FIELD NOTES: Tam Nguyen // Rebuilding America's Defense Manufacturing Base @ Alva Precision
How a machine shop founder is bridging the gap between next-gen defense innovation and manufacturing reality while revolutionizing the industrial base through automation and AI.
In a conversation with Deep Tech Field Notes, Alva Precision CEO Tam Nguyen discusses the critical challenges facing America's defense manufacturing capabilities and his vision for rebuilding the industrial base. This interview has been edited for length and clarity. Tam Nguyen spoke with Deep Tech Field Notes from Southern California, where Alva Precision is developing next-generation manufacturing capabilities for defense programs.
// KEY STATS //
Founded: 2012
Leadership: Tam Nguyen, CEO
Background: 20+ years in precision manufacturing, started out as a Machine Operator then became a CNC Programmer/Mechanical Engineer.
Focus: Advanced manufacturing for defense and aerospace
Recent Development: Developing proprietary robotics and AI systems for automated manufacturing
Current Customers: Boeing Defense, Lockheed Martin, Northrop Grumman, L3, Raytheon
Programs: Supporting next-gen Defense & Space programs including Satellites, Hypersonic platform, Fighter Jet, etc.
The Manufacturing Crisis
What happens when brilliant defense innovation meets manufacturing reality?
"The last five years have been crucial for manufacturing, and not in a good way," Nguyen reflects. "We've faced three traumatic events - the 737 MAX crisis, the pandemic, and inflation - while simultaneously dealing with an aging workforce. Many shops couldn't sustain through these challenges. Between retirements and closures, we're losing critical manufacturing capabilities right when we need them most."
The crisis extends beyond just shop closures. "A lot of these shops were locked into long-term agreements with fixed pricing when material costs skyrocketed during inflation," Nguyen explains. "They couldn't renegotiate with customers, so many chose to close down rather than operate at a loss. We're not just losing manufacturing capacity - we're losing decades of specialized expertise that can't be replaced overnight."
This expertise gap is particularly concerning for next-generation defense programs. "When you look at the composite manufacturing skills needed for advanced platforms, there's a real shortage," Nguyen notes. "These are manually intensive tasks that are difficult to automate, yet critical for lightweight, high-strength components used in modern defense systems. As the older generation retires, we're struggling to transfer this specialized knowledge fast enough."
Bridging Innovation and Production
How do you solve the growing gap between defense tech innovation and manufacturing capability?
"All these big funding rounds are coming in for spacecraft, space tech, frontier tech, hypersonic weapons - but who's going to make the parts?" Nguyen asks. "A couple of years from now, after the design phase, they're going to have problems building prototypes fast and scaling production. That's the challenge I see the industry facing."
The disconnect between innovation and manufacturing capability is particularly acute in defense. "This is a high-barrier industry - it takes years to get approved by prime contractors and develop meaningful relationships," Nguyen notes. "You can't just decide to start making parts for classified programs tomorrow. Even after you get approved, it takes years to develop the relationship to get meaningful contracts. That's why we need to address this now, before it becomes a critical bottleneck for defense innovation."
Nguyen has seen this firsthand with emerging defense tech companies. "They come to us with brilliant designs but often have limited understanding of manufacturability. There's a real gap between CAD models and production reality. We've had to become translators between innovation and manufacturing practicality, sometimes completely redesigning components to make them producible at scale while maintaining performance requirements."
The Automation Imperative
What's driving the push toward automated manufacturing?
"We started our automation journey about five years ago when we noticed California wages and living costs continuously rising," Nguyen explains. "Most machine shops only utilize about 88 hours a week out of a possible 168 hours because they can't find people for second and third shifts. With automation, we're now running almost 24/7, achieving 90% capacity utilization. That's how you compete while keeping manufacturing in America."
The journey hasn't been straightforward. "We tried off-the-shelf robotics systems first, but they have compatibility issues with CNC machines and interfaces that are difficult for machinists to use," Nguyen shares. "The integrated systems that work well cost nearly $1 million and take 4-6 months to deliver and install. That's not scalable if we want to solve this problem industry-wide. That's why we're developing our own robotics system - we need solutions that can be deployed faster and more affordably."
These challenges led Alva Precision to rethink automation from the ground up. "We realized the critical component isn't the robot itself - it's the integration layer between the robot and the CNC machine. Most off-the-shelf solutions don't handle the variability in machine interfaces, especially with older equipment. Our approach focuses on creating a universal connection layer that works across different machine types and vintages, which drastically reduces implementation costs and timeframes."
Workforce Evolution
How do you attract the next generation to manufacturing?
"Many people view manufacturing as boring, manual work. That's not true anymore," Nguyen emphasizes. "With AI software and automation, you're not going to be a traditional machinist - you're going to be more like a robotics engineer or technician. We're creating technology so automated that we can enable machinists to become manufacturing entrepreneurs through a co-ownership model."
