Material Criticality Assessment as a Supply Chain Risk Management Tool

Lamia Mouloudi and Karine Evrard Samuel ()
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Lamia Mouloudi: UGA - Université Grenoble Alpes, CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes
Karine Evrard Samuel: UGA - Université Grenoble Alpes, Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes

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Abstract: Supply chains of companies evolves in a complex, hostile, dynamic and uncertain environment, which generates several undesirable events that may disturb or interrupt the flows of materials and information. Thus, to ensure the continuity of their flows, companies implement supply chain risk management (SCRM) approaches, that includes risk identification, risk evaluation and risk mitigation. These approaches define a clear framework to reduce vulnerability towards risks and globally increase supply chain resilience. However, the implementation of SCRM and the effectiveness of risks mitigation hugely depend on the types of risks considered, which are strongly linked to the company's context and the visibility in its supply chain. In this paper, we assume that material criticality assessment could be integrated into SCRM as a new tool to consider supply risks linked to the growing scarcity of certain raw materials. Material criticality assessment is a method used to identify materials that may become difficult to obtain for several reasons. We particularly consider the access to all materials necessary to achieve digital and energetics transitions. Indeed, by increased utilization of digital communication technologies and deployment of clean energy to meet environmental considerations, the consumption of certain elements, for example some metals like gold or platinum, or rare earths needed has increased drastically for the last twenty years, and the supply is becoming more and more uncertain if the rhythm of consumption stays at the same level. The availability of some elements is more and more uncertain and generates high probability of supply disruptions due to geopolitical, economic, and/or technical factors. For these reasons, critical materials are as a source of vulnerability to supply chains and their identification is an issue as this source of risk is not considered yet as a key element of SCRM. The purpose of this paper is to establish the relationship between these two concepts, material criticality assessment and supply chain risk management, in order to integrate material criticality as a new tool for SCRM. Based on a literature review on material criticality assessment and SCRM, we highlight the absence of structured SCRM and the lack of consideration of critical materials in current practices.

Keywords: Raw material; Criticality; Supply Chain Risk Management; Resilience (search for similar items in EconPapers)
Date: 2020-10-07
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Published in 13èmes Rencontres de l'Association Internationale de Recherche en Logistique et Supply Chain Management, AIRL-SCM, Oct 2020, Le Havre, France

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04516312

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