Is there a standard approach for grading sequence-based questions?

You could give points for the longest subsequence in the correct order.
Alternatively, you could make it an open question: "Describe the process step by step, make sure to include in your answer 1, 2, 3, 4 and 5." Then grade by a few essential insights that need to be in the answer. This eliminates any easy guessing and shows you why the student misorders the process.
Also a possibility is to only let the students place 1 element of the process in the correct spot. For example:

Where in the process does 1 happen?
A. before 2
B. after 2, but before 3
C. after 3, but before 4
D. after 4, but before 5
E. after 5

Another possibility is to focus on the parts of the process that directly follow each other. Suppose the student answered "1,2,3,4,5", you could look at the pairs (1,2), (2,3), (3,4) and (4,5). Then give a point for (1,2) if 1 directly precedes 2 in the correct sequence, give a point for (2,3) if 2 directly precedes 3 in the correct sequence etc.

I don't know any standard method for grading such questions, but I have the impression that we get the best correlation between student knowledge and grades if we base the grading on the number of wrongly ordered pairs (or in other words, the Kendall tau ranking distance between the given answer and the correct one). A wrongly ordered pair is a pair of items (x,y), where x occurs before y in the answer, but should occur after y. So, for example,

• (1, 2, 3, 4, 5) has 0 wrongly ordered pairs,
• (1, 3, 2, 4, 5) has 1 wrongly ordered pair, since 3 should occur after 2,
• (3, 1, 2, 4, 5) has 2 wrongly ordered pairs, since 3 should occur after 1 and after 2,
• (2, 1, 5, 4, 3) has 4 wrongly ordered pairs, since 2 should occur after 1, 5 should occur after 4 and after 3, and 4 should occur after 3,
• (5, 4, 3, 2, 1) has 10 wrongly ordered pairs.

The minimal number is 0, the maximal number is n(n–1)/2. For grading, define some function that maps the interval [0,n(n–1)/2] to points, not necessarily in a linear way.