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Speed, innovation, collaboration: The future of defense manufacturing


The defense manufacturing industry is evolving fast as it works to deliver solutions for every potential combat domain–air, sea, land, space, and cyber. Through aggressive technological innovation, improved manufacturing efficiency, and much-needed acquisition process improvement, the industry is working to put the right tools in the hands of its warfighters at an accelerated speed. Emerging technologies like unmanned systems, artificial intelligence, collaborative combat, and advanced munitions need to be quickly and fully realized, ensuring that warfighters are mission-ready and equipped to win. The required transformation and the competitive advantage it can confer will only be realized through digitalization and integration across disciplines, organizations, and domains.

What divisions make up the defense industry?

The modern defense industry encompasses a global network of service providers that build and maintain mission-critical military systems for governments amid strict rules and fast-changing needs.

Large defense contractors: the “primes”

These defense corporations—global brands like General Dynamics, Raytheon, Leidos, and BAE—are competitively awarded major government contracts to deliver comprehensive weapons systems or complete platforms. Program execution, systems integration, and coordination of subcontractor networks are handled in-house.

Tier 1 Suppliers and subcontractors

Many specialized companies deliver specific components, subsystems, or technologies to prime contractors. They operate within complex supply chains, delivering economies through specialization and highly targeted expertise, while meeting defense-specific requirements for performance and compliance.

Government agencies

Defense departments and procurement agencies set strategy, define military requirements, develop budgets, and oversee acquisitions. Service branches like the Army, Navy, Air Force, Space Force, and other defense agencies drive demand across the defense industry.

Military service companies

The government outsources many specialized services to private companies focused on IT, maintenance and sustainment, operational and logistics support, and facilities management.

The need for speed in defense

Operating at the right speed is not optional—it’s mission-critical. The nature of war is changing, and critical transformations are required to meet rising challenges across every domain. The global threat environment is more complex and high velocity than ever, and those challenges are being amplified by the day.

Defense programs have historically been challenged by long, complex acquisition processes and often unpredictable budget anomalies like sequestration. It’s now of paramount importance that the industry remains current and immediately relevant to the threats our warfighters face and the missions we expect them to execute.

What challenges is the defense industry facing?

Speed and innovation are fundamental

The defense landscape today demands that innovation cycles move at the pace of, and even anticipate, emerging threats. Contractors are under tremendous pressure to accelerate R&D, compress development timelines, and deliver mission-ready solutions fast—without sacrificing quality or compliance. To compound the pressure, all these demands are being met within outdated government acquisition frameworks designed in the 1940s and 50s that aren't known to be quick or nimble.

Complexity of modern defense systems

Modern defense systems integrate software, electronics, and mechanical components across domains, creating levels of complexity never seen before. Complexity is amplified by the doctrinal ascendance of multidomain operations that require a seamless synthesis of effort across service branches—as well as the companies that supply them. Extremely robust systems engineering is fundamental to achieving this, as are issues like traceability from concept to sustainment.

Digital collaboration

With globalized supply chains and distributed development teams, multidisciplinary digital collaboration is essential. Defense primes and suppliers must ensure that secure, real-time data sharing supports cross-functional alignment, reduces expensive rework, and is never impeded by design silos. Managing this dynamic among dispersed teams, extended supply chains, and even across national alliances demands a deep, reliable, and efficient transfer of ideas, data, and processes.

Advancement of technology

Rapid advances in AI, hypersonics, autonomous unmanned systems, and other disruptive technologies require highly agile development ecosystems. And as individual tactical and strategic weapons systems become more advanced, they must be increasingly interoperable. Defense organizations need to adapt faster, innovating, integrating, and manufacturing new technologies, while maintaining and upgrading legacy systems to interface with future systems.

Cybersecurity and cyber warfare

As the digital systems that warfighters rely on become more integral to defense platforms, they also become targets. Cybersecurity is critical in the prevention of computer-based attacks that can disable weapons systems, interfere with effective communication, and sabotage critical infrastructure. Managing cybersecurity throughout the product lifecycle—from design through deployment and sustainment—is a critical priority, especially given the growing sophistication of cyber threats and the strategic value of defense IP.

