How to Mitigate 5 Common Supply Chain Cybersecurity Risks?
Supply chain management has become an essential component of modern businesses. Those who want to scale “globally” and provide excellent customer service must have a robust supply chain system.
A market report from Markets&Markets has estimated that the global supply chain management (SCM) market will be worth around USD 28.9 billion in 2022. The report highlights the increasing demand for visibility and transparency in supply chain processes. In addition, incorporating AI and Cloud in the SCM product has opened new possibilities for SCM vendors.
The supply chain industry has benefited from technological advancement and market evolution, but so has its alarming risk. This article will discuss five common supply chain cybersecurity risks and how businesses can mitigate them.
What is Supply Chain Security?
Defining supply chain security is complex, as it’s a broad area involving physical and software aspects. Although, we will focus more on the software aspects.
There is no specific single, functional definition as it could be needed to protect transactions or mitigate threats that might arise with immediate business networks or involvement of “n” party relationships.
The end goal of supply chain security is to identify and validate risks associated with third parties in the supply chain and mitigate them. Following the best practices and guidelines for supply chain security could be the ideal way to tackle such tangled challenges. However, the techniques and approaches may differ from company to company.
Why is Supply Chain Security Important?
“98% APAC leaders negatively impacted by a cyber security breach in their supply” was a headline of a recently published article at ET (CIO South-East Asia). The report also states that despite the severe negative impact of cyber security breaches in their supply chain, 62% of APAC respondents said third-party cyber risk management is either not a priority or somewhat of an importance.
Supply chains are all about delivering the right things to customers at a given time and at a reasonable price. However, considering the market expectation and technologies, the modern supply chain has become more complex and evolved. This results in increased potential for security vulnerabilities and a large surface area for attackers.
Breaches and cyberattacks can happen at any supply chain tier, causing operational, financial, and brand damage. Therefore, businesses must strengthen security management and implement cyber-defense-in-depth principles to prevent catastrophic consequences.
5 Common Supply Chain Cybersecurity Risks
Analyzing the global logistics market and the industry leaders’ concerns, these are the top five common cybersecurity challenges faced by today’s supply chain:
Transparency and Data Governance
When working on a multi-enterprise network, the purpose is not only enabling the exchange of data between businesses but also granting access to data to allow for viewing, sharing, and collaboration by multiple enterprises.
Business transactions revolve around data, which must be secured and controlled at rest and in motion to avoid any unauthorized access or tampering.
In addition, ensuring secure data exchange also involves placing trust in the other source, which can either be a third party or an e-commerce website.
Data critical to business operations can be found at all levels of the supply chain, and it is essential to identify, categorize, and safeguard it, regardless of its location.
Apart from logistics, there are many other regulated industries where data must comply with industry standards and government mandates.
It’s inevitable to remove other parties from different supply chain tiers, and each third party brings new risks with them based on their approach to manage own vulnerability.
Whenever data is transferred between different parties or moved within various systems, each such point allows it to be tampered with, intentionally or accidentally.
Best Practices to Mitigate Supply Chain Security Risks
Putting the best supply chain security practice is combining a layer of defences. Here are some best approaches that organizations can imply to strengthen their SCM security:
Digital Transformation & Data Modernization
Technology is revolutionizing every industry, transforming essential manual processes and data storage with digitization, bringing reliability and business security.
You can utilize techniques such as encryption, tokenization, data loss prevention, and file access monitoring and alerting by updating business processes and software to enhance security. Additionally, ensuring that teams and partners are educated on security awareness and receive relevant training is vital.
Identifying Data and Encrypting It
Data breaches are inevitable; organizations must take every possible step to identify and encrypt data crucial for business operations.
Using a data discovery tool can aid in the identification and classification of files that contain confidential financial information, proprietary knowledge, and user data. In addition, by thoroughly understanding all the data within the organization, it is feasible to safeguard crucial resources using advanced encryption techniques.
Handling Third-Party Risk
Modern supply chain industry has multiple connections and interdependencies from third parties, requiring businesses to redefine vendor risk management for end-to-end protection.
Being cognizant of third-party risks helps businesses assess the potential impact on their operations stemming from insufficient monitoring, non-compliance with data security regulations, or public exposure to data breaches.
Setting Up Controls and Visibility
A multi-enterprise business network enables dependable and secure data exchange between different parties, utilizing tools to manage access based on roles and users.
Implementing identity and access management security practices is essential for the safe sharing of confidential and proprietary information across an extensive and potentially diverse business ecosystem. In addition, such measures help minimize the risk of unauthorized access or breaches by identifying and addressing vulnerabilities.
Vulnerability Mitigation with Penetration Testing
Conducting a vulnerability scan early helps identify low-level security risks. The early results made possible by vulnerability mitigation minimize risk without increasing downtime or reducing efficiency.
Once the team has detected the basic concerns, engage penetration testing experts like ImpactQA to locate vulnerabilities across all new and legacy applications and the IT infrastructure that supports the entire supply chain.