How Is Cybersecurity Used in the Supply Chain?

5 min read
June 20, 2023

Cybersecurity threats are one of the most significant challenges facing supply chain companies today, with 98% of companies reporting negative impacts from cyberattacks. Malicious attackers steal sensitive information that can result in millions of dollars in lost profits. Other general risks, like supplier delays, prevent supply chains from working at optimal efficiency.

Supply chain officials can integrate cybersecurity plans into their risk management strategies. Understanding how to use cybersecurity in the supply chain can help you stay prepared for potential threats.

What Is Supply Chain Risk Management?

Supply chain risk management consists of identifying vulnerabilities within the supply chain and building plans to mitigate the effects. Threats can occur during production, handling, packaging, distribution, or any other area of supply chain operations. By developing response plans, your company remains resilient.

Cybersecurity supply chain risk management focuses on digital and online threats. Cyber attackers target companies and use malicious software to steal sensitive data. Breaches can cause significant downtime, lost customer trust, decreased revenue, and other detrimental effects. By implementing thorough cybersecurity techniques, you reduce the likelihood of data breaches and other online attacks.

For instance, you can address risks in the cybersecurity supply chain with new security technology or upgraded training programs. Advanced security options protect your data, while enhanced cybersecurity training keeps employees aware of these threats.

How Do You Approach Risk Management for Your Supply Chain?

All supply chain companies face digital and physical risks. These threats can impede efficiency and revenue generation, or result in stolen data. Physical risks, like supplier delays or inventory stock-outs, happen during manufacturing and shipping. Digital risks threaten your company’s online systems and data. Managing these threats requires proactive strategies.

Supply chains face two major types of risks:

  • Known risks: Known risks are identifiable and measurable. You can anticipate these challenges and make the necessary preparations to minimize damages. For example, supplier delays or company bankruptcies are understood risks when you work within the supply chain. Companies often use data collection and analysis to predict known risks. For instance, you can use financial histories or shipping trends to forecast these problems. In addition, cybersecurity threats are quantifiable risks to supply chains using software and online applications.
  • Unknown risks: In contrast, forecasting unknown risks is challenging or impossible. These threats occur without warning, making it difficult to prepare for them. For example, an abrupt snowstorm that makes travel impossible for several days could prevent a supplier from manufacturing or shipping products. Or an attacker could profit from a cybersecurity vulnerability your company is unaware of. A risk-aware culture and proactive approaches can help you minimize the impacts of unknown risks.

Because known and unknown risks are so different, supply chains need separate strategies to manage them:

How to Manage Known Risks

Preparing for known risks is more manageable because you anticipate them before they happen. Digital tools help you forecast threats based on historical data, while structured response plans let you protect your company from harsh impacts.

Here are a few steps to take for known risk management:

1. Identify Risks


By determining the threats that impact your business most, you can prepare most effectively. Most companies use a mapping process to lay out all of the suppliers, warehouses, transport routes, and other key players that form your supply chain. This end-to-end view lets you assess each component in detail and you can view bottlenecks and inefficiencies that limit your supply chain’s effectiveness. 

For instance, you could note that one supplier has frequent supply stock-outs or that a warehouse’s coastal location might cause weather-related delays. Or, a particular system you use might have vulnerabilities that could lead to a data breach.

2. Evaluate Risk Severity

Next, analyze each known threat. Determine its potential impact on your organization, the likeliness of its occurring, and your management plans if it happens. You can prioritize risk management plans by the most severe threats. 

Use a consistent and fair scoring method to rank each risk. For instance, you should prepare for threats with the most significant negative impact first. Risks that threaten your overall success or have adverse financial consequences might need more preparation than others.

3. Build a Response Framework

After you've ranked the threats, you can develop plans to address them. Your response plans could consist of new monitoring tools, inventory management approaches, new cybersecurity techniques, or other specific methods. These frameworks should address your organization's specific concerns and circumstances, making this process different for everyone. For instance, you could invest in advanced monitoring technology, which tracks current and historical data to predict potential threats and risks.

Known risk preparation is an ongoing process. As supply chain trends and cybersecurity threats shift, new risks might emerge and previous threats disappear. You should repeat the above steps to keep your supply chain as agile and resilient as possible.

How to Manage Unknown Risks

Unknown risks make preparation more difficult. Preventative and proactive mindsets can help your organization minimize these threats. Staying aware of risks lets you respond with more agility. 

Supply chain leaders can emphasize traits like:


An open and communicative atmosphere helps employees and personnel stay aware of unseen threats. Leaders should explain potential cybersecurity risks and the organization’s ability to respond in case they occur. That way, employees can look for warning signs that indicate an unknown threat could happen. Transparency also encourages open communication about concerns and inefficiencies within response plans.


When an unknown risk suddenly occurs, agility is crucial. The faster you act, the more you can reduce its negative impacts. Employees should feel confident in their roles and prepared to take action if necessary. If they understand their role in the supply chain and how their actions affect others, they can take more responsibility when it’s time to respond. 

Comprehensive Defenses 

Robust cybersecurity defenses are necessary to protect your data and systems from cyber attackers. Security software types can track and identify system threats, then take immediate action to resolve them. In addition, thorough employee training for online methods can prevent breaches due to human error. 


Learn More About Osa

Your risk management strategies protect your company from negative impacts. At Osa, we understand the importance of robust risk management techniques. We offer an industry-leading supply chain visibility platform that connects all areas of your organization.

Our powerful AI-based technology gives a comprehensive view of all supply chain points and data. You can easily monitor performance, ongoing trends, and security. The increased visibility lets you anticipate threats more quickly, boosting your risk management plans. Use our Unified Commerce Collaborative Visibility Platform to improve security measures and boost efficiency all at once.

To get started with Osa, contact us today to learn more.

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