Supply chain security concerns continue to rise. Does your company have a risk management strategy that addresses the possibility of a major supplier security failure?
With the rise of cybercrime, many companies fall victim to viruses and malware transmitted to them by vendors and business partners.
So far, there has been no clear strategy to address this. But there are now new third-party risk assessment strategies, services and tools that can help identify security “weak points” in your company’s supply chain.
Is now the time to invest in them?
Why do supply chain vendors pose security risks?
In 2021, BlueVoyant, a cybersecurity provider, reported that 98% of organizations it surveyed said they were affected by a supply chain security breach. And in 2022, in a global study of 1,000 chief IT officers, 82% of respondents said their organizations are vulnerable to cyberattacks targeting their supply chains.
SEE: Microsoft wants to help you avoid supply chain problems (TechRepublic)
There are many reasons for these statistics and concerns. The most obvious are:
- The size of company supply chains, which can include hundreds of thousands of suppliers for a single company
- Cybersecurity requirements that vary from country to country
- Lack of supplier readiness, awareness, and resources for robust cybersecurity practices
- Lack of awareness of supplier security in departments such as purchasing that post supplier requests for proposals that do not stipulate security requirements for doing business with the company.
What risk management steps can you proactively take to minimize supplier security breaches?
Accelerate your policies for increased supply chain security
To safely secure your supply chain, you should start with a supplier audit. Who are your most risky suppliers? Do they provide mission-critical components that your company will have a hard time replacing if their business fails or is interrupted?
Embed security in supplier RFPs
Corporate departments such as purchasing that issue RFPs to suppliers focus on the types, quality and delivery times of the components they order. Security may never have been written into RFPs, and it’s time to change that thinking.
Companies should insist on including security as a condition of doing business with their suppliers. If there is a unique, mission-critical vendor that does not have the resources to meet its security requirements, a plan should be developed by which the company can assist that vendor in aligning with security. These companies also audit suppliers for safety annually to ensure improvements are made.
Increase supply chain risk management awareness in your organization
IT is constantly concerned with security, so there may be a tendency to think that other senior executives, including the CEO, share the same security awareness. This is not always the case.
The CIO should make it a point to visit other senior management members as well as the board of directors. The goal is to ensure that everyone is fully engaged with a sound security implementation and the necessary financial investment required to support and maintain it.
On an annual basis, a “State of State” presentation on corporate security and risk management should be made to the board of directors and C-level management.
Implement supply chain security tools
In addition to providing training to providers, departments, and leaders, IT can also use software to improve supply chain security.
Software frameworks for vendor evaluation
Commercial software is available for vendors that provides security survey templates that you can customize as you formulate your own security surveys. Input from these surveys allows you to identify your security vendors most at risk.
Digital twin supply chain simulations
Supply chain digital twin software enables you to digitally model your entire supply chain so you can simulate different supply chain risk scenarios.
artificial intelligence (AI)
Companies use artificial intelligence to plan supply chain routes and predict adverse weather, natural disaster, and even political issues so they can develop possibilities for these potential disruptions. The good news is that there are a number of commercial supply chain risk management systems that do this, so you don’t have to develop supply chain risk AI from scratch.