Development of a configurable system that evaluates the materials criticality at a corporate level

Abstract: The use of different materials is a central part of our development, especially in the electronics industry since it is dependent on materials such as gold, silver and copper etc. to achieve the required performance. The material consumption is increasing, while material production is limited to a few countries. Industries and companies that consume unusual or large amounts of material are most exposed to this problem. Therefore it is important for companies to be able to identify their critical materials. There is a lack of systems that can identify different materials criticality at a company level. This report proposes a system that can identify critical materials at a company level, regardless of the company's industry and size. By combining a literature study with a case study in a leading electronic company, a system that identifies materials criticality at a company level was developed. The theoretical study consisted of a comparison between three existing systems for evaluating critical materials, combined with a qualitative study, interviews, that were conducted at the electronic company Ericsson. The developed system evaluates a material's criticality based on two parameters; supply risk and corporate importance. Each parameter includes several categories and indicators that measure the materials criticality. By testing the system on Ericsson's most important and used materials such as; Al, Au, Ag, Cu, etc., it was found that the company do not have any critical materials. The developed systems corporate importance part is configurable, which makes it company-specific. It is up each company to customize it for their own business and situation. The case study also showed that a nation´s critical material doesn’t necessarily need to be company critical just because the company operates within the nation, it mainly depend on the material usage. Companies that manufacture end products so called OEMs in the electronics industry don’t usually buy materials directly from the mine, but components containing these materials. This makes it difficult for OEMs to trace the material origin. Apart from the material production concentration that is limited to a few countries, the knowledge of how to manufacture certain components may also be limited, by being concentrated in few countries. This factor makes the OEMs to become more dependent on certain suppliers, which can affect the business.