Supply chains are vital to the modern world. Many processes associated with them are now digitalized, creating advantages and risks. In recent years, over 2000 entities that handle supply chains have been exposed to cyber threats.
Cyberattacks on supply chains can disrupt operations, compromise data, and damage trust among partners. Thankfully, supply chain risk management and cybersecurity can mitigate many problems that can occur due to cyber attack exposure.
This article explores the most notable supply chain risks and some key mitigating methods.
Supply chain cybersecurity explained
A supply chain comprises people, processes, vehicles, software, and hardware. For example, a warehouse uses software to track its inventory. This requires complex software and human involvement to organize and track each item properly, as well as coordination with services like freight courier companies to ensure the timely movement of goods.
Overall, from the path of raw materials to the retailer, the supply chain has many potential risks. Supply chain risk management involves identifying vulnerabilities in the whole network and protecting them.
The Internet has become a critical part of the supply process. Companies rely on it to order products en masse, seek help through customer support, order products from retailers by the end customer, etc.
For example, a warehouse uses software to track its inventory. This requires complex software and human involvement to organize and track each item properly.
If malicious software, like ransomware, gets access to the computers that store inventory data, several problems will emerge. The company will lose track of its inventory unless it also has paper documentation, and the partners that depend on it will experience a slowdown in their processes.
Cybersecurity measures for these logistics systems would prevent cyber risks from unfolding. They would also minimize downtime, data losses, and exposure to these problems.
What makes supply chain security essential?
If security measures don’t adequately protect the system, companies might have to pause their processes until they fix the problem. Some types of malware, like ransomware, can lead to downtimes that could last several days.
If a logistics business fails to operate for an extended period, it could lose millions and even partners and customers. While supply chain firms don’t mainly handle user data, they can be fined if they experience a data breach.
This can happen if they don’t follow the California Consumer Privacy Act (CCPA) or General Data Protection Regulation (GDPR) protocols. Data integrity and protection are essential for building trust and protecting customers.
Cyberthreats on the supply chain
There are numerous types of cyber attacks, from ransomware attacks and malicious code in the form of SQL injections to social engineering attacks. Instead of explaining all the possible cyber attacks, I’ll break down the three crucial types of threats to the supply chain.
Software supply chain attack
One of the most common cyber threats to logistics businesses is software attacks. In these scenarios, hackers leverage security vulnerabilities to obtain unauthorized access to the company’s network.
Vulnerabilities can appear if the software is outdated or new updates have unfixed bugs and exploits. An insider threat or unaware employees can provide access to these hackers.
From there, they can release and escalate their privileges, blackmail the company, steal intellectual property, or sabotage its operations.
Hardware attack
Hardware attacks include exploiting vulnerable hardware in the logistics network. It can be compromised if the hardware has a zero-day vulnerability or lacks security features.
Once a hardware attack is successfully conducted, the hacker can establish a persistent threat in the network’s landscape.
Third-party compromise
Compromising one node in the logistics network can lead to problems for everyone involved. This is not only in terms of operational continuity; if the hacker has access to a device used by business A, they might be able to use it to access information on business B.
It’s important that all businesses that comprise this network collaborate on their cybersecurity protocols to ensure high levels of awareness and security. Furthermore, you should collaborate with third-party vendors that don’t have a history of data breaches and similar problems.
5 Strategies to mitigate supply chain threats
Cybersecurity has existed for decades, but the landscape is changing swiftly. What would have ensured security a decade ago may be obsolete now.
However, certain practices, like proper access management, are timeless. The best way to ensure supply chain resilience to cyber risks is to combine innovative methods, such as threat detection, with traditional strategies, such as encrypted communication and data storage.
1. Threat detection software
Software that detects viruses and malicious programs has existed for decades.
It monitors traffic and transactions and flags suspicious activity. Sigma rules, for example, look for early warning signs, such as unusual supplier login patterns or unexpected software behavior.
