MIT CTL WHITE PAPER TRANSFORMING THE FUTURE OF SUPPLY CHAINS THROUGH DISRUPTIVE...

MIT Center for Transportation & Logistics

MIT CTL WHITE PAPER

TRANSFORMING THE FUTURE OF SUPPLY CHAINS THROUGH DISRUPTIVE INNOVATIONMATERIALS SCIENCE

BY KEN COTTRILLGLOBAL COMMUNICATIONS CONSULTANTMIT CENTER FOR TRANSPORTATION & LOGISTICS

SPRING 2011


CONTENTS

Executive Summary...........................................................................................................................................3 Introduction.............................................................................................................................................................4Building on Breakthroughs.............................................................................................................................5 Mapping the DNA of Materials.......................................................................................................................8 Operations Overlaps.........................................................................................................................................9Seizing the Opportunities............................................................................................................................11Next Steps...........................................................................................................................................................12

TRANSFORMING THE FUTURE OF SUPPLY CHAINS THROUGH DISRUPTIVE INNOVATION: MATERIALS SCIENCE | 2


Executive Summary

Innovations in materials science that have been taking shape in

the laboratory over the last decade will become commercial reali-

ties over the next 10 years. High-performing materials fashioned for

specific applications could radically change the way products are

designed and marketed, and by implication, bring new challenges

and opportunities for supply chain managers.

By harnessing advances in modeling methods and the power of larg-

er computers, researchers have compressed the development cycle

for new materials. They have also honed their ability to engineer the

atomic building blocks of compounds and metals.

The result is a leaner, more precise materials science that has already

delivered real-world solutions such as an environmentally friendly

electroplating process and a low-cost alternative to gold. Addition-

ally, processes that “grow” metals are redefining materials manufac-

turing. As more commercial applications emerge, the potential for

further innovation is limitless.

There is also much potential for change in the operations domain.

The availability of alternatives to commonly used raw materials

could have a deep impact on sourcing and recycling programs. Ma-

terials that offer important supply chain advantages such as lighter

products, a smaller carbon footprint, and lower cost could affect

operational decisions.

Supply chain professionals need to be aware of these developments,

even though they might assume that the materials science field is

tangential at best to their own sphere of influence.

This white paper is part of a series of papers published by the MIT

Center for Transportation & Logistics (MIT CTL), on disruptive tech-

nologies that could reshape supply chains over the next decade.



Traditional foundries conjure images of molten metal and house-sized furnaces. Over the next decade, a new ver-

sion of this classic industrial scene will emerge: a light manu-facturing facility where metals are not cast in cavernous plants, but grown in layers in “clean” conditions one atom at a time. It’s a striking example of the changes we can expect as advances in materials science take root in the commercial world.

In this world, researchers mix and match atoms to produce materi-

als that are tailor-made for certain applications or exhibit special

properties that open up new possibilities for product designers. And

the development cycle for these materials proceeds at warp speed

compared to the conventional R&D regimen.

Customizing compounds and metals to meet commercial demands

is nothing new. “It’s always been the game, mostly because materials

are always needed in many different forms,” says Christopher Schuh,

MIT professor of metallurgy. Commodities such as copper and steel

have to be fashioned into wire and sheet forms, for example. “By

definition you have to be flexible,” Schuh says. What has changed

is that unwieldy and time-consuming practices no longer constrain

innovation in the laboratory.

Non-specialists fail to appreciate just how ponderous conventional

approaches to materials science can be. “On average it can take 18

years to commercialize a new material,” says Gerbrand Ceder, MIT

professor of materials science and engineering.

To demonstrate this point, consider how long it took GLAss REin-

forced Fibre Metal Laminate, commonly known as GLARE, to enter

into commercial service. Fiber metal laminates incorporate metals,

fibers, and matrix resins. Following development work done in the

1980s, GLARE was introduced in 1991 and achieved its first commer-

cial application in the fuselage of the Airbus A380 passenger aircraft.

The first flight of the A380 took place on April 27, 2005.



Until now researchers have been handicapped by a lack of detailed

information on how new molecular configurations will behave.

“A lot of the process is trial and error and there can be dire conse-

quences when you scale up,” Ceder says.

Such a situation could occur if researchers are looking for an alloy

with good energy storage properties, for instance. They identify

a promising candidate and fashion a new compound. But when

production is scaled up for commercial applications, serious flaws

come to light. Perhaps the material is not sufficiently resistant to

corrosion, interacts adversely with other substances, or does not

meet strength criteria.

“You often find these problems when you are way down the devel-

opment chain,” says Ceder. Moreover, it can be difficult to pinpoint

the root causes of the misdirected R&D effort. “When something

goes wrong in the lab, you may not know why; maybe it is not sup-

posed to work or you just did not do it right,” explains Ceder.

Another example from the aerospace industry illustrates the point.

In the late 1960s, British aero engine manufacturer Rolls Royce

developed carbon fiber fan blades that reduced the weight of a

new jet engine. But during tests the company discovered that the

blades shattered when subjected to the kind of impact associated

with bird strikes.

