Arsenal Buildup: Turning Performance

The United States can design and deploy some of the most advanced weapon systems in the world. The question facing the defense industry today is far more practical: Can it produce enough of them — fast enough?

Recent conflicts and sustained global commitments have exposed a growing gap between demand and production. Stockpiles have been drawn down, munitions consumption rates have exceeded expectations, and the Pentagon has signaled increasing urgency around rebuilding capacity — pushing industry toward a “wartime footing.”

For manufacturers, the issue is not theoretical — it shows up on the shop floor as longer lead times, tighter schedules and increasing pressure to scale beyond traditional capacity.

Production is rising. Contracts are being awarded. Investment is increasing. But across the manufacturing sector, a consistent message is emerging: scaling output is not simply a matter of turning up the dial.

A System Not Built for Surge

From a structural standpoint, the U.S. defense industrial base is not currently positioned for rapid expansion, according to defense industry expert William C. Greenwalt, a former deputy undersecretary of defense for industrial policy at the U.S. Department of Defense from 2006-2009. Greenwalt, currently a senior fellow at the American Enterprise Institute, a Washington, D.C.-based public policy think tank, focuses his research on the defense industrial base.

The defense industry doesn’t have enough skilled labor “or likely all of the necessary tooling to think about 5x or 10x increases in capacity in the short term,” Greenwalt said. That limitation reflects decades of operating under a fundamentally different model.

“Since the end of the Cold War,” Greenwalt explained, “we have operated a peacetime system of low-volume production to barely keep the industrial base alive. Our Arsenal of Democracy became the Artisans of Democracy.”

The distinction is critical. The U.S. manufacturing base has evolved to excel at precision, complexity and low-volume work — not sustained, high-output production. Reversing that reality, Greenwalt noted, will take several years and require significant defense demand and budgets.

U.S. munitions production, Greenwalt said, has always been cyclical and the government has always underpurchased. This history, he added, is “a major hurdle” for getting more of the industrial base to serve the defense market.

Meanwhile, the existing defense manufacturing base continues to grapple with a series of significant hurdles that impede defense production expansion.

A Supply Chain With Limited Visibility

The most immediate constraint is not necessarily at the OEM level, but deeper in the supply chain. Defense manufacturing depends on a layered network of:

• precision machine shops,
• specialty processors (heat treatment, coatings, plating), and
• raw material suppliers.

And it is often the lower layers where delays originate.

CTE readers who responded to our “Defense Manufacturing Capacity” survey last month consistently pointed to material shortages and outside processing constraints as key factors making it difficult to increase defense production. Plating services, in particular, were cited as a recurring bottleneck. Other respondents pointed to delays in receiving critical materials such as tungsten and specialty alloys.

Even when capacity exists at the machining level, a single delayed process or unavailable material can stall production. To mitigate such delays, the DoD is pursuing several visibility efforts to improve its ability to identify foreign dependency risks in the supply chain, according to a July 24, 2025, Government Accountability Office report titled Defense Industrial Base: Actions Needed to Address Risks Posed by Dependence on Foreign Suppliers.

While the report acknowledges progress gathering supplier information for major subsystems and components, “these efforts are uncoordinated and limited in scope and provide little insight into the vast majority of suppliers, including those that provide raw materials and parts.” With more than 200,000 suppliers supporting U.S. defense production, there remains limited visibility into where parts are made and whether suppliers are domestic or foreign.

Machining Workforce Shortage

Just as supply chain issues limit flow, workforce constraints limit throughput. Across the survey responses, one theme appeared repeatedly: the shortage of skilled labor.

These are not new concerns — but defense demand is amplifying them. Unlike many commercial applications, defense manufacturing often requires:

• experienced machinists,
• familiarity with documentation and compliance requirements, and
• the ability to maintain tight tolerances consistently.

Without enough skilled labor, even shops with available machines may be unable to increase output. Several respondents pointed to this uncomfortable reality: “capacity exists — but cannot be fully utilized.”

At the same time, cultural perceptions of manufacturing careers as a “dirty, unrewarding skilled trade” continue to haunt workforce development efforts. Without a pipeline of trained workers, and without a shift in how manufacturing careers are perceived, scaling production becomes significantly more difficult.

Production Model Mismatch

Perhaps the most important — and least discussed — constraint is the mismatch between U.S. manufacturing’s strengths and what the nation’s current defense demand requires. The industry is highly effective at building one complex part perfectly — but that is very different from producing thousands of identical parts on tight deadlines.

Survey respondents echoed this disconnect in different ways. Some pointed to outdated specifications and processes that slow production: “Lead times [are] extended due to specifications calling out outdated processes and materials.”