Common risks of digital supply chain transformation

The supply chain is changing. Like many industries — retail, critical infrastructure, healthcare — what was once analog is now digital, and the digital supply chain transformation carries with it new, unimagined risks. 

How the supply chain is transforming

The answer, simply, is the internet of things. Analog is gone, and supply chains are now being controlled, monitored, and adjusted from afar. There’s cloud computing, software that monitors and responds to changes in analog systems, and supply chains where one point is in the middle of America and the other is in China, and all of it exists online. Like any entity that has a strong digital presence, and, undoubtedly, relies on a myriad of third parties, this puts the entity at risk for a cyberattack.  Just look at a recent example from Toyota. Toyota's factories rely on a smooth supply chain to get parts to build cars to ship those cars. When a plastic parts and electronic components factory was recently hit by a breach, the factory had no choice but to pause operations. It’s a domino effect where one bad actor can disrupt an entire supply chain.

Common risks associated with digital supply chain transformation

If operations are digital, they can be hacked, and if proper cybersecurity measures aren’t taken to manage and control access, there are many risks for a supply chain organization. Here are some of the most common risks of digital supply chain transformation:

• The potential disclosure of sensitive information shared with supply chain partners. Partners within the supply chain are sharing vast amounts of high-value information, be it operational technology specifics, customer information, intellectual property or otherwise, and all of it is being shared digitally. A single breach could expose those high-value assets, and cyber espionage between competing supply chain organizations isn’t out of the question.
• Compromise of infrastructure shared with supply chain partners such as networks, software, cloud service, and managed services providers. Many aspects of a supply chain are digital, which means they’re susceptible to DDoS or ransomware attacks. Just take a look at the Kaseya attack of 2021, which resulted in 1,500 businesses being held for ransom at once. That’s a lot of downtime, potential revenue loss, and operational technology issues. Hackers know how interconnected digital supply chains are, and fully realize they can get a lot of bang for their buck taking advantage of that.
• Attacks through common commercial and open-source software used in business and IT operations. Supply chains all have one aspect in common: the use of third parties and third-party software. Third parties continue to be a major risk for organizations as hackers know they can use them to unlock doors to different organizations and achieve a “hack one, breach many” goal. If a third party causes a breach, the cost is estimated to rise by almost $400,000. That’s a hefty price to pay for not being proactive about high-risk third-parties.
• The exploitation of security flaws in the digital products sold to customers. Software is just as big of a part of a supply chain as plastic parts are to a Toyota factory. Look at SolarWinds. That company makes software for clients, and by hacking a piece of digital technology pushed out to customers, 18,000 customers were exposed to malware, including large government agencies (SolarWinds announced that the actual number of customers hacked through SUNBURST to be fewer than 100).

How to mitigate digital supply chain transformation risks

It all comes down to access: what access points exist, who has access and how well those individual, decentralized points are protected – especially when connected to third-parties.  Instead of relying on outdated methods like castle-and-moat architecture, organizations need to take a modern, decentralized approach that focuses not on external threats but on vulnerabilities within access points. By employing Zero Trust Network Access, focusing on access control, and putting resources towards managing and controlling third-party access, organizations can build a more comprehensive, and more adaptable cybersecurity strategy that fits the changing times and evolving breaches.