Report: U.S. Last in Combat Gear Output Per Spent Dollar

[[R_H]]

Defense News

The United States scored last in a new study that examined how 33 major militaries spend funds on weapon systems - while potential U.S. rival Russia ranked third.

In a study due out March 15, consulting firm McKinsey & Co. examined how efficiently 33 nations that account for 90 percent of worldwide defense expenditures perform a range of functions. The study looked at how these militaries go about doing certain tasks in three key areas: personnel, maintenance and weapon buying."In general, countries that make it a point to support their domestic defense industries have higher procurement costs than those that rely on imports. Countries that procure older equipment from the global market tend to have very capable fleets for less money," according to the report.

"The United States and Australia are the lowest performing countries with regard to equipment output for every dollar spent," McKinsey concludes.

Washington and its Down Under ally both tallied scores of 17, worst among the 33 nations McKinsey examined.

Brazil gets the most military output per dollar spent, racking up a study-best 330 points, followed by Poland's 287 and Russia's 253.

The average score was 100 points, according to the report, which will be published as a special defense issue of the firm's "McKinsey On Government" publication, which focuses on government management practices.

John Dowdy, head of defense and security for McKinsey, said there is no question, however, which nation's military brings the biggest punch to any given fight: the United States.

"The American military is very high quality, but that comes at a very high cost," he said.

Although the report awarded points for most efficient practices in several areas, including procurement, its chief authors said no one nation can be branded as most efficient.

"Studies have found, in education, Singapore and Finland are the best across the board," Dowdy said. "I'm afraid in defense, there are no Singapores or Finlands."

BEST PRACTICES
"There are pockets of best practices that we have identified," Dowdy said. For instance, one nation may be doing tank maintenance the best but has a way to go on helicopter training.

The goal of the study, he said, was identifying best practices that nations can apply in areas where they may be wasting money with inefficiencies.

McKinsey researchers conducted the study by analyzing publicly available records "on the quantity and type of military equipment, number and general classification of personnel, annual defense budgets disaggregated into key spending categories," the report states. Data was then converted into a series of ratios that measured actual outputs in the three areas.

The McKinsey study also determined that militaries that do things across their various armed services scored higher.

Within the 33-military sample, the highest level of "joint spending" was 68 percent (South Africa) and the lowest was 3 percent (Brazil, Portugal and Greece).

The United States ranked toward the low end on a chart in the report, with 16 percent joint spending. France, Taiwan and Australia were all midpack, with about 30 percent.

"Not surprisingly, we found that countries that share more functions across the armed services tend to be more efficient," the report said.

TOOTH-TO-TAIL
On personnel, the study examined the nations' so-called tooth-to-tail ratios. The tooth is defined as the military strength "in the front lines." Non-combat tasks such as procurement, maintenance, accounting and others were placed in the tail category.

Norway had the largest tooth-to-tail ratio, with its personnel breaking down as 54 percent tooth, 36 percent non-combat and 11 percent combat support. The United States was second-to-last with 84 percent of its personnel in non-combat or combat support positions.

The average was 26 percent tooth, 63 percent non-combat and 11 percent combat support.

The McKinsey report also notes that some nations, such as France, are attempting to bring about a "dramatic reduction of administrative personnel through investment in IT systems and outsourcing of certain non-combat operations to the private sector."

Keeping its focus on best practices, the report points to an unnamed "Northern European" nation that set out a few years ago to increase its tooth-to-tail ratio. When it started, this nation's military personnel were 40 percent tooth and 60 percent tail. The goal was a 60 to 40 ratio.

This nation met its goal, the report said, "by centralizing formerly duplicative support functions including [human resources], [information technology], finance, media and communications, health services, and facilities management."

This nation mapped "the functions' activities and resources - what exactly each function did, who did it, and how many people did it in each regiment - and by comparing itself with other public and private sector organizations, the defense ministry realized that centralization would yield savings of approximately 30 percent per function," according to the report.

On maintenance, the firm found a wide range on how much nations spend to keep their equipment running.