Sigma rules allow organizations to spot potential supply chain breaches before they spiral into significant incidents. Cloud Security Posture Management (CSPM) plays a key role in this by continuously monitoring cloud infrastructure for misconfigurations and unusual behavior that could signal a breach. This approach’s beauty lies in its simplicity—once a team writes an effective detection rule, it can deploy it across any security platform in its infrastructure.
This also allows companies to implement effective methods to mitigate threats from the devices of their partners or customers.
2. Advanced data protection
The complexities of ecommerce sales tax compliance present an often-overlooked vulnerability in supply chain cybersecurity.
As businesses track transactions across multiple states and maintain detailed records of nexus relationships, tax rates, and customer locations, they create valuable data repositories that could be attractive targets for cybercriminals.
The South Dakota v. Wayfair ruling’s expansion of tax obligations has compelled companies to store even more sensitive financial and location data, making robust security measures essential for protecting both tax compliance systems and the broader supply chain ecosystem.
This intersection of tax management and data security becomes particularly critical when considering that many organizations rely on third-party tax automation software that integrates with their core supply chain management systems, potentially creating additional attack vectors if not properly secured.
3. Encrypted communication
Companies that form the supply chain must maintain high-security standards for their communication. This includes using software that ensures End-to-End Encryption where data is encrypted on the sender’s device and only decrypted on the recipient’s device.
Internal communications tools like Blink are built specifically for secure team collaboration and often offer enterprise-grade plans. Multiple teams can collaborate on a single document in many cases.
Regardless of the document’s purpose, they must use platforms with configured access policies.
A bonus would be implementing policies that enforce multi-factor authentication or passkeys, providing additional security against unauthorized access.
Communication security doesn’t revolve solely around using secure platforms. Employees must also be able to recognize phishing and social engineering attempts.
As mentioned, the supply chain consists of several businesses and services. When connecting different systems or tools, you must ensure that you have encrypted third-party application programming interfaces (APIs) and follow secure coding practices to prevent unauthorized access.
4. Zero-trust architecture
The Zero-Trust model revolves around the principle of “never trust, always verify. ” It ensures that every access request is authenticated and validated regardless of origin. This prevents hackers from using stolen accounts and insider threats from causing harm.
Businesses in the supply chain are highly encouraged to follow the principle of least privilege. This principle states that no employee should have privileges higher than those necessary to conduct their tasks.
Additional security is ensured by dividing the network into smaller segments to limit the movement of attackers—for example, separate production systems from administrative systems.
5. Robust Shadow IT rules
Shadow IT is when employees use unauthorized tools and systems. Software that’s not vetted by IT teams can introduce significant vulnerabilities into the supply chain.
Controlling it involves both preventative and corrective measures. Implementing policies that restrict the use of unapproved software and tools can solve this. Tools like employee monitoring software can also help detect unsanctioned activity early by tracking software usage across devices. Companies should explain all the risks behind not following these policies to their employees.
Implement platforms with similar or better functionality than unauthorized tools to make employees more comfortable. Eventually, you should extend shadow IT policies to third-party vendors by requiring transparency in their technology stack and adherence to security protocols.
Mitigating cyber threats is essential for supply chain businesses
There isn’t a software product or a cybersecurity protocol that can prevent 100% of the risks a business is exposed to. However, the discussed strategies can significantly reduce cyber risks and protect a specific business.
Some of these can be costly. Yet, the problems that cyber attacks cause, such as ransomware, can cause significant expenses and difficulties, and most security measures are worthwhile.
Proper security auditing and identifying the risks to which your supply chain networks are exposed will protect your operations against current and future threats.
Author Bio:
Jeremy is co-founder & CEO at uSERP, a digital PR and SEO agency working with brands like Monday, ActiveCampaign, Hotjar, and more. He also buys and builds SaaS companies like Wordable.io and writes for publications like Entrepreneur and Search Engine Journal.