Exceptional Release Presents:
Predicting and Measuring Competitive Advantage in Future State Logistics
By Lt Col Dan McGuire
The Department of Defense (DoD) and United States Air Force (USAF) should think big, start small, and learn fast about the Internet of Things (IoT) and the associated logistical capability towards future state-contested environments. Enhancing prior waves of information technology competition, IoT enables disruptive innovation by adapting the logistics enterprise to exceed the competitive advantage of adversaries. Centered upon future-state logistics with global implications, the research first asks what if? What if USAF logistics could identify the next disruptive innovation within future state logistics and the critical period of integration? What if USAF logistics could forecast alternative futures of a nation or region’s capability to exploit the innovation and gain competitive advantage? Correspondingly, this is in connection with the National Defense Strategy’s (NDS) foresight where “new commercial technology will change society and, ultimately, the character of war.”
The NDS asks us to “evolve innovative operational concepts” by anticipating how competitors and adversaries will employ innovative technologies to deter and defeat the US. In future environments, where time is a decisive parameter, logistics enterprise must make decisions and process data faster than the enemy. Regarding Anti-Access, Anti-Denial (A2AD), the technological capability a nation holds within its borders will have greater influence on deciding the outcomes of future conflicts. Because both state and non-state competitors will have access to these technologies, there is a risk of degraded conventional advantage. To mitigate this risk, we must consider IoT capability within future state logistics.
Thirty-year Cycles of IT Evolution in Logistics
Through an industrial lens, we may consider the vast leaps forged within logistical infrastructure through the integrated network within information and communications technology (ICT), energy, and transportation. Between 1900 and 1929, the United States constructed comprehensive infrastructure interconnections of electrical grids, telecommunications, roads, pipelines, water, and sewage. As a result, advanced production arose across every industry from manufacturing to real estate, propelling economic advantage and increased industrial competition. In time, these industrial advances framed 30-year waves of information technology (IT) evolution. Namely, electronic information via computers in the 1960s followed by an integrated network of information via the internet in the 1990s. The third wave of IT evolution is postured for 2020 in the form of IoT (Figure 1).
Figure 1: IoT Evolution in Logistics
When engaging the future of IoT integration, the world’s population is of great consideration. Reductionist demographic projections will radically alter the workforce, military end strength, and arising political conflicts. It is projected within 2020-2030, the United States and its military will gradually become short of workers and require them at the same time the rest of the industrial world develops a similar demand.
The Influence of Culture.
At the heart of America today is the blended culture of traditional values and disruptive innovations; consider the military as a reflection of this culture. Arguably, the binary logic held within USAF computations is merely an extension of military pragmatism and the desire to evaluate ideas within easy to understand practical consequences. However, the DoD has learned current warfare no longer reflects this methodology. Therefore, if we are to use technology to enhance the logistics posture towards future conflicts beyond 2020, the technology must be congruent with the warfare itself: analogously wicked, interconnected, complex, and adaptive.
50-Year Economic Crises and further influence of Infrastructure:
Every fifty years, the United States has been confronted with a defining economic crisis reemphasizing the importance of infrastructure. A historical, cyclical perspective reveals the transition from founders to pioneers (1776-1828), pioneers to small-town America (1828-1876), small-town America to industrial cities (1876-1932), and industrial cities to service suburbs (1932-1980). In our current cycle, President Reagan’s supply-side economics set the foundation for late 20th-century economic gains and will be continually modernized towards 2030 until no further efficiency remains. Fast-forwarding to the next presidency and beyond towards 2030, this model is forecasted to no longer suffice and the US. will need to modernize its infrastructure. Because at this time, the US. and DoD will require increased production of goods and materials with less available labor.
The International Futures (IFs) model, by way of the Pardee Center at the University of Denver, contains the required parameters and equations to forecast the implications of new technologies and the associated strategic advantage. IFs has evolved over the past 25 years as a global database drawing heavily upon demographic, econometric, and systems dynamics traditions. Under the parameter category of technology, IFs contains a subset titled, artificial intelligence subject to tasks, which includes measurements of IoT. Under the parameter category of infrastructure, IFs reflect measurements within ICT, energy, and transportation. As a force multiplier, IFs offers cybersecurity measurements as an index through the International Telecommunication Union database. Through integrated computer simulation, IFs further offered a comparison of alternative levers inside a consistent framework. Strategically, if this research can compile a baseline means of evaluating IoT capability, then a discussion can begin regarding how to best adapt and monitor the data and metrics IoT offers going forward.
Forecasting Alternative Futures in IFs
The research forecasted two alternative futures to evaluate specially selected dependent variables as compared with time in highly contested regions. One alternative future contains the label  to indicate baseline, and the other alternative future is labeled  to indicate working. The baseline case is a future remaining consistent with current social and economic trends resulting from policy frameworks. In comparison, the working model contains additional parameters of technological and military focus. The working case incorporates strategic interventions such as ten percent increases in investment in research and development, protectionism in trade, increased electronic networking, technological advancement, and expenditures in the nuclear enterprise. This manipulation was framed by the research’s strategic themes and implemented through self-learning by the researcher on the means to forecast variables within IFs. A summary of forecasted trends is found in Table 1 below.
