At the start of the MRAP program, supply managers at FPII identified no sourcing issues with the exception of a specific Timken tapered roller bearing required for transfer cases. The DX rating assigned to the program alleviated this concern; the company also worked with its axle supplier, Marmon Herrington, to increase capacity to meet the increased demand. Armor was not seen as a shortage item, although it was a long-lead item that took up to 120 days to procure, even with the DX rating (Walsh, 2008a, August 6).
The FPII management was willing to license vehicle designs for production by
other defense contractors partnership with General
at the program start. Dynamics, resulting in
The company entered a Cougars being produced
licensing by that
company, as well as with BAE. by BAE) and Textron, Inc. as a
FPII also partnered with Armor Holdings (now owned means of expanding production capacity. The company
accepted risk at such as armor (2008a, August
the start of the MRAP program, investing $50 million in long-lead items and axles in anticipation of contract awards and capacity expansion 6). The raw material investment turned out to be a low-risk decision and
company, but the production capacity expansion far exceeded the that the company received. This over-expansion is evident in the rapid
growth in work force, followed by an approximate not receive the anticipated vehicle orders.
The FPII strategy was to create a network of capacity across multiple OEMs, capitalize on the existing fleet of Cougars and the company’s history to secure the bulk of the MRAP market, get ahead and stay ahead of schedule, conduct strategic supply base purchases (at risk), and create a joint venture with a reputable defense contractor. However, the company has faced challenges based largely on the difficulties in rapidly transitioning from a small to a large business. Namely, their technical data packages were immature, unstable, and unable to quickly incorporate changes needed for large- scale production and licensing across multiple facilities and manufacturers. In addition, this growth brought tremendous challenges due to the lack of an enterprise resource planning system that integrated accounting, ordering, estimating, and other functions (2008a, August 6). Finally, the intensive in-house production process made ramp-up and