Rochester Institute of Technology RIT Scholar Works Theses 12-12-2019 A Framework for Firm-Level Critical Material Supply Management and Mitigation Gillian A. Griffin [email protected] Follow this and additional works at: https://scholarworks.rit.edu/theses Recommended Citation Griffin, Gillian A.,A " Framework for Firm-Level Critical Material Supply Management and Mitigation" (2019). Thesis. Rochester Institute of Technology. Accessed from This Thesis is brought to you for free and open access by RIT Scholar Works. It has been accepted for inclusion in Theses by an authorized administrator of RIT Scholar Works. For more information, please contact [email protected]. A Framework for Firm-Level Critical Material Supply Management and Mitigation by Gillian A. Griffin A THESIS Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Science in Sustainable Systems Department of Sustainability Golisano Institute for Sustainability Rochester Institute of Technology December 12, 2019 Committee Approval: Dr. Thomas A. Trabold Date Associate Professor and Department Head, Sustainability Dr. Gabrielle Gaustad Date Research Faculty, Golisano Institute for Sustainability Advisor and Committee Chair Dr. Callie Babbitt Date Associate Professor, Sustainability Committee Member Dr. Jennifer L. Schneider Date Professor, College of Applied Science and Technology Committee Member Table of Contents Table of Contents .......................................................................................................................... 3 Abstract ........................................................................................................................................... i Acknowledgments ......................................................................................................................... ii Table of Figures............................................................................................................................ iii Table of Tables .............................................................................................................................. v Chapter 1 - Introduction .............................................................................................................. 6 1.1. Background ..................................................................................................................... 6 1.2. Research Objectives ...................................................................................................... 10 2. Chapter 2 – Methodology ................................................................................................... 10 2.1. Methods......................................................................................................................... 10 2.2. Literature Review.......................................................................................................... 11 2.3. Exploratory Case Study ................................................................................................ 15 2.4. Analysis of Existing Firm-Level Frameworks .............................................................. 18 2.5. Internal Indicators for Firm-Level Risk Assessment and Mitigation ........................... 19 2.6. Developing a Novel Framework ................................................................................... 19 2.7. Data ............................................................................................................................... 20 Chapter 3 - Results.............................................................................................................. 21 3.1. Aviation Case Study ..................................................................................................... 22 3.2. Controlled Environment Agriculture ............................................................................ 26 3.3. Firm Response: Supply Disruption Profile ................................................................... 33 3.4. The Bullwhip Effect ...................................................................................................... 37 3.5. Firm-Level Indicators and Criticality Assessment Framework for Firms .................... 40 3.6. The Role of the Organization ........................................................................................ 48 Conclusions .......................................................................................................................... 51 4.1. Recommendations for Future Research ........................................................................ 54 Appendix A .................................................................................................................................. 56 5.1. Cobalt Criticality ........................................................................................................... 56 Appendix B .................................................................................................................................. 58 6.1. Criticality Assessment Literature Summary ................................................................. 58 6.2. Regulatory and Compliance Indicators ......................................................................... 60 6.4. Example Firm-Level Scorecard .................................................................................... 65 Appendix C .................................................................................................................................. 66 7.1. CEA Methodology Supplemental Information ............................................................. 66 7.2. Determining Critical Material Intensity of Horticultural Lighting Technologies ........ 71 7.3. Mass and Cost of Critical Materials by Lighting Technology ...................................... 72 Appendix D .................................................................................................................................. 73 8.1. Price Volatility and Firm Performance ......................................................................... 73 References .................................................................................................................................... 81 Data Sources ................................................................................................................................ 89 Abstract Organizations of all sizes are vulnerable to critical material supply disruptions. Although there is a significant body of literature that examines how large entities such as nations and governments can assess and mitigate criticality, there is very little work that addresses firm-level criticality in a way that is actionable for businesses. This work uses literature review and case study analysis to understand the impact of critical material supply risk at the firm level, and to determine salient internal indicators. A total of 42 criticality studies were reviewed and the findings were used to develop a framework to assess and monitor criticality risk using internal firm-specific data. The framework incorporates three categories of risk including product concept viability, production, and profitability. It also contains four key business functions including finance, procurement, marketing, and production. These aspects were chosen because they are relevant to all businesses that produce and sell manufactured goods, and because they represent dynamics that are within the control of an individual firm. Unlike the global and national level indicators emphasized in most current research, the indicators proposed in this research are derived from data such that firms can compile it with reasonable ease. Finally, this work considers the role of the organization in criticality risk assessment and mitigation through an examination of the data needed to complete the aforementioned framework and the likely sources of that information. The findings of this analysis elucidate the gap between internal and external and micro and macro criticality assessment, as well as provide a framework for firm- level criticality mitigation. i Acknowledgments I would like to express my sincere gratitude to my advisor, Dr. Gabrielle Gaustad, for her continuous insight, support, and confidence during my tenure as a student in the M.S. program in Sustainable Systems at the Golisano Institute for Sustainability at the Rochester Institute of Technology. Dr. Gaustad’s guidance and encouragement allowed me to venture into challenging new areas of research which substantially broadened my understanding of sustainability, and inspired me to keep exploring realms previously unknown to me. I would also like to acknowledge the valuable expertise and feedback provided by Dr. Callie Babbitt in the context of sustainable food-energy-water systems. Further appreciation goes to Dr. Jennifer Schneider for her valuable inputs on the use of metrics and indicators in corporate decision making. Finally, I would like to acknowledge funding from the United States National Science Foundation (NSF), through CBET award #1454166 and support from the Center of Excellence in Advanced and Sustainable Manufacturing at the Rochester Institute of Technology which is supported through the New York State Department of Economic Development (DED). ii Table of Figures Figure 3.1.1. Price Volatility of Rhenium, 1975 – 2017 (Polyak 2017, Polyak 2018)…………..24 Figure 3.1.2. Unit Cost of Rhenium per Trent XWB Engine vs. 2017 Gross Margin