Conducting Security Audits in Supply Chain Management
Supply chains are among many organizations’ most critical operations. Unfortunately, they’re also typically some of the most vulnerable. Cyberattacks against supply chains have risen recently, but many risks go unnoticed and unaddressed. As cybercrime grows, supply chain professionals must embrace regular security audits.
Why Supply Chains Need Security Audits
A staggering 81% of organizations in 2024 experienced negative effects from a security breach from a connected third party. Because supply chains involve so many entities and such massive data exchanges, they’re more sensitive to lateral movement and similar attack vectors than other operations. Cybercriminals know this and are targeting these vulnerabilities with increasing frequency.
Supply chain attacks can have severe consequences. In previous incidents, a breach at a single supplier has affected as many as 18,000 businesses, highlighting how quickly these issues can grow.
One of the primary reasons such breaches are so common and damaging is that cyber risk is difficult to spot in a large, complex supply chain. Consequently, the industry needs regular and thorough security audits to find and fix vulnerabilities before a criminal discovers them.
Supply Chain Security Audit Best Practices
Although audits are a fairly common practice in cybersecurity circles, supply chains present unique challenges. Consequently, security practitioners in this industry should consider a few sector-specific best practices.
Maximize Visibility
The first and most important step in a supply chain security audit is to ensure transparency. Only 43% of companies today understand their tier-one suppliers’ performance, and even fewer can see beyond that. This lack of insight leaves entities open to third-party risks and hinders an effective assessment, so teams must address it before anything else.
Maximizing visibility will require some newer technologies. Internet of things (IoT) devices can provide insight into how goods pass between hands, while automated network mapping and asset discovery can provide clarity into how data moves. Larger supply chains may need to deploy blockchain tracing solutions to ensure records remain transparent and tamperproof.
Connect With Supply Chain Partners
Understanding the full extent of a supply chain’s cyber risks means gauging the security posture of a business’s suppliers, logistics providers and downstream partners. Consequently, security teams must collaborate with these third parties to gain the necessary insight. Ensuring visibility will likely require buy-in from other parties within the supply chain.
Getting external organizations to comply with requests for information requires trust. As such, the primary company must also be willing to demonstrate its security measures and share data with those they ask the same of. Teams can use secure platforms like smart contracts and encrypted cloud databases to perform such communications securely.
Consider Regulatory Compliance
Security vulnerabilities are not the only things a supply chain audit should search for. Given how far-reaching these networks are, any assessment should also ensure compliance with applicable regulations across companies and countries. Even though a business may operate out of an area not subject to such laws, its supply chain and partners may fall under other jurisdictions.
At least 24 nations added data privacy laws or adapted existing legislation in the past eight years. These regulations can vary between nations, and many affect foreign organizations with operations or partners within the country in question. Consequently, any large supply chain likely falls under at least a few cybersecurity laws, so verifying compliance in all relevant entities is crucial.
Establish a Regular Schedule
Security teams working in supply chain management must also realize that an audit shouldn’t be a one-time effort. Cybercrime techniques and data regulations change frequently, so a network can be safe and compliant one year but not the next. As such, ongoing reassessment and adjustment is necessary.
It’s important to collaborate with other supply chain partners to develop a formal, regular schedule for when and how to perform security and compliance audits. Some regulations — like the Cybersecurity Maturity Model Certification — require annual audits for some organizations, so it’s best to conduct assessments at least once yearly. Reviews should also judge the analysis process itself to confirm its techniques remain reliable.
Employ Continuous Monitoring Technology
Because cybercrime can move so quickly and supply chains are so complex, manual inspections will fail to produce comprehensive results. Companies can address this gap by automating much of the assessment process. Most importantly, they should pair regular full audits with continuous monitoring so they can respond to emerging threats quickly.
Artificial intelligence (AI) network monitoring reduces breach timelines by 108 days on average, potentially saving millions in the process. Because AI thrives in data-heavy environments with complex relationships, it’s the ideal solution to discover potential threats within a supply chain.
Security Audits Are Central to Safe Supply Chains
Supply chain security is essential. Any entity engaging in international trade or complex domestic operations needs to audit its supplier network to remain safe.
Failure to perform these assessments can result in far-reaching consequences, especially as cybercriminals target the industry with frequency. To ensure a secure future, cybersecurity teams must learn to adapt to the sector’s unique needs and concerns.
