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Strategic planning in the defence industry: the relevance and methodological support
Material posted: Publication date: 07-07-2013

Considered the relevance of creating a system of strategic planning of the defence industry, basic principles and methodological foundations of its functioning, the relationship of this system with other similar systems, proposals for the establishment and operation of.

1. Introduction to the problem

In recent years, in the global system is undergoing profound changes that actualized the problem of improving the security of our country from external military threats. Special attention is devoted to Renaissance and the formation of the modern military-industrial complex (MIC).

Analysis of the situation in the Russian defense industry after 20 years of reforms showed that these problems are due to the superposition of a number of negative factors, the main of which are the following.

  1. Insufficient funding for the entire complex of measures on creation, the serial production and repair of weapons and military equipment (Vivt).
  2. The decrease in the controllability of the process of creating Vivt. Many defense companies have received financial independence, and manage them has become much more difficult. We must learn not only to give orders and instructions, but use different promotional tools.
  3. The widespread use of market management tools demonstrated in MIC of the inconsistency. The reason is very simple: market-based instruments essentially normally short-term or medium-term, and the development of many designs and weapons systems take a long time; therefore the expected result is beyond the horizon of short-term and medium-term plans that effectively guarantees their failure.
  4. To create Vivt and evaluating their expected efficiency it is necessary to use the source data system (LEDs) according to the characteristics of enemy weapons and possible ways of its combat use. Without analysis of the expected combat effectiveness of Vivt planning impossible. In the USSR the centralized development LED was engaged in a special military research Institute. Now they are formed by the developers of Wept, in its own way. The urgency of this issue was emphasized by President Vladimir Putin [1]: "...Another problem is that enterprises and institutions in the defence industry lack a common information base, often duplicative research and development. We must go towards the creation of a "cross-cutting" editor, common database, common standards, transparent mechanism of pricing for defence industry projects. Should work for more integration and cooperation between various enterprises, the unification of production capacities". In the USSR, many of research teams engaged in formation of the system of source data on likely opponents (and the phrase "likely opponent" did not hesitate to use). This is a really important phase: on the one hand, to not produce too light-weight requirements, not to reduce the effectiveness of future weapons and not to complicate them, pereyasliv new weapons and making it too expensive. How well was this work carried out can be judged by the fact that the Russian weapons, which is essentially Soviet, still successfully sold abroad. It is therefore advisable to reinstate the old order – to conduct development LED coordination of public authorities and under their strict control.
  5. The creation and production of Vivt should consider the need for it. But needs weapons and their nomenclature based on military dangers and threats. No firm, no company-developer of weapons and military equipment (Vivt), some literate and erudite analysts in their analytical departments, is unable to predict military threats, they just don't have for this information, much of which is secret. But such information is available in the General staff and the foreign intelligence Service. This fact alone leads to the conclusion about the necessity of the centralized state planning of the development of weapons systems. I.e. in the defence industry necessary waste, at least in part on market mechanisms and the use of methods of state planning.

Since, as noted above, the development of many designs and weapon systems takes a long time, when planning the activities of the defence industry there are always large uncertainties: it is not clear how will the development which will meet the challenges of changes in the characteristics of the means of the enemy, finally, who will be the enemy within a few decades. Therefore, the planning of the defence industry to the greatest degree corresponds to the so-called strategic planning, which is intended to develop rational action plans in the face of substantial uncertainties in the external system environment of limited resources, but with strict orientation to the ultimate strategic goal.

In order then to be understood, you need to determine the values of certain terms.

Strategy is a rational set of rules and techniques that allow you to achieve global and local goals of the country, state, ministries, companies.

Strategic planning is one of the main functions of management, which is the process of substantiation of the rational ways to achieve global and local goals in terms of restrictions on available resources and a significant amount of informal information and high uncertainty of the external system environment.

From these definitions it follows that strategic planning deals with the selection of rational ways to achieve global long-term goal, progress towards which should be carried out in conditions of high uncertainty.


2. Key documents and strategic planning in the defence industry

Now let's see how these common features of strategic planning are specified in state planning activities of the defence industry. Let us consider this process in its most General form, from the methodological point of view, without some, may be an important but secondary details. This will allow to identify its most essential features, clearer idea of the procedure of state strategic planning of the defence industry.

