Pre-manufacturing Portfolio Management Decisions in the Defense Industry

Abstract

Defense Industry production quantities and manufacturing timeline are different from commercial industry. Specifically, the platforms take years to develop, are in field-use for multiple-decades. The installed payload systems on these platforms must be backward compatible when upgraded. The production volumes are small, and many products are highly integrated to fit size, weight & power (SWaP) constraints. Cost, while important, is not the primary driving factor in design for manufacturability. Under these conditions, the Portfolio Managers in the industry make technology and material readiness decisions several years ahead of manufacture. Data needed for such decisions is often sparse, inaccurate, compartmentalized and deliberately obfuscated. Our modified Delphi method based qualitative research shows that under these constraints, middle managers in the defense industry, make tactical and strategic decisions based on best-consensus, using paired-comparison processes. And, when they choose to make ‘more unilateral’ decisions regarding portfolio management (PM) and new product development (NPD) investments, these are less robust.