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Design in an Era of Constrained Resources


As global competition for materials strains the supply chain, companies must know where a shortage can hurt and then plan around it.
By Steven J. Duclos, Jeffrey P. Otto, and Douglas G. Konitzer

The rapid development of much of the world is turning agricultural economies into manufacturing centers. People born on unmechanized farms are moving to cities in pursuit of higher-paying jobs. Many developing countries are getting a first taste of prosperity.

The spread of prosperity, however, has its unintended consequences. The growing economies of the world are competing for a bigger share of the world’s material resources. That increased demand can put a strain on the supply chain, and make various commodities scarcer, or more costly, for everyone. (Among the articles published in recent years that have discussed the increasing constraints on the availability of certain raw materials was one in the June issue of Mechanical Engineering, “The Era of Insufficient Plenty” by John G. Voeller.)

This phenomenon will drive manufacturers to develop products that use materials more efficiently and to consider the recovery of those materials at the end of the product’s useful life. Design practices for products will need to incorporate the worldwide sustainability of materials. Advancements in material science will be required to design materials that minimize the use of elements that are not sustainable, without losing the properties that enable product integrity.

The first step in this direction is to identify the materials at risk of supply constraints or price increases, and the second step is to take actions that can minimize the risk. General Electric has developed a process to quantitatively understand what materials are at risk and has identified steps that can be taken to minimize the risks.



GE’s method of assessing materials risks is based on a methodology developed by the National Research Council. This methodology seeks to quantitatively determine the demand and price risk, as well as the impact of a supply restriction. Each element is plotted on a criticality matrix. Elements with a relatively high score in both categories are identified as elements that require further attention. There are several approaches to reduce these risks, ranging from development of new sources to elimination of the element by the use of alternate materials.

As a diversified manufacturing company, GE uses at least 70 of the first 82 elements on the periodic table. Assessing the risks for all of these elements was determined to be impractical in a reasonable timeframe. A subset of these elements was selected based on the total value of the annual purchase of each element. The annual value, Ve, of each element, e, was determined by

Design in an Era - Equation




where pe is the spot price of the element at the time of the study, Design in an Era - Symbol(e,s) is the fraction of the mass of subsystem, s, that is composed of element, e, and md(e) is the total direct buy of the element, e; s is summed over all vendor-provided subsystems that make up GE products. The raw materials in the subsystems directly produced by the company are captured in md(e). Estimates were made of the elemental composition of those subsystems where the actual composition was unknown. 

A pareto of Ve (ranking the elements from high to low value as given in the equation) was created and the top 24 elements in terms of annual purchase were determined. Of these 24 elements 11 were selected for further detailed risk study. This downselection allowed the study to focus primarily on minor metals, particularly those non-commodity elements that can have significant price deviations due to constrained supply.

Then we evaluated the different types of specific risks—the sub-risks—that the company faces in connection with each of the 11 elements. The sub-risks are defined as follows:

GE’s percent of world supply: The annual mass of the material used by GE is divided by the annual mass that is refined worldwide. The value of X in Table 1 is chosen such that two or three of the elements receive a “Very High” score.

Impact on GE’s revenue: This is the sum, over the products containing the element, of revenue that would be lost if the element was unavailable and the company was unable to make the products.

GE’s ability to substitute: This is an assessment of the company’s ability to replace an unavailable element with an alternate material. If no immediate substitute is available this also assesses the perceived difficulty and time scale of developing a substitute.

Ability to pass through cost increases: Competition or other considerations can make it difficult for the company to pass cost increases through to customers. A “Very High” rating indicates that sale prices are essentially fixed and GE would have to absorb any cost increases; a “Very Low” rating indicates that GE sale prices contractually adjust to changes in material costs.

Each sub-risk is given an integer value from 1 for very low risk to 5 for very high risk. The overall impact of a supply restriction on GE is determined for each element as an average of the four sub-risks.

Similarly, we look at supply and price risk, which are broken down into sub-risks. These sub-risks are defined as:

Abundance in Earth’s crust: As a measure of the rarity of the element, this is the average concentration of the element in the earth’s crust as determined by the U.S. Geological Survey.

