CSCMP's Supply Chain Quarterly
March 31, 2020

A new player in supply chain innovation

An agile and nimble startup organization seeks to brings Silicon Valley-style fast-paced experimentation to a mature and ossified supply chain.

At first glance, DIU appears to be a typical Silicon Valley startup with a supply chain focus. It's a relatively small organization with 75 employees, headquartered in Mountain View, California, (also home to Google) with satellite offices in tech hubs like Boston, Massachusetts; Austin, Texas; and Washington, D.C.1

Like many high-tech startups, DIU is focused on "delivering advanced commercial technology"—such as artificial intelligence (AI), autonomous solutions, and augmented reality—to its customers. And it takes a Silicon Valley-style approach to accomplishing this goal, saying that it will "seek out and rapidly prototype commercial solutions to challenges while lowering barriers to entry for nontraditional companies."

Dr. Ash Carter, currently a professor at Harvard, says he helped establish DIU because he saw an opportunity to "capitalize on U.S. business' growing investment in research and development (R&D) and venture capital funding in high-tech startups."

Yet while the DIU team may look and act like a typical Silicon Valley startup firm, it's not. The DIU acronym spelled out is "Defense Innovation Unit," and it reports to the Pentagon. Ash Carter may now be a professor at Harvard, but when DIU was established in 2015, he was the U.S. Secretary of Defense. Today DIU reports to the Office of the Under Secretary of Defense for Research and Engineering.

Why did the Department of Defense choose to structure the DIU this way? Well, an elephant cannot be taught to dance. Instead of attempting to reform the Pentagon, DIU elected to immerse itself in the land of innovation. Through immersion, DIU is becoming infused with agility and speed.

A different sort of integrator

At its heart, DIU acts like a supply chain integrator, translating capabilities created by technology innovators in hubs like Silicon Valley into bundles of solutions to a targeted set of customers. DIU finds interesting innovations, packages them, and links them to its customer: the Department of the Defense (DoD) and its entities. In this way, DIU acts like a business-to-business integrator in its target niches. Currently DIU has five main areas of focus: AI, autonomy, cyber, human systems, and space.

Artificial intelligence: In this space, DIU is investigating whether commercial AI can be applied or adapted to solve high-impact DoD problems. Recent projects include prototypes to develop algorithms for humanitarian assistance in post-disaster environments and strategic reasoning to deliver insights about force deployment in wargaming and planning environments.

Autonomy: DIU is focused not only on developing autonomous applications for the DoD but also on developing technology that can counter them. Recent projects include: counter-unmanned aerial systems (UAS) that would be able to identify, track, and remove small UAS like drones; autonomous quadcopters designed for indoor flight and tactical early-warning systems; software to defend commercial drones against cyber vulnerabilities; and "distributed autonomous logistics" for long-range delivery of small cargo like medical supplies.

Cyber: This portfolio of projects seeks to deliver cybersecurity and enterprise IT solutions that would aid cyber warfare operators and analysts. Recent projects include "security-as-a-service" prototypes and multifactor authentication for enterprise security.

Human systems: Here, the aim is to enhance warfighter survivability and mission accomplishment. Recent prototype projects include augmented reality display technology with night vision capability for enhanced situational awareness in high-threat environments and predictive analytics for early warning of infection and threat agent exposure.

Space: These projects facilitate the Defense Department's ability to access and leverage the growing commercial investment in space to address existing capability gaps, improve situational awareness and decision making, and increase interoperability with international partners.

DIU has had an impact. For example, in October of 2019, the organization announced the results of an 18-month project in predictive health monitoring with the multinational electronics company Royal Philips.2 The project team used a blend of machine learning and artificial intelligence to develop an algorithm that predicts the likelihood of an infection before symptoms even begin to show. The new product delivers predictive capabilities, allowing users to anticipate requirements—patient medical needs—up to 48 hours in advance. DoD and Royal Philips are now working on a wearable device that would use this algorithm to monitor a soldier's health and deliver earlier alerts to potential infection. 

Two other current projects involve preventive maintenance for vehicles. DIU has contracted with Uptake, a predictive analytics software company, to apply its Asset IO solution to the U.S. Marine Corps' M88 armored recovery vehicles and the U.S. Army's Bradley Fighting Vehicle.

The need for speed

Today seems to be an era where national consensus is out of reach. Yet there is broad agreement on one thing: The DoD supply chain is ossified, ponderous, and in need of overhaul. The United States needs innovation and approaches to stay ahead of its adversaries and protect the national interest.

Yet DoD research and development budgets are not limitless. This is exactly where DIU fits in. Commercial technology vectors are evolving alongside the defense requirements. This creates an opportunity for the government to cross-pollinate with private sector entrepreneurs. Instead of trying to expand government R&D budgets, DIU seeks to connect with R&D from the commercial supply chain and venture capital funding. Its portfolio companies have been backed by such venture capital partners as Andreessen Horowitz, Founders Fund, GV, In-Q-Tel, Lux Capital, New Enterprise Associates, Sequoia Capital, Social Capital, and Spark Capital. In other words, DIU looks and acts like a typical Silicon Valley player working with top venture capital partners on some extremely difficult problems. Those problems, however, just happen to be related to national security.

If you have a truly innovative concept that you'd like to move through the DoD supply chain quickly, reach out to DIU ( They are open for business.



1. Stephanie Meloni,"What the Defense Innovation Unit Wants Industry to Know About CSOs-Part 1," ImmixGroup, June 4, 2019:

2. Jessica Kent, "Philips, DoD Build Machine Learning System to Detect Infection," Health IT Analytics, October 23, 2019:


Steve Geary is the president of the Supply Chain Visions family of companies, consultancies that work across the commercial and government sectors around the world.

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