What is a Cyber Supply Chain Risk Management (C-SCRM)?

What is a Cyber Supply Chain Risk Management (C-SCRM)? 

While the term “supply chain” traditionally conjures up images of raw materials, production lines, haulage trucks and cargo ships, in the information age, an organisation must also consider its digital supply chain.  

A supply chain can be defined as the resources, people, and processes that a company uses to deliver its goods and services from the point of production to their customers. Subsequently, as the internet and a huge array of applications are essential for companies to carry out their operations, cyber supply chain attacks are an increasingly common and malicious cyber security threat.  

Worse still, as organisations move to cloud-computing environments, add more third-party applications to their IT ecosystems, and develop their own digital solutions, their supply chain risk will only grow. To mitigate these threats, companies must develop cyber supply chain risk management (C-SCRM) strategies.  

Let’s look at the importance of cyber supply chain risk management, types of supply chain attacks malicious actors employ, and effective ways to strengthen your supply chain cyber security.  

Why cyber supply chain risk management is important 

Cyber supply chain risk management is essential because companies of all sizes and in every industry are increasingly dependent on digital solutions. More specifically, they rely on software from third-party vendors, with the organisations using an average of 130 software-as-a-service (SaaS) applications in 2022. Additionally, companies are more interconnected than ever, granting vendors, partners, clients, and other members of their supply network access to their systems and data.   

As a result, malicious actors don’t have to find a vulnerability in the cyber security defences of a company they’re trying to infiltrate – they can exploit security gaps in their supply chain instead. Subsequently, as a company’s digital supply chain grows, so does its attack surface.  

Worse still, whether cloud-based applications and platforms or the IT infrastructure of a partner or supplier, companies lack visibility into their digital supply chain and can’t accurately determine the true extent of their cyber risk profile. Without sufficient insight into the cyber threats their supply chain poses, security teams can’t implement the appropriate policies and controls to mitigate risk.   

More alarmingly, between companies adopting cloud-based infrastructure and the rapid increase in the use of Internet of Things (IoT) devices, the traditional network perimeter has grown progressively blurry. With their networks growing in size and complexity, companies need a more comprehensive cyber threat mitigation strategy that encompasses more than conventional network and endpoint security. Failing to adapt to the evolving needs of their growing IT infrastructure not only compromises their own cyber security posture but that of their supply chain network as well. 

Lastly, with a growing emphasis on protecting sensitive data, regulatory compliance frameworks like GDPR, SOX, and PCI DSS have specific guidelines on how companies should implement cyber supply chain risk management. Failure to implement the required supply chain cyber security measures can result in a company being fined for non-compliance. Not to mention the compensation the company may have to pay to those whose data was stolen during a breach – and the resulting reputational damage.  

Cyber supply chain attacks explained 

Much like the term ‘malware’, supply chain attack has a broad definition and refers to different types of cyber threats. This makes cyber supply chain risk management strategies all the more essential because they protect your organisation against various malicious activities. With that in mind, let’s look at some of the types of supply chain attacks used by cybercriminals.  

Software supply chain attacks 

This sees a malicious actor infect an application with malware, compromising every organisation that uses that software. This could involve inserting malicious code in the software itself or deploying malware into the software vendor’s update server – so companies that download the update are infected.  

This is known as an upstream supply chain attack because the compromised software is at the top of the supply chain – or “upstream” of organisations that utilise it. Subsequently, the malicious code travels downstream to enter a company’s IT infrastructure. The recent, high-profile SolarWinds data breach is an excellent example of the potential severity of a software supply chain attack, as it compromised over 18,000 companies – with total damages in the billions of dollars. 

However, software supply chains aren’t only restricted to off-the-shelf software but bespoke digital solutions too. This is because cybercriminals could compromise components such as third-party APIs and open-source code – creating a vulnerability in the application from its inception. 