Sourcing and geopolitical risk: An assessment of risks in obtaining the element based on how geographically concentrated the sources of the element are. If few countries mine the material, or if the countries that do are politically unstable, then this risk will be high.

Co-production risk: Many elements are produced only as by-products of the refining of other elements. If the need for the co-produced element rises while the need for the primary element does not, then this will normally put constraints on the co-produced element. This risk can also be elevated if environmental concerns put the extraction process in jeopardy.

Demand risk: The assessment of future increases or decreases in the demand of the element is based on new applications that use the element.

Historic price volatility: This quantitative assessment looks at the price volatility over the previous five-year period.

Market substitutability: An assessment of the availability of substitutes for the element in key uses outside of GE. If it is deemed relatively easy for the usage of the element in non-GE products to be substituted by other materials, then this sub-risk is low. (The assessment of GE’s ability to substitute is part of the “Impact of an Element Restriction on GE.”)

Each sub-risk is given an integer value from 1 for very low risk to 5 for very high risk. The overall supply and price risk is determined for each element as an average of the six sub-risks.

Design in an Era - Table 1: Impact of an Element Restriction on GE



We turn these data into a visual tool, the criticality diagram, which enables an assessment of relative risks of each analyzed element.

The criticality diagram is constructed by plotting the “Impact of an Element Restriction on GE” versus the “Supply and Price Risk.” The Criticality Diagram for GE in 2008 is shown in Figure 1. Each circle in the diagram represents one of the selected 11 elements that had the highest Ve. The area of the circle is proportional to Ve for the given element.

The elements shaded in orange were determined as needing further development of risk-mitigation plans. The identification of the actual elements is proprietary to GE, except for one element, rhenium, which is identified in Figure 1. Re is used in superalloys, primarily in GE’s high efficiency turbine engines.

Design in an Era - Table 2: Supply and Price Risk



Elements that are determined to be high both in impact to the company and in supply and price risk require a plan either to stabilize their supply or to minimize their usage. Generally there are several approaches to accomplishing this, ranging from shorter-term sourcing options to longer-term material substitutions. In our experience often more than one approach can be applied to minimize risks. Each element, and each use of that element, requires its own assessment of the optimum set of approaches.

Among the sourcing options are improvements in the global supply chain including the development of alternate sources, long-term supply agreements with material suppliers, and development of an internal inventory of the material. Building up an inventory can be a strategic short-term solution, but it generally needs to be accompanied by other approaches to ensure a long-term supply.

Design in an Era - Figure 1: The 2008 GE Criticality Diagram

A second solution is to improve material utilization in manufacturing and reduce manufacturing waste. Manufacturing processes designed at a time when the material supply was not constrained are likely not to be as efficient in minimizing waste and yield loss as they could be. For materials that are sensitive to contamination this can include the dedication of tooling to work on only one material in order to ensure that the waste stream remains uncontaminated. Lean manufacturing processes can also be introduced to minimize the usage of material. These options drive redesign not only of the manufacturing processes, but also of the products themselves to ensure that no more of the critical material is used than is absolutely necessary.

A third solution is to develop recycling technologies that extract at-risk elements from both end-of-life products and manufacturing yield loss. This includes the design of products that are more easily recycled, for example by designing easier disassembly into individual parts. Also in this category is the design of systems that can be serviced in order to extend the useful life of a product, which will have direct positive impact on the amount of materials used in manufacture.

Fourth, component materials and system technologies can be developed that either greatly reduce the use of the at-risk element or eliminate the need for the element altogether. Understanding of the engineering behind the design of a material used in a product can often lead to avenues to reduce its usage.

Design in an Era - The CFM56

The CFM56, built by CFM International, a joint venture of GE and Snecma
of France, has been called “the workhorse of the aviation fleet.”

Rare metals tend to be more expensive and therefore tend to be used only when the product requires the specific properties afforded by the element. However, material design trade-offs made at a time when a material is plentiful, and relatively inexpensive, may need to be revisited when the material supply becomes constrained.

Often another element or composition can supply the necessary properties, particularly when design modifications to the complete system are also considered to enable alternate material choices.

