Conclusion 70

Beyond securing investment, there are further difficulties in replenishing stockpiles at pace. We heard from Professor Michael Clarke that the companies responsible for supplying precision weapons to UK Armed Forces have had small production runs for some time which there are challenges in scaling up, partly because of the consolidation of companies in defence industry both at the prime and sub-prime levels.145 Media and think tank reports have also demonstrated that there is insufficient industrial capacity to replace munitions transferred to Ukraine at the speed required, as set out in the box below.146 Box 1: Challenges for industry in increasing production of munitions • The small pool of consumers of military equipment means that a production line will be closed if there are insufficient orders to maintain it. Many components and subcomponents are likely to be provided by a subcontractor—without revenue from that line, these may go out of business or switch focus to providing parts for a different production line making the original line difficult to restart, as happened in relation to NLAW.147 • There are supply chain bottlenecks and a lack of available raw and processed materials. The manufacturing of components and subcomponents—which in many cases stopped or slowed during the COVID-19 pandemic—requires the sourcing of production materials (“chemicals for explosives to metals and plastics for fuses and artillery shell casings”) some of which can take months to arrive. Without an increase in the capacity of the supply chain, there cannot be an increase in the production of the finished product. This is further hampered by other supply chain issues, for example: the difficulty of sourcing castings and forgings (the US Navy is investing in metal additive manufacturing due to the scarcity of producers148); the scarcity of semiconductors (for instance, the British Army has found that the lead time for delivery of semiconductors has increased from one to three wee