Project Vault is changing how the U.S. approaches critical minerals. In this Supply Chain Byte, Lisa Anderson explains Project Vault, the Strategic Critical Minerals Initiative focused on creating stockpiles and preferred trade zones. She also outlines what manufacturers should be thinking about now—from evaluating their end-to-end supply chain to considering strategic stockpiles, capacity planning and stronger strategic partnerships to support long-term success.
Critical minerals are of paramount importance for almost everything including artificial intelligence. Since electronic components dominate products in today’s supply chain with items from phone to medical devices and car technology components to aerospace and defense, it is essential to ensure a continued supply. China has dominated this industry with 60% of the rare earth mining operations and 90% of processing capacity. Thus, the U.S. decided to create a strategic stockpile of rare earth minerals, similar to the strategic petroleum stockpile. Project Vault will combine public loans through EXIM bank and private funding of more than twelve companies (and growing) to create a stockpile of the critically important minerals. For example, there are 42 minerals imported for high-tech and 13 where the U.S. is largely import reliant. Project Vault is also focused on creating a preferential trade zone of allied nations.
What should manufacturers be thinking and taking away? Evaluate your end-to-end supply chain and assess your critical and/or strategic materials, components, and/or products. Consider building a strategic stockpile (increasing inventory positioned throughout your network), ensuring you can ramp up capacity as needed to support growth (if you can produce upon demand, you don’t need to store as much), and/or you partner with strategic suppliers to support your needs rapidly. Larger companies might consider vertical integration to the degree that it makes sense and/or alliance partners. The bottom line is that you must proactively plan for your growth and stay ahead of changing conditions with the ability to scale up, down, reallocate and/or pivot quickly based upon predictive models and a SIOP (Sales Inventory Operations Planning) process.
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