In a previous blog post we discussed the benefits associated with the digital supply chain. As a quick refresher, digital supply chains connect information, goods and services within your company – and with third parties – through real-time data capture using technologies such as GPS tracking, radio frequency identification (RFID), barcodes, smart labels and wireless sensor networks. With access to real-time data, manufacturers can foster new collaborations and improve visibility in-house, as well as with customers and suppliers.
While the ability to move and share data (such as confidential intellectual property or personal information) across platforms and among third parties creates tremendous opportunities, it exponentially increases cybersecurity risks. According to IBM, the number of cybersecurity breaches grows by 64 percent every year, with the manufacturing industry steadily budging up the list of the sectors at higher risk of cybercrimes. While cyber threats are known to come from competitors and organized crime syndicates, the report also mentions that 60 percent of cyber breaches are linked to current and former employees, service providers and suppliers. These hackers realize the attractiveness, value and vulnerability of manufacturing companies that are not fully ready or equipped to cope with an attack.
To combat these risks, everyone in the digital supply chain needs to know what is expected to mitigate and manage cyber risks. Manufacturers must establish policies and procedures through contractual agreements, supported by continuous monitoring and training. Proper training is a key element in this process because even the most advanced firewalls can’t always protect manufacturers against phishing scams. Providing adequate knowledge about what phishing emails look like – and how to avoid/report them – can go a long way in protecting a business and its supply chain network.
Telling manufacturers to protect every part of their supply chain is much easier said than done. In all honesty, it is almost impossible to do. Thus, organizations must identify their most valuable and confidential information and allocate resources strategically to protect that data.
With the risks that accompany a digital supply chain, it can be tempting to ignore going digital and continue with the status quo. However, the transformation into a digital supply chain provides the following benefits that can truly drive growth:
- Reduced procurement costs for all purchases of goods and services
- Decreased supply chain process costs
- Increased revenue
The key to a successful digital supply chain is taking a proactive rather than reactive approach. Always make an effort to assess the cybersecurity risks of third parties and create an emergency plan, just in case.