New Drone Factory Model Boosts Production Resilience
Defense manufacturers are adopting distributed, underground production sites to maintain supply chain continuity during conflict.
Updated on Oct. 24, 2026 in Manufacturing
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Croatian manufacturer ORQA and Ukraine-based General Cherry have announced a partnership to jointly develop and produce drone components and counter-drone systems. The collaboration includes establishing an underground factory in Ukraine and a serial-production plant in Croatia to ensure operational continuity.
Why it matters
Localizing manufacturing within Ukraine offers significant logistics advantages over shipping from NATO countries, allowing for the rapid exchange of battlefield technical data into system updates. This distributed production model addresses the operational need to mitigate supply chain risks in active conflict zones.
ORQA currently supplies 24 NATO allies with specialized drone technology, including controllers, goggles, and simulators. The new partnership aims to scale serial production for counter-drone systems across dual facilities in Croatia and Ukraine.
The players
ORQA
A Croatian developer and manufacturer of drone hardware including controllers, flight goggles, and simulation equipment currently serving 24 NATO allies.
General Cherry
A Ukrainian defense firm focused on domestic manufacturing of drone technologies and systems.
The details
The companies are deploying a distributed production strategy to avoid single points of failure, a common necessity for defense firms operating in Ukraine. By moving component manufacturing underground and cycling through multiple sites, the partners maintain output capacity despite external attack risks. This approach integrates battlefield-derived performance data directly into the design cycle for both Ukrainian partners and NATO markets.
Timeline
The report was published on October 24, 2026.
Market Landscape
The partnership follows the operational patterns established by NATO defense production cooperation standards by aligning private manufacturing output with regional security requirements. It marks an shift toward integrating agile, high-risk, in-theater manufacturing with established Western supply chains.
Operators in high-risk or volatile sectors should monitor how decentralized, multi-site production models can safeguard output when physical infrastructure is threatened. The strategy highlights a transition toward regionalizing supply chains to accelerate product feedback loops rather than relying solely on global shipping.
The takeaway
The move demonstrates that embedding R&D in active conflict zones provides a distinct competitive advantage in refining hardware through real-time battlefield feedback. Consider auditing your own supply chain for single points of failure that could be mitigated through distributed, localized production.
Further reading
For additional context on supply chain resilience, visit the Manufacturing section.
Live Poll
Should Western defense manufacturers adopt decentralized production methods to better withstand potential future conflicts?
