Cyber Security and Risk Management

Supply chains are highly interconnected and often involve multiple third-party vendors and suppliers, which increases the risk of cyber-attacks. Any weak link in the supply chain can put the entire operation at risk, and businesses must proactively identify and address these vulnerabilities.

One of the main risks associated with supply chain operations is the use of outdated or insecure technology. For example, many supply chain partners may still be using older versions of software that have known security vulnerabilities. Hackers can exploit these vulnerabilities to gain access to sensitive data or disrupt operations.

Another common risk is the lack of communication and collaboration between supply chain partners when it comes to cyber security. Each partner may have their approach to cyber security, and this can create gaps or overlaps in the overall security strategy. Businesses must prioritize communication and collaboration with their supply chain partners to ensure everyone is aligned with cyber security best practices.

Businesses must take a proactive and holistic approach to strengthen cyber security and risk management. This includes 

  • Implementing robust security measures across the entire supply chain
  • Conducting regular risk assessments, and 
  • Developing a response plan in case of a cyber-attack or data breach

One example of a business taking a proactive approach to cyber security in supply chain operations is Intel. The technology company has implemented a program called the Cyber Security Assurance Program (CSAP), designed to ensure the security of its supply chain partners. The program includes rigorous security assessments, training, and regular monitoring to ensure partners follow the best practices.

Another example is Walmart, which has launched a blockchain-based supply chain platform that enhances transparency and traceability in its operations. The platform allows Walmart to track products from suppliers to customers, and any changes to the supply chain are recorded and verified on the blockchain. This helps to reduce the risk of fraudulent activities and increases overall cyber security in the supply chain.

Learn more from our experts how you can digitalize your freight forwarding & logistics business.

The Hidden Vulnerabilities

One of the biggest vulnerabilities in supply chains is the lack of visibility and control. As supply chains become more complex, businesses are relying on third-party vendors and suppliers to provide goods and services. However, these vendors and suppliers may not have the same level of security measures in place as the business, making them a weak link in the chain. According to a survey by Deloitte, 37% of companies do not have complete visibility into their supply chains, leaving them vulnerable to cyber-attacks.

Vulnerability lies in the use of outdated software. Many businesses are still using outdated systems that need to be equipped to handle modern cybersecurity threats. These systems may have vulnerabilities that hackers can exploit, putting the entire supply chain at risk. The 2020 Cost of a Data Breach Report by IBM found that businesses using outdated systems were more likely to experience a data breach, with the average cost of a breach reaching $3.86 million.

Strengthening Cyber Security and Risk Management

To address these vulnerabilities, supply chain companies need to take a proactive approach to cyber security and risk management. Here are some steps they can take:

  • 01

    Conduct Risk Assessments

    Risk assessments can help businesses identify potential vulnerabilities in their supply chain and develop a plan to address them. This includes assessing the security measures of third-party vendors and suppliers and ensuring they meet the same security standards as the business.

  • 02

    Implement Multi-Factor Authentication

    Multi-factor authentications add an extra layer of security to login credentials, making it more difficult for hackers to gain access to sensitive information. This can be especially important for businesses using cloud-based systems or sharing sensitive data with third-party vendors.

  • 03

    Update Systems and Software

    Businesses should ensure that all systems and software are up to date and have the latest security patches installed. This can help prevent vulnerabilities that hackers can exploit.

  • 04

    Develop a Response Plan

    Even with the best security measures in place, breaches can still happen. Businesses should have a response plan that outlines the steps to take in the event of a cyber-attack. This includes notifying stakeholders, containing the breach, and restoring systems and data.

Few Latest Examples

The need for strengthened cyber security and risk management in supply chains has become even more evident in recent years. In 2020, the SolarWinds hack exposed vulnerabilities in the supply chains of several US government agencies and private companies. The attack was carried out by hackers who infiltrated the software supply chain and inserted malicious code that gave them access to sensitive information.

In response to this attack, the US government issued an executive order aimed at improving the cyber security of federal agencies and their supply chains. The order includes requirements for multi-factor authentication, encryption, and the security standards for third-party vendors and suppliers.


The supply chain is no doubt one of the most critical components of any business operation in the world. On one end, technology has served to streamline and optimize supply chain movement in a major way. On the other end, it has also exposed them to cyber security threats. The hidden vulnerabilities in supply chains can put businesses at risk of data breaches, loss of intellectual property, and reputational damage. By taking a proactive approach to cyber security and risk management, supply chain companies can identify and address these vulnerabilities and strengthen their supply chains. Businesses must stay updated with the latest security threats and measures to ensure supply chain security.

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