The invisible supply chain. Your prime sees you, you can’t see your suppliers

Leonardo has connected more than 5,000 suppliers to the AirSupply platform, 87% of them small and medium enterprises, with more than a thousand fully integrated; with the LEAP program it assesses 500 suppliers on about 200 KPIs. It is the most extensive digitization Italy’s defense supply chain has ever seen, and it came from the top: the platform serves the prime contractor, to see its suppliers, receive order confirmations, and measure deliveries.

For a supply-chain SME this means one more portal, one more confirmation cycle, and a dashboard that measures it. It means obligations. Visibility stays above. If your prime knows in real time when you deliver, do you know as much about your second-tier suppliers? About the heat treatment you outsource, the raw-material supplier, the electronics that arrive from a distributor? In most of the companies we have met, and in the national aerospace cluster alone 220 companies out of 276 are SMEs, the answer is a person making a phone call.

Supply-chain digitization came down from the top for the prime’s compliance. It gave the SME obligations. Visibility stayed above.

The European Defence Industry Programme, EDIP, given final approval in December 2025, puts 1.5 billion euros on 2025-27 and sets a simple rule: in funded projects, components from non-EU countries cannot exceed 35% of cost. It is a rule about the supply chain, and to comply you have to know the origin of every component, tier by tier. Today, in an SME, that data lives in emails with the supplier, on delivery notes and, on a good day, in a spreadsheet column updated by hand.

That is the whole paradox. European funds, Readiness 2030’s 800 billion and SAFE’s 150 included, reward whoever can prove provenance; the industrial base that has to prove it is made of more than 2,500 SMEs that never needed a system to do so. Oliver Wyman, analyzing more than 600 sub-tier suppliers, says it another way: most supply chain departments do reactive problem-solving, one issue at a time. A component’s origin stays a detail until someone asks for it. Then it becomes a problem all at once.

Institutional answers are arriving. In Italy Confindustria launched Connext Filiere in June for aerospace and defense, with Leonardo, Fincantieri, and Avio Aero as anchors: a sector worth 21.4 billion euros with 54,300 employees, where more than 80% of companies are SMEs. In Germany, the same month, BDSV and BME opened SVI Connect to connect SMEs with the large defense groups. In France Sopra Steria and the Ministère des Armées are working on SME access to defense markets.

They are all useful initiatives, and they are all the same thing: they match supply and demand. A prime looks for a machining supplier, an SME presents itself. None of the three produces the missing data, that is how much the supply chain as a whole can produce, with which components, and from where. That data does not come from a digital trade fair. It comes from the plants, one by one, and from a way to add them up without anyone having to hand their numbers to a competitor.

The aggregate map of production capacity cannot belong to a prime contractor, for a simple reason: the prime is part of it. Leonardo knows how much its suppliers can produce for Leonardo; it does not know, and must not know, how much they produce for Fincantieri or for a German prime. The reverse holds too. And an SME that handed its numbers to a platform owned by a customer would lose the only bargaining lever it has.

Federated means this: one node per plant, owned by the company, holding its data and its rules. Nodes talk to each other by each one’s rules. The buyer, or a ministry, sees the status, how much and when and from where, without seeing the content: neither prices, nor drawings, nor the full customer list. Technically it is less exotic than it sounds. It is the same principle as data sovereignty applied to a network instead of a single company, and the governance that makes it possible, information classes and written rules, is the one in the second piece of this series.

An American case shows it can be done. L3Harris reports rebuilding, with Palantir’s platform, the country of origin of its products’ components by reading millions of shipping documents, and using the same tool to find shortages in night-vision goggle production. It is proof that provenance can be rebuilt from documents that already exist. In Europe the same work has to be done without bringing the data of 2,500 companies inside a single vendor, and that is exactly why the layer has to be federated.

In Venice, between the sixteenth and seventeenth centuries, the Arsenal employed thousands of people and, by tradition, could launch a galley a day in an emergency, with assembly lines, standardized parts, and orderly warehouses. Rival powers feared the factory that could build a galley a day more than the fleet already at sea. The deterrent was production capacity, made visible and known to all.

Four centuries later the principle is the same, and Commissioner Kubilius’s number in the first piece of this series, four million shells versus two, says Europe lost visibility over its own capacity even before the capacity itself. That is what the map is for: to know, and to make known, how much the supply chain can produce. It is the piece of deterrence built with software, in the factory and between factories, and one that cannot be built at the front.

The first thing needs no software. It is the single-source map of your own suppliers: a sheet, one row per component, with supplier, country of origin, cost share, lead time, qualified alternative, and date of the last check. In most companies this sheet exists in three partial versions, in purchasing, quality, and production; making it one is a month’s work, and it pays for itself at the first EDIP or prime-contractor question.

The second is to move that sheet into the one place where the company’s know-how and rules live, so that it updates from delivery notes and orders instead of by hand, and an agent in production can answer the question “where does this component come from” with the source. It is the step where the sheet becomes a node.

The third is a question to ask the district, the cluster, and the Ministry: is there a federated layer where my node can talk to the others without handing over my data? Today the answer is no. The 2026 AI and Defense Strategy talks about data consolidation and open architectures against lock-in, and it is the right frame; the federated layer for SMEs, one node per plant, is what is still missing, and it is worth raising a hand for.

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