Their view: Defense industry relies Pa. manufacturers
|Author: Eric Joseph Esoda - Guest Columnist Times Leader|
Date: Thursday, August 3rd, 2017
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According to the U.S. Department of Defense, Pennsylvania ranked sixth among all states in total DoD contract fulfillment during the 2015 fiscal year.
That year, commonwealth businesses provided more than $10.3 billion of goods and services to all branches of our nation’s military.
Reports generated from the Pennsylvania Defense Contract Analysis website, which accumulates data from a number of public and governmental sources, indicate that state manufacturers were awarded $6 billion in direct DoD contracts and an additional $1.59 billion in subcontracts during the 2016 fiscal year.
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The vehicles, artillery systems, protective devices, mission support equipment and technology used by our Armed Forces are the end products of a complex network of thousands of supply chain partners that work together to meet the needs of our military.
Although large-scale DoD suppliers such as Boeing, Raytheon, Northrup Grumman and L3 Communications often capture the headlines, smaller manufacturers clearly dominate the list of Pennsylvania-based DoD contractors. In fact, of the 1,189 prime and subcontract DoD suppliers listed on the commonwealth’s defense system web portal, 867 have 100 or fewer employees. Another 139 support between 101 and 500 employees. Only 183 employ 500 or more workers, signifying that small manufacturers play big roles in our nation’s defense supply chain.
Across Northeastern Pennsylvania, 77 regional manufacturers participated in the DoD supply chain during 2016 through the awarding of direct contracts or subcontractor work orders. Of those companies, 61 have fewer than 100 employees. Together, however, they provide more than 1,600 full-time, well-paying manufacturing careers. Conversely, only 11 of the 77 companies have more than 500 workers.
In order to preserve Pennsylvania manufacturers’ leadership position in supply chains that meet DoD demands and expectations, smaller suppliers need access to consultative services, technical assistance and research and development resources similar to those available to their larger counterparts. All too often, however, the private consulting sector overlooks smaller companies due to their need for custom-built solutions, modest discretionary budgets or rural locations.
Fortunately, several public-private partnerships are available to provide smaller DoD suppliers with the expertise they need to remain innovative, competitive and viable. The nationwide Manufacturing Extension Partnership network is the most prominent, and most successful, example of how these partnerships work.
MEP affiliates, seven of which are located in Pennsylvania, receive funding from the U.S. Department of Commerce and the Commonwealth of Pennsylvania. To access that support, however, each affiliate must secure at least an equal level of funding from industry partners or other stakeholders.
With those resources, MEP affiliates reach out to otherwise underserved smaller DoD supply chain companies to discuss their needs, assess their operations, introduce them to new technologies and make relevant recommendations. Companies are then free to implement those recommendations in a way that works best for them.
Given the importance of Pennsylvania’s smaller manufacturers to our nation’s overall DoD supply chain and the jobs that those companies support, prioritization should be given to programs and initiatives that are proven to keep the commonwealth’s industrial sector vibrant, competitive and world-class.
Some budget discussions in Washington and Harrisburg, however, are overlooking these important programs. These arguments conflict what the real data, real effects and real arguments suggest – that smaller manufacturers are driving our state and national economies, contribute significantly to our national defense and, therefore, deserve technical resources that keep them out front and on top.
Bolstering small manufacturer competitiveness and accelerating their adoption of new technologies will become increasingly important as DoD spending increases and the need to rebuild and further modernize our military becomes more urgent. The MEP initiative can ensure that America’s DoD suppliers continue to fulfill the needs of our military.
Eric Joseph Esoda is president & CEO of the Northeastern Pennsylvania Industrial Resource Center. The Times Leader invites officials from area nonprofits to write guest columns. Officials should submit their columns to email@example.com
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