Strategic stockpiles: why resilience is built before the crisis, not during it

The debates in France over stockpiles of ammunition and critical components have highlighted a simple principle, often forgotten outside a military context: resilience built during the crisis almost always arrives too late. I described its concrete effects in an article on the war economy seen from an SME in the French defence industrial base (BITD).

The just-in-time trap applied to strategic resources

Lean, just-in-time logic, effective at cutting costs in normal times, becomes a major risk for resources whose availability determines the capacity to act in times of tension, whether ammunition or critical electronic components.

What distinguishes a strategic stockpile from an ordinary stock

• It is sized for a tension scenario, not for average demand
• Its holding cost is accepted as a resilience premium, not as an inefficiency to be corrected
• Its replenishment is planned in advance, not decided in a rush

What the LPM 2024-2030 provides for stockpiles

The French Ministry of the Armed Forces makes no secret of where the problem comes from. In its magazine Esprit défense, spring 2023, it points out that after the Cold War, defence production switched to a flow logic, with a fall in stocks, particularly of ammunition and raw materials. The same issue sums up the challenge in one sentence: it takes longer to produce equipment than it does to use it.

Law no. 2023-703 of 1 August 2023 on military programming for 2024 to 2030 (the LPM) draws two consequences from this. On the budget side, its annexed report schedules 16 billion euros of ammunition requirements over the period and provides for the consolidation of stockpiles. On the legal side, its article 49 created a mandatory stockpile mechanism in the French Defence Code (article L. 1339-1): the administrative authority can require a company holding an authorisation to manufacture or trade in war materiel to build up a minimum stock, up to the armed forces' requirements over twenty-four months. Building up and maintaining this stock is not compensated.

In other words, the resilience premium is no longer just a management choice. For part of the BITD, it has become a legal obligation.

The European ASAP plan: producing more shells, faster

The Union followed the same logic at its own level. Regulation (EU) 2023/1525 on supporting ammunition production, known as ASAP, mobilised 500 million euros from the EU budget, from 25 July 2023 to 30 June 2025, to strengthen and accelerate production capacity for ground-to-ground and artillery ammunition as well as missiles.

The tool is revealing: it does not fund shells, it funds production capacity and the removal of bottlenecks. A stockpile is only worth as much as the factory capable of replenishing it.

A useful transposition

Any organisation that depends on a single critical component or supplier would do well to ask itself the same question as military planners: what is the cost of unavailability, compared with the cost of holding a safety stock?

Sizing a safety stock in a company

The answer is built resource by resource, with the purchasing and production teams. I set it out as a table.

Resource	Cost of unavailability	Holding cost	Typical decision
Single-source component, no equivalent	Production stoppage	Low to medium	Safety stock and search for a second source
Standard component, several suppliers	Limited delay	Medium	Just-in-time, framework contract
Bulky or perishable part	Variable	High	Capacity reserved at the supplier rather than stock
Rare skill, held by a single person	A project blocked	Training time	Pairing and documentation

To prioritise, I use the same grid as for a project: probability of disruption and impact. A tool to assess the probability and impact of a disruption is enough to reveal the few resources that really deserve a stock, and to leave the others on just-in-time.

An example that makes the principle concrete

The war in Ukraine revealed how far Western ammunition stockpiles, sized for short and limited conflicts, proved insufficient in the face of a protracted high-intensity conflict. The consequence is not only military: it forced a complete review of stockpiling doctrine in several European countries, with industrial replenishment lead times counted in years, not months. This is exactly the pattern I describe in my overview of the drone war: an industrial constraint revealed by the crisis, never resolved during the crisis itself.

The civilian parallel is direct for any organisation that depends on a component, a supplier or a rare skill: the question "what happens if this resource becomes unavailable for six months" should be asked in calm times, with time to think, not when the disruption has already happened.

The 2021 semiconductor shortage, the civilian version of the lesson

The civilian world went through its own stockpile crisis. In a May 2022 note on the proposed European regulation on semiconductors, the Presidency of the Council of the EU notes that global chip shortages forced factories to close in many sectors, and that car production fell by a third in some Member States in 2021. The same document points out that the Union, which accounts for more than 20% of world GDP, holds less than 10% of the global semiconductor production market.

The mechanism is the same as for ammunition: a chain optimised for flow, dependence on a very small number of players, and a production capacity that cannot be increased quickly when demand picks up again.

Resilience cannot be decreed in the middle of a crisis. It is budgeted, calmly, while everything is still going well.

Further reading: the French defence industrial base and the long game · framing debt costs more than technical debt

Frequently asked questions

What is a strategic stockpile?

A stock sized for a tension scenario rather than for average demand, whose holding cost is accepted as insurance. In France, the LPM 2024-2030 makes it possible to require certain defence companies to build one up.

How much does France spend on ammunition?

The report annexed to the LPM 2024-2030 schedules 16 billion euros of ammunition requirements over the period.

How do you size a safety stock in a company?

By comparing, resource by resource, the cost of unavailability with the holding cost, then focusing the effort on single-source, high-impact resources.