The rise in supply chain attacks has highlighted a significant issue in supply chain risk management (SCRM) - most organizations are unaware of the potential risks in their supply chain.
This limitation is caused by a discontinuity between cybersecurity initiatives and the threat landscape of global supply chains.
Supply chain ecosystems are unpredictable, dynamic, and always evolving. To optimize their supplier risk mitigation efforts, organizations need real-time visibility into the different types of risks in the supply chain.
In this post, we outline the 4 different categories of risk management software that could suppress risk exposure in supply chain operations.
The 6 Categories of Risk in Supply Chain Management
All supply chain disruptions can be mapped to six categories of risk:
- Cybersecurity Risks - Third-party risks facilitating supply chain attacks, such as vulnerabilities in third-party software.
- Geopolitical Risks - Political events disturbing business continuity in the supply chain, such as the current unsettling relations between Russia and Ukraine.
- Man-Made Risks - Human errors causing workflow disruptions, such as fires or staff falling for phishing attacks.
- Natural Disaster Risks - Natural events causing delays in the entire supply chain, such as storms or pandemics.
- Reputational Risks - Reputational damage caused by failed contingency plans that could impede procurement processes.
- Financial Risks - Pressures on profit margins caused by product development issues, poor supplier management, or events in any of the above categories.
To simplify mitigation strategies, organizations should focus on the different categories of supply chain risk management solutions, rather than being pigeonholed into a specific list of providers. This approach will empower businesses to investigate potential solutions from the lens of their unique management system objectives.
The 4 Quadrants of Supply Chain Management
By implementing supply chain management tools in each of these categories, the majority of supply chain risks will be addressed.
1. Attack Surface Visibility
Cybersecurity is the most critical risk category in supply chain management because it has the greatest impact on all other risk categories. By primarily focusing on mitigating cybersecurity risk in the supply chain, you'll also be indirectly mitigating risks across all categories.
The first step to addressing security risks is by discovering them. Attack surface visibility is especially complicated in the supply chain because attack vectors extend beyond the third-party level. The suppliers of your suppliers, and even their social media profiles, could act as pathways to your sensitive data if they're compromised. It's imperative, therefore, to monitor both the third and fourth-party landscape throughout the entire lifecycle of each supplier.
Vendor Risk by UpGuard includes an attack surface visibility feature.
2. Vendor Risk Management (VRM)
A vendor risk management solution will further support the discovery of third and fourth-party risks. Besides a surface-level attack surface scan, a deeper risk analysis is required in the form of risk assessments.
VRM solutions help you manage the complete scope of Third-Party Risk Management (TPRM), to the point of even enabling automation options for ensuring assessments are always sent on schedule.
With a VRM solution, you can either choose from a library of risk assessments or use them as a template for your own custom questionnaire designs. The results of each assessment map to popular cybersecurity frameworks to help your teams track their third-party risk metrics and any compliance gaps.
Some VRM solutions are even capable of forecasting security posture improvements based on remediation tasks to help you focus on exposures with the highest potential detriment.
Vendor Risk by UpGuard is a Vendor Risk Management solution
3. Code Verification
Poor code practices in vendor software result in vulnerabilities that could facilitate supply chain attacks. Third-party software exposures are tracked in the CVE database, but you shouldn't wait for an exposure to be published by CVE before addressing it. Cybercriminals are usually already exploiting an exposure before it's published by CVE, and those that aren't so quick to the party, reference the CVE database to get informed of new attack vectors.
To rapidly discover coding vulnerabilities before they're exploited by threat actors, code verification solutions such as Veracode and IBM AppScan should be added to your supply chain risk management portfolio.
Geopolitical disturbances have a direct impact on supply chain continuity and security. By monitoring geopolitical data you could detect potential disturbances to raw material availability or security and implement preemptive action and preserve the integrity of supply chain operations.
GeoQuant is an example of a geopolitical solution.