Defense Systems Says Innovation Key to Defense Cuts

In an article Dec. 5th, titled “How defense cost-cutting can spur innovation” authors (Randy Garber, Sohin Chinoy, and Andrea Cruden) lay out an interesting scenario! What if Defense reductions formed the motive for an innovation based response?
The model focuses on provider based innovation to stimulate cost reductions rather that cost cutting contracting policies like Low Price Technically Acceptable (LPTA). They contend that businesses asked to meet requirements should be allowed to include innovative approaches and that such a policy would benefit Defense as it does in the private sector where this approach is routine.
Their take on the “How and Why” start with a cultural observation:

“Management commitment to invest in innovation management enabled forward-thinking companies in deregulated industries to translate customer and regulatory body openness into stronger returns. At the same time, inertia caused by old cultures rendered others unable to address competitive pressures and to maintain market share. We believe a similar situation will follow for defense contractors.”

With an innovative management approach allowing independent supplier driven investment they say the benefits would be similar –

“Potential benefits from a new innovation model include:
• Shortened product development times.
• Reduced reporting requirements.
• The potential to capitalize on innovation in commercial and international markets.
• The ability to use existing intellectual property in ways that leverage corporate expertise to better aligned to a company’s long-term strategy.
• The creation of a more dynamic workforce by reducing reliance on legacy technologies.
And the combination of these benefits offers the overall potential benefit of delivering innovation-enabled capabilities at affordable prices.”

Now that sounds like something we should all get behind. Low Price and Technically Innovative (LPTI). Just saying….

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