The U.S. Army produces or procures 350 different types of munitions (bombs, bullets, grenades, rockets and so on.) Currently, it has shortages in 25 of those items, the most noticeable being fragmentation grenades and blank ammo for the M-16 rifle and SAW light machine-gun. The Department of Defense produces all of its small arms ammunition at one factory, in Lake City, Missouri (the largest plant for 5.56mm-20mm ammo in the world). But this facility is now running 24/7 and Congress is under pressure re-open older, smaller, mothballed plants. The Lake City plant can produce over a billion cartridges (mostly various types of 5.56mm ammo) a year, so why the shortages? A large part of it has to do with troops getting ready for duty in Iraq. This involves a lot of infantry training, and that requires a lot of blank 5.56mm ammunition. There was apparently a lack of coordination between the people in the Pentagon deciding to greatly expand infantry training, but no one told the Joint Munitions Command so that production of munitions used in training could be increased. This sort of thing was not a problem during the Cold War, when there were always large "war reserve stocks" of ammunition. This was necessary because the main threat was the Warsaw Pact (the Soviet Union and it's East European allies) that threatened to invade Western Europe. A war there would last a while and require huge quantities of ammo to keep the troops supplied while munitions plants increased production. So thousands of tons of ammunition was always kept in stockpiles. But this ammo would degrade with age. Thus every year there were large quantities of "use it or lose it" ammo reaching the point where you either fired it off or recycled it. Once the Cold War ended, so did the need for the large war reserve stocks of ammo. Billions of dollars a year could be saved by sharply reducing the war reserve stocks, and that was what happened. Unfortunately, there were some miscalculations in doing that, and there have been periodic shortages of 5.56mm ammo over the last few years. No one at the Pentagon will give a straight answer as to why this is happening, but whatever planning system they are using, it needs a little tweaking.