As Supply Chains Get Tech Savvy, Are They Still Secure?

Supply chain business processes are increasingly powered by artificial intelligence. Algorithms process big data to optimize shipping routes, warehouse employee duties and the arrangement of parcels on trucks. Warehouses have already adopted robots and drones, and third-party logistics companies are seeking to use robots and drones to handle last-mile delivery as well. Blockchain, the public ledger technology that powers Bitcoin, has a variety of potential supply chain applications.

But as business managers adopt contemporary supply chain technology, they need to ensure continued security.

The analog threats to supply chain security – such as piracy, theft, counterfeit components, and tampering – persist. But now there are digital threats too. In 2017, a global cyberattack took Maersk, one of the world’s largest shipping carriers, offline. The malware known as NotPetya caused more than $10 billion in economic damage worldwide as it spread from server to server, Wired reported last year. The malware was installed on a computer at Maersk’s Odessa office and spread to its computers around the globe.

NotPetya took Maersk’s servers offline for days, costing the business millions of dollars. It’s an extreme example, but not an isolated one: Digital threats now pose just as much risk to shippers as physical threats do in supply chain operations.

Threats to Digital Supply Chain Technology

Nowadays, the entire supply chain operation depends on software and hardware working together. As the hardware moves goods, software gathers and transmits real-time data about inventory levels, shipment arrival times, maintenance schedules, and much more. In some cases, machine learning allows supply chain software to improve these systems in real time— these advanced analytics have streamlined many processes, continuously improving supply chain visibility and presenting solutions to many common issues.

However, this means supply chain management systems face a wide array of threats and challenges related to the information security of their business.

Most supply chains today store information and insights in the cloud. That means that databases, applications, and other digital information are stored on servers accessible from any computer that has the proper credentials — rather than on servers accessible only from the campus of a warehouse, for example.

Cloud storage makes it easy to scale IT services and for every link in the supply chain to communicate with every other link. But it also introduces new risks. Cloud access must be closely managed lest users have access to more data than they should, or worse, unauthorized users gain access to the network.

Additionally, when data is stored in the cloud, it’s almost always stored on servers that another entity owns. If you’re making decisions about cloud storage for your business, make sure that the host is a business that has cleared security audits and earned your trust.

The real-time data generated by the supply chain isn’t the only data at risk. “Internet of things” technology, also known as IoT, is becoming more and more integrated into supply chains for inventory management and machine monitoring. IoT has been widely adopted in certain business sectors, including aerospace and defense, but is not yet as common as cloud storage.

Still, if IoT software is compromised, hackers can learn about order volumes, suppliers, maintenance risks, and more.

Additionally, supply chains generate millions and millions of data points that are shared not only with supply chain partners, but also with the software companies that make supply chain management possible. That includes email and web hosting companies, law firms, accounting software providers, and more. If one of those companies experiences a data breach, all their clients are put at risk too.

To protect your supply chain, try to limit the amount of external software you use. Strictly control permissions, so that only the users who need access to certain information have it. And work with expert partners to make sure all your security precautions are up to date.

Threats to Analog Supply Chain Technology

Even in the digital age, longtime analog threats to supply chains persist. A report by BSI recently concluded that there were, on average, 3.1 terrorist attacks on supply chains per week over the course of the previous decade.

Employees touch every part of the supply chain — at least for now — putting supply chains at risk of inventory theft at every stage, from raw material processing sites to distribution centers. Theft rings surrounding supply chain operations can be large and well-organized, involving not only the people on site who steal goods but those who transport them, resell them, and potentially smuggle them.

Supply chains also face the risks of counterfeit goods. Partners throughout the supply chain may, officially or unofficially, replace proper materials with fake ones, posing great risk to the quality of products.

Piracy still threatens supply chains too. In West Africa, piracy cost shipping companies an estimated $793 million in 2016, between lost goods and added protection costs.

Finally, high-tech pieces of supply chain technology also face physical risks. Employees and outsiders can tamper with AI-powered robots, drones, cameras, data collection devices, and more, hindering their ability to work as they’re supposed to and potentially disrupting data-based decisions throughout the supply chain.

How Secure are Supply Chains?

Global supply chains have never been, and will likely never be, perfectly secure. It’s all but impossible to ensure that every partner is following security protocols at their sites, and even harder to police each employee.

Proactive supply chain management teams can start, however, by identifying potential weaknesses. Work with experts to find vulnerabilities in your setup and strengthen them. And follow a few general online safety rules: avoid using software you do not need, monitor your systems closely for malware, and check in regularly with your third-party vendors so that you know as soon as possible if any of your data has been compromised.

The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.

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