10 Steps to Identify and Prevent Resource Scarcity

Feb. 14, 2012
The threat of metals shortages is putting manufacturing supply chains at risk.

More than three-quarters (77%) of manufacturers consider minerals and metals scarcity as a serious supply chain risk to their businesses, according to a recent study conducted by PricewaterhouseCoopers. What's more, these manufacturers believe that only 39% of their customers share their concern.

"New business models will be fundamental to the ability to respond appropriately to the risks and opportunities posed by the scarcity of minerals and metals," notes Malcom Preston, PwC's global sustainability leader. Metals on the "critical" list include beryllium, cobalt, tantalum, fluorspar and lithium. PwC offers the following checklist for manufacturers to avoid disruptions to their supply chains due to the scarcity of resources:

  1. Develop a set of leading risk indicators that is forward-looking and based on continuous monitoring and analysis of critical resources.
  2. Recognize all the different types of risk -- physical, economic and geopolitical -- that can affect your supply chain and product portfolio.
  3. Match risks with appropriate remedial measures, such as inventory safety stock, dual sourcing and substitution of resources at risk.
  4. Have effective systems across your supply chain to identify and act on early-warning signs.
  5. Consult with your suppliers and customers to investigate new business models to reduce resource scarcity risks.
  6. Find opportunities within your industry sector to take an integrated, sustainable approach to your supply chain.
  7. Identify and promote the sustainability value of your products, and feed this back into product development.
  8. Put modern process control systems in place to manage production in ways that reduce or eliminate waste and ensure minimal use of scarce resources.
  9. Evaluate initiatives such as extending product life, take-back programs and extended product responsibility to reinforce customer relationships.
  10. Develop effective lifecycle assessment and cradle-to-cradle strategies to minimize harmful impact and maximize benefits for any production process.

See Also:
Raw Material Risks

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