Adopting best practices in certain areas, Dowdy said, could save militaries "up to 60 percent."

One primary way to generate such savings, according to the report, is avoiding placing large numbers of uniformed personnel in nonmilitary jobs.

"Our experience working with a number of defense organizations indicates a 40 percent to 60 percent potential for increasing the quality and productivity of the maintenance, repair and overhaul (MRO) function without increasing costs," the report states. "We have found that the best-performing military MRO organizations make smart use of outsourcing, excel at contracting, and constantly optimize their maintenance processes."

Dowdy said McKinsey researchers have been "testing" the study and its methodology for some time. The firm plans to present its findings to defense officials across the globe.

The report here (PDF, 10 pages, under 1MB)

[Red]

Blargh.

Talen and I talk about this often. If I were dictator of the US (lol!), I would demand that the military operate something more like a business, because the inefficiencies are atrocious. My first question for the report, though, is whether or not the researchers compared their findings to countries' levels of legal red tape. One explanation for the inefficiencies isn't just that the US isn't doing some best practices, but that it CAN'T because it's paralyzed by procedure and bureaucracy. One wonders... does the level of inefficiency move directly with the level of bureaucracy? Or are nations of all types spread across the scale?

[Illuminatus Primus]

No surprise here: the Defense Department is the de facto means of subsidizing high-tech business and propping up the economy in the U.S., so it follows logically that it would produce as little relative to actually stated output goals as possible relative to comparative nations. Of course one will not find the Pentagon being protested by Tea Partiers enraged by "government waste".

[Surlethe]

I'm hesitant to jump to conclusions from this. Two points jump to mind. First, how much of US military spending is on research and development (wasteful or not)? Second, the force structure has to play a significant role in the proportion of logistics to front-line personnel; a navy that operates (say) an aircraft carrier task force would seem to me to have proportionally more in logistics than one which operates a small littoral fleet.

[atg]

Second, the force structure has to play a significant role in the proportion of logistics to front-line personnel; a navy that operates (say) an aircraft carrier task force would seem to me to have proportionally more in logistics than one which operates a small littoral fleet.

Not to mention the operational areas and logistics required for a globaly deployed military. How many global commitments do the 'top/best 3' in this study have? That is going to have a massive effect on the required logistical train and hence money/resources dedicated to that.

[Sea Skimmer]

Talk about fucking meaningless comparisons. I mean wow the US has lots of support troops when it has a half million men fighting on the other side of the world? And we spend a lot to consistently create the world’s best weapons? Shocking, totally shocking. I mean those Brazilian stealth fighters sure are the big shit. Iraq in 1991 had an awesome tooth to tail ratio too, so good in fact that many Iraqi divisions had absolutely no organic trucks wasting manpower with drivers at all! A brilliant cost cutting move. Walking is awful economical.

[spaceviking]

I agree with the review being to harsh on the U.S as countries on the leading edge of military tech will no doubt have less hardware per dollar then countries buying older materiel. Though the part about military integration is fair, I find it ridiculous how the U.S has the navy, marines, army and army air-force, air-force etc.

[Sea Skimmer]

I agree with the review being to harsh on the U.S as countries on the leading edge of military tech will no doubt have less hardware per dollar then countries buying older materiel. Though the part about military integration is fair, I find it ridiculous how the U.S has the navy, marines, army and army air-force, air-force etc.

Umm yeah, you know even the mighty bastion of military power that is Brazil has Army, Navy, Marine Corps and Air Force too. The Soviet Union had at least five different air forces too. No such thing as an ‘army air force’ exists in the US though. Yeah our army has aircraft, but they are quite distinct from what the air force flies and roles which are common like light transport (H-60 and C-27J) are done using common aircraft. But feel free to explain how the US can do without a major service branch that even much lesser military powers feel they need.

[spaceviking]

I don’t mean get rid of a service branch just greater integration, could they not have an American forces?, the shear scale of the American army would mean they could not have the integration of Canada, but it could remove departmental rivalry. Though I guess this rivalry could exist more in the media then actual practise.