At first, we denote the main strategic planning documents from which it starts and which it ends.

Primary source documents are the Concept and the Strategy of national security of Russia, Military doctrine, and LED by the opponents and on the current status of defense enterprises.

Primary output documents – the State program of armaments (GPV), which details its short-term State defence order (GOZ), Federal target program, which is currently called "Development of the military-industrial complex of the Russian Federation for 2007-2010 and for the period till 2015".

Global task planning MIC is clear – we need to create a weapon system with such characteristics and nomenclature, to minimize the total probable detriment to his country under different scenarios of development of international situation.

You should be aware that planning is important not in itself, but as one of the functions of management. So the first thing you need to understand what the control parameters, i.e., how and to what extent we can manage. For example, you can control the levels of funding (or more generally resource components) of different activities – R & d, mass production, recycling. Together they will shape the intensity of production of different types of Vivt.

Due to the long production Vivt when planning you must consider all phases of the product lifecycle: creation (R & d), production, repair and maintenance, modernization, capital construction, ensuring mobilization readiness, utilization.

If we talk about the predictive phase before starting planning, we first need the definition of possible opponents, levels and dynamics of military threats. Without this it is impossible to establish the need for different types of Vivt.

It is very important for the forecasting of science and technology, methods of warfare. When creating new types of Vivt forecasting should be more long term ("horizon") than planning. For example, in the United States to determine the prospects of development of the armed forces applied the "Long-term strategic analysis", which assesses the expected strategic environment and the General orientation of development of arms in 10-16 years. This document is fundamental for the subsequent selection of planning military research in order to create the necessary weapons in the longer term.

In this connection pertinently to remind that in our country soon will begin the work of the recently created advanced research Foundation, which defense companies have high hopes. The Fund will be to seek and develop breakthrough technologies, including "dual" purpose.

In addition to technical and technology forecasts for strategic planning is necessary also forecast overall levels of funding for the creation of the military-industrial complex, and other crucial resources, such as personnel.

Finally, we need to formulate constraints for enterprises of the defence industry on the minimum level of funding (resource support), below which you cannot fall when you select values of control parameters to avoid the systemic destruction of enterprises.

After that, it is possible to choose a rational combination of control parameters that ensure the most rapid progress toward global objectives in the current plan period. This should be solved the corresponding optimization problem (mathematical programming problem). It is formulated as the selection of rational combinations of operating parameters that maximize progress toward global strategic objectives, in terms of available resource and system constraints.


3. Possible approaches to the formulation and solving of mathematical problems strategic planning

Currently known, at least two clearly defined from a mathematical point of view the problem statement strategic planning activities of the defence industry.

As adopted in [2,3] approach addresses the case of a possibility of a reliable prediction of the dynamics of military threats and overall funding levels (in comparable prices) of all complex activities of the defence industry.

Then may be introduced into the consideration of the special integral time quality score, optimizing to obtain rational temporal profiles of all of the scheduled events for each type Vivt and the weapon system as a whole, i.e. on the armament programme.

The necessity of introduction of integral common ratio is due to the fact that there are nonzero probabilities of occurrence of wars and military conflicts at any moment of time the implementation of the programme of weapons and weapon system needs to be prepared.

The value of the integral indicator of the quality of the armament programme depend on the moments of the beginning and the end of activities, levels of financing (in the more General case of resource provision). This set of control parameters associated with the efficiency of various types of Vivt and overall weapon system through a system of nonlinear differential equations.

You should choose the values of these control parameters in such a way as to obtain an extreme value of the integral indicator of the quality of the LG. In other words, to optimize by choosing rational option of using available resources.

During optimization, applied numerical methods optimization of multiparameter functions, the number of variables which can amount to several thousand. This is to ensure that the formation of a rational variant of the LG for a reasonable time with acceptable accuracy may require the creation of a special numerical optimization algorithms and application of high-speed computers.

An important advantage of this approach is the ability to visually represent the effect of the threat of war on the structure of the LG. For example, if the threat is not great yet, but in the future it can begin to grow in the beginning of LG, it is advisable to concentrate on the complex R & d, while spending a significant portion of appropriated funds. This will allow in the future to apply new developments to create more perfect specimens of Wivt and therefore more effectively confront potential adversaries.