Building on Breakthroughs

Much of the uncertainty that hinders the materials development

process is being eliminated by powerful computers and new soft-

ware tools.

“The modeling we can do in metallurgy these days is very sophis-

ticated,” says Schuh. Bigger computers can now simulate larger



Figure 1. Nano scale representation of a metal

numbers of atoms and hence the behavior of complicated structures.

Inputs to these models are more precise because more is known

about the physics of materials.

To get a glimpse of what can be achieved, consider a nano scale

representation of a metal based on a configuration of only a few

hundred thousand atoms. This minuscule slice of the metal’s atomic

arrangement is repeated countless times in space “to capture the

basic essence of the entire structure of the metal,” explains Schuh.

The atoms are then rearranged into different patterns to assess the

strength and durability of each iteration. “You can use the computer

to tell you what the best structures are, and what the metal should

look like internally,” he says (see figure 1).

Still, even the most elegant atomic arrangement is only a virtual

construct, and production processes that work in the lab might not

be viable in a full-blown commercial operation. The next step is to

scale up. Established manufacturing methods do not make the grade

“when you are trying to sculpt a metal at the level of individual at-

oms,” Schuh notes.

“We have developed processes where we grow metals one layer at a


source: Christopher Schuh


time.” Each layer is deposited “in submilliseconds,” so in a matter of

minutes or hours a sheet of metal is formed. “But you have control at

the level of individual atoms,” he says.

About five years ago, Schuh set up a company called Xtalic in Marl-

borough, MA, to commercialize these innovations. The company is

helping original equipment manufacturers to install and support

these cutting-edge processes. The enterprise also supplies the pre-

cursor chemicals these enterprises need to grow the metals.

The potential commercial applications are immense. A good example

is a nickel-tungsten alloy developed as an alternative to chrome. In

its base state chromium metal is harmless, but as part of electroplat-

ing processes it generates various noxious substances that can be an

environmental nightmare. The multibillion-dollar chromium plating

industry is heavily regulated, and companies have long been on the

lookout for an alternative process. But chrome is also harder than

steel, durable, lustrous, and provides effective protection against

corrosion. At the very least a chrome replacement must match these

qualities.

Schuh’s team identified nanocrystalline nickel as a strong candidate.

However, nickel loses its hardness when the crystals grow from the

nano scale to the micro scale in service conditions, so the researchers

developed a nickel-tungsten alloy that does not suffer from this flaw.

The result is a material that is more environmentally benign than

chromium coatings, and offers improved durability.

A similar approach was used to find an alternative to gold. The elec-

tronics industry uses some $2 billion worth of the precious metal

every year as a coating for connectors, Schuh explains. Gold is ex-

ceptionally conductive and resistant to corrosion. As the cost of gold

has soared, so its use has eroded margins in the industry. Xtalic has

developed a substitute that meets the industry’s performance stan-

dards at lower cost. These are examples of “the idea of having a more

diverse set of materials that can perform a given function,” Schuh

says. He believes that the concept will transform materials science


over the next decade. “This is a coming revolution.”

The revolution will also lead to the emergence of a new generation

of materials. Consider, for example, aluminum with the strength of

steel, a material that has been scientifically demonstrated and is

expected to become available on a mass scale in a few years, accord-

ing to Schuh. The new offering will probably have a cost premium,

but the potential applications are legion for a metal that offers the

strength of steel at about one-third the weight.

There are innumerable supply chain possibilities. An obvious ex-

ample is lower distribution costs owing to lighter products. The

more complex implications include a fundamental reshaping of

operations as product designs are redefined, and more demand for

fast-response supply chains as the availability of innovative materials

accelerates the development of new products.

Mapping the DNA of Materials

Another major advance in the field is the Materials Genome project.

Using high-power computing, the project has created a vast data-

base of the properties of all known inorganic compounds. Sophisti-

cated analytical tools sit on top of the database. Ceder, who leads the

project at MIT, likens it to a database of raw stock market statistics

that researchers can use to generate insightful analyses such as fore-

casting the performance of a stock based on historical data.

The database is deployed at MIT, where Ceder’s team has used it to

develop new materials for lithium battery electrodes. A public ver-

sion, which is being developed in collaboration with the Lawrence

Berkeley National Laboratory in California, is scheduled for release

in the summer of 2011. This version can be accessed on a number

of levels. Materials engineers can use it to research materials with

particular properties, for instance. More sophisticated users “will do

things with the data that we cannot even imagine,” says Ceder.




The detective work that leads to the creation of new materials will be

easier and considerably faster with the benefit of the database’s vo-

luminous memory banks. In addition to identifying compounds with

specific properties, this bottomless store of data gives researchers an

accurate idea of potential side effects, such as how a material might

react with other substances. “We will be able to make more informed

choices. When we set out to make a new material, its properties will

come out close to what we calculated, and that’s important,” Ceder

explains.

The traditional approach to developing materials scores a hit rate of

less than 1% in the laboratory, he estimates. “With genome comput-

ing, our hit rate is probably 50%, because you know what you are

going to get when you spend all this effort on making the material,”

he says.