Regulatory compliance

Navigating compliance regimes like ITAR, DFARS, FedRAMP, S-Series, CMMC, and other strict frameworks is non-negotiable in defense manufacturing. Especially in autonomy and artificial intelligence, the volume of policies and regulations is growing fast and is not expected to slow down. For example, since 2023 and the release of US DoD Instruction 5000.97, US defense contractors are also required to maintain digital engineering standards. Additionally, the UK Ministry of Defence has been implementing digital engineering practices through its Defence Digital Service. Similarly, the European Defence Agency (EDA) promotes digital engineering and model-based systems engineering (MBSE) within its member states. Ensuring compliance requires highly integrated systems that support auditability, access control, and secure data governance across the product lifecycle.

Supplier coordination and risk management

Defense primes and their Tier 1 suppliers rely heavily on complex and dispersed supplier networks. Managing risk, quality, and performance across tiers requires systems that provide visibility, standardization, seamless communication, and proactive issue resolution.

Lifecycle integration and traceability

The demand for digital thread capabilities—seamlessly linking requirements, design, testing, and maintenance—is becoming a differentiator, and not every defense industry player is up to speed yet. This is now a matter not only of national security, but of competitive advantage for the enterprise. Full traceability helps reduce risk, ensures compliance, and enables faster decision-making throughout the lifecycle.

How are defense leaders using PTC solutions?

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The US Air Force optimizes complex service supply chains

Learn how the USAF is leveraging Servigistics to plan and optimize its $76 billion service parts supply chain tuned to asset availability.

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Digital engineering at NASA

Learn how NASA is transforming its strategic priorities with digital engineering, which enhances mission safety and accelerates efficiency.

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Boeing Global Services optimizes immense service parts network with innovative technology

Learn how PTC helps Boeing efficiently manage inventory demands, while prioritizing customer satisfaction.

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BAE Systems innovates vision of future fighter pilots

Hear how BAE is creating the Striker II, a helmet-mounted display that enables pilots to see symbology overlaid onto the real world at 360 degrees.

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PTC digital transformation solutions for the defense industry

Requirements management

Requirements must be thoroughly mapped before building and coding, so that software and hardware requirements are properly defined and aligned. Also, reuse of existing requirements for different products saves time and money. PTC Codebeamer streamlines requirements management on a centralized platform that ensures traceability and compliance throughout the lifecycle—crucial for defense projects where aligning complex requirements with regulatory standards is essential.

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Model-based systems engineering (MBSE)

Development timelines can be shortened— “collapsing the V”—by visualizing and analyzing every aspect of a system and validating that all components are working together seamlessly. PTC’s MBSE approach uses integrated models to design and visualize complex defense systems and systems of systems, resulting in better decision-making and cross-disciplinary collaboration. This methodology simplifies the development of safety-critical systems by providing a common language for all stakeholders.

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Collaborative product development

The complexity of the industrial defense supply chain demands seamless collaboration between teams whose roles are highly diverse. PTC’s integrated PLM and ALM solutions enable secure, real-time collaboration across functionally and geographically dispersed teams and suppliers. By unifying data, models, and workflows, PTC helps defense organizations reduce silos, accelerate iteration, and maintain alignment from concept through sustainment—even in highly regulated, multitier environments.

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Composites design and manufacturing

Composite part design lets defense engineers mix and match material layers, customizing a design to very specific requirements. Manufacturing with composites requires the definition and documentation of instructions to allow for the production of composite parts. PTC Creo 10 offers advanced tools for composites design and analysis, enabling engineers to create lightweight, high-strength components essential for modern defense applications.

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Supply chain collaboration

In the industrial defense industry, lack of visibility into the supply of critical components can limit a manufacturer’s ability to quickly adjust when suppliers can’t deliver. PTC Windchill bolsters the resilience of volatile supply chains with advanced capabilities for real-time data sharing, end-to-end visibility, and a single system for supplier data with automated integrations and orchestration. And PTC Servigistics applies AI-driven optimization to enhance the service supply chain, ensuring high parts availability, while controlling costs. Aligning inventory with service demands helps defense organizations maintain operational readiness.

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BOM management and transformation

PTC Windchill facilitates comprehensive industrial defense BOM management by enabling seamless and accurate BOM transitions between engineering and manufacturing BOMs. Windchill becomes the single, unified “system of truth” for the BOM, and informs engineering and manufacturing teams about what can or can’t be changed downstream. This integration means accuracy and consistency across product development stages, especially critical for defense manufacturing processes.

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Change management

Effective change management maximizes the ease and speed of implementing engineering changes and helps automate the entire spectrum of change processes. Windchill's powerful change management capabilities allow defense organizations to control and track modifications across complex product structures and the extended supply chain. The result is that all changes are fully defined, centrally governed, and compliant with defense industry standards.

