How to prevent digital supply chain threats

In recent years, supply chains have become more vulnerable to disruption than ever before, and there are no signs of this instability ending anytime soon. Savvy businesses should take steps to mitigate the risk of supply chain insecurity that has become the norm, so they can continue with business-as-usual no matter what external events come their way.

What is the digital supply chain?

While the supply chain involves all the steps in a product’s life cycle—from raw materials to the customer—the digital supply chain is the technology needed to create a modern, automated supply chain that is interconnected and dynamic with real-time visibility.

The result is a more efficient and agile supply chain, potential cost savings for customers and a better and more transparent customer experience.

Digital supply chain risks

It’s no surprise that the main risks to digital supply chains involve technology. They include:

• Cyberattacks, such as ransomware and malware that may result in unauthorized access and the loss of critical data.
• Supplier- and vendor-related vulnerabilities.
• Software tampering.
• Counterfeiting and material substitution.

Ways to protect your digital supply chain

There are steps businesses can take to lower their risk of digital supply chain disruption. First, it’s critical that they have strict cybersecurity measures in place, such as zero trust architecture with constant user verification and limiting user access to only what is essential for them to perform their role.

It's also important to ensure the vendors are properly vetted, trained and monitored to ensure they are adhering to security protocols and are not creating exposure points on their end.

Standard cybersecurity measures also apply, including keeping software patched and updated, monitoring for external threats, encrypting data, ensuring employees and vendors are properly trained, and performing regular risk assessments.

Strengthen security controls

The first line of defense to protect a digital supply chain is to implement strict security controls, which are rigorous measures such as user authentication and firewalls designed to prevent unauthorized access to networks and systems.

The gold standard is zero-trust architecture, which requires both internal and external users to be validated and authorized every time they access any level of the digital supply chain system.

It’s also critical to have an incident response plan ready in the event of a breach, and businesses should revisit these plans regularly to ensure they are still relevant and aligned with their digital supply chain and the latest risk mitigation techniques.

Employee education

Employees are also often considered the first line of defense in protecting a business’s digital supply chain. It’s essential that businesses prioritize regular cybersecurity training for their workforces so they can stay aware of the latest cybersecurity threats and best practices for protecting sensitive systems and data.

Schedule regular digital security evaluations

Just as it’s important to keep employees trained on current cybersecurity protocols, it’s also necessary to conduct digital risk assessments on a regular basis. This includes cyberattack simulations that can help a business identify any vulnerabilities and weaknesses before bad actors do, as well as setting up automated notifications from the system if it detects any cyber risks.

Data management

Using proper data management processes can also help safeguard digital supply chains. Businesses should be sure to encrypt their data and store it in secure databases, being careful to backup any critical data frequently. Managing the flow of data also plays an important role in ensuring sensitive data is protected from bad actors.

Establish standards for vendor relationships

Finally, vendors are an essential part of a digital supply chain. Because of the integral role they play, it’s important to vet them properly to confirm they have the appropriate security measures in place before allowing them to access systems, networks and proprietary data.

Key takeaways for preventing supply chain threats

There is a lot that businesses can do to protect their digital supply chains—from implementing the right cybersecurity measures to training employees and assessing vendors. While those efforts can help mitigate the risk of a cyberattack, there are no guarantees. That’s why cyber insurance is critical part of any digital supply chain risk management strategy.

An insurance professional can help businesses assess their unique risk profiles and customize the specific coverages they need, so they can rest easy knowing they have protection in place in the event of a cyberattack on their digital supply chain.