Integrated strategic sourcing of critical raw materials in an era of global disruptions
Year: 2025
Type: article
Abstract: Geopolitical tensions pose a threat to the supply of critical raw materials (CRMs), which are highly concentrated in a small number of mining and processing countries. CRM-intensive technologies are driving growing demand for these materials and intensifying global competition for secure and reliable access. Some supplying countries pursue geopolitical interests that can restrict CRM availability. The combination of concentrated supply, rising demand, and geopolitical tensions underscores the need for strategies that enhance supply resilience. This article integrates supplier criticality into strategic sourcing to promote a more resilient and economically viable CRM supply for enterprises. This integration is implemented through the Dual Sourcing Raw Materials Lot Sizing Problem, which analyzes five criticality scenarios with four different spot market procurement shares in a silicon case study. Criticality is measured using the World Governance Indicators. The empirical results reveal that increasing procurement through spot markets significantly reduces dependency on critical suppliers and the associated supply risks. A central result is that supply disruptions caused by critical high-volume suppliers can increase total costs by up to 23 %, while higher spot market shares reduce this effect to approximately 10 %. Therefore, sourcing CRMs from spot markets increases the robustness of an enterprise's supplier portfolio while simultaneously reducing its dependency on critical suppliers. This article introduces an approach that links criticality with strategic sourcing and demonstrates quantitatively that dependencies on CRMs can be mitigated through spot market sourcing. Managerial implications follow for CRM-intensive sectors, where explicit spot-share targets can complement long-term contracting under geopolitical risk.
Institution: Chemnitz University of Technology
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $4,420
OpenAlex ID: W4416972105