Home Security & Supply Risk: A Tale Of Dogs, Smoke Detectors & Digitization
I have a home filled with animals including two dogs. Both will alert me of any approach to my house and one would certainly act if there was an unwanted entry. So, the question is: “Is my home safe?” What has home security got to do with supply chain risks?
Home Security and supply chain risks
Managing the safety of one’s home environment has been undergoing an evolution since the 80s. This evolution very much parallels what is happening in the enterprise relative to managing the risk with suppliers and more broadly across the entire supply chain. Let’s examine the evolution of home security as a guide for where the enterprise must go, albeit with a higher rate of change.
Historically home security was equated to having a dog at home to alert and ultimately to keep the unwanted intruder out.
Risk in the enterprise is undergoing a similar and more rapid evolution.
Risk management used to equate to category and supplier management professionals interacting with their suppliers to see if everything was copacetic. The financial crisis of 2007 and 2008 pushed organizations to begin to monitor the financials of their suppliers paralleling the smoke detector being fit for purpose but providing protection for only one of many possible threats. As the public became more aware of new threat types to their homes and in the case of the enterprise as Social Responsibility grew in importance, CSR was added-on, like a carbon monoxide detector but still this was just one more point solution and falls short of being comprehensive.
The demands of the modern supply chain require a comprehensive approach to risk that accounts for specialization, geographic expansion and rising social awareness. A comprehensive approach must cover all aspects of risk including viability, delivery, image, compliance, market factors and performance. It requires that all potential disruptions are actively monitored and that there is an active program to re-mediate and ideally prevent the occurrence of such events. The enterprise is ready for its comprehensive approach to threats that are actively monitored.
Another interesting aspect of the move to a centralized and affordable home monitoring system is that it can be employed broadly making it attractive to all home owners. This means the monitoring can be implemented across all the homes in a neighborhood (or ecosystem) bringing better security to all. This again parallels what is happening in the enterprise.