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Analyzes the capability of the lower tiers (the subcontractors and suppliers) of the industrial base to surge production of defense-related output in time of crisis. Industrial Preparedness Planning (IPP) currently used by the Department of Defense (DOD) to measure and plan industrial capability is ineffective. A more productive approach would involve (1) surge demand analysis, (2) lower tier industrial activity overview, and (3) collection and analysis of data on potentially critical industries. This overview indicates that the lower tiers could significantly increase production of defense-related output in a year. Nonferrous forgings, semiconductors, and optical instruments were investigated using a data-gathering instrument that DOD could adopt as the third step in this new approach. In these industries current defense producers could double their defense-related output in a year's time and noncurrent defense producers could undertake some defense production within six months. The most critical determinants of the feasibility of surge are the availability of labor and capital, particularly skilled labor.

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