Headline-grabbing stories about potential shortages of rare earth elements have certainly raised awareness about the reliance of modern technologies on certain materials. But how well do companies really understand the issues surrounding materials supply? According to a 2011 PWC report, 80% of senior executives from global manufacturing companies cite mineral and metals scarcity as a pressing issue. For certain businesses, for example car manufacturers, the rising costs the raw materials needed to produce their product has forced them to tackle the issue straight on. Many car manufacturers have research and development programs aiming to reduce or eliminate the use of particular elements in their future designs.
But not all companies purchase raw materials directly and, for those businesses, realising the potential risks posed by material security can be more difficult. The ‘criticality’ may be embedded in components, fully assembled products or even processes. Take the example of a mobile phone, which contains an astonishing array of elements. Assessing the potential risk is complex and requires consideration of numerous factors such as options for recycling, alternative suppliers, alternative technologies and consideration of the quantities involved.
Whilst important for a business to assess whether any future supply disruptions could affect business, there is a flip side. Supply shortages or high prices will drive businesses to seek alternatives and this will present be global market opportunities for innovative solution providers, particularly when entirely new technologies emerge.