The Real Takeaways of 2021 for Your Supply Chain Security

June 11, 2021

Blog

Supply chain security is becoming increasingly complex as technology evolves. Here’s what you should know about securing your supply chain in 2021.

According to IBM Sterling CTO, Marshall Lamb, supply chain security is a complex and multi-disciplinary issue. It requires collaboration between businesses, customer support teams, and IT departments to protect business data successfully.

Lamb says that the companies that successfully implement supply chain security best practices are those that start with IT and a secure multi-enterprise corporate network. Once this is in place, they build upwards using secure access to analytics and visibility capabilities.

Thereafter, they continuously monitor every layer of their supply chain security for anomalies, breaches, and other red flags.

The Importance of Securing Supply Chain Data

Supply chains function on the concept of bringing customers the products they need at the right prices, the right places, and the right times. Any threats or disruptions to the integrity of the supply chain or the products it delivers, or even the privacy of the data it exchanges, can have massively negative financial and operational consequences for a brand.

Ransomware attacks and data breaches from the inside or from a third party can compromise any link of the supply chain. Even a security incident that only affects a single vendor or third-party manufacturer or supplier can still cause dramatic disruptions to the process of goods delivery.

Implementing supply chain security is crucial to mitigate these risks. But it’s important to know that this form of security is a moving target that poses growing challenges. Supply chains are becoming increasingly more complex and global. As they do so, more and more third-party partners require access to data and specific data access rights. Stresses on budgets, employees, and unforeseen issues because of partners, strategies and supply, and demand further complicate the matter.

In the interim, more educated and socially conscious consumers are demanding increased visibility and transparency into the brands they support and the products they buy. Each of these touchpoints adds another risk factor that requires identification, management, and minimization where possible.

The 5 Leading Supply Chain Security Concerns in 2021

There are plenty of supply chain security elements that pose challenges and risks to businesses and industries across the globe. These are the most pressing concerns in 2021:

1. Continuous data protection. Business transactions rely on data, which is why it must be securely controlled to prevent breaches and cyberattacks. Secure data exchanges rely on trusting the sources they’re sent from, whether they’re third-party suppliers or eCommerce platforms. It’s essential that businesses know that the parties they interact with are reputable and trustworthy.
2. Prevention of fraud. Data changes hands several times in every order-to-cash cycle performed, be it online or on paper. Every data exchange point presents a risk, which is why each point needs to be secure.
3. Data locality. Every tier of the supply chain contains critical data that needs locating and protecting at all costs. This is particularly true for stringently regulated industries such as healthcare, financial, and government services. In these industries data must be obtained, stored, and exchanged in compliance with strict standards and regional laws.
4. Data governance and visibility. Multi-enterprise company networks facilitate B2B data exchanges and allow many enterprises to access this data. Participating organizations need control over this data, along with the ability to choose who to share it with and how much each permitted party is able to view.
5. Third party risk. The world’s products and services are becoming increasingly more reliant on sophisticated modern technology. This has led to supply chains relying on several tiers of suppliers in order to deliver goods. Every one of these third parties can expose a business to new and unexpected risks, especially if they do not adequately mitigate their own vulnerabilities.

Best Practices for Supply Chain Security

Comprehensive supply chain security demands an intelligent, multifaceted approach. Organizations can protect their supply chains in 2021 using layered defenses and strategies. Best practices include:

• Conducting regular security strategy assessments. You can assess risk and compliance by assessing existing security governance, including your company’s data privacy, IT compliance needs, and third-party risks. These factors should be weighed against business requirements, goals, and challenges.The process should lead to the development of tailored security programs, regulatory and standards compliance, and security training and education.
• Testing and mitigating vulnerabilities. Identify key security concerns by conducting vulnerability scans on your supply chain. You can significantly and easily reduce risk by fixing basic issues like poor database configurations, unsecured endpoints, and weak password policies. If your business’s budget allows it, hire penetration test specialists to find more complex and obscure vulnerabilities in every aspect of your old and new programs, supply chain IT infrastructure, and your employee network.
• Modernizing and digitizing your data systems. It’s virtually impossible to keep data secure if you still rely on paper, faxes, and telephones to conduct business transactions. Digitizing your manual processes adds security, reliability, and manageability to your transactions. Plus, it lays the foundations for secure data exchange within your enterprise and between trading partners and clients. As you modernize your processes and software, you can implement encryption, data loss prevention, and file access monitoring to strengthen your supply chain security protocols.
• Encrypting crucial business data. Data protection policies and programs should always include classification methods to highlight files and databases that contain sensitive customer records, financial data, and other proprietary information. Once this data is located, the latest security technologies and encryption protocols must protect all kinds of data, including IoT, inventory, financial, order, health, logistics, and more. Encryption will demand that incoming connections are validated and that file content gets tracked in real time.
• Adding transparency and trust. Blockchain platforms are becoming preferred for supply chain security. With Blockchain, data cannot get manipulated or removed once added to a ledger. This assists in the prevention of fraud, and helps to authenticate data, monitor product quality, and add transparency to the supply chain.
• Managing third party risks. The more connections established between businesses and third parties, the more enterprises need to assess vendor risks and implement strict end-to-end security. It’s recommended that you gather your technical and business teams, and your vendors and partners to identify essential assets and potential risks to business operations should a compliance violation or data breach occur.
• Planning for incident response. It’s crucial to proactively plan for shutdowns, breaches, and disruptions before they occur. Having a strong incident response plan in place prevents revenue loss, reputation damage, and customer and partner churn. Use data and metrics to develop a plan that your business and its partners can use to make rapid decisions to prevent attacks, mitigate damage caused by them, and prevent such incidents in the future.

The Bottom Line

In the age of technology, supply chain security will continue to grow even smarter. More and more solutions are using the power of AI to proactively detect threats and anomalies, send alerts for human response, and automatically block suspicious access attempts.

According to industry experts like the Cloud Native Computing Foundation, an effective supply chain security protocol is built on trust, automation, clarity, and mutual authentication. It should also aim to identify and mitigate third party risks, modernize and automate manual business systems where possible, and plan proactively to respond to data security breach incidents.