The SolarWinds breach is a salient example of how organizations can suffer cascading effects from supply chain cybersecurity risks. This intrusion caught many organizations off guard, revealing internal procedure deficiencies regarding customer reporting and a lack of appropriate incident response planning. Prevalent found that 37% of impacted parties had no documented incident management policy for responding to the SolarWinds breach. The SolarWinds supply chain breach has wreaked havoc on Orion consumers around the world, despite their best efforts to recognize and minimize the risks. This was one of the most far-reaching and sophisticated cyber-attacks seen in recent history. The attackers’ point of entry was an HVAC subcontractor that had served numerous Target locations.Īnother more recent example is the 2020 SolarWinds attack, which compromised the company’s Orion Platform. For example, in 2013 Target suffered a massive data breach that exposed the PII of up to 40 million consumers. In many cases, large enterprises will have robust cybersecurity programs, but these don’t always extend to third-party organizations that may have substantially less cybersecurity knowledge and capability. Some of the most important risks facing 21st century supply chains are data breaches and other cyber incidents, which can jeopardize suppliers, their customers, and even their customers’ customers. Types and Examples of Supply Chain Risks Cybersecurity Risks It also addresses board-level topics, such as operational resilience, business continuity, and product lifecycle management. While you may be unable to predict specific disruptions, a comprehensive and effective supply chain risk management program will help your organization prepare for unexpected events. While just-in-time supply chains and global outsourcing reduced costs and increased efficiency during times of stability, these practices have left supply chains exposed to existential threats in recent years. The COVID-19 pandemic, geopolitical unrest such as the war in Ukraine, climate change, natural disasters, and other events have spurred many companies to revisit their approaches to SCRM. Today, supply chain risk management means the difference between success and failure for many organizations. Why Supply Chain Risk Management Is Critical in 2022 Additionally, advance planning can pave the way for organizations to implement automated supply chain risk management solutions to shoulder part of the load. Gaining a clear understanding of supply chain risk enables the organization to better prepare for and respond to disruptions to product and service delivery. A Supply Chain Risk Management Strategy Outline.Understanding Profiled, Inherent & Residual Risk in the Supply Chain.Industry-Specific Supply Chain Risk Management Concerns.Types and Examples of Supply Chain Risks.Why Supply Chain Risk Management Is Critical in 2022.The rest of this post will cover the following topics: Well-designed programs also include risk mitigation and risk transfer processes, as well as the ability to measure and analyze key performance indicators (KPIs) for ongoing program optimization. Through supplier assessments, continuous monitoring, data analysis and risk mapping, effective SCRM programs prioritize interdependent risks that can lead to supply chain disruptions and downtime. The goal of SCRM is to maintain supply chain continuity in the event of an incident that could negatively impact business relationships, customer service and profitability. These sequences can be short and simple, such as a farmer selling goods at a farmer’s market – or they can be long and complex, such as consumer products organization that designs and markets its products but then relies on hundreds of third, fourth and Nth parties for raw materials, assembly, packaging, and distribution. Supply Chain Risk Management (SCRM) is the practice of identifying, analyzing, and addressing the risk of data breaches, operational failures, and other business disruptions that can affect an organization’s suppliers – and therefore limit its ability to deliver products and services to its customers.Ī supply chain is broadly defined as the sequence of processes required to produce a product or commodity.
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