When counterfeit titanium was discovered in Boeing and Airbus jets, it made headline news and triggered a Federal Aviation Administration investigation. But industry insiders could have predicted that such an emergency was coming.

Indeed, an eventual supply chain crisis within the aerospace industry was an inevitable result of years of waning domestic capability, pent-up production demand, and an overreliance on producers from adversarial nations like Russia and China.

For over a decade, titanium has been a tightly constrained market with a small group of players dominating global production across the element’s lifecycle — from initial mining and refining to sponge manufacturing, and finally milling into sheets or bars that are ready for industrial use. 

From there, the valuable material, known for its light weight and durability, is deployed in critical sectors such as aerospace and defense. Everything from landing gear systems to missile shells and propulsion systems are heavily reliant on titanium.  

About five years ago, however, U.S. producers took sponge manufacturing offline. Now, the U.S. is dependent on imports for more than 90% of sponge used for defense applications. Further downstream, there are only a handful of U.S. and ally-based mills that produce these materials for the aerospace and defense sectors, compared to behemoths like Russian-based VSMPO-AVISMA, which accounts for more than a quarter of global titanium mill product.

These dynamics create a gap in production, and a potential supply chain bottleneck. This vulnerability was exacerbated by Russia’s invasion of Ukraine, a key source of titanium production. And from there, the supply chain dominoes started to fall. 

The U.S. and its allies sought to reduce reliance on Russian and Chinese producers, especially as countries such as Canada imposed sanctions. They had to rapidly shift to Japan as their primary source for sponge, and source as much titanium back to domestic environments, squeezing capabilities and prolonging production timelines from 60 weeks to 90 weeks.

Although the appropriate steps to secure and reshore the titanium supply chain are in motion, they won’t meaningfully alleviate demand and production constraints for several years. In the aircraft sector alone, new orders exceed 15,000; at the current production rate it would take 13 years to fill these orders.

This kind of strained production creates an environment where smaller, upstream companies have the incentive and ability to falsify records and sell counterfeit goods. Indeed, as part of Boeing’s response to the FAA’s investigation, the company has asked its suppliers to provide documentation of titanium purchases sold going back 10 years.

Supply chain mapping and visibility is essential to avoiding dangerous fraud and unsustainable dependencies, as the U.S. and its allies slowly normalize titanium production. But as Boeing is likely experiencing firsthand as part of its own investigation, it’s not that simple knowing who your direct suppliers are. Titanium is often used in complex supply chains, where the chain of custody is murky and vast, spanning hundreds if not thousands of sub-tier suppliers.

Artificial intelligence tools offer arguably the only sustainable and accurate means of conducting supply chain analysis for critical materials. Organizations that rely on this technology will be better equipped to map all of the parts and critical components in their supply chain, from tier 1 suppliers down to tier 2 distributors and intermediators, the mill at tier 4, and all the way to tier 5, where core inputs are derived from mining, refining and sponge production.

Whether it’s the commercial sector, government agencies or the defense industrial base, it’s imperative that organizations using titanium are able to map and verify their underlying sources to ensure they’re coming from legitimate and secure suppliers.

The titanium crisis also offers a valuable case study for similar critical minerals and rare earth minerals. A failure to cultivate long-term supply chain resilience in areas such as nickel, aluminum, silicon and other rare earths is almost certain to result in similar outcomes.

As the U.S and its allies face a geopolitical future that’s trending toward bipolar powers, it’s in the best interest of governments and business to forecast potential supply chain risks, and invest in creating more resilience for key areas like defense and aerospace before these kinds of bottlenecks form and play out on the world stage. It’s a matter of economic competitiveness and national security, as well as basic airline passenger safety.

Derek Lemke is senior vice president of supply chain transformation with Exiger.