Reinforcing the Supply Chain with Smart Material Substitution

In the procurement process, material selection is among the most important considerations. As most will know, choosing a material with the right mechanical, thermal, and chemical properties can mean the difference between a successful application and part failure. In today’s world of rising supply chain volatility and material scarcity, however, you can’t always rely on your first choice material being available. Let alone in a way that conforms with lead times and budgets. 

Material substitution is therefore an increasingly critical part of a resilient supply chain strategy. One that enables manufacturers to overcome bottlenecks caused by material shortages and adapt to a changing raw material landscape while maintaining production consistency. Smart material substitution, in particular, is supporting suppliers as they transition from reactive procurement to more sustainable, agile production. 

In this article, we’ll look at how material scarcity and material shortages can cause significant supply chain challenges and how smart material substitution is a strategic solution. By turning to intelligent online manufacturing services like FACTUREE, procurement specialists and manufacturers can now exploit the benefits of smart material substitution and rely on consistent, high-quality production. 

When materials become a bottleneck

Every manufacturer’s goal is to establish a reliable, resilient supply chain. However, with this goal dependent on many factors (such as access to labor and machines, efficient logistics, and degree of material scarcity) a completely invulnerable supply chain is practically impossible to achieve. Materials alone can create a variety of bottlenecks in production chains, ranging from short-term delays to more significant long-term issues that can disrupt manufacturing and destabilize supply chains. 

Short-term production bottlenecks can be caused by simple delays in material shipments due to weather, geopolitical dynamics, and infrastructure issues. For example, in 2021, when an Evergreen containership blocked the Suez Canal for six days, an estimated $9.6 billion worth of goods was delayed each day. [1] Another reason for short-term bottlenecks is materials not meeting quality standards when they are delivered, making them unsuitable for use.  

More impactful long-term bottlenecks caused by material shortages can be traced to several root issues. These include reliance on single-source or scarce materials, regionally constrained raw materials, long qualification cycles, and demand outpacing supply. Such is the case with molybdenum, a refractory metallic element commonly alloyed with steel for energy and automotive applications. With demand growing for the element, production has failed to keep up — one reason being the difficulty in obtaining new mining permits in China. As a consequence, prices for the material have surged, rising 34% between 2022 and 2023 in the U.S. market. [2] Recent geopolitical instability, notably between China and the United States, has also led to significant global supply chain disruptions in the form of export restrictions, sanctions, and tariffs.

It goes without saying that challenges in securing a steady material supply have wide-reaching impacts on the production chain, including: 

• Production continuity

• Quality and compliance

• Cost and lead time commitments 

Overall, material-driven production bottlenecks can cause severe supply chain disruptions, making manual or reactive procurement strategies ineffective. Smart material substitution is therefore becoming a strategic necessity that can not only help overcome material shortages but can anticipate them and fill material sourcing gaps before they impact production schedules. 

What is material substitution?

Before going any further, let’s break down what constitutes material substitution. In simple terms, material substitution is a resilient supply chain strategy that enables the transition from a scarce material — or a bottleneck-prone material — to a functionally equivalent alternative. 

For example, there are broad-scale efforts to transition away from using rare materials to more Earth-abundant materials. We see this in the photovoltaics sector, where research is advancing towards substituting aluminum and copper for silver, a more critically raw material. [3] 

The primary considerations in material substitution relate to functional material properties. In other words, the substituting material should meet the mechanical, thermal, electrical, and chemical requirements of the application in question. If you are manufacturing a part for the maritime sector that requires a combination of strength, durability, and extreme corrosion resistance, the substitute material should deliver on all fronts or could fail under the specific stresses of the maritime environment. 

Other important considerations when selecting a substitute material are related to the following:

• Manufacturability and process compatibility (i.e. can the replacement material be processed using the same production technique and parameters as the first-choice material) 

• Regulatory and certification constraints (i.e. is the material validated for the sector/application area in question)

• Availability on the global market 

In the best cases, the substituting material will not only meet all functional and regulatory requirements, it will also be easier to source, more sustainable, and more cost-efficient than the first-choice material.

Why use smart material substitution

When we talk about smart material substitution, we are not simply referring to substituting like-for-like materials. Rather, smart material substitution is a strategic approach that uses algorithm-driven software to identify optimal material options. This intelligent approach can be built into procurement and manufacturing workflows and takes the legwork and guesswork out of material substitution by generating rapid solutions based on reliable data. This data is derived from various sources, such as certification documentation, material property databases, historical performance reports, life cycle assessments, and cost, availability, and lead-time signals.