[ShadowDragon8685]

There's arguments for and against integration of the forces. I'm not nearly the military wank that Shep is, but...

There's organizational benefits to having discrete services. Is this block of money going to ships or planes or boots and bullets? If you just fund the military as a whole, a colossal wrestling match ensues between the generals who want more boots on the ground, the generals who want more planes in the air, and the admirals who want more ships at sea. How do people sign up - do they just take the plunge and hope they get into the service they wanted into? Is it possible to request one service but 'wash out' of the Army into the Navy?

OTOH, departmental rivalries are a known problem. For example, Congress forbade the Army from operating any fixed-wing aircraft a while back. I'm not sure what loophole they used to allow the AC-130 gunships and their ilk, but I do recall quite clearly reading about how the one weapon the army wanted more than any which they could not have was A-10 Warthogs with direct lines between the pilots in the sky and the boots on the ground.

Apparently, the Air Force strenously objected to directly aiding the ground-pounders, with a motto from back in the day, which I'm sure shep knows more about, of "not a pound for air to ground!"

This leads into the tribalism aspect. Humans like to define themselves by tribes and military servicepeople are no different. Everyone knows that his tribe is the best: Marines know unquestionably that they're superior to the undisciplined, sloppy Army at being boots and far better than the Army aviators at bringing ground support from helicoptors. Navy knows that without them, none of the other forces would have a chance to do anything useful, and Air Force knows that without them, the crypto-facist-commie-arab-jihadist bombers would start flying over the pole.

Then of course it goes down from there: Army aviators know they're better than army boots, submariners know they're better than the floating targets atop the sea, and so forth and so on, right down to the squads that know that their squad is the best squad in the platoon, and so forth and so on.

Plus, of course, each branch developed differently in antiquity, and has entirely different meanings for many of the same things. For example, you tell an Army soldier "at ease" and he stops standing at attention. You tell a Navy sailor "at ease" and he goes back to doing what he was doing before you showed up. If the forces remain under one umbrella but maintain discrete, distinct command structures, organizational structures and ways of doing things... Congratulations, you have exactly what you have now; everything under the more or less useless umbrella of "United States Armed Forces."

[Sea Skimmer]

The budget does not meet all requirements. You are going to have rivalry, and in fact a large part of the rivalry is within each service branch. Like money for bomber upgrades vs. money for new fighters in the Air Force. I mean you’d think everyone in the Air Force backs buying more F-22 right? But that isn’t true, many would rather see the money spent on bombers because they have enough range to operate from bases outside of enemy reach. But does it matter if you shoot down a plane in the air, or blow it up on the ground with a bomber launched missile? Sometimes yes, sometimes no.

The US military has made considerable efforts to launch more joint programs, and operate more joint pools of equipment such as the Air Force-Navy EA-6 Prowler fleet when the role is completely common. However even when you have similar roles requirements can be very different (for example Prowler was not fast enough to USAF escort jammer requirements, it has to lag behind fighters), and making programs joint is absolutely no defense whatsoever against waste, cost overruns and other trouble. Look no further then JASSM which is still labeled as a joint project, even though the USN never bought it and prefers its own SLAM-ER missile. This because while the role of ‘fighter launched stand off missile’ looks similar the USN wanted man in the loop control to precisely refine aim points on things like ventilation shafts, while the Air Force with more single seat jets wanted fire and forget capability. Neither service wants to pay for the others capability being on the weapon since it wont get used. So JASSM was produced as fire and forget only to control costs, and the USN just didn't buy it. So much for joint saving anything. Remving naval requirements completely would have let JASSM have a simpler design (no seawater to worry about) and a less advanced safe/arm system.

So in short, integration can only go a short distance before the any savings from being ‘joint’ are used up. Often that is not worth the trouble of making people agree on the common requirement in the first place, particularly when they leads to very complicated systems like F-35.

