Our world is more connected than ever, allowing us to access entire worlds of information at our fingertips. However, increased connectivity isn’t always a good thing. Easy access to information has also increased the vulnerability of sensitive information. In 2020 alone, the number of data breaches in the United States came in at a total of 1001 cases, affecting 155.8 million individuals. However, cybersecurity is just one aspect of the broader, more complex issue of supply chain security.
Supply chain security is an overarching term for practices and initiatives developed to protect an organization’s value chain from a wide array of both external and internal threats. These threats can be in the form of external, physical threats like natural disasters, terrorist attacks or accidents, or internal threats like theft, piracy, or corporate espionage to name a few. A company’s supply chain is the backbone of its entire business. The threat to supply chains is real and demands urgent, affirmative action against ever-evolving threats and ever-increasing stakes.
Supply chain governance is a system of practices, protocols, methods, and institutions put in place for an organization’s legislative, executive and judicial processes to increase efficiency and ensure the optimal performance of a given supply chain. Effective governance cannot take place without consideration of the organization-wide risk. As a result, supply chain governance and security are inextricably linked.
In order to protect information from going into the wrong hands, it is important to ensure that it is available to the right ones. Transparency and unobstructed flow of information within an organization promote cross-functional collaboration and allows for clearer rules and protocols for individual and collective accountability. Collaboration can help plan, create, and communicate policies, assess risk, and develop mitigation strategies with multiple fail-safe measures at every level to ensure security.
To determine the success of a risk mitigation strategy or tool, organizations need to establish well-defined metrics. These metrics can then be evaluated and maintained through iterative and incremental auditing, tracking, and reporting across internal and external stakeholders in the value chain. This process reveals weaknesses and vulnerabilities that need to be addressed with strategic, proactive, data-driven approaches. Statistics show that nearly two-thirds (aprox. 66%) of security breaches are a result of third-party vulnerabilities and 40 percent of security breaches were due to attacks on weak links in the supply chain. Clearly, detection and resolution of such threats should be a priority to achieve optimal efficiency, performance, and compliance in the face of advancing threats.
As challenges of supply chain security are becoming more and more nuanced and sophisticated, so are the technologies and solutions to mitigate them. For example,
Blockchain, an emerging technology could potentially reduce cybersecurity risks inherent to supply chains by creating an auditable, immutable, unchangeable ledger of transactions that can be connected to a verifiable identity. Smart technologies such as smart sensors, IoT, and decision-making algorithms can detect threats and follow and execute security programs and protocols. Practices such as design thinking can aid with the conception, implementation, and maintenance of secure supply chains through creative problem solving and inclusive ideation.
Industry 4.0 technologies and practices like the ones mentioned above are quickly becoming integral to successful supply chain governance and security. Gartner echoes this sentiment and predicts that “Through 2024, 50% of supply chain organizations will invest in applications that support artificial intelligence and advanced analytics capabilities.” The relevance of Industry 4.0 is only going to increase in the near future and organizations that embrace it early will have an undeniable competitive advantage and will likely emerge as the industry leaders of tomorrow.