The vision extends beyond just individual careers. "Instead of running a few CNC machines, we want operators managing multiple automated systems," Nguyen details. "We're developing interfaces that make complex manufacturing processes more accessible. This isn't just about filling jobs - it's about creating a new class of manufacturing entrepreneurs who can own and operate their own automated shops. That's how we scale manufacturing capability across the country."
This approach addresses both the workforce shortage and the expertise gap simultaneously. "We're not just trying to hire people - we're building pathways for experienced machinists to become business owners through partnerships with us. They bring the technical expertise, we provide the automation technology and business infrastructure. By lowering the barrier to shop ownership, we can multiply capacity faster than traditional expansion methods."
The Next-Gen Manufacturing Infrastructure
How are prime contractors adapting to manufacturing challenges?
"The layers of bureaucracy in defense procurement make it nearly impossible to build things quickly," Nguyen explains. "We might get an RFQ that gives us three weeks to bid, then wait several more weeks for an order. If that's the process for ordering parts, how can we possibly build next-generation systems at the speed needed to stay competitive globally?"
However, Nguyen is seeing early signs of change. "Some next-generation programs we're involved with are starting to streamline procurement. They're recognizing that building faster requires fundamental changes to how they work with suppliers. It reminds me of how SpaceX transformed space launch operations - someone needs to prove there's a better approach to defense manufacturing."
The comparison to SpaceX isn't coincidental. "Just as SpaceX changed how NASA operates, we need similar transformations in defense manufacturing. The current model simply can't deliver at the speed and scale required for modern defense challenges. I'm cautiously optimistic about initiatives like Arsenal One potentially catalyzing this kind of transformation, though it remains to be seen exactly how they'll approach manufacturing challenges."
Looking Ahead: The Next Four Years
What's your outlook on the future of defense manufacturing?
"Right now is actually the best time to start a manufacturing venture," Nguyen notes. "With current sanctions affecting machine tool manufacturers globally, there's equipment availability and affordable financing. The challenge is that this remains a high-barrier industry - it takes years to get approved by prime contractors and develop meaningful relationships. But for those willing to commit, the opportunity is tremendous."
The evolution is already underway. "We're seeing changes in how primes handle procurement for next-generation programs," Nguyen reveals. "They're starting to realize that to build faster, they need to streamline these processes. Just like SpaceX changed how NASA operates, we need similar transformations in defense manufacturing. Someone needs to prove this can be done differently - that's the opportunity we're pursuing."
Nguyen is particularly focused on creating pathways for new manufacturing entrepreneurs. "I was fortunate to have former employers who gave me my first contracts when I started Alva Precision. I'm looking to pay that forward by helping others start their own shops. The industry desperately needs new capacity, and I believe the solution isn't just a few large companies but many smaller, agile manufacturers working together."
His final advice for those considering manufacturing ventures? "Don't be intimidated by the high capital costs that you hear about. While other high-precision machining ventures are taking the high-investment approach, we've proven that bootstrapping is viable. You don't need tens of millions in venture capital to start making an impact in this space. What you need is expertise, determination, and a willingness to innovate in how you approach manufacturing itself."
// FIELD NOTES //
THE MANUFACTURING BLINDSPOT:
Address the Invisible Crisis - While defense tech innovation surges, the U.S. faces a critical shortage of manufacturing capabilities
Automate for Competition - Running 24/7 operations through automation is key to keeping manufacturing in U.S., especially in high-cost regions
Transform the Workforce - Modern manufacturing requires reframing the industry as a high-tech career path
Build for Speed - Traditional procurement processes must evolve to enable faster manufacturing capabilities
ROBOTICS-FIRST PLAYBOOK:
Start with Automation - Focus on extending operational hours through robotics before scaling human workforce
Develop Proprietary Systems - Off-the-shelf solutions may not meet specific manufacturing needs
Think Beyond Traditional Models - Consider new approaches in a unique co-ownership and collaboration model to scale capabilities and capacity faster
Focus on Next-Gen Skills - Train workers as robotics technicians rather than traditional machinists
MACHINE SHOP RESURGENCE ROADMAP:
The Machine Shop Paradox - Why Now is the Time to Enter Defense Manufacturing:
Look Beyond Software - Physical manufacturing capabilities are critical for defense innovation
Build for Independence - Structure operations to run 24/7 through automation
Focus on Speed - Prime contractors are beginning to value rapid manufacturing capabilities
Leverage Available Resources - Current market conditions provide unique opportunities for manufacturing ventures
Editor's Note: Alva Precision is pioneering next-generation manufacturing capabilities with a unique approach to automation and workforce development. For founders interested in starting their own manufacturing venture, Tam Nguyen has offered to provide guidance on bootstrapping machine shops. He notes that current market conditions, including favorable equipment financing rates (0-1%) and increased machine tool availability due to trade restrictions, create unique opportunities for new entrants. To learn more, connect with Tam Nguyen on LinkedIn.