Naval maintenance, repair, and overhaul (MRO) is the backbone of fleet readiness and operational availability. Today, aging infrastructure, persistent workforce shortages, rising asset complexity, and intensifying geopolitical pressures are converging to expose systemic weaknesses across the US naval sustainment ecosystem.
In a recent Frost & Sullivan’s Growth Webinar on The Future of Naval MRO, industry leaders emphasized that naval MRO is reaching a critical inflection point. Incremental improvements are no longer enough; sustaining fleet superiority in an increasingly contested maritime environment is demanding defense modernization, digital enablement, and coordinated transformation across the sustainment value chain.
Listen to Our Growth Podcast Episode on The Future of Naval MRO
Featured Experts
In this session, Frost & Sullivan’s Aerospace & Defense thought leaders explored how defense modernization initiatives, digital technologies, and allied partnerships are reshaping the US Naval MRO landscape:
- Wayne Shaw, Growth Expert, Director & Practice Area Leader – Aerospace & Defense Practice, Frost & Sullivan
- Shreya Khakurel, Senior Industry Analyst – Aerospace & Defense Practice, Frost & Sullivan
Transformative Viewpoints Discussed in This Session
Why US Naval MRO Is Reaching a Strategic Inflection Point
Naval MRO operators are navigating an environment of exceptional complexity and consequence. Unlike commercial maintenance operations, naval shipyards are responsible for sustaining some of the world’s most advanced and capital-intensive platforms, including aircraft carriers, destroyers, and nuclear submarines. These missions demand uncompromising precision, speed, security, and compliance, all while maintaining cost discipline and operational efficiency.
Much of the US public shipyard infrastructure was constructed between the 1940s and 1960s, an era far removed from today’s digitally enabled platforms, advanced propulsion technologies, and modular combat systems. As naval assets have increased in size, sophistication, and software dependency, the disconnect between infrastructure capability and operational demand has grown more pronounced.
SIOP: Driving Transformational Change Across Naval Shipyard Infrastructure
In response to these structural challenges, the US government launched the Shipyard Infrastructure Optimization Program (SIOP) in 2018. This multi-decade, multi-billion-dollar initiative is designed to modernize public shipyards through dry dock upgrades, optimized layouts, improved workflows, and the integration of digital tools to enhance throughput and predictability.
SIOP represents a critical step toward restoring capacity and resilience, but it also highlights the scale and depth of the challenge. With a projected timeline spanning nearly two decades, the program makes clear that infrastructure modernization alone is unlikely transformational outcomes. Sustainable impact will depend on parallel investments in workforce capability, operating model innovation, and advanced technologies that enable faster, smarter maintenance execution.
The Workforce Imperative: A Readiness Risk and Growth Opportunity
- Primary constraint: Workforce shortages are the most immediate limiter of naval MRO performance and fleet readiness.
- Severe talent gap: US shipyards require 20,000+ skilled workers across core trades to meet current and future demand.
- Operational impact: Stopgap measures, such as local sourcing of spare parts, are exposing breakdowns in maintenance planning and supply chains.
- Outdated training: Existing training and certification models are too slow and misaligned with modern naval platform complexity.
Want to learn more from the Growth Webinar? Watch the on-demand session now.
Immersive Training with AR and VR: Accelerating Skill Readiness at Scale
Augmented reality (AR) and virtual reality (VR) are emerging as high-impact enablers of naval MRO workforce transformation. These immersive technologies allow technicians to practice high-risk, high-complexity maintenance tasks in safe, controlled environments, significantly reducing time-to-proficiency while improving procedural accuracy and minimizing human error. For a constrained workforce, AR/VR functions as a force multiplier, enabling higher productivity with fewer personnel.
Beyond training, AR tools enhance live maintenance execution by overlaying real-time digital instructions, diagnostics, and schematics onto physical systems. This capability reduces rework, improves first-time fix rates, and elevates overall maintenance quality, directly contributing to faster turnaround times and improved fleet readiness.
Global Best Practices: Leveraging Public–private Partnership Models for Efficiency
- Learning from global leaders: Countries such as India, South Korea, and Japan have modernized naval MRO through effective public–private partnership (PPP) models.
- Dual-use shipyard models: PPP frameworks enable shipyards to support both military and commercial MRO, improving asset utilization and financial sustainability.
- Accelerated innovation: Commercial workloads drive process efficiency and technology advancement, which defense programs can rapidly adopt.
- Stabilized demand cycles: Blending commercial and defense work smooths capacity utilization and reduces volatility in shipyard operations.
Additive Manufacturing: Redefining Naval Logistics and Supply Chains
Additive manufacturing is poised to fundamentally reshape naval sustainment and defense logistics. By enabling the on-demand production of certified components, 3D printing can dramatically reduce reliance on long, fragile supply chains.
With secure digital part libraries stored onboard, vessels operating far from home ports could manufacture select non-critical metal and polymer components as needed, cutting wait times from weeks to hours. Over time, this capability could shift naval logistics from inventory-heavy models to digital, distributed supply chains that enhance operational resilience and mission readiness.
The Path Forward in Naval MRO
The future of naval MRO will be shaped by seamless integration, combining infrastructure defense modernization, workforce transformation, digital technologies, and collaborative operating models. While programs such as SIOP establish a critical foundation, lasting impact will depend on how rapidly enabling capabilities like AR/VR, additive manufacturing, and public–private partnership frameworks are scaled and embedded into day-to-day operations.
For defense stakeholders, the implication is unmistakable: sustainment is a strategic differentiator. Organizations that act decisively to modernize naval MRO will strengthen fleet readiness and resilience and create long-term growth opportunities across the broader maritime defense ecosystem.
Ready to Lead the Transformation?
- Book a Growth Strategy Session: Align your growth roadmap with Frost & Sullivan’s visionary Growth Pipeline™ Dialog.
- Engage with Growth Experts: Co-design AI-enabled, data-driven operating models that scale industry-specific and commercial impact.
- Share Your Transformation Story: Position your organization as a transformation leader through Frost & Sullivan’s Transformational Growth Leadership platform.
- Join the Growth Council: Collaborate with industry leaders shaping the future of your ecosystem.
- Nominate for the Best Practices Recognition: Be recognized for excellence in growth strategy, execution, and customer impact.
- Demonstrate Industry Positioning on the Frost Radar™: Benchmark your growth performance and innovation strength against industry competitors.
- Activate Brand & Demand Growth: Accelerate awareness, engagement, and revenue growth through integrated brand and demand generation strategies.
“The US Navy’s increasing funding for MRO represents a strategic shift towards enhancing maritime domain awareness. Evolving military alliances, a revitalized domestic industrial base, and the adoption of commercial off-the-shelf solutions will transform the naval MRO industry.”
Shreya Khakurel, Research Analyst, Aerospace & Defense, Frost & Sullivan
“The US Navy’s increasing funding for MRO represents a strategic shift towards enhancing maritime domain awareness. Evolving military alliances, a revitalized domestic industrial base, and the adoption of commercial off-the-shelf solutions will transform the naval MRO industry.”
“Naval MRO may not always be visible, but its impact is immediate; delays, backlogs, and aging facilities directly affect fleet availability, lifecycle costs, and the Navy’s ability to project power.”
Wayne Shaw, Director and Practice Area Leader, Aerospace & Defense, Frost & Sullivan