On the other hand, if at the commencement of the LG great the threat of war, and then she may decrease (for example, it is known that certain work is performed through diplomatic channels), it is advisable all available resources to put on serial production and repair of already created weapons, as R & d for new developments to be postponed until better times.

But making long-term forecasts cannot all be taken into account, after some time usually always appear the error between predicted and observed values of the parameters. It is therefore advisable to implement sliding mode design of the LG, when periodically (e.g., annually or every 5 years) carry out a reassessment of the situation and adjustment of the GPV. This method of managing development of the system Wiwt allows you to adapt program planning to a changing external environment.

Development and the logical conclusion of this approach in the second method of the development management system Vevt, which is known as dynamic mode planning [4].

The essence of this method is, that in case of high uncertainties on the dynamics of military threats and General levels of resource provision it is proposed to replace long-term planning system medium-term plans, moving with such time horizons within which it is already possible to forecast with reasonable accuracy. But what is very important in the development of each medium-term plan should remain unchanged overall strategic goal. In other words, all plans must be United by a common understanding of a strategic objective, as if "tied" to it. In a sense we can say that thus is realized the medium-term strategic planning.

The scheme of such planning is carried out as follows.

For the medium term are predicted military threats, and overall levels of resource provision of set of activities normally provided and LG.

The purpose of mid-term program planning is to maximize the increments of the generalized parameter, which determines the damage was prevented. To determine the contribution of various suggested interventions in the value of this index is usually based hierarchical diagram of the relationship of the values of composite index with the results of executing the proposed actions. When the analysis assesses the contributions of various activities to achieve an overall medium-term objectives in the next planning period.

In relation to the MIC, you can use eight-level hierarchical scheme.

First, the top level is the entire goal of this plan period – the increment of value of the damage prevented.

Second hierarchical level – the level of different military dangers, i.e. the fundamental determinants of the already formed and evolving military threats.

Third hierarchical level – the level of various military threats, i.e. specific, already clearly manifested military risks.

But the military threat can lead to various scenario forecasts of wars and military conflicts. So the next fourth hierarchical level – level scenarios.

On the fifth level there are mechanisms to counter various threat scenarios. For example, the improvement of the systems of the strategic missile forces, air force, air defense, Navy, army and etc. it Should be noted that the importance of these mechanisms may vary considerably in different scenarios.

The sixth hierarchical level – the level of main technical systems – complex Vivt.

Seventh hierarchical level – the level of specific funds Wept.

And finally, the eighth hierarchical level – of the activities carried out by improvement of Vivt.

Should not cause bewilderment that in a hierarchical scheme presents both threats and methods of their parrying. This is not a defect of the scheme. The fact that the significance of the different systems, complexes and devices Vivt can be correctly installed only in the context of their tasks. But the importance of these challenges are determined by the threats. So everything is logical.

If you draw the hierarchical diagram graphically showing all the intermediate links between goals of different hierarchy levels, it can seem very confusing. Indeed, specific military threats can be caused not by one but by many fundamental factors. Specific scenarios of wars and military conflicts can translate to various threats, and from different potential enemies (even more complicates the situation is the possibility of conclusion between them of military alliances). Specific types of Armed Forces involved in different scenarios of hostilities. Etc.

Fortunately, there is a method of "untangling" of such schemes is a method of solving matrices. Its main task is to establish the significance of various events on progress toward strategic goals.

It is necessary to note following circumstance. While developing medium-term plans, as a rule, insufficient time for the development of complex mathematical models that establish the relationship between factors at different hierarchical levels. Therefore, in addition to mathematical models is necessary to apply various expert methods. The main question – selection methods that maximize the accuracy of examinations.

Best suits this task the method of pairwise comparisons. If it is combined with the method of solving matrices, we get a fairly effective method of analysis of hierarchies.

It is important to understand that in filling such hierarchical schemes should involve specialists in different fields: from military strategists to developers of technical systems. The whole problem in the whole breadth and depth no one can see in nature there is no such universal experts. This is why everyone should operate on the hierarchical level where the maximum competence. In other words, a hierarchical diagram is a graphical representation of the "collective mind" in the subject area.

