Evaluating your supply chain resilience as a whole is a tough task. With so many moving parts, people involved, and processes to keep track of, it can seem impossible to say whether your supply chain can withstand disruptions at every stage.
But the good news is that while it takes time and effort, it is possible to get a pretty good idea about how your supply chain stacks up and even test whether it can withstand a disruption that may take place.
Let’s look at the steps you’d need to take below.
Make a List of Stakeholders
Supply chains involve many steps, and that means they also involve many people. Namely, you need the people who play key roles at various stages to participate if you are going to effectively evaluate different elements of your supply chain and their resilience.
That’s why the first step of a supply chain resilience assessment is to look at the stakeholders who will need to collaborate and coordinate throughout the process. This list can include stakeholders that represent suppliers, manufacturers, logistics providers, distributors, and more.
When planning your assessment, assign responsibilities and roles at the beginning so that you don’t have to fill gaps in your process later. It’s not just about the roles, but also the stakeholders and their commitment to executing an accurate and effective assessment from the start.
Map Out Your Supply Chain
The supply chain is made up of many different parts, all of which need to work together to function. But they also need to be evaluated individually, so you need to understand how each part is connected and how it needs to work as part of the entire chain.
An integral part of assessing your resilience is creating a comprehensive map of your supply chain and evaluating the different ways that each part interacts and affects one another. This will help you establish evaluation parameters and look at potential vulnerabilities, as you may find that there’s a weak area in your supply chain that is essential for the function of the entire chain.
Assess Risks
At this stage, you’ll be ready to conduct a more thorough risk assessment, creating a list of disruptions that could potentially cause issues for different parts of your supply chain. But for the assessment to be useful, you need to take a broad scope and evaluate the risks from various angles.
Some of the potential disruptions you should consider at each stage of your supply chain are political instability, economic shocks, natural disasters, and cyber threats. Once you compile a list of possibilities, make sure to also evaluate their likelihood, potential damage, and venues for mitigation.
Perform a Stress Test
Once you have a better understanding of what your supply chain looks like, the key stakeholders that are involved, and the potential weaknesses, it’s time to put your supply chain to a test using a stress test. A stress test is a simulation of a potential disruption, allowing you to evaluate how different parts of your supply chain would respond, what steps could be taken, and what impact it would have.
To start, define the purpose of your stress test and choose a scenario that would help you accomplish that. Then, create a digital model of the supply chain and simulate disruption scenarios, which will show you which areas hold up well and which need better mitigation strategies.
Evaluate Results
After the stress test, you should have a better idea of how your supply chain could function in a potential disruption scenario. But that’s only valuable if you can then draw useful conclusions that allow you to make changes and improve how your supply chain functions and withstand shocks.
That’s why at the end of the evaluation, take the time to go through your results and put together a list of priorities that need to be addressed. That will give your supply chain resilience strategies much more focus and enable you to become the leader in your field.
Ensuring Business Stability
Having a resilient supply chain isn’t something that you can set and forget. It will require constant monitoring and review to stay resilient as conditions change and new threats emerge. But that also means that companies that do this well will continually improve and make their supply chain stronger as time goes by.
Every disruption is an opportunity to learn something new and become better prepared. The key is to ensure that you can actually weather the storm and use it to become stronger, rather than allowing it to deliver a crushing blow to your business.
Previous chapter