This algorithm-based approach to material substitution is more powerful, responsive, and scalable than manual processes, which are highly dependent on individual expertise and tend to be more reactive in nature. This expanded capability is owed to software’s ability to simultaneously evaluate a multitude of variables, from mechanical properties and manufacturing processes to cost and global availability. This multidimensional optimization enables manufacturers to make the best choice based on not one but all factors. 

Moreover, smart material substitution can use different types of algorithms, including rule-based filtering, optimization models, and machine-learning similarity and performance prediction. By integrating this multifaceted model into production workflows, suitable material substitutes can be rapidly screened. Moreover, top alternatives can be backed up by insights that illuminate the similarities and trade-offs between different material options. 

The benefits of smart material substitution

For manufacturers and procurement teams alike there are many things to gain from integrating a smart material substitution strategy. In addition to the central benefit of being able to rapidly assess a wider variety of materials based on an enormous amount of data in a truly scalable way, we see other advantages related to productivity, sustainability, and overall supply chain resilience. These benefits include: 

• Reduced production stoppages and downtime caused by specific material shortages.

• Improved cost control in volatile conditions (and in some cases lower material costs). 

• More standardized material selection processes within an organization, even across different projects and teams.

• Increased sustainability through the use of LCAs in the algorithmic model, which can factor in a material’s carbon footprint.

• More proactive risk analysis that uses real-time data (such as availability, cost, geopolitical signals) to anticipate material bottlenecks and pre-plan substitutions.

• Increased agility and future-proofing, resulting in shored up supply chains that are ready for expected and unexpected hurdles. 

Material substitution made easy with FACTUREE

Online manufacturing services and networks are facilitating access to smart material substitution. Manufacturers like FACTUREE, which operates an AI-driven platform that matches procurement inquiries for custom parts with qualified manufacturers in its 2,000-strong network. FACTUREE’s intelligent solution effectively matches client requests with manufacturers based on criteria like design requirements, tolerances, production method, and material availability.

If a primary material for a custom part is unavailable or is impacted by an unstable supply, the company is able to provide the client suitable alternatives based on material properties, manufacturability, cost and inventory. Thanks to the AI that analyzes and qualifies requests with the help of real time people who have a final look at every single inquiry coming in.

The AI that FACTUREE uses was trained since 2017 with real-world data on material properties, manufacturability, price and inventory of the supplier network. The continuously growing dataset, which now includes over 600,000 data points, currently represents almost the entire manufacturing market, eliminating the need to inquire about individual supplier manufacturability. 

So, for example, if a customer wants to order parts made from aluminum but the price of aluminum is unstable FACTUREE is able to suggest — on customer request — a functionally equivalent metal or even polymer to ensure production continuity is maintained. 

Moreover, FACTUREE can advise customers on beneficial material substitutions even when material shortages are not an issue. For instance, high-performance thermoplastics such as PEEK are increasingly being adopted as a cheaper, more lightweight alternative to metal in industrial applications that require low weight, electrical insulation, and chemical resistance. Smart guidance on material substitutions can therefore not only alleviate supply chain challenges, but can enhance part performance and help improve bottom lines. 

Not only is the FACTUREE supplier matching system accessing the trained AI, but also the new domain-based AI agent FACTUREE Navigator that was launched in late 2025. Anyone who procures or designs components is often faced with the same questions: Which material is best suited? Which surface treatment suits the process? Such decisions require specialist knowledge and cost time. The FACTUREE Navigator, a free-to-use tool without a login, closes this knowledge gap. The new AI-supported agent answers technical questions about materials, manufacturing processes and surface treatments in a matter of seconds. It makes complex manufacturing knowledge available to everyone for the first time. 

With responses informed by a wide range of proprietary data, Navigator can help FACTUREE customers find material substitutes while also benefiting from lead time improvements and lower costs, all without sacrificing quality or performance.

Conclusion

Ultimately, as manufacturers and procurement professionals seek to establish more resilient supply chains, smart material substitution has a central role to play. Intelligent algorithms, as demonstrated by the platform capabilities of FACTUREE, can harness vast quantities of material data and enable manufacturers to choose suitable material alternatives when primary raw materials are scarce. This approach can establish greater stability in an increasingly volatile raw materials market and ensure that parts meet all requirements in terms of production scales, schedules, and budgets, as well as performance and quality.

References

[1] Harper, Justin. Suez blockage is holding up $9.6bn of goods a day. BBC News, March 26, 2021. https://www.bbc.co.uk/news/business-56533250 

[2] Mineral Commodity Summaries 2024. U.S. Geological Survey, January 31, 2024. https://pubs.usgs.gov/publication/mcs2024 

[3] Mertens, J., Dewulf, J., Breyer, C. et al. From emissions to resources: mitigating the critical raw material supply chain vulnerability of renewable energy technologies. Miner Econ 37, 669–676 (2024). https://doi.org/10.1007/s13563-024-00425-2