on that knowledge by learning faster than the competition…knowledge by learning faster than the competition…
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A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
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A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
A Systems ApproachA Systems Approach
National Military Strategy Military Industrial Base
National Security Strategy U.S. Industrial Base
U.S. National Global Strategy Global Industrial Base
An example of Globalocalization
Influencing Effects Influencing Effects
Influencing Effects Influencing Effects
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
The military industrial base… The military industrial base… Cannot be separated from the other Cannot be separated from the other
systems that it is a part ofsystems that it is a part of It can be influenced, but not managed or It can be influenced, but not managed or
controlled, though many federal agencies controlled, though many federal agencies and departments as well as Congress and departments as well as Congress contribute to its influences; sometimes contribute to its influences; sometimes with forces that are opposed to one with forces that are opposed to one another or conflicting… must understand another or conflicting… must understand 22ndnd, 3, 3rdrd, and 4, and 4thth order effects of our order effects of our decisionsdecisions
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
Other nation’s actions and policies Other nation’s actions and policies influence our industrial base whether we influence our industrial base whether we want them to or notwant them to or not
Controlled competition is a misnomer in a Controlled competition is a misnomer in a world of globalization; it accomplishes world of globalization; it accomplishes little to assist U.S. companies in becoming little to assist U.S. companies in becoming globally competitive especially since the globally competitive especially since the system cannot be controlled, only system cannot be controlled, only influencedinfluenced
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
Free market forces aren’t free either, since all Free market forces aren’t free either, since all countries have various non-market forces on their countries have various non-market forces on their markets as do we – a free market state is an ideal markets as do we – a free market state is an ideal we may want to strive for… but at the present we may want to strive for… but at the present time, it does not reflect reality time, it does not reflect reality
We need to understand that reality or in striving We need to understand that reality or in striving for free markets we could do irreparable damage for free markets we could do irreparable damage to ourselves by not understanding what other to ourselves by not understanding what other countries, and are own, are doing within the countries, and are own, are doing within the complex system - sum total of all regulations, complex system - sum total of all regulations, laws, etc…laws, etc…
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
The question isn’t, The question isn’t, ““Should we have a free market driven Should we have a free market driven
industrial policy or a controlled industrial policy or a controlled competitive one?” it must be taken in the competitive one?” it must be taken in the context of: context of:
““How do we assist the United States in How do we assist the United States in remaining strong so we can be concerned remaining strong so we can be concerned with ‘the peace of the entire world…’ and with ‘the peace of the entire world…’ and remain a superpower…?”remain a superpower…?”
So, what should we do?So, what should we do?
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
To be strong we need to:To be strong we need to: Maintain a capability to be globally competitive in Maintain a capability to be globally competitive in
product and process innovation – we must regain product and process innovation – we must regain our manufacturing prowess and our manufacturing prowess and leadership leadership including low volume businessincluding low volume business
Be world leaders in investment in R&D – nothing Be world leaders in investment in R&D – nothing else will produce the leading edge knowledge, else will produce the leading edge knowledge, capabilities and patents the country must have to capabilities and patents the country must have to remain a superpowerremain a superpower
Invest in manufacturing across government owned Invest in manufacturing across government owned operations – re-think BRAC, perhaps, make operations – re-think BRAC, perhaps, make manufacturing bases and depots GOCO’s as manufacturing bases and depots GOCO’s as opposed to GOGO’s but don’t just abandon them – opposed to GOGO’s but don’t just abandon them – make them world class, purple and keep them make them world class, purple and keep them world classworld class
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
To be strong we need to:To be strong we need to: Increase investment within the national Increase investment within the national
laboratory system and throughout the laboratory system and throughout the higher educational system to maintain our higher educational system to maintain our knowledge and innovation advantageknowledge and innovation advantage
Provide incentives to our young people to Provide incentives to our young people to become scientists and engineers even if it become scientists and engineers even if it means paying for their college educations means paying for their college educations
Improve cooperation between Improve cooperation between government, industry and academia government, industry and academia everywhere to leverage our knowledge everywhere to leverage our knowledge assetsassets
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A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
To be strong we need to:To be strong we need to: Have DoD prioritize those technologies that are Have DoD prioritize those technologies that are
critical to regaining and then maintaining critical to regaining and then maintaining leadership and competitive advantage for our leadership and competitive advantage for our weapon systemsweapon systems
DoD must understand its weapon system supply DoD must understand its weapon system supply chain (its non-linear globalocalization system) chain (its non-linear globalocalization system) down to raw materials in order to mitigate risks down to raw materials in order to mitigate risks across its supply chain – you can’t influence a across its supply chain – you can’t influence a system, especially a complex one unless you are system, especially a complex one unless you are in a continuous learning mode using accelerated in a continuous learning mode using accelerated learning cycles, like those of Toyota learning cycles, like those of Toyota
DoD also needs strategies to reduce its DoD also needs strategies to reduce its dependence on foreign oildependence on foreign oil
February 23, 2005February 23, 2005 Copyright: The University Group, Inc.Copyright: The University Group, Inc. 2020
A Systems Approach – A Systems Approach – Lessons Learned and OptionsLessons Learned and Options
To be strong we need to:To be strong we need to: Develop system-wide industrial base Develop system-wide industrial base
metrics to include metrics to include • Finance (we already have) Finance (we already have) • Technological development on the edge Technological development on the edge
(things) (things) • Intellectual leadership and capabilities (people)Intellectual leadership and capabilities (people)• Methodologies – both product and process Methodologies – both product and process
capabilitiescapabilities• Global supply chain (system) risk assessmentsGlobal supply chain (system) risk assessments• New systems languageNew systems language
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Options for Maintaining a Robust, Options for Maintaining a Robust, Adequate and Efficient Industrial Base:Adequate and Efficient Industrial Base:
Free Market vs. Free Market vs. Controlled Competition ModelsControlled Competition Models
A Systems ApproachA Systems Approach
Thank you!