The Importance of Supply Chain Security

The Importance of Supply Chain Security

The risk management part of supply chain management that deals with external suppliers, vendors, logistics, and transportation is also known as supply chain security. Its important mission is to identify, analyze and properly manage the risks associated while dealing with another in a supply chain. At the same time, both physical security and cybersecurity are parts of supply chain security.

There is no single set of established supply chain security principles or best practices because supply chains range widely from one group to the next, and many diverse firms may be involved. Risk management principles and cyber security in depth are required for a holistic supply chain security strategy. It also considers government protocols for foreign supply chains, such as those defined by the Department of Homeland Security or customs rules.

Physical supply chain security and integrity

Supply chain security used to be largely concerned with physical security and integrity. Theft, sabotage, and terrorism are examples of physical threats that can come from both internal and external sources.

Physical attacks are frequently mitigated by tracing shipments and double-checking regulatory documents. Vendors may also be required to secure shipments in accordance with certain quality criteria, and a company may employ multiple vendors to assure a consistent supply of commodity products.

A factory might be visited by external auditors or inspectors, and corporations could do background checks on employees. To prevent tampering or theft, shipments could be logged, secured, and scrutinized before and after shipping.

Cyberthreats and supply chain security

Cyberthreats have recently come to the top of supply chain security worries. Malware assaults, piracy, illegal ERP access, and unintended or intentionally introduced backdoors in the commercial, open-source, or proprietary software used by enterprises are all examples of cyberthreats.

In this case, supply chain security largely entails avoiding risks associated with employing software built by another company and securing organizational data accessed by a third party in your supply chain. It is impossible for businesses to assume that the software they use or acquire is secure.

Because close communication between firms, suppliers, and resellers is frequently required, computer networks may get interwoven, and sensitive data may be shared. As a result, a breach at one organization could affect many others. Instead of direct targeting, hackers may target a weaker organisation in the target’s supply chain to achieve their objectives.

The response of many companies to such attacks is limiting their dependence on overseas suppliers and focusing on supply networks in their country. Other businesses are shifting output from international manufacturers to domestic ones.

For example, Hewlett Packard Enterprise has produced a server product line that relies on a trusted supply chain for all of its parts. Furthermore, by 2022, the Chinese government has mandated that its ministries cease utilizing foreign-made hardware and software.

Importance of supply chain security

Businesses must prioritize supply chain security over others since a compromise in their systems could interrupt their operations. Supply chain vulnerabilities can result in extra costs, delivery inefficiencies, and loss of intellectual property. Furthermore, they must afraid of lawsuits in the case of delivering unapproved or faulty products.

The protection of supply chains from both physical and cyber threats can be achieved with the use of security management systems. While threats cannot be totally eliminated, supply chain security can help to provide a more secure, efficient flow of commodities that can quickly recover from interruptions.