Up to €41 billion in defence orders are ready for the Dutch manufacturing industry (Source: PwC). This presents a huge opportunity for SMEs, but only if they are prepared for it.
Directeur | MBB
Contents: The opportunity is significant and tangible | Scaling up is not just about producing more | Why capacity alone is not enough | Conclusion
The defence budget will increase by €3.4 billion in 2026 to €26.8 billion. Over €13 billion of this will go towards the maintenance and acquisition of equipment, with approximately a quarter allocated to infrastructure and digitalisation. The reason is no secret: the security situation has deteriorated, and the Netherlands, along with NATO allies, must be able to scale up more quickly.
For the Dutch manufacturing industry, this is not merely a budget item. It represents the largest demand stimulus in decades.
According to PwC, the increased NATO standard could generate up to €41 billion in orders for the Dutch manufacturing industry over the next five years. This potential is not limited to large defence companies; it primarily lies with SMEs.
Rabobank indicates that a wide range of sectors can benefit: metalworking companies with precision capabilities, electrical engineering companies with control systems, sensor companies in vision and radar, ICT companies with cybersecurity expertise, and material companies with knowledge of composites and coatings. Metaalunie and MKB-Nederland calculated that approximately 300 SMEs currently supply Defence directly, while over 3,000 SMEs could relatively quickly join the defence supply chain. This represents a gap of 2,700 companies between those currently supplying and those who could join.
Metaalunie rightly states in response that Defence must offer clarity, long-term agreements, funding, and better access to contracts. However, SMEs must also take action themselves. A defence contract places high demands on delivery reliability, quality, traceability, and continuity. Companies wishing to participate must therefore get their operations in order now: clear responsibilities, predictable and stable processes, and the right competencies among employees.
Problems should not be solved daily through improvisation but must be addressed structurally. The supply chain also deserves attention: critical suppliers, materials, and dependencies must be known and managed.
Simply organising additional capacity is not enough. Production must be demonstrably under control before responsible scaling up can occur. Those who only begin professionalising after securing a defence contract are likely to be too late. Preparation therefore begins now, with a thorough analysis of processes, risks, performance, and the decision to professionalise.
Defence demands not only larger volumes but also speed and agility. Product requirements can change suddenly, and delivery times are under pressure. SMEs must therefore be able to plan flexibly, rapidly industrialise new products, and scale up capacity in a controlled manner.
Automation and digitalisation are essential in this regard, especially given the shortage of technical personnel. Consider robotisation, digital workflows, real-time production information, and data-driven quality control. This not only increases productivity but also makes processes more repeatable and demonstrably controlled.
Furthermore, quality systems must align with the defence supply chain. ISO9001 or IATF16949 provides a strong foundation, but for defence, AQAP is often the logical next step. AQAP adds requirements for risk management, configuration management, contract review, traceability, and quality assurance throughout the entire chain. Quality must become an integral part of daily operations.
Only in this way will SMEs be ready to receive the orders. And this will prevent the aforementioned €41 billion from being spent abroad.
€41 billion in defence orders are on the horizon for the Dutch manufacturing industry. Metaalunie rightly points to the necessary clarity and long-term agreements from Defence. However, SMEs must ensure they are ready to seize these opportunities.
Simply creating sufficient capacity is not enough. SMEs must now invest in employee development and in professionalising, controlling, and automating their processes. Additionally, they must prepare for the quality requirements within the defence supply chain, such as the AQAP standard for defence suppliers.
The question is not whether opportunities will arise, but whether your organisation is ready when the order comes. Do you want to know where your organisation stands? Start with a CIMM scan to identify your improvement potential, or contact us for a consultation on AQAP and operational scaling.