Defense Armor Manufacturer: Supply Chain Ethics Overhaul & 97% OTD Recovery

The Challenge

A defense armor manufacturer operating 4 facilities with $28M in annual procurement spend was in crisis. On-time delivery to military customers was below 50%, and three DCMA government quality representatives were stationed full-time at the facility because of chronic late deliveries.

The root cause ran deeper than scheduling: purchase orders were concentrated with a few favored, capacity-constrained suppliers who batch-produced far more than the BOM called for, creating constant shortages. Indirect material spending in the tool room was $65,800/month with no controls.

Our Approach

After the findings were presented to the owner, the compromised purchasing relationship was ended. The machining supply base was expanded from 6 to 12 suppliers to remove capacity bottlenecks, and purchase orders were restructured to require complete kits matching BOM quantities.

Pull systems were established for raw materials, components, and indirect supplies; formal purchasing, sourcing, planning, and shipping/receiving processes were created; and scorecards were built across all 4 sites.

Kanban and weekly spend reviews brought tool-room spending under control, and a multi-facility ERP integration improved procurement, logistics, and planning.

Measurable Results

• $425K in strategic sourcing savings across $28M spend through competitive bidding
• On-time delivery recovered to 97% — from below 50% at baseline
• Indirect material costs reduced by 67% ($44K/month savings), from $65,800 to $21,700 per month
• Delivered 97 units to clear the entire military backlog to zero
• All 3 DCMA government quality representatives departed the facility after observing the transformation
• Scorecard metrics established across 4 sites for the first time in company history