Steve Geary is adjunct faculty at the University of Tennessee's Haaslam College of Business and is a lecturer at The Gordon Institute at Tufts University. He is the president of the Supply Chain Visions family of companies, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly.
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 (www.diu.mil/contact). They are open for business.
ReposiTrak, a global food traceability network operator, will partner with Upshop, a provider of store operations technology for food retailers, to create an end-to-end grocery traceability solution that reaches from the supply chain to the retail store, the firms said today.
The partnership creates a data connection between suppliers and the retail store. It works by integrating Salt Lake City-based ReposiTrak’s network of thousands of suppliers and their traceability shipment data with Austin, Texas-based Upshop’s network of more than 450 retailers and their retail stores.
That accomplishment is important because it will allow food sector trading partners to meet the U.S. FDA’s Food Safety Modernization Act Section 204d (FSMA 204) requirements that they must create and store complete traceability records for certain foods.
And according to ReposiTrak and Upshop, the traceability solution may also unlock potential business benefits. It could do that by creating margin and growth opportunities in stores by connecting supply chain data with store data, thus allowing users to optimize inventory, labor, and customer experience management automation.
"Traceability requires data from the supply chain and – importantly – confirmation at the retail store that the proper and accurate lot code data from each shipment has been captured when the product is received. The missing piece for us has been the supply chain data. ReposiTrak is the leader in capturing and managing supply chain data, starting at the suppliers. Together, we can deliver a single, comprehensive traceability solution," Mark Hawthorne, chief innovation and strategy officer at Upshop, said in a release.
"Once the data is flowing the benefits are compounding. Traceability data can be used to improve food safety, reduce invoice discrepancies, and identify ways to reduce waste and improve efficiencies throughout the store,” Hawthorne said.
Under FSMA 204, retailers are required by law to track Key Data Elements (KDEs) to the store-level for every shipment containing high-risk food items from the Food Traceability List (FTL). ReposiTrak and Upshop say that major industry retailers have made public commitments to traceability, announcing programs that require more traceability data for all food product on a faster timeline. The efforts of those retailers have activated the industry, motivating others to institute traceability programs now, ahead of the FDA’s enforcement deadline of January 20, 2026.
Inclusive procurement practices can fuel economic growth and create jobs worldwide through increased partnerships with small and diverse suppliers, according to a study from the Illinois firm Supplier.io.
The firm’s “2024 Supplier Diversity Economic Impact Report” found that $168 billion spent directly with those suppliers generated a total economic impact of $303 billion. That analysis can help supplier diversity managers and chief procurement officers implement programs that grow diversity spend, improve supply chain competitiveness, and increase brand value, the firm said.
The companies featured in Supplier.io’s report collectively supported more than 710,000 direct jobs and contributed $60 billion in direct wages through their investments in small and diverse suppliers. According to the analysis, those purchases created a ripple effect, supporting over 1.4 million jobs and driving $105 billion in total income when factoring in direct, indirect, and induced economic impacts.
“At Supplier.io, we believe that empowering businesses with advanced supplier intelligence not only enhances their operational resilience but also significantly mitigates risks,” Aylin Basom, CEO of Supplier.io, said in a release. “Our platform provides critical insights that drive efficiency and innovation, enabling companies to find and invest in small and diverse suppliers. This approach helps build stronger, more reliable supply chains.”
Logistics industry growth slowed in December due to a seasonal wind-down of inventory and following one of the busiest holiday shopping seasons on record, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The monthly LMI was 57.3 in December, down more than a percentage point from November’s reading of 58.4. Despite the slowdown, economic activity across the industry continued to expand, as an LMI reading above 50 indicates growth and a reading below 50 indicates contraction.
The LMI researchers said the monthly conditions were largely due to seasonal drawdowns in inventory levels—and the associated costs of holding them—at the retail level. The LMI’s Inventory Levels index registered 50, falling from 56.1 in November. That reduction also affected warehousing capacity, which slowed but remained in expansion mode: The LMI’s warehousing capacity index fell 7 points to a reading of 61.6.
December’s results reflect a continued trend toward more typical industry growth patterns following recent years of volatility—and they point to a successful peak holiday season as well.
“Retailers were clearly correct in their bet to stock [up] on goods ahead of the holiday season,” the LMI researchers wrote in their monthly report. “Holiday sales from November until Christmas Eve were up 3.8% year-over-year according to Mastercard. This was largely driven by a 6.7% increase in e-commerce sales, although in-person spending was up 2.9% as well.”
And those results came during a compressed peak shopping cycle.
“The increase in spending came despite the shorter holiday season due to the late Thanksgiving,” the researchers also wrote, citing National Retail Federation (NRF) estimates that U.S. shoppers spent just short of a trillion dollars in November and December, making it the busiest holiday season of all time.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
As U.S. small and medium-sized enterprises (SMEs) face an uncertain business landscape in 2025, a substantial majority (67%) expect positive growth in the new year compared to 2024, according to a survey from DHL.
However, the survey also showed that businesses could face a rocky road to reach that goal, as they navigate a complex environment of regulatory/policy shifts and global market volatility. Both those issues were cited as top challenges by 36% of respondents, followed by staffing/talent retention (11%) and digital threats and cyber attacks (2%).
Against that backdrop, SMEs said that the biggest opportunity for growth in 2025 lies in expanding into new markets (40%), followed by economic improvements (31%) and implementing new technologies (14%).
As the U.S. prepares for a broad shift in political leadership in Washington after a contentious election, the SMEs in DHL’s survey were likely split evenly on their opinion about the impact of regulatory and policy changes. A plurality of 40% were on the fence (uncertain, still evaluating), followed by 24% who believe regulatory changes could negatively impact growth, 20% who see these changes as having a positive impact, and 16% predicting no impact on growth at all.
That uncertainty also triggered a split when respondents were asked how they planned to adjust their strategy in 2025 in response to changes in the policy or regulatory landscape. The largest portion (38%) of SMEs said they remained uncertain or still evaluating, followed by 30% who will make minor adjustments, 19% will maintain their current approach, and 13% who were willing to significantly adjust their approach.
Specifically, the two sides remain at odds over provisions related to the deployment of semi-automated technologies like rail-mounted gantry cranes, according to an analysis by the Kansas-based 3PL Noatum Logistics. The ILA has strongly opposed further automation, arguing it threatens dockworker protections, while the USMX contends that automation enhances productivity and can create long-term opportunities for labor.
In fact, U.S. importers are already taking action to prevent the impact of such a strike, “pulling forward” their container shipments by rushing imports to earlier dates on the calendar, according to analysis by supply chain visibility provider Project44. That strategy can help companies to build enough safety stock to dampen the damage of events like the strike and like the steep tariffs being threatened by the incoming Trump administration.
Likewise, some ocean carriers have already instituted January surcharges in pre-emption of possible labor action, which could support inbound ocean rates if a strike occurs, according to freight market analysts with TD Cowen. In the meantime, the outcome of the new negotiations are seen with “significant uncertainty,” due to the contentious history of the discussion and to the timing of the talks that overlap with a transition between two White House regimes, analysts said.