Can German Defense Industry handle Ramp-up?

The debate on Germany’s defense ramp-up often sounds simple. Can industry deliver the required volume, or not? Recent reporting framed the issue as a potential supply gap. One model suggested Germany could face a defense production shortfall by 2035. Closing that gap would require annual growth rates of up to 28 percent. The Federation of German Security and Defence Industries e.V. (BDSV) strongly disagrees with this conclusion. Chief Executive Hans Christoph Atzpodien points out publicly that companies have already expanded capacity and can mobilize additional industrial and human resources. Both sides raise valid points. But the debate still stays too narrow. Ramp-up is not just a question of production volume. It is a broader transformation challenge. It involves supply chains, procurement logic, workforce capabilities, management systems, and leadership behavior. If decision-makers focus only on factories and funding, they will miss the real execution risks.

Understanding ramp-up holistically

According to European Defence Readiness 2030, the European Commission believes that Europe’s defense industry currently cannot produce at the necessary scale and speed. It is also fragmented, and requires reliable multi-year contracts to skale up. In addition Europe’s defense industry needs to eliminate logistical bottlenecks. NATO and the EU also emphasize the importance of resilient supply chains, clear demand signals, standardization, and multinational procurement. All these aspects must also be taken into account for ramp-up.

There are additional factors to consider: For instance, a technical paper published in 2023 on the successful management of ramp-up projects in manufacturing identified agility, collaboration and integration, system robustness, and continuous improvement as key factors. For the defense industry, with its many low-volume/high-complexity (LV/HC) products, the integration of risk management and earned value management (EVM) is also crucial as a means for realistic project cost and schedule estimates. All of this demonstrates how holistically the ramp-up of production in the security and defense industry (SDI) must be understood.

Change Management essential during ramp-up

Another key point must be added: the human side of ramp-ups. The European Commission also addresses this, noting that a large-scale industrial ramp-up can only succeed if companies recruit, train, employ, and upskill or reskill significantly more skilled workers. These are classic change projects: new roles, routines, and interfaces. But we at viadoo Change Guides also consider flatter hierarchies for faster decision-making to be urgently needed for the successful expansion of ramp-up capacity. The change then lies in strengthening personal responsibility within teams and fostering a culture of error tolerance and speaking up. This also includes adjustments to governance with clear guidelines that describe what justifies an escalation, when it should occur, and who must be involved.

Incidentally, ramp-up in the defense industry is also supported by digital continuity. This refers to the integration of data and information as a “single source of truth” across the entire lifecycle (development, manufacturing, operation, and service) of LV/HC products. Because digital continuity accelerates time-to-market processes and improves quality, it also facilitates ramp-up during peaks in demand. However, its implementation requires a cultural shift, as it changes the way the entire company operates and reorganizes both internal and external collaboration. A coherent change management architecture that incorporates processes, competencies, and working methods is also essential for this.

Conclusion: Focusing on numbers is not enough

Therefore, anyone seeking to increase the ramp-up capacity of the German defense industry must not limit the discussion to investment sums or additional production lines. Rather, decision-makers from politics, procurement, and industry must ensure these three aspects simultaneously:

1. At the national level, they must eliminate logistical bottlenecks, award multi-year contracts on a binding basis, ensure resilient supply chains, and expand standardization and multinational procurement among political and industrial partners in Europe.
2. Companies need professional multi-project management.
3. Top executives in the defense industry must realize that ramp-up capability can only be achieved through serious change management. For only then will the people involved willingly embrace new processes, flatter hierarchies, new teams, new ways of working, new responsibilities, and new cultures. If a critical mass fails to do so—for example, because the necessity, urgency, and benefits of these changes were not explained to them convincingly enough and they were not able to participate in the process—all political (combat readiness by 2029) and economic goals (production ramp-up) will be missed.

Only the combination of these three aspects increases the likelihood that additional defense requirements will ultimately be translated into actual quantities, delivery dates, and full operational readiness.

This article first appeared today on the LinkedIn account of viadoo GmbH.

Image: ChatGPT, based on author’s prompt