Supply Chain Security Management - How to Minimize Risk

Risk Management
5 min read
James Mignacca
June 28, 2023
James Mignacca
June 28, 2023
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Managing Supply Chain Security Risks
In this blog James Mignacca and George Kehayas review factors driving supply chain risks and why every business should audit their supply chain vendors.

As your business becomes increasingly reliant on vendors, suppliers and providers to support operations or deliver goods and services, managing security risk in your supply chain becomes more complex.

Attackers are aware of this fact and often target and use vendors as an access point to larger targets — like your organization. Having a plan in place with detailed measures to manage and mitigate supply chain risk is mission-critical, especially when a supply chain breach could compromise your systems, lead to outages, or exploit sensitive data.

What is supply chain security management?

The first step to establishing supply chain security is understanding the scope of your vendor relationships. This means taking inventory of all the vendors you use, from those who provide IT services or cloud storage solutions to those who manufacture products for you. Next, assess each one’s potential impact on your business operations in the event of an incident.

Once you have a clear picture of which vendors pose the greatest risks (and why), it’s time to start implementing measures to minimize and mitigate risk.

One way that organizations can reduce their exposure is by conducting thorough due diligence when selecting new vendors and when renewing existing contracts. Additionally, companies should require that all third parties they work with adhere to certain standards, such as having up-to-date cybersecurity policies in place and requiring regular penetration testing on any software or applications they develop before they’re deployed within your production environments.

A third-party audit can help  

Establishing a centralized and automated audit management process helps both parties (you and your vendor) align to data protection best practices, meet compliance requirements, and institute a repeatable and efficient audit cadence.

As a customer, third-party audits make it easier for your service provider or auditor to analyze your current and historical data liability and data risk posture. As an auditor or MSP, the auditing process offers real-time access to the state of data inventories, sensitive data, and data protection measures.

You can also consider establishing contractual agreements with your suppliers that outline specific requirements related to security controls and protocols, such as encryption methods used for data transmission, or authentication processes for sensitive information access across databases hosted by external providers.

These types of clauses ensure both parties remain accountable for protecting customer or other shared sensitive data throughout the duration of any given relationship while also providing legal recourse should a breach occur due to negligence on either side of the relationship.

Finally, it’s important that companies regularly monitor how third-party partners handle customer or sensitive company information once it has been shared, so they can quickly identify any suspicious activity occurring within company ecosystems before serious damage occurs.

This could include tracking changes made within source code repositories managed by outside developers, or monitoring network traffic between internal systems connected via VPN tunnels via external service providers.

Leverage trusted industry programs for supply chain security management

The NIST Cybersecurity Supply Chain Risk Management (C-SCRM) program is designed to help organizations identify, assess and mitigate risks through product and service supply chains. The program complements best practice frameworks like the NIST cybersecurity framework and the CIS Benchmarks.

Managing supply chain risk requires ongoing effort. Introducing shared processes, audit cadences and continuous monitoring can simplify program management and ensure both you and your supply chain partners maintain strong defenses and risk mitigation measures.

Listen in to the Insider Series as George Kehayas, CEO and Founder at Yokoten Operations Management and Cavelo CEO James Mignacca talk about the evolution of the supply chain and share tips to manage supply chain security.

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