Who stocks warehouse nowadays? The real question is, “Who owns warehouses…or sub-assembly plants…or even manufactures products?” Cisco, Intel, Micron and others lead a trend where rapid fluctuations in markets and technologies have led to supply chains that rely on external organizations to create just-in-time supplies of parts and even whole products. What does this mean for BPM? It means new systems to manage new risks.

“I need guarantees“

Just as companies push work out to the World, there are standards to ensure the World delivers. Take the International Organization for Standardization (ISO) as a great example:

– Need to ensure suppliers share your Green commitment and reduce your impact to the environment? ISO 14001 as an environmental management system framework.

– Need to know suppliers aren’t running a sweatshop that is risky for its employees…or can end up in the NY Times with your name attached? ISO 18001 for occupational health and safety.

– Need guarantees your supplier is managing information security risks, threats, vulnerabilities and their impacts…including YOUR designs and data? ISO 27001 for information security management.

There are as many standards as there are risks, or in Apple parlance, “there’s a standard for that.”

The new game is to have supply chains that meet these measures of quality and process — as the best guarantee against disruption, bad products, bad press and more. As a business relies more on people and behaviors NOT directly under its control, the more standards become the new currency of the contract.

Compliance = Competitiveness

One of my customers recently fired up a $9B steel mill to serve primarily the needs of the automotive industry. What is their best pitch for the commodity product of rolled steel? An uninterrupted supply chain backed by quality, environmental, health, safety, IT and business process standards? This customer made ISO certifications as critical as plumbing and wiring.

Just a few months into production, the biggest and best names in the market are beating a path to their door. It is working.

Quality and compliance is no longer just an internal question…we have moved to where business is brokered on compliance to quality standards before the first slab of steel hits the rollers. Are you ready?