The materials supply risk: digging deeper - seeking an accurate picture of demand
Manufacturers could be underestimating their products’ dependence on so-called critical raw materials. Researchers from Rolls-Royce Plc, materials IT company Granta Design, and sustainability consultancy Oakdene Hollins, all UK, reveal how a new project is taking a rational approach for more accurate results.
There has been much discussion in recent years about the supply of certain ‘critical’ raw materials. These discussions have mostly focused on the supply of elements, including rare earths such as neodymium, as well as biotic resources such as timber or palm oil. The 2010 report Critical Raw Materials for the EU highlighted 14 elements (EU14) considered both economically significant to the EU and with a perceived elevated risk of supply disruption. Various other lists have subsequently been produced, reflecting the use of alternative metrics or the application of different materials within different industrial sectors or economic regions.
Concern has grown in some circles that these lists are becoming de-facto resources for risk-assessment at the business level, and that their use in this way might inadvertently lead to false negatives regarding a product’s dependence on materials that are susceptible to supply disruption. This is particularly likely where technical requirements fulfilled by a material are particular to smaller volume, higher value applications. Aerospace components, for instance, are typically manufactured in comparatively low volumes, but nevertheless underpin a significant economic capability.
Part of the problem is that manufactured parts, assemblies and products comprise many materials, each of which contain multiple elements in varying proportions. As if it wasn’t hard enough to simply assess which elements are in a product, the relative proportions of each element have a significant impact, especially when considering the effects of price volatility. A rapid means of assessing critical material risks at both a product and a business level has been sorely missing.
A recent project led by Rolls-Royce and funded by the TSB has sought to address this requirement. Entitled Strategic Affordable Manufacturing in the UK with Leading Environmental Technologies (SAMULET), the project is taking a rational approach to the risks represented by critical materials.
Partnering with materials information technology specialist Granta Design, headquartered in Cambridge, UK, the risks associated with 65 elements have been mapped across a number of well recognised metrics – including crustal abundance, monopoly of supply, geopolitical risk, environmental country risk, price volatility/ variation and conflict minerals.
Based on the elemental composition in each alloy, the risks associated with these elements are mapped to the 1,800plus alloys stored in Granta’s MaterialUniverse database. Reports can be generated from a bill of materials for a part, product, or assembly, listing each of the elements contained and the level of each risk category. Similar reports exist for other significant business drivers, such as restricted substances, energy and CO2. Other tools enable alternative materials to be identified based on performance requirements, factoring in the desire to minimise specific risk categories.
Consider CMSX-4, a nickel-base superalloy used by a wide range of aero-engine manufacturers for components such as turbine vanes and blades. Taking the EU14 as a definitive list, the primary concerns with this alloy are represented by cobalt, tungsten and tantalum, each of which represents 6–10% of the composition by mass (see graph, below).
However, the picture is very different when looking at the five-year price variation for each element and scaling for composition. Although rhenium comprises only 3% by composition, it also represents the biggest risk for the alloy as a whole in terms of price variation, accounting for more than 80% of the compositional price variation. Nickel and tantalum comprise the bulk of the remaining 20%. According to the EU14, rhenium and nickel both have comparatively low supply risks. Without using this metric individually and factoring for the alloy’s composition, the true risk of the superalloy would be underrepresented.
Looking at the geopolitical risk for the elements of CMSX-4 (see graph below right), tungsten and cobalt appear to represent the most significant risks. Their supply is dominated by the Democratic Republic of Congo (53% of cobalt) and China (85% of tungsten). In this context the risk for tantalum is lower than molybdenum or chromium (which are not in the EU14). However, tantalum and tungsten are both conflict minerals, and so there is the potential for legislative risk and additional administrative burdens from the use of these elements. As a result, the business response for tantalum is likely to be different.
There are several approaches to mitigating the risks associated with critical materials identified in the product supply chain (see chart opposite top). Of these, increased data collection or trade agreements are best suited to trade associations, governments or international organisations (such as metal study groups). Individual companies can either:
- modify procurement policies
- vertically integrate by taking a sufficient shareholding in mining and refining operations to influence supply behaviour
- increase resource efficiency actions
- substitute the material in question
Material substitution requires significant engineering knowledge and may also mean departure from long established technologies. Consider again the example of CMSX-4. Its excellent creep strength and good thermal barrier coating installation life bring with it a high cost, meaning it is reserved for demanding operating environments. Unfortunately, the alloy additions that provide such high performance are also those that pose a supply risk. As such, while Granta’s substitution tool reveals some potential alternatives, these also all contain cobalt, tungsten, tantalum or rhenium.
This leaves three options for substitution:
- reduce turbine operating temperature to enable the use of lower-performance alloys, possibly negating the need for the highlighted alloying elements (although lower operating temperatures generally mean lower performance and reduced fuel efficiency)
- improve the installation life of thermal barrier coatings on lower performance alloy
- develop a new turbine blade material that does not use cobalt, tungsten, tantalum or rhenium, by substituting individual alloying elements
Lack of readily available substitutes is a common problem with high reliability, high technology products. However, substitution is a tactical (and therefore limited) response to supply risks. The main benefit of such an assessment of material supply risks is the identification of broader strategic responses, such as securing supply and resource efficiency.
Several advanced engineering companies have recently moved to secure their supply of critical materials by purchasing mining rights, some even exchanging core know-how in the process. However, this strategy only works for large organisations with significant investment capital. For smaller companies that cannot afford to buy mining rights, risks can be reduced by additional financial commitments – for example, higher stock levels, carrying a reserve stockpile of material, or long-term contracts with suppliers. These may have to include take-or-pay clauses, where a company secures supply at the expense of flexibility.
Increased recycling of critical materials is the strategy that is normally adopted. The whole supply chain may need addressing, from recycling swarfs and postindustrial wastes during manufacture to collection at end of life. Challenges include segregation of different alloy types from machining, so that minor alloy additives (often the critical materials) are not lost by dissipation into general scrap metal collection.
The component may need tracking through its use phase, so that compositional knowledge is retained to end of life. Even then, identification, reverse logistics and disassembly are needed for efficient recycling.
Rolls-Royce has applied this strategy with CMSX-4 and other high-value alloys. Its internal recycling programme, Revert, allows for collection of waste alloys across the value chain, returning them to the material supplier for reuse in aerospace products.
Resource efficiency can also be achieved by minimising either the amount of critical material used in the component or the size of the end component itself. Additive manufacturing is one possible means of delivering such reductions, and has been the subject of a number of recent and ongoing research projects.
Lastly, product life extension strategies such as re-manufacturing can be adopted to keep the same material in circulation and in use for longer. A 2011 report by Oakdene Hollins for the European Pathway to Zero Waste (EPOW) identified the use of this strategy in a number of key industrial sectors, which are described in the table below.
The SAMULET study into the materials supply risk has revealed it to be a multifaceted problem. While there is normally a range of options available to minimise these risks, the most important elements of material supply risk management is to conduct assessments as soon as data levels permit, and to consider the broader strategic response to the risks.
This feature was co-authored by Dr James Goddin and Dr Jamie O’Hare of Granta Design, UK, Dr Andrew Clifton from Rolls-Royce, UK, and Nick Morley of Oakdene Hollins, UK. For further information on the SAMULET study, email James Goddin, James.Goddin@grantadesign.com