Accenture and MIT Team to Create a Supply Chain Resilience Stress Test
October 26 2020 - 7:59AM
Business Wire
The new standard for proactively assessing a
global supply chain’s ability to mitigate the impact of disruptive
events will improve agility and help companies outmaneuver
uncertainty
Accenture (NYSE: ACN) and the Massachusetts Institute of
Technology (MIT) are co-developing a supply chain resilience stress
test for assessing operational and financial risks created by major
market disruptions, disasters or other catastrophic events.
Inspired by the crucial financial services industry stress tests
that became compulsory after the 2008 financial crisis, the joint
effort aims to create a global industry standard for a data-driven
strategic assessment of supply chain resilience.
“The COVID-19 pandemic exposed considerable weaknesses,
resulting in severe disruptions in supply chains around the globe,
shedding light on the need for intelligent supply chains that
prioritize transparency, anticipate new risks and enable faster
decision-making,” said Kris Timmermans, senior managing director
and Accenture’s global supply chain & operations lead. “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.”
Leveraging Accenture’s extensive expertise in supply chain,
operations and analytics, and MIT’s leading research and
capabilities in data science, the stress test will quantify supply
chain resilience in a single resilience index. With this test,
organizations will be able to quickly identify potential points of
failure in their supply chain, assess their related financial
exposure, and define appropriate mitigation strategies and actions.
Because the scenarios are standardized, organizations both in the
public and private sector will also be able to benchmark their
resilience against peers and competitors across industries.
The test is designed to be scalable and adaptable to changing
market conditions and customer expectations as supply chains
continue to evolve. Global food company, Sigma, through its
European subsidiary Campofrio, is among the companies working with
Accenture and MIT to implement the stress test on its supply chain
and provide input and use-case insights to its development.
“As a company with a wide international footprint, we need to
ensure an uninterrupted supply of products to our customers, no
matter what disruptions occur. Managing the impact of COVID-19
required high effort on our side, and in the process, we uncovered
several weaknesses in the supply chain we wished we had identified
more proactively before,” said Fernando Ibarra, Supply Chain
Director of Sigma in Europe. “Working with Accenture and MIT on
this groundbreaking project will be key to recognize other
potential weaknesses and continue increasing our supply chain
resilience.”
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.
“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, and Identifying Risks and
Mitigating Disruptions in the Automotive Supply Chain). “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. 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.
About Accenture
Accenture is a global professional services company with leading
capabilities in digital, cloud and security. Combining unmatched
experience and specialized skills across more than 40 industries,
we offer Strategy and Consulting, Interactive, Technology and
Operations services—all powered by the world’s largest network of
Advanced Technology and Intelligent Operations centers. Our 506,000
people deliver on the promise of technology and human ingenuity
every day, serving clients in more than 120 countries. We embrace
the power of change to create value and shared success for our
clients, people, shareholders, partners and communities. Visit us
at www.accenture.com.
About the MIT Data Science Lab
The MIT Data Science Lab develops ground breaking analytic
techniques and tools for improving decision making in environments
that involve uncertainty and require statistical learning. Our
methods have been implemented by a large number of companies across
a variety of industries such as Airlines, Insurance, Manufacturing,
Retail, and Finance. Visit the Lab at https://dsl.mit.edu/.
Copyright© 2020 Accenture. All rights reserved.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201026005284/en/
Maggie Nolan Accenture +1 917 452 3964
margaret.d.nolan@accenture.com
Accenture (NYSE:ACN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Accenture (NYSE:ACN)
Historical Stock Chart
From Apr 2023 to Apr 2024