Recent reporting on the depletion of U.S. critical munitions stockpiles has intensified urgency around scaling production. The U.S. Department of Defense (DoD) has appropriately engaged major primes, Lockheed Martin, RTX, Northrop Grumman, and others, to lead that effort. 

Those companies play a critical role in coordinating and delivering complex systems. But as the industry moves to scale, the conversation must expand, because success will ultimately depend on the strength and readiness of the entire defense industrial base. 

The reality is that primes and suppliers are tightly interconnected. When demand increases, the ability to respond depends just as much on the thousands of small and mid-sized companies in the supply chain as it does on the primes themselves. 

For companies across the supply chain, ramping production is not simply a matter of increasing output. It requires coordinated growth across several constrained areas: 

Workforce Availability and Retention 
Highly skilled engineers, assemblers, and technicians are among the most critical and limited, resources. Across the industry, companies are competing for the same talent pool. 

Larger organizations often have greater flexibility to adjust wages quickly, which can drain resources from smaller suppliers. This dynamic creates a self-reinforcing cycle in which smaller companies struggle to deliver to larger organizations. This reflects differences in scale, not intent but it underscores the need for workforce strategies that support stability across the ecosystem. 

Capital Investment Across the Supply Chain 
Scaling production requires sustained investment in equipment, facilities, and process improvements. Primes are already making significant investments, but many enabling capabilities sit further down the supply chain. 

Suppliers must be able to invest with confidence, without short-term pressure on the free cash flow required for working capital to meet increased demand. Without this, upstream investments will not fully translate into increased throughput. 

Material Availability and Lead Times 
Availability and long lead times for components and raw materials continue to constrain production. Even when demand signals are clear, the ability to respond is limited by overall availability and competing demands. Defense often represents a small proportion of OEM component manufacturers’ revenue and is therefore not prioritized or allocated accordingly. 

Addressing this requires greater flexibility, a longer-term perspective, and coordinated procurement strategies, not only at the prime level, but across the entire supplier network. 

Working Capital Constraints 
Growth requires liquidity. Increased capacity drives higher inventory levels, increased labor costs, and longer cash conversion cycles. 

While primes often have greater financial flexibility, many suppliers operate with tighter margins and limited access to capital. Smaller suppliers do not benefit from the same credit terms as larger organizations and are often required to pay for goods and services in advance of their customers. In steady-state conditions, this can be managed. During periods of rapid ramp-up, however, the resulting working capital strain can become unsustainable. Bridging this gap is critical to enabling consistent, reliable scaling. 

Aligning on Long-Term Demand 
One of the most encouraging developments is the increasing focus on multi-year and long-term contracts at the prime level. These provide the predictability required to justify investment and expansion. Extending this approach throughout the supply chain is essential and will be transformative. 

Suppliers make capital decisions years in advance. Without visibility into sustained demand, those decisions carry significant risk, particularly for companies backed by private equity or managing debt obligations. Greater alignment on long-term demand signals, through longer-term agreements, forecast commitments, or structured supplier partnerships, will provide the confidence required to secure funding and invest in capacity. 

Funding is paramount, but it remains out of reach without predictability. 

An Opportunity to Strengthen the System 
The current moment presents a unique opportunity, not only to increase output, but to strengthen the resilience of the entire industrial base. 

Primes are central to this effort. With their program visibility and supplier relationships, they are uniquely positioned to translate demand signals into actionable plans across the supply chain. In partnership with the DoD, they must ensure that investments and policies translate into real, scalable capacity at every level. 

Practical Steps Forward 
A more integrated approach should include: 

Targeted Investment Across the Supply Chain 
In addition to prime-level funding, access to capital for small and mid-sized defense suppliers must be expanded, through direct investment, streamlined grant programs, low-interest loans, and tax incentives. This will ensure that capacity scales where it is most needed. 

Long-Term Contracting and Demand Visibility 
Longer-term agreements between primes and suppliers should be encouraged and enabled to provide the stability required for investment. Structured demand forecasts and volume commitments will significantly reduce uncertainty. 

Workforce Development and Retention Initiatives 
Industry-wide efforts to expand the talent pool, through partnerships with colleges, training programs, apprenticeships, and technical education—must be prioritized. Targeted incentives during surge periods should also be implemented to stabilize the workforce across companies of all sizes. 

Improved Working Capital Access 
Accelerated payments across all levels of the supply chain, combined with government-backed, low-interest supply chain financing and lending programs, will help suppliers manage the cash demands of growth. These tools are most effective when aligned across primes and their partners. 

Flexible and Trusted Material Sourcing 
DFARS regulations governing material traceability play a critical role in ensuring quality and security. However, greater flexibility should be introduced in how qualified companies source components, particularly for obsolete or long-lead items, or where the defense industry lacks sufficient allocation to meet increased demand. 

One viable path is the creation of a U.S. government-approved network of accredited suppliers authorized to perform controlled gray market sourcing and authentication. Companies with demonstrated quality systems and technical expertise can reduce lead times while maintaining confidence in part integrity. 

Supporting Financial Stability in Critical Suppliers 
Many companies in the defense supply chain operate with private equity backing or carry debt tied to past investments. During periods of rapid demand growth, financial pressure can become a limiting factor. 

Mechanisms must be implemented to provide stability, whether through government-backed credit support, longer-term or prioritized contracting, or other tools that ensure critical suppliers can invest and grow without taking on unsustainable financial risk. 

A Supplier’s Perspective 
At SMT Corp., an independent distributor and highly accredited test company with expertise in gray market sourcing and authentication, the willingness to support increased demand is strong, the real challenge lies in aligning the resources required to execute effectively. 

Scaling requires: 
· Clear demand visibility and long-term funding commitments 
· Access to working capital to support sourcing and inventory investment 
· A stable and skilled workforce 
· Streamlined regulatory pathways for highly trusted, accredited companies to conduct gray market sourcing and authentication 

These are not isolated challenges, they are shared across much of the supplier base. 

Moving Forward Together 
Primes, suppliers, and the DoD share a common objective: delivering the capability required to support a generational need for secure national defense. 

Meeting today’s demand and preparing for future requirements, will depend on how effectively the entire system operates as one. By ensuring that support extends throughout the supply chain and that demand signals, funding, and risk are aligned, the industry will not only respond to current pressures but will also build a more resilient and scalable foundation for the future. 

The opportunity is not just to ramp production, it is to strengthen the partnerships that make that production possible.