After that the only way to save money is eliminate capabilities altogether. So that’s why you’ve got to name the capability, or name the branch to kill if you want to start cutting serious money. Reforming the procurement system would also help, and this is not linked to any specific branch, it’s a product of largely civilian manned Pentagon Bureaucracy, ever changing battlefield requirements, all compounded by the ever longer R&D timescales of weapons which are a direct result of increasing complexity.

[Darth Wong]

<snip>

From the point of engineering design, it's actually much easier to create specialized systems.

You need to understand that most of the time required to roll out a complex engineered product is consumed in the design process, not the manufacturing process. And most of the time required for the design process is consumed by nailing down precise specifications, first for the entire system and then for all of the various sub-systems (a process which starts all over again when some nitwit at the top makes a revision to the overall specifications).

The more varied kinds of applications you have for a product, the more complex its requirements become, and the more wrangling you will see over those requirements. So there is a pretty good logical reason why "integration" could conceivably create more problems than it solves, at least in terms of designing multi-role systems to serve multiple branches and do multiple jobs.

Mind you, the big problem with the military-industrial complex is the fact that part of the reason it exists in the first place is as a socialist job program, by virtue of creating a vast network of government suppliers. That would not change if you attempted to integrate the services more closely.

[defanatic]

"In general, countries that make it a point to support their domestic defense industries have higher procurement costs than those that rely on imports. Countries that procure older equipment from the global market tend to have very capable fleets for less money," according to the report.

Brazil gets the most military output per dollar spent, racking up a study-best 330 points, followed by Poland's 287 and Russia's 253.

I swear Russia has most, if not all, of its defence stuff produced inside Russia.

[Sea Skimmer]

I swear Russia has most, if not all, of its defence stuff produced inside Russia.

Yup its nearly every last item designed and produced in Russia. During the Cold War they did use some military jet trainers from Czechoslovakia, and LSTs produced in Poland (built to a Soviet design) but that’s about it for imported weapons that I’ve ever heard of. Modern Russia is talking about buying an assault ship from France but that’s it, though they do have joint R&D programs with India which are Russia heavy. The Czech trainers are being replaced by Russian built aircraft, and the LSTs are almost all retired.

[Fingolfin_Noldor]

The Russians did purchase some UAVs from Israel if I recall vaguely.

[Sarevok]

They also use French designed Damocles targeting pods on some of their aircraft.

[Vympel]

The Damocles targeting pods are intended to be produced in Russia by UOMZ- probably with Thales supplying the first models and UOMZ building the rest after an adjustment period, as is typical with these sorts of arrangements. It hasn't happened yet, AFAIK - the aircraft that would use them - the Su-34, Su-35, MiG-35 etc aren't in widespread service yet. Maybe the MiG-29SMT/UBT could use them, Russia has a regiment of them on hand from that Algeria debacle.

The more significant thing Thales/France has provided Russia with is tank thermal sights. Its T-90A production over the last five years has been exclusively equipped with Catherine-E and now Catherine-XP thermal sights.

Russia had to rely on a mixture of (now) primitive Buran-P/A image intensification sights and inferior-technology Agava-2 thermal sights produced indigenously for its original model T-90s that it retained from the early 1990s.

[Sarevok]

Quick question - APA (the Australian air power) site claims Russians use the Texas Instruments TMS320 digital signal processor in some of their missile seeker. I am very curious about the state of russian military digital electronics. Do they make their own ICs, microprocessors or import them from abroad ? What about the embedded software within - the US military developed languages like Ada and Jovial for programming military hardware. Do the Russians have their own equivalents or use commercial solutions ?

[Illuminatus Primus]

Yeah, maybe its expensive because we are carrying out two simultaneous foriegn occupations, but who said that that is a sound low-tax, peacetime military requirement? Off-handedly blaming it on that implies that completely a legitimate use of force and expenditure relative to all the, I dunno...actually defensive things most militaries limit themselves to? The fact that the U.S. defense procurement even in relative terms clues you in to the bullshit that it was only necessary to oppose the USSR during the Cold War.