The process must begin with a comprehensive map of the existing supply chain to ensure a high level of transparency, followed by an analysis of the level of diversification across the four dimensions of the model.

• Dimension 1 – Multi-shoring: Chart all supplier locations, including company-owned manufacturing facilities and ideally down to tier 3 suppliers. Identify key customer locations and evaluate the company’s current capacity to supply its main markets. 
• Dimension 2 – Multi-sourcing: Identify and assess key suppliers, partners, and manufacturing facilities. Analyze the company’s dependency on each and its ability to supply essential parts, products, and services. 
• Dimension 3 – Modes of transport: Outline the current main modes of transport for each trade lane. Assess the physical flow of goods and examine the existing transportation network in terms of capacity, flexibility, reliability, and partners. 
• Dimension 4 – Logistics operations: Map the current distribution and warehouse networks (owned and third-party), detailing inventory locations and levels. Assess the current capacity to respond to fluctuations in market demand.

Define the objective in terms of diversification and in alignment with the company’s overall strategic goals, considering the key benefits of diversification: customer centricity, agility, sustainability, resilience, and profitability. Based on the current level of diversification derived from Step 1, determine the level required to best meet that objective.

• Dimension 1 – Multi-shoring: Based on the business objectives, identify which additional geographical locations would improve the reliability of the company’s supply. 
• Dimension 2 – Multi-sourcing: Consider potential additional suppliers to partner with. Determine the optimal number of suppliers needed to achieve the business objectives effectively.
• Dimension 3 – Modes of transport: What other modes of transportation could the company use to satisfy business needs? 
• Dimension 4 – Logistics operations: Evaluate potential strategies for expanding the company’s existing logistics operations network.

Assess and conduct a thorough analysis to determine if the current level of diversification matches the envisioned level. Consider the impact on the business and evaluate the following aspects:

• Financial (e.g., operational cost, inventory levels, cost of capital, cost to serve) 
• Customer satisfaction (e.g., service levels, quality, brand reputation)
• Sustainability along all Environmental, Social & Governance pillars
• Current risk profiles vs. those of envisioned level
• Skills, capabilities, and mindset available and required 
• Infrastructure, ecosystems, and resources available and required 
• Levels of management complexity

Determine the essential resources and investments needed for the envisioned levels of diversification, which include:

• People, including change management needs
• Processes 
• Technology
• Customers 
• Supplier and partner engagement

If diversification is deemed necessary, proceed to the next step to initiate the planning, implementation, and management process.

Note that the decision will vary for each company and specific supply chain and is contingent on multiple factors assessed in the previous steps, such as the competitive landscape, financial considerations, sustainability goals, risk mitigation, infrastructure readiness, and organizational capabilities.

If Steps 1-4 suggest that diversification is not warranted, no further action is required; however, routine evaluations of supply chain diversification are recommended.  

Identify the critical dimensions to be prioritized and formulate a comprehensive strategy to achieve the envisioned level of diversification. It is also imperative to remember that supply chain diversification is not a “set-and-forget” endeavor but demands continuous management and improvement. 

Consider the following recommendations:

• Develop a business case that showcases the benefits and impacts of diversification.
• Draft a roadmap with a tactical plan, action items, timeline, and key performance indicators (KPIs). 
• Involve key stakeholders including key suppliers and logistics partners.

Note that it is crucial to maintain flexibility during the implementation and management process. Supply chains are inherently dynamic, influenced by evolving regulations, geopolitical risks, and shifts in market dynamics.