Table 1: Summary of Forecasted Trends towards IoT Capability
Analogous to the indexes represented within IFs, this research is introducing an index concerning the interconnections within IoT. This research is titling the formulation as the IoT Capability Index Score and desires to demonstrate the relationship of these parameters in a simplistic, organic, and comparable value. A visualization of this index is seen in Figure 2, and the theoretical equations are displayed in Equation 1. This research does not claim this index to be a solution to the complex issues surrounding 2+2+1 but one method to help understand how the evolution of technology can impact the future battlespace.
Figure 2: IoT Capability Index Score
[ (ICTn,r,t *(n/N)) + (Energyn,r,t * (n/N)) + (Transportationn,r,t * (n/N)) ] * (ICTCYBSECURITYr,t)
In this weighted equation, a measurement of a nation-state or region (r) at a given year (t) occurs through the combination of the weighted score of their n ICT parameters, Energy parameters, and Transportation parameters multiplied by their Cybersecurity Index Score. N represents the total number of ICT, energy, and transportation parameters considered in the equation, and n represents the individual parameter. The utilization of N and n within a theoretical formula is intentional as this research hopes the formula will be adapted, modified, and enhanced in the future.
Figure 3: IoT Index Score charted through 2030
As the theoretical index is computed, the US is forecasted to maintain a competitive advantage within the measure of the interconnection between ICT, energy, and transportation through the year 2030. However, the growth rates are not as rapid as peer competition and begin to plateau. North Korea lags behind but experiences steady growth towards 2030. While Iran lags as well, they begin to experience an accelerated growth towards 2025-2030, and by 2030, they almost reach the state the US currently holds. While Russia closely models the growth of the US, China advances aggressively to surpass Russia by 2030 ultimately. The figure indicates both China and Iran if they continue to experience these rates of growth, would ultimately surpass the US in the future.
Base Case versus Working Case: IoT Capability Index Score.
Analysis of the baseline case versus the working case reveals the strategic interventions of the working case equate to higher values than the baseline case. This means nation-states who apply strategic interventions within ICT, energy, and transportation can maintain a competitive advantage in future environments where new interconnected technology holds exponential influence.
The strategic implications of the IoT Capability Index reach far into the future. In truth, a weapons culture of interacting, synchronized sensors will be congruent with the projected demographic reduction of 2020-2030. Ultimately, this paves the necessity and requirement of IoT to supplement and enhance the logistics workforce. This enhanced logistics capability will be proven first on land-based platforms such as base, fleet, and inventory management before fully transitioning to aerospace and hypersonic platforms. Eventually, successes learned during initial exploration and incorporation will create enhanced technological capability in space. This is a similar pattern to the first use and then the modernization of precision-guided munitions as well as aircraft. When this occurs, the military conceptualization of societal mobilization within a global battlefield will begin to fade. In fact, as the evolution of technology further increases speed, accuracy, and range the size of the required military force decreases alongside massive stockpiles of land-based resources and associated petroleum requirements.
As IoT continues to become the third wave of disruptive IT innovation within logistics, a fourth wave becomes postured. The most logical conclusion in the next thirty-year cycle becomes the exponential growth of artificial intelligence. As USAF logistics evolves towards smart, connected systems, the logistics enterprise will one day facilitate what this research currently titles the Internet of Military Things (IoMT). Research predicated towards the IoMT will then shape what future-state logisticians may know as the Internet of Logistics (IoL) where physical and digital logistics are fully integrated within smart operations.
Under IoT integration, logistics leaders are postured for success within a national strategy advocating modernization and innovation towards current resources. Leaders with the ability to effectively communicate sustainment on behalf of the DoD will be fully complementary to military success in the future. The evolutionary initiatives found within IoT integration pave the way for logistic leaders to innovate how the USAF postures for war.
Ultimately, the current culture of move-by-move control within most military operations has proven ineffective in a networked world of complexity and speed. As logistics and IT are further integrated, the days of a senior leader who acts as a controller and surveyor of all will shift towards a crafter of information and culture. A key leadership trait will become promoting integration and collaboration within a similar pattern in the technologically advanced environment. Only those with the ability to lead in adaptation will find success.
About the Author:
Lt Col Dan McGuire is a 15-year Air Force logistician currently serving as Commander of the 377th Logistics Readiness Squadron at Kirtland AFB. Lt Col McGuire holds a PhD in Strategic Foresight from Regent University and is a recent graduate of the Advanced Study of Air Mobility.
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Airmen assigned to the 97th Logistics Readiness Squadron push a pallet loaded with food into the back of a C-17 Globemaster III on Altus Air Force Base, Okla., Dec. 28, 2012. After loading 137,000 pounds of beans and rice, members of the 58th Airlift Squadron transported the food to Port-au-Prince, Haiti, in support of the Denton Amendment, a program that provides relief to Haitian citizens by making the transportation of humanitarian aid possible. U.S. Air Force photo by Airman 1st Class Levin Boland