The stress test begins with the creation of a “digital twin” of an organization’s supply chain. This enables the subsequent modeling of various combinations of scenarios and impact that would significantly disrupt the organization’s ability to serve customers, shareholders, employees, and society. Such scenarios could include sudden spikes or drops in demand, the shutdown of a major supplier or facility, scarcity of a critical raw material, or disruption of a key port. The stress test can identify both the time it would take for a particular node in the supply chain to be restored to full functionality after a disruption (i.e., “time to recover”) and the maximum duration the supply chain can match supply with demand after a disruption (i.e., “time to survive”). This approach to supply chain risk management has been introduced and discussed by MIT Professor David Simchi-Levi and his PhD students in their article, From Superstorms to Factory Fires: Managing Unpredictable Supply-Chain Disruptions^[2].

“There is a critical need for a global stress test standard to help prevent shortages of vital products and supplies from happening when the next disaster strikes,” said Simchi-Levi, who has published extensively on the need for consistent approaches for identifying and mitigating supply chain risks (see We Need a Stress Test for Critical Supply Chains^[3], and Identifying Risks and Mitigating Disruptions in the Automotive Supply Chain^[4]). “The test will allow companies to understand the resiliency of their supply chains, recognize weak links and act quickly to balance the impact of unprecedented events on customers, operations and finances.”

Accenture and MIT have a long history of collaboration and recently launched the MIT and Accenture Convergence Initiative for Industry and Technology^[5]. The new initiative brings together Accenture experts and the best minds from across MIT to explore how the convergence of industry and technology will transform global business and society, and how organizations can uncover and better capture its opportunities.