Operations Overlaps

Engineering molecular structures through predictive modeling and

creating a genome database for materials are a far cry from the day-

to-day challenges of managing supply chains. But these worlds do

intersect. Companies hedge against fluctuations in the cost of raw

materials such as copper, and these commodity markets are expect-

ed to remain volatile.

“The companies I currently work with are held hostage to the whims

of the commodity markets,” agrees Schuh. If materials science pro-

vides alternatives to these supplies or reduces industry’s dependence

on them, will there be less need for hedging strategies? More diverse

sourcing options could mitigate other supply-side risks.

For example, in 2010 China cut exports of rare earths – materials used

in many consumer electronics products – causing prices to surge in

anticipation of shortages. Developing alternatives to at-risk materi-

als such as rare earths could help companies to offset these risks and

respond with greater speed when supply chain disruptions like these


occur. However, advances in materials science that make it easier and

faster to create new materials could introduce more risk.

“There might be more potential for disruption, particularly in applica-

tions where the material carries enormous value,” suggests Ceder. An

example is energy storage, where “the electrodes store the energy so

a better electrode material can kill other products.” Should it become

easier to copy innovative compounds and metals, products that draw

significant competitive advantage from these materials will be under

threat.

New product development (NPD) is another area where materials sci-

ence could become more impactful. The availability of a wider choice

of materials, including ones that can be tailor-made for products,

gives designers more choices. Operations can also benefit. Forward-

thinking companies already include input from the supply chain in

the NPD process because it is easier and cheaper to alter specifica-

tions at this stage. Selecting materials that streamline the supply

chain could become more important to NPD. One example would be

a lighter metal that reduces shipping costs or is a less expensive and

more reliable sourcing option.

But will supply chain managers be able to take advantage of these

opportunities? More work is needed to ascertain which materials

properties yield the biggest operational paybacks and to determine

how operations staff can interact more effectively with designers and

marketers to make better materials decisions.

Profound supply chain changes are possible when companies look

for alternatives to materials they are using in existing products.

Schuh points to the automobile industry as a prime example. Auto

manufacturers are exploring alternatives to steel. One possibility is

magnesium, which is significantly lighter. But switching to magne-

sium has far-reaching supply chain implications. “It’s not just swap-

ping materials, it’s a paradigm shift,” he says.

Unlike steel, magnesium can’t be welded and is difficult to bend, but




it can be die- cast and manufacturers might be able to take cost

out of production lines by making components in one piece. The

steering wheel, for instance, is a complicated assembly of steel

parts. “When you switch to a different metal, not only are you

changing the properties, you are switching the way the steering

wheel is made,” says Schuh. Multiply this by the number of com-

ponents and suppliers involved in the construction of an automo-

bile, and the scale of the supply chain challenge becomes appar-

ent.

The ability to create customized materials quickly and cost-effec-

tively could also reinforce the trend towards distributed supply

chains. As companies outsource functions such as R&D that used

to be defined as core, perhaps there will be strong growth in the

number of design shops that offer quick-response materials de-

velopment services.

This is not an unreasonable assumption; the idea for the Materi-

als Genome project was born in a design shop run by Ceder. “We

harnessed high throughput computing to analyze tens of thou-

sands of compounds at a time,” he says, and invented materials

for client companies. This capability will become widely available

through the genome project.

The rapid switching of materials and related suppliers requires

highly flexible sourcing strategies and agile supply chains to

support the new products. More complex products made by a

diverse range of niche, specialty manufacturers could change the

structure of distribution networks.

Seizing the Opportunities

The high-tech alchemy that is transforming materials science

started in the laboratory, but over the next decade it will change

the products we buy. And these changes have important ramifica-

tions for supply chains. Materials choices are likely to figure more

prominently in operational and design decisions. The introduc-



tion of better-performing compounds and metals could reshape

supply chains, particularly for complex products.

These innovations also bring opportunities, such as enhanced

risk management, because operational managers will not be as

dependent on uncertain materials supplies. Perhaps even more

important, supply chain managers might discover new ways to

improve operational efficiency by leveraging the transformative

potential of materials science.

“We want to stimulate and accelerate materials research so that

there are better materials and in some cases more alternatives,”

says Ceder. At the very least, operations folks should be open to

the possibilities.

There is a need for better communication between scientists and

the companies that are looking for solutions to materials prob-

lems, suggests Schuh. This is particularly the case now, when the

field of materials science is evolving rapidly and delivering break-

throughs that companies can turn into competitive advantage.

“We are at the point where researchers need to hear about mate-

rials problems from industry,” says Schuh.

Next Steps

MIT CTL is exploring potential supply chain applications for a number

of cutting-edge technologies. For more information, contact:

Jim Rice, Deputy Director, MIT CTL, at email: [email protected].



ABOUT US

About the MIT Center for Transportation & Logistics: MIT CTL has been a world leader in supply chain man-agement research and education for more than three decades. Combining its cutting-edge research with industry relationships, the Center’s corporate outreach program turns innovative research into market-winning commercial applications. And in education, MIT is con-sistently ranked first among business programs in logis-tics and supply chain management.

For more information, please visit http://ctl.mit.edu.


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