Businesses must plan carefully to avoid the impacts of future disruption in the supply of Technology Metals & Critical Materials

University of Birmingham

This blog post has been produced for the Greater Birmingham and Coventry and Warwickshire Chambers of Commerce as part of the 2021 Sustainable Business Series: Net Zero campaign.

The Sustainable Business Series: Net Zero is the Chamber’s first campaign on environmental sustainability, which aims to share best practice, guidance and knowledge to increase business progress to net zero. In 2021, this involves 5 free online webinars taking place from the end of September and throughout October along with publishing thought leadership podcasts, videos and blog content. The campaign will feature a Sustainability Summit on 3rd November

Thanks to our Headline Sponsors – Aston University, Arup, Morgan Sindall and the University of Birmingham - all webinars and the Summit are free to attend. Interested parties can find out more and register to attend Sustainable Business Series: Net Zero events here, and the Sustainable Business Summit here.

In the past couple of years, we have witnessed all manner of unprecedented challenges to supply chains, that have tested the resilience of firms, big and small across the nation.

The timing could not have been worse: There has been a perfect storm at the confluence of the many unprecedented challenges that have resulted from the Coronavirus pandemic - just at the moment that firms were trying to adapt to the many supply chain challenges that were anticipated in the wake of the Brexit referendum.

The frustrations have been compounded as they have been combined with labour market and logistics challenges that have posed wicked problems for firms across diverse sectors from agriculture to the automotive industry.

The effects of this disruption have been inescapable for most businesses. Whether it be the shortage of construction materials, microchips or beer the challenges are widespread and manifold.

These interlinked crises have highlighted the importance of supply chain availability to businesses in every sector. Some challenges are beyond our control, but others can be managed through planning and policy.

Whilst firms are preoccupied with the immediate challenges of the here-and-now, the interruption to the status quo has given managers compelling reasons to carefully consider future challenges that could similarly disrupt their endeavours.

Climate change and the need to curb greenhouse gas emissions is high on the political agenda. With COP26 fast approaching, combined with a summer of the impacts are being felt, and the need for solutions is pressing.

Many of the technologies that will enable decarbonisation are reliant on technology critical metals. To give an example: Rare earth magnets are used inefficient motors and generators. These can be found in applications as diverse as off-shore wind turbines, electric vehicles, efficient pumps and power tools. Lithium-ion batteries are another technology that is similarly ubiquitous and find their way into technology products used in every sphere of business.

It is anticipated that given the enormous global demand, and constraints on supply because of bottlenecks in supply chain development, there could be future challenges with technology critical metals and critical materials availability.

At the University of Birmingham, we foresaw that UK policy around Technology Critical Metals would need to evolve rapidly post-Brexit. Hitherto, our critical materials policy had been considered as part of the larger EU-bloc, however, on leaving the EU, with the inevitable changes to policy, trading relationships  and legislation, it was essential that the UK had leadership in this area. This is essential in order to retain access to the materials that will be key to our future competitive advantage as globally there is a scramble to secure access to these materials.

At the University of Birmingham, we set up the Birmingham Centre for Strategic Elements & Critical Materials to address some of these challenges, and the Centre has recently delivered a policy commission, chaired by Sir John Beddington “Securing Technology Critical Metals for Britain”.

What are the take-home messages for managers and businesses?

To mitigate the impact of materials criticality on businesses, the following approaches may be helpful:

Reduction: Reducing the need for Critical materials and Technology Critical Metals by redesigning products, businesses and services. There are business model approaches like “dematerialisation” and “product service systems” that can reduce the need for as many physical goods to achieve the same service objective.

Substitution: Substituting critical materials in products for other technologies that employ non critical materials (however, there may be a performance trade off).

Reuse and Recycling: Finding innovative ways to reuse and repurpose existing technologies that contain critical materials and recycling them at the end of their lives. [For example Lithium Ion Batteries] Designing products that use secondary recycled materials may help mitigate against

Business must also anticipate that as this issue is currently being actively considered by policy makers, future regulation in this area may also impact businesses.