Hardware supply chain attacks 

This involves a malicious actor exploiting vulnerabilities in hardware, compromising all organisations that include it in their physical architecture. Much like a software supply chain attack, if the hardware manufacturer has a large customer base, this can have far-reaching consequences. Similarly, a cybercriminal could infect the firmware required for the device to operate, compromising the hardware component until the flaw is discovered – if at all – or the vendor pushes out a new version.  

Physical supply chain attacks 

In addition to cyber attacks that hone in on an organisation’s digital supply chain, some malicious actors target elements of the conventional physical supply chain. On one hand, this includes manufacturing facilities and freight companies, while on the other, cybercriminals may attack critical infrastructure such as power stations, financial services, and healthcare.  

Two examples of such attacks were carried out by the Lazarus Group, a cybercriminal syndicate believed to be linked to the North Korean government. The first was an attack on the SWIFT banking payment system in 2016, while the infamous WannaCry ransomware attack disrupted the UK’s National Health Service (NHS). 

Vendor compromise supply chain attacks 

While many supply chain attacks are designed to compromise as many companies as possible, giving malicious actors a variety of potential targets, some attacks have a specific company in mind. In such cases, cybercriminals may seek to infiltrate a specific vendor associated with their target. This may include social engineering campaigns, such as phishing, for acquiring access credentials, exploiting weak security controls, launching distributed denial of service (DDoS) attacks, etc.  

Best practices for cyber supply chain risk management (C-SCRM) 

Now that we’ve detailed why supply chain cyber security is vital, and the different attacks employed by malicious actors, let’s look at some of the most effective cyber supply chain risk management strategies. 

Conduct a supply chain risk assessment 

Identify and catalogue every application and platform that comprises your digital supply chain. You can achieve this with supply chain risk management software that will scan applications for vulnerabilities and compliance issues.  

Secondly, analyse the cyber security posture of all partners, suppliers, etc., that can access your systems and data. Assess the value and sensitivity of the assets they have access to and the severity of the consequences if they were to suffer a security breach. With this information, assign them a risk rating, e.g., low, medium, and high, and determine the policies and controls they’ll need to implement to reduce your supply chain risk.   

Subsequently, communicate your required risk mitigation measures to each supplier, and request a plan for how and when they intend to implement them.  

Reduce and Prevent Shadow IT 

Shadow IT, i.e., when users install applications without their IT department’s knowledge or approval, increases supply chain risk. Firstly, every application expands the company’s attack surface, but, secondly, its security team can’t assess and mitigate a threat it’s unaware of. A Cloud Access Security Broker (CASB) allows IT departments to discover instances of shadow IT and enforce policies and controls that prevent users from installing applications without permission.  

Create a Patch Management Process 

Some software vulnerabilities that malicious actors exploit have been fixed by their vendors with patches or updates – only for organisations to neglect to download and apply them. By establishing a patch management process, you’ll remain aware of which applications have known vulnerabilities and when a patch is released to correct it. Better still, turn on auto-updates where possible so patches are applied automatically.  

Continuous monitor your IT infrastructure 

Between your digital supply chain being so dynamic and different supply chain attacks that require mitigation, periodic point-in-time assessments are insufficient. Alternatively, you must continuously monitor your IT ecosystem for supply chain risk and improve your cyber security posture accordingly. Fortunately, cyber supply chain risk management software typically features continuous monitoring capabilities that allow you to consistently identify and mitigate cyber threats.  

Develop an official C-SCRM program 

Combine all your organisation’s cyber supply chain risk management best practices and create a formal, documented C-SCRM program. It should detail the controls, policies, and tools used to mitigate supply chain risk, as well as the roles and responsibilities of personnel involved in risk mitigation.   

Seize control of your cyber supply chain risk management with RiskXchange 

We can help you identify and assess your company’s supply chain risk and develop the appropriate mitigation strategies to strengthen your overall cyber security posture.  

Contact us to get a free trial of RiskXchange Platform – an award-winning supply chain risk management software.

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