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Top 5 supply chain cyber risks

By Avetta Marketing
October 26, 2023
5 minutes
Top 5 Supply Chain Cyber Risks

Supply chains are delicate. If you consider each link in the chain as a potential cyber-attack target, the opportunities are simply too juicy to pass up for hackers.

Cyber-crime, in general, is on the rise, and so is supply chain-targeting cyber-crime. Supply chain cyber-attacks have quadrupled since 2020, but the attacks are also increasing in size and severity. Earlier this year a mysterious hacking group hit hundreds, potentially even thousands, of victims in a massive supply chain attack that abused a Microsoft-trusted software model to make the attackers’ malware look real.

In our increasingly digitalized world, supply chains serve as the lifeline for global commerce, seamlessly connecting manufacturers, suppliers, distributors, and retailers. However, with this connectivity comes a plethora of cyber risks that threaten supply chain integrity and security. Cyberattacks on supply chains can have devastating consequences, ranging from operational disruptions to financial losses and reputational damage.

Let’s look at the top five cyber risks faced by supply chains today and discuss strategies to mitigate these threats.

1. Third-party vulnerabilities

One of the primary cyber risks in supply chains is the vulnerability associated with third-party vendors and partners. Supply chains often involve numerous external parties, each with varying levels of cybersecurity measures. Cybercriminals exploit these weaker links to gain unauthorized access to sensitive data or inject malware into the supply chain network, usually taking advantage of the less-protected systems of contractors and subcontractors to reach their ultimate targets.

What to do about it:

Businesses must conduct thorough due diligence when selecting vendors, ensuring they meet stringent cybersecurity standards. Regular security audits and contractual obligations can help enforce compliance and reduce third-party vulnerabilities.

2. Phishing attacks and social engineering

Phishing attacks and social engineering tactics remain prevalent in the cyber threat landscape. Cybercriminals impersonate trusted entities within the supply chain, sending deceptive emails or messages to manipulate employees into divulging confidential information, such as login credentials or financial data.

What to do about it:

Employee awareness training and robust email filtering systems are crucial defenses against phishing attacks. Encouraging a culture of skepticism and teaching employees to identify suspicious communication can significantly reduce the risk of social engineering schemes.

3. Data breaches

Per IBM’s Cost of Data Breach Report, the average cost of a data breach in 2023 was $4.45 million. That’s a lot of dough for an event that occurs in a matter of milliseconds. Breaches pose a significant threat to supply chains, exposing sensitive customer data, financial records, and proprietary information. Cybercriminals target weak points in the supply chain's digital infrastructure to gain unauthorized access and exfiltrate valuable data.

What to do about it:

Implementing encryption, access controls, and regular security assessments can help safeguard sensitive information. Additionally, businesses should have an incident response plan in place to promptly detect, contain, and mitigate the impact of a data breach.

4. Ransomware attacks

Supply chains are attractive targets for ransomware attackers due to their interconnected nature and reliance on timely data exchange. Ransomware attacks have become increasingly sophisticated, encrypting critical data and demanding hefty ransoms for decryption keys. The FBI is now even warning about dual ransomware attacks, in which the same organization is targeted more than once in quick succession.

What to do about it:

To mitigate the risk of ransomware attacks, supply chain stakeholders must regularly update software, employ robust cybersecurity tools, and conduct regular backups of essential data. Developing a comprehensive incident response plan that includes ransomware scenarios is essential to minimize downtime and financial losses in the event of an attack.

5. Supply chain disruptions

Beyond direct cyberattacks, supply chains are vulnerable to disruptions caused by attacks on key infrastructure, such as transportation systems or manufacturing facilities. These disruptions can cascade through the supply chain, causing delays, shortages, and financial losses.

What to do about it:

Supply chain companies should diversify their supplier base, review the cybersecurity posture of their critical suppliers, and establish contingency plans to mitigate the impact of potential supply chain disruptions. Also – collaboration is key. Supply chains are essentially big communities, and it helps to think of them that way. Work with your partners and vendors to enhance collective resilience and create a cyber risk posture.

More cyber risk-related reading:

How cyber proof is your procurement castle?

Mitigating digital risks in the supply chain: Best practices

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