After this method of analysis of hierarchies will be established the significance of the different activities, determine resource costs associated with their possible implementation. Then solves an optimization problem of forming a rational medium-term plan, i.e. determine the resources allocated to each event and its targets. Note that due to the limited overall available resources medium term plan may not include all stated initially of the event, but only those that have the highest values of the indicators "efficiency (contribution to the achievement of a common goal)/cost." Such events are called priority.

The mathematical procedure of solving an optimization problem much easier, because within the medium-term planning horizon is usually possible to linearize an objective function and to reduce optimization problem to a linear programming problem.

In the next phase, i.e. when preparing the next medium-term plan, as a rule, have to re-enter specified data on the nature of military threats, overall levels of resource support, it is even possible to reformat the hierarchical schema, excluding some factors, or, conversely, typing some more. This procedure is called restructuring of the conditions of planning.

After this re-optimization problem is solved with new terms is drawn up and the next medium-term plan for the next time period.

Thus, the formation of long-term strategic plan in dynamic scheduling mode is replaced by a set of medium-term plans aimed at achieving the strategic objectives unchanged. I.e., the planning itself has a sliding nature.

It's very important to note the following important circumstance. It can be shown that if is possible to implement a reliable long-term forecast, the long-term development plan (first formulation of planning) will lead to better resultsthan dynamic scheduling, involves the development of a system of medium-term plans. In other words, the dynamic mode is a "fee" for failing to perform a reliable forecast.

For clarity, you can make a quick analogy. Suppose someone stands at the foot of the hill and wants to climb it. If he can clearly see all the bumps on the surface of the hill (safe prediction), he will choose the path with the least expenses of physical efforts and time. But if the hill shrouded in thick fog (unreliable forecast), our traveler will have to choose the path in another way: to see what is coming a few metres, and optimize only a small part of its journey. Then the next point is again to estimate the near future, to outline the next locally best route, etc., i.e. to implement a dynamic scheduling mode of transportation from the starting point to the end. And almost always this way would require more effort and time than in the first case.

A common feature of the above considered two methods of strategic planning is the use of expert (if you implement the second method in boa larger extent than in the first) and predicted (here the situation is reversed) ratings. I.e. in both cases the strategic planning process is quite intensive.


4. Suggestions for improving the system of state strategic planning

Strategic government planning aims to give unity and higher celebrationist the process of creating Vivt, integrity, defense industry, balance the entire range of activities – from R & d to disposal. It is the procedure of planning based on the result and closely tied to available resources.

State strategic planning (as with any strategic planning in other areas and on different system levels from firms to the government) will only be successful if it is focused on the end result, linked to the available resources and the decision-makers are sincerely interested in his success. It must be attached to a special state body which is fully responsible for organizing this process and has the appropriate authority.

Vladimir Putin wrote: "we should Start with linking military planning and providing the Army with armament and military equipment, and other resources. Along with this we should consider establishing a single body responsible for the placement and control of defence contracts. Such a body would be responsible for the execution of the state defense order in the interests of all agencies" [1].

It therefore seems timely significant expansion of the functions of the Military-industrial Commission under the Russian Government.

Strategic planning of activity of DIC is very complex and knowledge-intensive problem that requires the involvement of a large number of qualified experts, system engineers and mathematicians. So you need centralized management of this process with the involvement of specialists not only inter-specific but species research Institute of the Ministry of defense. Frankly, these research teams of the research Institute in recent years was "bloodless", program planning they are under-represented. It is advisable to restore the appropriate academic units.

Strategic planning of the defence industry should be closely combined with the strategic planning of personnel training. It is not enough to create a modern and efficient weapons, we need to know how to correctly apply. Without trained officers it is unreal, all the efforts of the defense industry will go down the drain. Ideally, it is expedient to conduct joint strategic planning of development of WIUT and personnel policy for the training of military personnel as proposed in [4].

At the present time in the sphere of military-technical policy of the state there are 13 laws, 8 presidential decrees and 11 government regulations. Only 32 of the document of direct action. They cover literally all aspects of the defense enterprises, as market participants, mainly by limiting their rights without offering any benefits or compensation.

