Accenture, MIT Develop Stress Test For Supply Chain Resilience

To evaluate the financial and operational risks presented by significant market interruptions, disasters or other catastrophic occurrences, Accenture and the Massachusetts Institute of Technology (MIT) are creating a supply chain resilience stress test together.

The initiative was inspired by the financial services industry stress tests that became mandatory following the 2008 financial crisis, with the goal of creating a worldwide industry standard for data-driven evaluation of supply chain resilience, according to a Monday (Oct. 26) announcement.

“Our stress test enables companies to run more than 40 scenarios at one time, providing unprecedented visibility into where and how their supply chains will be impacted during a major disruption,” said Kris Timmermans, senior managing director and Accenture’s global supply chain and operations lead.

The stress test will measure supply chain resilience in one “resilience index.” Groups will be able to quickly find possible points of failure in their supply chains, evaluate their related financial exposure and come up with mitigation plans and actions.

Furthermore, groups in government and business verticals will be able to compare their resilience against peers and rivals as the cases are standardized.

The stress test begins with the formation of a “digital twin” of a business’ supply chain. This allows the creation of different scenarios that could potentially hamper the group’s capacity to provide for clients, investors, staffers and society. For example, possible cases could include a shortage of important raw materials and the closure of an essential vendor or building.

The stress test can determine the time required for a part of the supply chain to return to complete capacity following an interruption, as well as the longest time the supply chain can continue to meet demand following an interruption.

The news comes as COVID-19 has thrown companies into a completely new playing field and left a number of them rushing to find solutions. As noted in April, retail demand has spiked for products such as groceries and cleaning items, while it has fallen off in other product areas, leaving firms to acclimate to evolving purchasing pattern