Can Managed Cyber Security Services Protect My Supply Chain?
Beginning with China sending workers home and closing important sectors of their economy in January 2020 to contain COVID-19, a global flow of products came to a significant slowdown. The shutdown of China flowed around the world, slowing international trade and supply as the pandemic began to spread, causing production shockwaves covering the planet.
With an unprecedented public health crisis growing, companies around the globe began immediately focusing on protecting their staff, and in turn, the communities they represent. Manufacturers immediately set on a course to maintain production, find alternative supplies, and secure PPE for staff to keep production running.
Now, a year and a half later, some countries are beginning to shift from this initial pandemic response to plans for moving forward post-pandemic. Leadership teams and boardrooms are analyzing supply chain and risk to secure stability in the future.
Events like COVID are not unique. Disruptions to business happen all the time and are increasing in frequency. Between climate disasters, public health, geopolitical events, or even a container ship getting stuck in the Suez Canal! Other events such as the US-China trade war and Brexit sharply cut trade networks as other recent examples.
In an increasingly turbulent world of global trade, supply networks need to ensure protection while maintaining low-cost supplies and limited inventories. To stretch yourself too thin can devastate a business in a short period.
Analysts at Bain & Company show that a resilient supply chain is more robust and grows faster because it can pivot at a moment's notice. Resilience helps to meet client needs when there is a shift in market demand. These companies who can provide this security can increase customer satisfaction by 30% and increase perfect order rates by 40%.
Moreover, a flexible supply chain can cut costs and increase cash flow by increasing inventory turnover by 20 to 40%. In addition, executives can reduce market disruptions by building additional security within their supply chains with advanced analytics to improve forecasting accuracy.
If you work in logistics, this past year and a half have likely been quite miserable and stressful for you at times. With the pandemic, international trade uncertainty with several countries, there have been significant challenges to the job. On top of the global problems, there are a host of new regulations many governments are enacting.
The COVID-19 pandemic is arguably the most significant disruption to trade ever to affect global logistical supply chains. The resulting troubles brought many companies, governments, and people substantial losses. People everywhere struggled to obtain even the most basic of supplies (such as toilet paper). Demand fluctuated as homes altered consumption as well as businesses. The market changes radically altered supply chains overnight, leaving companies scrambling to adapt.
So far, we are seeing vaccines and other preventative measures leading the world to return to normal. Some regions are starting to look like it is 2019 again.
Now that the end is in sight, risk managers and other logistical managers are closely looking at their current supply chains. Companies need to determine what they can do to prevent the security and logistics problems they have seen since the beginning of 2020. Disruption from the COVID-19 pandemic created light in the darkness by creating opportunities for advancing the way we manage supply chain logistics in the future.
Sleepless nights ahead?
COVID-19 showed the world just how fragile our supply chains could be. Modern strategies of maintaining low inventories and regular restocking became problematic as instant transportation experienced delays and reduced production. Freedom of movement globally meant reduced ability to keep inventory on hand. The new problems showed us glaring issues in need of solutions.
The global disruptions were most evident in the sectors most needed at the time. With shortages in personal protective equipment caused dangerous reuse of PPE, exposing the dangers of single-source limited inventory cost controls. However, the scarcity did not stop there with other shortages in hand sanitizer, toilet paper, and other products.
With the problems of COVID-19, it was not the first disaster to disrupt global supply chains. In 2011, the Fukushima nuclear disaster in Japan also interrupted the global supply chain of many industries, including automobiles, electronics, and other computer products, among others. The Fukushima disaster got some executives rethinking supply chain management.
However, unlike other events, COVID-19 carried far more devastating consequences on a global scale. Events like the Suez Canal obstruction and Fukushima were more localized disruptions.
There is already extreme pressure to recreate more resilient and diverse supply chains that also continue to be efficient and cost-effective while expanding resilience. The task to accomplish this will be daunting but necessary.
Supply chain cyber security services
With the new look at supply chains, companies are also analyzing their cyber security and taking a fresh look at managed cyber security services. Many businesses are diligent in protecting their data, but what about your supply chain vendors? Up to 80% of cyber attacks occur somewhere in the supply chain rather than at the beginning or end. The threat to supply chain cyber security is so dire that the US Department of Defense has created the cyber security Maturity Model Certification (CMMC) to ensure supply chain security for defense contractors. A business can not do business with the DoD without it.