Arose rather strange situation. The law "On state defence order", but so far no law on the LG. Ie the main long-term and strategic for the defence document, on the basis of which formulated all state defense orders, does not yet have legislation. In other words, the legal status of the LG is nowhere in Federal law is not defined.

This leads to the fragmentation of responsibility for implementation of the state defense order, to the emergence of many private development strategies and interests dictated by the market, rather than systemic interests of the defense sector in General. The MIC lives simultaneously in several different systems of rules and vertical subordination. And the government regulates it too, on several quite different principles.

In other words, all hope rests on the "manual control". Perhaps this is one of the main causes of failure of the previous TAG.

Legislative initiatives in the field of "defense" should be aimed at, first of all, change the system of its state regulation. Enterprises are not required to be torn between conflicting requirements of different agencies, structures and systems of regulation. We urgently need to rectify this situation – to develop and adopt the draft law "On the state program of armaments".

As you know, currently under consideration by the State Duma is the draft law "On state strategic planning in the Russian Federation". This bill covers all spheres of state activity, not only in the defence industry and the Armed Forces. Therefore, it is natural that strategic planning of the defence industry should fit into this more General law. Will discuss it in detail.

This bill is one of the fundamental, the adoption of which will strengthen the role of state institutions in determining long-term goals and priorities of the country, in the formation of transparent rules of doing business in the real economy, in creating the legislative foundations for the development of the system of national security. The adoption of this law will help to develop effective tools of development in those industries where short-term market mechanisms are inefficient or even insolvent.

But when reading the draft law establishes the following.

First, the bill is the emphasis on the list of planning documents, trying to register is already the current practice of design and the names of those documents – all kinds of concepts, strategies, doctrines, programs, and main activities. This obscured the very essence of the state strategic planning – the choice of long-term strategic objectives for the development and justification of effective of the set of measures within the overall resource constraints the maximum progress towards the strategic objectives within the planning horizon.

Secondly, I do not quite understand the scheme of interconnection medium and long term development plans.

Thirdly, when considering the state planning system on lower levels in the bill the main emphasis is on planning in subjects of the Russian Federation. This bias looks pretty strange.

In the amendments to the bill should clearly indicate the scheme of the state strategic planning. Given the high level of systematic uncertainties, it appears that the emphasis should be accorded to the dynamic mode with the restructuring of the planning conditions. Accordingly, it is necessary to pre-define these concepts in the first articles of the bill.

The bill stipulates the distribution of responsibilities between different actors of state power on state strategic planning without unnecessary duplication or conversely gaps. For example, in the bill as the subject of strategic planning indicated the Federal Assembly of the Russian Federation, and it is not marked. Need to fill this gap.

Finally, you must define a special Federal authority for government strategic planning. This body can be called a modern version of Gosplan, the significant difference from its predecessor that its activities should focus not on legislative but on indicative methods of state planning and management, complementing the market mechanisms.

Thus, there are currently pleased with a clear understanding of the need, feasibility, basic principles of creation and functioning of system of strategic planning of the defense industry, linking its functions and results with systems of state planning in linked areas. You should try to implement these ideas and turn them into real, viable system.

It is necessary to establish a clear system of strategic planning, greatly increasing the efficiency of budget funds allocated to the modernization of the defense industry.


A list of sources used

  1. Vladimir Putin, "Being strong: national security guarantees for Russia" / / Rossiiskaya Gazeta 20.02.2012
  2. Baskakov V. V., Fomin A. N., Usatenko O. V. Methodology of substantiation of the rational variants of the armament Programme based on the methods of utility theory. Monograph. Part 1 // the Ministry of defense, Academy of military science – M., typography VA. Peter The Great, 2010
  3. Baskakov V. V., Fomin A. N., Gudkov B. N. Methodology of substantiation of the rational variants of the armament Programme based on the methods of utility theory. Monograph. Part 2 // the Ministry of defense, Academy of military science – M., typography VA. Peter The Great, 2010
  4. Baskakov V. V., Gudkov, B. N., Fedoseev S. A., Fomin A. N. "Methodological foundations of crisis management and strategic planning in economic systems" // the Russian defense Ministry, the Academy of military science,. VA strategic missile forces. Peter The Great, 2012


I. V. Samarin

Source: "Strategic stability", № 2 (63), 2013, S. 67-73

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