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From page 76... ... In addition, the management of any supply chain system for critical materials must be dynamic and based on knowing what materials are needed, how much of each, and whether substitutions are available for each material. Then, there are several policy tools available to ensure supplies. Read the entire page →
From page 77... ... 2001. Supply Chain Management. Read the entire page →
From page 78... ... PREPUBLICATION COPY SUBJECT TO EDITORIAL CORRECTIONS Page Intentionally Left Blank Read the entire page →
From page 79... ... In response to these changes in force planning and in foreign reliability estimates for materials suppliers, the materials requirements and the inventory of the stockpile have changed considerably over the decades. However, there have been significant lags between changes in military planning and scenarios used in modeling stockpile requirements, a significant lag between stockpile requirements and legislated stockpiles goals, and a significant lag between goals and NDS inventory levels. Read the entire page →
From page 80... ... . Stockpile Requirements, but essentially the law mandates that the materials requirements process includes a conflict scenario built around the following elements: • The length and intensity of the assumed conflict, • The military force structure to be mobilized, • The losses anticipated from enemy action, • The military, industrial, and essential civilian requirements to support the national emergency, • The availability of strategic and critical materials from foreign sources and domestic production during the mobilization period, the military conflict, and the subsequent period of replenishment, taking into consideration possible shipping losses, and • Civilian austerity measures required during the mobilization period and military conflict. Read the entire page →
From page 81... ... The term "strategic and critical materials" means materials that (A) would be needed to supply the military, industrial, and essential civilian needs of the United States during a national emergency, and (B) Read the entire page →
From page 82... ... This materials is neither strategic nor critical. a ST = Short Ton b LB = Pound c ct = carat d KG = Kilogram e SDT = Short Dry Ton f Tr Oz = Troy Ounce g Ac oz = Avoirdupois Ounce h MT = Metric Tonne i LT = Litre The Process for Setting Materials Requirements There are three broad groups of strategic materials for which stockpile requirements are determined: standard materials, specialty materials, and non-model materials.(United States Department of Defense, 2005) Read the entire page →
From page 83... ... The requirements for the three non-model materials -- that is beryllium, mica and quartz -- are evaluated based on interagency consultations through interagency working groups chaired by DLA The materials requirements are determined through an extensive modeling process that estimates the demands on the economy (industry) for essential civilian and defense goods and services; the resultant demand for strategic and critical materials (SCMs) Read the entire page →
From page 84... ... c The small value of the muscovite block mica in the NDS appears as zero due to numerical rounding. There are three pillars to the modeling process that IDA uses: military planning, large-scale econometric models to forecast materials needs, and forecasts of domestic and foreign supplies. Read the entire page →
From page 85... ... Supply forecasts are compared, on a time-phased basis, to the forecasted materials demands of the United States over the duration of the particular conflict scenario, which can include a reconstitution phase. Factors affecting materials supply side forecasts include assessing supply risks from potential enemies and other hostile countries, estimates of foreign infrastructure reliability, understanding foreign excess capacity, and determining the risk of domestic port damage. Read the entire page →
From page 86... ... Generally, reductions in the imports of strategic materials are imposed at the start of the military conflict scenario and allowed to run for the entire duration of the period being modeled. The Outcomes – Materials Requirements At the final point in the modeling process, the integral of the military planning scenarios, the econometric models, and the supply scenarios result in a detailed time-phased analysis of the supply and demand for each of the modeled strategic and critical material over the duration of the conflicts. Read the entire page →
From page 87... ... Table 6-4 shows the NDS requirements from 1989 to the present and Table 6-5 shows the materials goals from 1999 to the present. After the end of the Cold War, the committee found that DoD requirements declined more rapidly than the legislatively authorized goals. Read the entire page →
From page 88... ... ) that mandate the purpose of • Iodine preventing "a dangerous and costly reliance on • Jewel Bearings imports for strategic and critical materials during a • Lead national emergency" drove down the import reliance • Manganese from the DoD base case and drove up requirements • Mercury (to be consistent with law) Read the entire page →
From page 89... ... • Nickel 1997 • Mica • Quartz • Beryllium • Beryllium HPP Metal 13.15 Million • "Civilian sector estimates are lower in the 1999 base 1999 • Mica Muscovite Block case as a result of a change in methodology to solve • Quartz Crystal supply-demand mismatch problems that lead to systematic overestimates of non-conflict demands for NDS materials relative to supply in the 1997 Report and as well as prior years' assessments." • Mica and quartz are non-model materials, beryllium an advanced material. Requirements for these materials were estimated "off-line" and based on special studies conducted by IDA. Read the entire page →
