A 5-step guide to managing cyber threats in the supply chain

With digital networked systems leaving supply chains vulnerable to cyber-attacks, how should companies prevent and manage these risks?
12 February 2019

When Danish shipping giant A.P. Moller-Maersk was attacked by the NotPetya malware in 2017, access to its electronic booking systems was blocked and ultimately forced a 10-day overhaul of its entire IT infrastructure.

The malicious attack still remains one of the largest disruptions to affect the global shipping industry to date. As a result of lost bookings and terminal downtime, Maersk incurred a massive US$300 million (€264 million) loss.

With the increasing sophistication of cyber threats, companies worldwide have to brace themselves for a new reality where supply chain disruptions are no longer restricted to those of a physical form. Cyber-attacks have the potential to disrupt or, at its worst, cripple the logistics and supply chain operations of an entire business across different geographies.

Instead of adopting a reactive approach to cyber security, companies should actively prevent and manage such cyber risks by devising a response plan with the following five steps.

1. Identify third-party risks

To successfully thwart future cyber-attacks, companies have to first determine which vendors or third-party entities have access to their firewall and could have the largest impact to the organization in a worst-case scenario.

When selecting possible vendors to work with, it is best to consider the amount of sensitive data that the vendor is handling, such as personally identifiable data, protected health information or financial transactions. With this knowledge, suitable mitigation measures must then be introduced to safeguard the sensitive data.

2. Monitor the cyber threat environment

As cyber threats are continuously evolving and news reports of a cyber-incident become known, it is a continuous effort to assess and understand events impacting the vendors or third-party entities that your organization works with.

The ability to persistently monitor one’s supply chain and the cyber threat environment will be the best determinant in responding adequately to a cyber-incident.

For instance, a year on from the cyber-attack on Maersk, Chinese state-owned shipping conglomerate COSCO Group managed to contain the damage and limit the length of disruption when its shipping operations in the Americas suffered a ransomware attack.

Though its shipping operations in the Americas came to a momentary standstill, the company’s swift response efforts and preemptive network segmentation prevented the escalation of the attack, allowing regular operations to resume within a week without significant damage.

3. Assess potential impact

Organizations should possess the capability to gauge the extent of the potential impact a cyber-attack can have on its business operations.

According to a DHL Resilience 360’s report, knowing the nature of each cyber-attack can better equip companies by facilitating understanding, communication and coordination along its supply chain.

Types of cyber-attacks

  • Data breach
    Release of secure information to an untrusted environment, including trade data, schematics, manufacturing systems, shipping data, and other confidential company information
  • Ransomware
    A form of malware which encrypts a user or end system, rendering all data within inaccessible, and demanding the payment of ransom to decrypt
  • Denial of service
    A cyber-attack performed by many actors to render a firm’s website or system unavailable to users
  • Vulnerability
    The discovery of a weakness, known or unknown, which may be exploited by a threat actor to perform unauthorized actions on a system
  • Phishing
    A fraudulent attempt to obtain security credentials from entry to executive levels for malicious purposes

Conducting a risk assessment on the areas of vulnerability from multiple angles will help companies measure the potential risk and threat of a sudden attack on its supply chain.

4. Develop risk scenarios and emergency protocols

Without emergency protocols established or adhered to in the event of a cyber-attack, it will likely cause confusion that could lead to disruption in the supply chain. Companies need to train its employees on potential threat scenarios and develop corresponding response plans to tackle different situations.

Often, these response processes might involve the use of advanced technology and human intelligence analysis. Having established the protocols and trained employees on their respective emergency response roles, the company will then be well-prepared to implement the appropriate measures to mitigate the potential damage inflicted by a cyber-attack.

5. Communicate relevant actions to stakeholders

When a threat has been identified, it is imperative to investigate the matter internally and cascade information in a timely manner within the organization before alerting the relevant authorities.

Once more details emerge and the nature of the threat is confirmed, organizations should pro-actively inform all stakeholders who have been affected, while activating the emergency response teams to rectify the issue.

With the threat of cyber-attacks looming large, companies need to take control and ready themselves with a proper response plan and top-notch cyber security practices to protect their supply chain.

 

This article was adapted from the DHL Resilience 360 report: “From Ports to Production: Insights into Supply Chain Cyber Threats”.

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