BIHLMAN’S RESEARCH SEEKS TO DEFINE SIZE, SCOPE OF TITANIUM ‘VALUE CHAIN’ As a speaker at TITANIUM 2014 in Chicago September 21-24th, Bill Bihlman, the president of Aerolytics LLC, South Bend, IN, will share his insights on current and near-term issues involving the titanium supply chain, or “value chain,” for the global aerospace industry, which represents an annual output volume of 130 million pounds of titanium. “The commercial aerospace industry is facing unprecedented growth and record backlog,” Bihlman wrote in the preview of his presentation. “This creates both challenges and opportunities for suppliers throughout the value chain. Titanium can be viewed as a strategic commodity. This industry’s health is of particular importance to both engine and airframe original equipment manufacturers.” An estimated 80 million to 90 million pounds of the overall annual global output volume resides in North America, according to Bihlman. He said closed- die forgings represent 40 percent of the output volume in the aerospace value chain, followed by plate (25 percent), bar (15 percent), with rod, wire and other components making up the 20-percent balance. Bihlman pointed out that, in terms of an overall dollar value, close-die forgings make up more than half of the value chain. He explained that, due to the difficulty of machining titanium, most of that work remains within developed countries. “Hard alloys,” such as titanium, are likely to be 10 times more difficult to machine than softer metals, such as aluminum. He admits that, due to a variety of factors, it’s a challenge to accurately estimate the amount of work being conducted in Asia. Bihlman believes China can be a contender in “standard” grade titanium (i.e. non- rotating) within the next decade. Numbers and percentages tell only part of the story, according to Bihlman. His research is focused on defining the “critical path” for titanium in the global aerospace value chain, with closed-die forgings representing the most important structure. As such, Bihlman examines the alignment between the four major segments of the aerospace value chain: melt, forge, machine and assemble. “Each of the four points in the value chain has its own level for stocking inventory,” he said, noting that inventory flow is a dynamic process in the value chain, subject to a number of industry and geo- political variables. Bihlman acknowledged that the global titanium supply chain is a complex system with a significant churn, ebb and flow. Generally speaking, as a result of production from previously announced aerospace backlogs, the North American titanium sector had been “burning off” inventories. “Now the inventory levels are going back up again,” Bihlman said. Attendance at the TITANIUM conference has grown rapidly during the last 10 years, keeping pace with the needs of complex, dynamic industry supply chains. This year’s event will be held at the Hilton Chicago September 21-24th. Registration is available at titanium.org
Posted on: Mon, 15 Sep 2014 18:23:12 +0000
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