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Manufacturing process management

When R&D and manufacturers work in siloed systems, concurrent workflows are impeded and the process of defining and updating specs can extend lead times and slow time to market. PTC's digital manufacturing solutions streamline workflows by providing configuration-specific work instructions, reducing errors and operational costs. This enhances efficiency and ensures that manufacturing processes meet the precise requirements of defense products.

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Service lifecycle management

In every domain of modern warfare, offensive or defensive, systems must be mission-ready on demand. Once fielded, military platforms and support infrastructure may require deployment and application with little to no warning. Service and maintenance protocols are critical. PTC's service lifecycle management solutions improve defense asset readiness by facilitating efficient maintenance processes, closing the loop between service and engineering, and optimizing the service supply chain so that mission-critical equipment is operational when and where needed.

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PTC: innovation and experience in the defense industrial base

Across every modern domain of warfighting—land, sea, air, space, and cyber—PTC partners with global leaders to deliver winning technologies for CAD, PLM, ALM, SLM and beyond.

Computer-aided design (CAD)

Accelerate design with Creo’s precise, model-based CAD tools for complex, mission-critical defense systems and advanced materials.

Product lifecycle management (PLM)

PTC Windchill unifies engineering and operations with secure, defense-grade control across the full product lifecycle from design to sustainment.

Application lifecycle management (ALM)

PTC’s powerful ALM solutions, including Codebeamer, Pure Variants, and PTC Modeler, help ensure precise traceability, rigorous compliance, and agile delivery of defense software systems across the full product lifecycle.

Service lifecycle management (SLM)

Maximize battlefield readiness with PTC’s powerful array of SLM solutions such as ServiceMax, Arbortext, and Servigistics. Tuned to your mission requirements, these sustainment solutions ensure the availability of your mission-critical defense assets.

Digital thread

PTC’s open architecture approach connects critical disciplines like engineering, manufacturing, and service, creating a strong, secure digital thread across domains, systems, and organizations.

Digital twin

Leverage real-time, data-rich digital twins to monitor asset performance, predict failures, and drive mission readiness in complex environments.

Defense industry frequently asked questions

What is defense manufacturing?

Global defense manufacturing is expected to reach US $2.67 trillion in 2025, according to Markets and Markets’ Global Defense Industry Outlook 2025. The industry comprises a vast network of public and private entities working together to meet the strategic and tactical needs of the military. The industry engages in the design, production, maintenance, and sustainment of military systems and their components—manned and unmanned fixed and rotary wing aircraft, vehicles, weapons systems, electronics, and all the material that support those elements. Vital to national security, the industry enables government defense agencies to deliver and sustain mission-readiness and maximum capability.

What is a defense contractor?

Defense contractors, including prime contractors, Tier 1 suppliers, and their various subcontractors, design, engineer, and provide products or services to a nation's military or intelligence agencies. The array of offerings is wide and can range from weapons systems and platforms, such as aircraft, artillery, tanks, and ships, to specialized services like logistics, training, housing, and cybersecurity. Defense contractors are instrumental in supporting national defense objectives and maintaining military readiness.

Are PTC products certified and/or compliant with federal cybersecurity policies?

Affirmative. PTC's cloud offerings have achieved US FedRAMP Moderate SaaS certification, complying fully with federal cybersecurity standards. Additionally, PTC solutions comply with the US Defense Federal Acquisition Regulation Supplement (DFARS) and NIST SP 800-171 requirements, meeting the stringent security protocols necessary for US defense contractors handling sensitive information.

Does PTC also support the aerospace industry?

Absolutely. PTC partners with leading aerospace innovators to transform how aircraft and space systems are designed, built, and sustained. Our technologies drive digital engineering, smart factory operations, and predictive maintenance, helping deliver complex, mission-critical systems with increasing speed and precision. From first concept to final flight, PTC gives aerospace teams the tools, technologies, and know-how they need to innovate with confidence, compete at the highest levels—and win.

Does PTC support startup companies in the defense industry?

Absolutely. PTC’s Startup Program is designed to empower early and growth stage defense companies with the tools they need to develop secure, high-performance systems more efficiently. Startups gain discounted access to industry-proven solutions like Creo+ for precision CAD and simulation, Onshape for agile, cloud-native design collaboration, Codebeamer+ for requirements and risk management, and Arena for product lifecycle management (PLM). With a focus on compliance, traceability, and speed, the program helps defense startups meet mission-critical demands while accelerating innovation from concept through deployment.