A final approach is to reassess the entire system. Often, more than one technology can address a customer’s need, and each will use a different subset of the periodic table. The solution to the material constraint may involve using a new or alternate technology. A good example of such a solution is happening now as lighting technology moves from fluorescent lamps that use considerable quantities of rare earth materials to light-emitting diodes that use one-seventieth as much rare earth material.



GE recently encountered a real-world case in which the company had to apply these solutions because of a perceived shortage of rhenium. Re is found and mined in association with copper, and the amount of Re that is mined depends to an extent on the market for Cu.

Re is primarily used as a strengthener for superalloys, which are used in a variety of applications, including turbine engines. Therefore a shortage of Re could have a direct impact on the ability to produce and deliver turbine engines.

We considered various approaches taken to reduce Re usage. (They are summarized in Table 3.) They involved reverting casting waste, recovering Re from grinding chips, recycling the material of returned parts, and reducing Re content by using alternate alloys.

These approaches were identified through an audit of sources and sinks for Re in the life cycle of a turbine engine component. Based on this portfolio of actions taken to address the shortage of Re it is feasible to have a closed system for Re. The success of such a closed system will depend on global users of Re participating in the system of recovery and recycling.

Revert is a common foundry practice for many alloys. The gates, runners, and other waste from the alloy casting process are cleaned and used to make subsequent melts of the superalloy. Thus, no development was needed to implement this approach.

Design in an Era - Table 3: Approaches to Reduce Usage of Rhenium

It was found through the usage audit that a significant amount of Re ends up on the shop floor as grinding chips. In the past this material would have been either disposed of or recycled for use in lower-value stainless steel alloys. With the need to use the scarce Re in superalloys it was found to be economical to recover Re from the manufacturing waste. In this case a chemical process was developed to recover the Re to be used as an input to subsequent superalloy master heats.

Recycling of field returned parts is being done between GE and users of the superalloys. When superalloy parts end their useable life, they are returned to the melt shop, cleaned, and used in master heats, similar to revert.

To reduce the usage of rhenium, GE also undertook a significant program to develop new superalloys with reduced amounts of the element. The requirements for the program were to produce the same properties as current alloys that are used, but at lower Re content.

Based on GE’s background and experience with development of superalloys two new alloys were designed, which reduce the Re content significantly. These alloys were run through a rigorous test plan including mechanical property testing, component testing, manufacturing trials, and engine testing to verify equivalence to current alloys in the engine system. These alloys are successfully operating in turbine engines.

As competition for the world’s resources increases in the future, it is critical for material users to determine what changes in design and materials will allow for continued growth. This starts with an assessment, as outlined above, of where the risks are. This is followed by a response that encompasses sourcing, manufacturing, and engineering. The Re example we present here demonstrates that such a response can be successful.


Design in an Era -

The implications of increasing demand for commodities in the developing world have been studied by a number of authors, including:

• John G. Voeller, “The Era of Insufficient Plenty,” Mechanical Engineering, June 2010.

• David Cohen, “Earth’s Natural Wealth: An Audit,” New Scientist, May 23, 2007.

• Stephen K. Ritter, “Future of Metals,” Chemical & Engineering News, June 8, 2009.

• The National Research Council published its risk assessment methodology in Minerals, Critical Minerals, and the U.S. Economy, The National Academies Press, (2007, Washington, D.C.).

Steven J. Duclos is chief scientist, manager–material sustainability at GE Global Research in Niskayuna, N.Y. Jeffrey P. Otto is director, GE Corporate Initiatives Group in Fairfield, Conn. Douglas G. Konitzer is manager, air foil materials and process engineering, at GE Aviation in Cincinnati.

The shortage of an element on the world market can have a serious effect on a company. GE examines each element of interest according to four sub-risks. Assigning a value of 1 for very low risk and 5 for very high, overall risk is an average of the four sub-risks.

Everything from an element’s availability in nature to national politics influences the supply chain. By analyzing key risks that can affect the supply of an element, GE predicts the likelihood of future shortages so it can prepare for them.

Seven elements, only one of which is identified here, were slated by GE for further development planning.


Re is a strengthener of superalloys used in a variety of applications, including components of gas turbine.



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