How do you evaluate the effectiveness of your supply chain security risk management?

This is what we are doing (pretty the same as other categories of risk management):

1. We have a list of requirements to be satisfied (these is generally consistent and the same across the enterprise, with nuances related to the geography, local regulations, site criticality etc)
2. We check for compliance, as security is a centralized function in our company; security is also part of our holistic site risk assessment program (assessments are multifunctional, in-person events and include plant tour and table top exercises)
3. We do post-mortem analysis of real-life events
4. We do periodical re-assessment of requirements and amend/improve when needed

Hope this helps.

This is a little vague of a question, but here are some things to consider:

1) Understand industry and what risks you are trying to mitigate:
    -Reputational Risk
    - Operational Risk
    - Data Leakage / Breach / Interaction

Some ways to accomplish such are to obtain management interested quantitative, qualitative and operational metrics. The thought would be to understand “HOW IS THE VENDOR/THIRD PARTY ACCUONTABLE FOR WITHIN OUR ENVIORNMENT?”

Some of the ways we can you can think of this are

Quantitative Metrics
1- Incident Frequency and Severity: Track the number of security incidents and their severity over time. A decrease in both indicates improved security.
2- Time to Detect and Respond: Measure the time taken to detect and respond to security incidents. Reduced times suggest better preparedness and response capabilities.
3- Compliance Rates: Monitor adherence to security policies and regulations. High compliance rates can reflect effective training and robust policies.
4- Audit Results: Use findings from internal and external audits to gauge how well the program adheres to standards and uncover areas needing improvement.
5- Cost Analysis: Calculate the cost savings from prevented incidents and reduced losses. Compare these against the program's operational costs to assess ROI.

Qualitative Metrics
1- Employee Feedback: Conduct surveys and interviews with employees to capture their insights on the program's effectiveness and areas for improvement.
2- Vendor/Supplier Feedback: Gather feedback from key suppliers and partners regarding their experience with the program.
3- Management Reviews: Regularly review the program with senior management to ensure it aligns with organizational objectives and risk tolerance.

Operational Metrics
1- Training and Awareness: Measure participation in security training programs and assess the knowledge retention through tests and drills.
2- Security Audits and Assessments: Regularly conduct security assessments of critical assets and processes within the supply chain.
3- Risk Assessments: Perform periodic risk assessments to identify new threats and vulnerabilities. Evaluated actions and changes based on these assessments can demonstrate program agility.
4- Performance Benchmarks: Compare the program's metrics against industry benchmarks to identify strengths and areas needing improvement.

Technology and Tools
1- Use of Security Technologies: Evaluate the deployment and effectiveness of security technologies (e.g., anti-counterfeiting measures, surveillance systems, and cybersecurity tools).
2- Data Analytics: Leverage analytics to track and analyze security trends and incidents.

Governance and Continuous Improvement
1- Review Policies and Procedures: Regularly update security policies and procedures based on emerging threats and lessons learned.
2- Continuous Improvement Programs: Implement and monitor continuous improvement initiatives to enhance supply chain security.

Regular monitoring, reporting, and management reviews are crucial for the ongoing evaluation and enhancement of the supply chain security risk management program.

I believe this to be a relevant topic. So, the question is timely. Here is an article you may find interesting. https://www.gep.com/blog/strategy/why-you-must-prioritize-supply-chain-risk-assessment-in-2024#:~:text=Identifying%20risks%20requires%20complete%20supply%20chain%20visibility.%20What,map%20out%20their%20supplier%20network%20across%20different%20tiers.

As the article illustrates, what I have seen from other clients, is the need to have enhanced supply chain visibility and product traceability. Before you can measure the effectiveness of supply chain security risk, it is important to establish rigor around how you vet vendors and technology providers to evaluate their security protocols. 

The final piece of advice I have is to ensure you have a strong governance structure in place with defined metrics or monitoring tools to gauge risk.