A significant issue with supply chain security is determining responsibility. Along the line, there are many partners with multiple staff members engaging in the transaction process. Thanks to this, choosing who can be held responsible for a data breach can be challenging to determine.
Along the process, various corporate entities may enact legal requirements with their suppliers. However, a question remains: "How are they enforced?" Do risk managers provide adequate assurances to the companies of the teams? On the other hand, are risk management policies put in place to ensure security?
Do these teams include plans for threat detection, analysis, and response processes for the entire supply chain, or only their part? Whose IT departments are responsible for the cyber security of other companies who may not have the capacity to meet requirements?
Digital transformation is an ongoing process that continues to change the way we work and live. As information progresses, providing new connectivity and data insights allowing businesses to transform and improve, the global economy becomes better, faster, and more efficient. Ongoing progress creates an expanding global network where the internet of things increasingly connects all aspects of our lives.
According to Gartner, 60% of organizations worked with more than 1,000 third parties, which grows every year. Still, other research by Deloitte shows that 40% of manufacturers have been victims of a cyber attack in 2019 alone. A year earlier, the financial cost of such attacks to businesses in the manufacturing sector totaled $7.5 million.
Indeed, with global supply chains becoming more diverse every day, this results in a diversity in overall cyber security risk for critical infrastructure, emergency services, and national defense security.
Most businesses are fortunate enough only to have to manage online threats. However, supply chain services have to deal with additional threats to other companies along the supply chain. Suppose an attack hits one business. In that case, the resulting devastation can ripple up and down the supply chain affecting other companies in the process. Knowing this, keeping your business safe is vital to your company's future and the businesses you have as partners.
Suppose cyber-criminals can punch a hole in your security. In that case, this can lead to an overall devastating breach costing you not just money and time but the future trust of your customers. 2016 reported over 1,000 data breaches to corporations in the USA alone. Some of these companies are incredibly secure. If hackers can breach a company like Equifax, so can yours.
Four steps to protect the data in your supply chain:
Stay up to date
One of the most straightforward and most vital steps to protecting your company from malware, viruses, and other security breaches is ensuring your security is up to date. If a competitor faces a cyber threat, immediately take steps to safeguard your systems. Security in a supply chain means constant vigilance against threats. Keeping software updated and educating your IT and other staff on best IT security practices is vital to safety.
With technology and IT infrastructure facing constant threats, many companies rely on various hardware and software working together. The technology works to manage inventories, gather shipment data, and even repair logs of equipment. This complexity creates several opportunities for vulnerability.
Our current dependence on technology creates ongoing opportunities for bad people with a desire to disrupt supply chains for personal gain or even political motives. In 2017, a cyberattack dubbed NotPeya used malware similar to ransomware to target Microsoft Windows-based systems. The result infected the master boot record to execute a payload that encrypts a hard drive's file system table.
The malware prevented Windows from booting until a Bitcoin ransom paid caused devastation. The attack targeted shipping company Maersk, the world's largest shipping container company. The results had immediate and devastating consequences.
Invest in robust cyber security response
Preparing a proper cyber security incident response plan to deal with ongoing and more complex attacks is vital. The speed at which a threat is detected and reacted to can save or cost a company millions. Often, only a managed cyber security services team can provide the most effective response. They focus on containment of the threat to limit spread, then work on eradication. After they contain the threat, the next step is to find the source and begin recovery.
Supply chain attacks can come from some of the least likely places. The best security is an inside-out approach.
In an ideal world, all of your vendors would follow one set of security protocols. One benefit of managed cyber security services is the ability to spread security across the entire scope of companies with whom you partner. The right vendor can make the difference between a secure or vulnerable supply chain.
Limit external end-user access
In every step of the supply chain, data needs to be kept safe and stored correctly. Data secured inside data centers beat data on hard drives or USB drives which you can remove or duplicate. It is evident how easily unsecured data can be stolen or misplaced.
Another benefit to managed cyber security services is that they offer consistent and reliable data protection in the cloud. Thus, you have access to your data from anywhere, even in the event of an unexpected disaster. Further, cloud storage ensures access across the supply chain without the inherent risk of sending through standard channels.
Of course, always have a backup and recovery plan in place just in case there is a breach.
To sum it all up
Leaving supply chains unprotected against cyber-criminals, viruses, and even hapless employees can be costly, potentially even business-ending. Invest in your company's security now rather than paying for the damage later. Cyber attacks cost businesses millions of dollars per year. Still, with a dependable managed cyber security services plan, you can protect your supply chain.