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Why Cybersecurity is the Key to Unlocking the Full Potential of Supply Chains While supply chains' interconnectedness offers advantages, it also makes them vulnerable to various cyber threats. Organizations must prioritize strong security measures to safeguard their operations.

By Apu Pavithran Edited by Micah Zimmerman

Key Takeaways

  • Cybersecurity vulnerabilities in supply chains require proactive planning, investment and third-party management strategies.
  • Addressing skill gaps is crucial for successful digital transformation and supply chain cybersecurity.

Opinions expressed by Entrepreneur contributors are their own.

If digital transformation had a poster child, it would be the supply chain management sector. Where inadequate data and opaque processes were the norm, digital tools like cloud platforms and data analytics now offer a comprehensive view of the entire ecosystem.

However, this transformation has its fair share of hiccups. Integrating modern digital tools with legacy systems is a Herculean task, compounded by complexity and financial constraints. That said, the biggest concern is the cybersecurity aspect of this sector. As supply chains become more connected, they are increasingly vulnerable to cyber threats.

While this may seem like an uphill battle, addressing these challenges head-on can unlock the full potential of digitization within supply chains. Just as Rome wasn't built in a day, neither will a secure, fully digitized supply chain be. But it is a start.

Overview of the supply chain landscape

At the core of it, the supply chain is a dynamic ecosystem consisting of suppliers, manufacturers, distributors, logistics, retailers and consumers. They all combine to make an interconnected web to facilitate a seamless flow of goods, information and capital across time zones and geographical boundaries.

While this interconnectedness offers opportunities for growth, innovation and efficiency, it also means that multiple endpoints are exposed to determined cyberattacks.

This is compounded by a report that says at least 50% of businesses in the UK experienced some form of cyberattack in 2023. Now, what are the numbers for businesses worldwide with an active supply chain? That number stands at a staggering 33%.

It isn't merely businesses that are vulnerable but even governmental organizations with supply chains of their own. This is evident in the Solar Winds cyber attack of 2020, which led to serious data breaches by US federal organizations. Solar Winds is a third-party vendor that handles the supply chain aspects of federal organizations.

The worst part is that the attack began in September 2019, and it was only in December 2020 that a breach was even detected and acknowledged. Then we have the Colonial Pipeline attack of 2021. Unlike the Solar Winds attack, the pipeline cyber incident was not a mere data breach but a direct attack on a critical infrastructure. It was bad enough for it to be declared a national security threat by the United States Government.

Incidents like these only lead to questions about the overall integrity of the cybersecurity infrastructure of supply chains.

Related: 3 Reasons to Increase Your Cybersecurity Protocols in 2024

What are the vulnerabilities in the supply chain network?

If the two examples are anything to go by, any organization or business is rather reactionary as opposed to being proactive. This is further reinforced by the S&P Global report on how only 42% of companies globally have a Cyber Incident Response Plan (CIRP) in place. The rest of the 58% don't have a plan in place, which puts them in an unenviable spot where they are exposed to devastating cyber-attacks that can cripple their system altogether.

Then, at least 77% of employees expressed concerns about the cybersecurity measures implemented by their organization. If the report about 33% of organizations lacking any endpoint policies is anything to go by, then the concerns of employees are wholly justified. It is not just the organizations' policies that should be up for scrutiny but also those of third-party vendors. This report by Cynethia Institute and SecurityScorecard cites that about 98% of organizations worldwide have been integrated with at least one third-party vendor whose security has been breached in the last two years. Attacks on supply chains are compounded by an intricate network of relations between businesses and their third-party service providers. Malicious attackers can exploit this network by exploiting a component within the supply chain, bypassing existing security measures.

Finally, we address the proverbial elephant in the room. While technology is closing the digital gap in many industries, it also widens the skill gap for employees. As per a survey done by West Monroe Partners regarding skill gaps, 56% of businesses believe that they have a moderate to severe skill gap when it comes to new technologies. Only 6% of its respondents believed that they have no skill gap at all. Meanwhile, another report states that 41% of employees perceive themselves to be proficient in using the tools within their organization. This skill gap could potentially delay the digital transformation of the supply chain industry. Numerous as they may seem, problems always have their solution, bringing us to the next topic.

Related: 3 Reasons Why Cybersecurity Matters Now More Than Ever

Solutions for Cybersecurity vulnerabilities

Fortunately, we can all heave a sigh of collective relief as numerous problems come with numerous solutions of their own. Let us start with the implementation of a Cyber Incident Response System. It goes without saying that every organization must have a CIRP in place. The time-tested idiom - "Prevention is better than the cure" still holds true here.

A robust CIRP, with an equally superb UEM tool to complement it, can work wonders. Not only can UEM tool close any vulnerable endpoint, but also provides a single console for installing, administering in enterprise security. When it comes to third-party vendors, organizations can also implement a robust third-party management program (TPRM). The program will consist of analyzing potential risks that may be introduced when engaging with vendors. This assesses their security setup and remediates any risks associated.

Lastly, organizations need to invest time and money in the skills and technology required to enforce a robust cybersecurity policy. Even in the era of automated technology, your greatest asset will always be people and the skillset they come with.

The path ahead may not be easy. Yet, addressing cybersecurity vulnerabilities head-on will be a start. Careful planning, investments and above all – a commitment to improvement will enable organizations to build a supply chain that is not only resilient to cyber threats but also future-proof.

Apu Pavithran is the founder and CEO of Hexnode. Recognized in the IT management community as a consultant, speaker, and thought leader, Apu is passionate about entrepreneurship and spends significant time working with startups and empowering young entrepreneurs.

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