The Impact of Digital Engineering on Defense Acquisition and the Supply Chain
Insights from an Industry Survey
ResearchPublished Jul 25, 2024
This report summarizes the results of an industry survey designed to assess the progress of digital engineering (DE) implementation and to identify (1) implementation challenges and opportunities and (2) possible metrics for tracking DE implementation. Although the benefits of DE might not be immediately apparent in terms of cost savings or schedule reduction, it has the potential to provide significant long-term benefits to defense acquisition.
In 2018, the U.S. Air Force announced a new strategy for using digital engineering (DE) in its acquisition life cycle process. The policy emphasizes the importance of DE in improving the efficiency, effectiveness, cost, and quality of Air Force systems and highlights the need for a common digital thread that connects all aspects of the acquisition process and life cycle management of weapon systems. To help the Department of the Air Force (DAF) gain insight into the potential benefits, costs, and challenges of implementing DE, RAND researchers examined the use of DE in the acquisition life cycle. This report summarizes the results of a survey of industry that was designed to assess the progress of DE implementation and to identify implementation challenges and opportunities along with possible metrics for tracking DE implementation. Survey results are supplemented by an open-source literature review and discussions with key government experts. Despite the perceptions captured in the survey, the benefits of DE to date have not resulted in notable cost savings or schedule reduction, but DE has benefited the Air Force in a multitude of other ways: allowing for an expanded trade space of design alternatives, enabling increased complexity in system design, collecting warfighter feedback in a more meaningful way, and supporting more accurate and comprehensive modeling and simulation. Overall, although the benefits of DE might not be immediately apparent in terms of cost savings or schedule reduction, it has the potential to provide significant long-term benefits to defense acquisition.
Key Findings
- Survey results indicated that firms were actively investing in DE activities. About one-half of respondents indicated that reasons for implementing DE were similar across defense-related programs or contracts.
- Respondents described business model changes in several areas, such as improving efficiency and performance, modernizing technology, changing policies and procedures, and investing.
- Coordination and collaboration across all stakeholders are key to realizing DE benefits and mitigating its costs.
- Information technology and related costs are reported to be the biggest drivers of DE implementation costs.
- Data management and governance and hiring, training, and retaining a qualified workforce also ranked as cost drivers by respondents but were identified as slightly less prohibitive than the other categories.
- A lack of standardization and interoperability, a shortage of skilled personnel, and the need for cultural change are main challenges identified from the survey. Other challenges are the need for better tools and infrastructure, the difficulty of integrating legacy systems, and the need for better collaboration and communication among stakeholders.
- Measuring the success of DE is a challenging task because much of the industry is not aware of what their leadership is tracking to measure DE success. There is a need for systematic and standardized approaches to measuring DE success.
- DE to date has not resulted in notable cost savings or schedule reduction. However, it has enabled increased complexity in system design and an expanded trade space of options. DE also can improve the quality and performance of defense systems and collaboration and communication among stakeholders.
Recommendations
- Develop goal-oriented plans of action. To ensure successful implementation of DE for defense programs, it is essential to develop goal-oriented plans of action tailored to the unique characteristics and objectives of each program.
- Manage the lack of standardization and interoperability. Defense programs must confront the lack of standardization and interoperability among government stakeholders and industry partners. Tools, software packages, and models that vary across these entities need to be identified and effectively managed.
- Adopt strategies for hiring and retaining skilled personnel. The shortage of personnel with the necessary expertise in digital engineering and related fields can hinder the DAF's ability to thrive in DE environments.
- Be mindful of the need for cultural change. Without purposeful change management and a drastic shift in culture that is centered around collaboration, communication, and innovation, successful implementation of digital engineering within the DAF will likely not materialize.
- Collect cost and schedule data at a low level. Impacts from DE may not be apparent at the platform level. Therefore, programs should aim to track data at the engineering activity or system component level to use in assessing the impact of DE implementation.
- Track qualitative benefits. While the DAF is still collecting data on the cost and schedule impacts of digital engineering, performance-related benefits that are already being realized should be documented.
- Investigate sustainment impacts. DE is expected to have the most significant impact during a weapon system's sustainment phase. The DAF should investigate the transition of digital artifacts from development and production into sustainment.
Related Content
Topics
Document Details
- Copyright: RAND Corporation
- Availability: Available
- Year: 2024
- Print Format: Paperback
- Paperback Pages: 64
- Paperback Price: $33.00
- Paperback ISBN/EAN: 1-9774-1364-1
- DOI: https://doi.org/10.7249/RRA2333-2
- Document Number: RR-A2333-2
Citation
RAND Style Manual
Clayton, Brittany, Obaid Younossi, Sarah W. Denton, Hilary Reininger, Angela Yun, David M. Adamson, Thao Liz Nguyen, Jonathan Roberts, Padmaja Vedula, Thomas Light, Augustine Bravo, Oluwatimilehin Sotubo, and Mohammad Ahmadi, The Impact of Digital Engineering on Defense Acquisition and the Supply Chain: Insights from an Industry Survey, RAND Corporation, RR-A2333-2, 2024. As of April 30, 2025: https://www.rand.org/pubs/research_reports/RRA2333-2.html
Chicago Manual of Style
Clayton, Brittany, Obaid Younossi, Sarah W. Denton, Hilary Reininger, Angela Yun, David M. Adamson, Thao Liz Nguyen, Jonathan Roberts, Padmaja Vedula, Thomas Light, Augustine Bravo, Oluwatimilehin Sotubo, and Mohammad Ahmadi, The Impact of Digital Engineering on Defense Acquisition and the Supply Chain: Insights from an Industry Survey. Santa Monica, CA: RAND Corporation, 2024. https://www.rand.org/pubs/research_reports/RRA2333-2.html. Also available in print form.
Research conducted by
This research was prepared for the Department of the Air Force and conducted within the Resource Management Program of RAND Project AIR FORCE.
This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.