Relational Analysis of Production Supply Chains in Defence Industry
R&D and production cooperation within the defence industry can be understood as a set of
interactions among firms involved in weapons production. These interactions give rise to complex
relational structures across economic actors and, ultimately, to multi-tier production supply chains.
Such chains typically involve a large number of suppliers, and their multi-tier nature increases the
sensitivity of the overall network to external shocks.
Arms production, viewed as a cooperative process, can be analysed across several tiers. At
the top tier, a prime contractor is responsible for delivering end weapon systems and military
equipment to the customer and subcontracts specific tasks to lower-tier firms throughout the
production cycle. Multi-tier supplier interactions form a stable network of linkages in which each
firm specialises in producing particular defence-related items. This type of cooperation is
especially salient because it often spans not only national but also cross-border linkages, thereby
increasing the complexity of the defence industry as an economic system of inter-firm relations.
Research on global value chains (GVCs) provides a rich methodological toolkit. However,
as for defence industry’s research, the available analytical work and datasets remain limited in
scope. Most studies either rely on highly aggregated industry-level data, which precludes
reconstructing cooperation at the firm level, or focus on individual programmes and contracts that
are difficult to compare across countries and supplier tiers. As a result, there is still a lack of microlevel methods for reconstructing defence production supply chains that can identify bottlenecks,
quantify the concentration of critical functions, and assess network vulnerabilities.
This study develops a methodology for reconstructing and analysing micro-level
cooperation within the defence industry based on open sources. Building on this approach, the
research team of the Institute of world military economy and strategy (hereafter – IWMES) is
compiling a relational database — “Supply chains in global defence industry”— designed to
support subsequent network and scenario analyses.
The methodology relies on a multi-level model comprising two interlinked layers. The first
layer represents defence products—the objects of cooperation—and their typology. The
production chain is described across three product levels: L1—end weapon systems; L2—
functionally complete assemblies and subsystems; and L3—components. This classification
distinguishes items by the degree of completion and their level of integration into the final system.
To operationalise the product layer, dedicated classification dictionaries were developed for each
level, including 4 categories of end systems (ground, naval, air, and space), 12 categories of
assemblies and subsystems (e.g., propulsion system, targeting and guidance systems, power
transmission, etc.), and more than 270 categories of components.
The second layer captures economic actors engaged in producing defence products and
classifies them into three tiers. At tier L1, the prime contractor bears responsibility to the customer
and coordinates cooperation with tier-L2 subcontractors producing assemblies and subsystems.
Tier L3 comprises firms manufacturing components and acting as subcontractors vis-à-vis
assembly-level suppliers. The resulting inter-firm linkages can be represented as a hierarchical
supplier tree (see Fig. 2), in which the chain starts from L3 suppliers that deliver components to
tier L2. This representation makes it possible to trace the roles of tier-L2 and tier-L3 firms across
different prime contractors and to identify bottlenecks emerging from the structure of cooperation.
The empirical basis of the study consists of open sources containing information on interfirm cooperation in the defence industry. Given the limited transparency of the defence industry,
collecting and processing such data requires advanced search and validation tools. Accordingly,
the study employs open-source intelligence (OSINT) methods that enable the most comprehensive
use of publicly available information.
For data collection, we draw on official procurement databases (TED EU, FTS, BOAMP),
government and agency portals, corporate websites and public disclosures, analytical platforms,
specialised analytical outlets, and the media. In the first stage, target end systems (L1) are selected
and search packages are constructed for the L2 level, combining lists of relevant assemblies and
subsystems, country-specific keyword sets, a curated source corpus, and a source credibility
grading scheme. In the second stage, data are collected on major L2 assemblies and their suppliers,
which forms the basis for further disaggregation to the component level (L3) and subsequent data
extraction. The third stage follows the same logic but applies a more granular search strategy at
the product level and leverages both direct and indirect indicators to identify manufacturers.
As a result, a relational database capturing links between firms and defence products was
built. The dataset includes more than 290 end weapon systems at L1 and over 1,500 assemblies
and components across lower levels. In total, more than 500 defence-industry firms were identified
across the United States, the United Kingdom, France, Germany, China, India, Pakistan, and Iran.
The proposed methodology is applicable to monitoring supply-chain resilience and
identifying critical suppliers; the resulting dataset enables fine-grained analysis of R&D and
production cooperation in the defence industry by linking specific products to their supplier
networks.