From page 90... ... Value of NDS Report Excess Date and Inventory Effective Total Value of for Date of Materials with Inventory Stockpile SCM Stockpile Goalsc Goalsd Goalsd Goals Value Comments Report Datea • Bauxite, $4,100M $611M $728M • Goals follow from enactment of FY1999 1/7/1999 Refractory Authorization and Appropriations Act. • Beryllium • NDS Stockpile inventory notes that the Effective • Chromium, Ferro, inventory for mica and is "neither strategic Date of High Carbon nor critical." Goalsb • Chromium Metal • A deficit of inventory of 18,324 ST of 11/17/1998 • Jewel Bearings Chromium Metal with an associated value • Manganese, Ferro, of $85M is noted. Read the entire page →
From page 91... ... High Carbon • Iridium • Palladium • Quartz • Tantalum Metal Powder • Tantalum Metal • Thorium Nitrate Report Datea • Bauxite, $2,909M $59M $504M • Goals follow from enactment of FY2000 1/16/2001 Refractory Authorization and Appropriations Act. • Beryllium • NDS Stockpile inventory notes that the Effective • Chromium, Ferro, inventory for mica and is "neither strategic Date of High Carbon nor critical." Goalsb • Chromium Metal • A deficit of some 53,726,779 pieces of 10/05/1999 • Jewel Bearings Jewel Bearings with an associated value of • Manganese, Ferro, $0.0M is noted. Read the entire page →
From page 92... ... This is a rare exception to DoD's policy of basing recommendations for NDS goals solely on the minimum scenario guidance in the Stock Piling Act." Department of Defense, 1997 Report to the Congress on National Defense Stockpile Requirements, June 1997, p. Read the entire page →
From page 93... ... The most influential variables in the modeling of the shortfalls in the more stressful case were foreign excess capacity and foreign infrastructure reliability on supply side, non-essential civilian demand and "dollar shock" on the demand-side. The largest single requirement, which is an on-going requirement, 5 "For all these reasons, it would be unwise to stockpile very expensive PGM materials for a very unlikely need." Department of Defense, 1995 Report to the Congress on National Defense Stockpile Requirements, May 1995, p. Read the entire page →
From page 94... ... The committee was also struck by the fact that these three materials requirements resulted not from the IDA analysis, but from the interagency process which focused on a more subjective analysis of the potential for disruption in the supply chain for these materials. Specific items currently in the inventory along with the recommended requirements as of May 2007 are shown in Table 6-1. Read the entire page →
From page 95... ... The committee is struck by the lack of coordination across the DoD and the military services to identify specific individual and shared materials needs. The IDA modeling to estimate stockpile requirements is done on the basis of economic models and not on specific DoD requirements. Read the entire page →
From page 96... ... Rather, the requirements result from an interagency process considering the supply chain needs for those materials. This, however, is not inconsistent with the stated purpose of the law, which is "to provide for the acquisition and retention of stocks of certain strategic and critical materials and to encourage the conservation and development of sources of such materials within the United States and thereby to decrease and to preclude, when possible, a dangerous and costly dependence by the United States upon foreign sources for supplies of such materials in times of national emergency."7 From a practical standpoint, however, the direction in law on how the DoD is to determine requirements for the report may be overly restrictive and may not reflect actual national security needs. Read the entire page →
From page 97... ... The purpose of the stockpile as stated in law is "to decrease and to preclude, when possible, a dangerous and costly dependence by the United States upon foreign sources for supplies of such materials in times of national emergency." Given the fact that defense production has become more globalized in recent years, some clarification in defining strategic and critical materials that takes into account current supply chain operations, would help clarify the types of materials that should be considered for stockpiling. The committee concludes: • the list of specific materials that have been considered for the stockpile over the last 20 years or so has largely been static – and is narrow in light of the emerging and future materials needs. Read the entire page →
From page 98... ... 2004. Strategic and Critical Materials Report to Congress, Operations under the Strategic and Critical Materials Stockpiling Act during the period October 2002 through September 2003. Read the entire page →
From page 100... ... PREPUBLICATION COPY SUBJECT TO EDITORIAL CORRECTIONS Page Intentionally Left Blank Read the entire page →
From page 101... ... But today's NDS had its beginning with the passage of the 1939 Strategic Materials Act that authorized $100 million for the Secretaries of War and the Navy acting jointly with the Secretary of the Interior and in conjunction with the Army and Navy Munitions Board to purchase stockpile strategic raw materials. The Army and Navy Munitions Board had developed a list of 42 strategic and critical materials needed for wartime production. Read the entire page →

From page 76...

... In addition, the management of any supply chain system for critical materials must be dynamic and based on knowing what materials are needed, how much of each, and whether substitutions are available for each material. Then, there are several policy tools available to ensure supplies.