Supply chain companies continue to grapple with challenges in the second half of 2021. Inflation has driven up logistics costs. Businesses in many industries face worker shortages. COVID’s Delta variant could slow down the economic recovery as the rate of infections throughout the United States rises again.
There are also constant supply chain security risks that logistics companies face. To successfully meet the challenges of the moment and stay competitive, businesses need to find ways to minimize these risks.
Supply Chain Cyber Security Risks
Supply chain security risks can be divided into two broad categories: cyber security risks and physical risks. In recent years, cyber threats from hackers have emerged as the gravest threat to supply chain security. These threats include malware attacks, piracy, unauthorized management systems access, and maliciously injected backdoors into the purchased, open source, or proprietary software used by organizations.
Supply chains are particularly vulnerable to cyber attack because of the close collaboration required between logistics companies, their suppliers, and resellers. Increasingly, logistics software and networking systems have become intertwined, allowing cybercriminals to affect multiple entities so long they can breach one vulnerable point.
The April cyber breaches of Colonial Pipeline, the largest fuel pipeline in the United States, led to fuel shortages across the East Coast. In 2020, hackers possibly acting at the behest of Russian intelligence services breached the management systems software of Solarwinds, a Texas-based software company. This potentially compromised thousands of their customers, including the Pentagon, the US Departments of the Treasury and Homeland Security, and companies such as Ford, Visa, Mastercard, and Procter & Gamble. Insured losses were estimated at $90 million.
To minimize cyber risks, supply chain companies should require a minimum standard of cyber security from their partners and vendors. They could, for example, insist that their partners utilize a proven cyber security protocol such as Advanced Encryption Standard (AES). AES is the first and only publicly accessible cipher approved by the US National Security Agency for protecting top secret information through encryption, and could make the difference between a successful or unsuccessful cyberattack.
Experts also urge supply chain companies to take a proactive approach to cyber security. They should assume hackers are continuously trying to breach their networks and those of their partners and vendors. For this reason, it’s vital that businesses regularly perform penetration testing and vulnerability assessments of both their management systems and the systems of any supply chain partners and vendors.
Physical Supply Chain Security Risks
Traditional physical security risks still threaten supply chains. Cargo theft is a $15 to $30 billion-dollar problem in the United States, according to one analysis, and the problem could get worse with bottlenecks stranding products and goods in warehouses and fulfillment centers throughout the country. Reducing cargo theft could significantly help reduce a supply chain company’s Total Cost of Business (TCOB).
Terrorist and criminal organizations can sabotage supply chain networks, while cargo shipped by sea is vulnerable to piracy. Threats to supply chain security can also come from internal sources, as disgruntled employees can play a role in stealing, sabotaging, or tampering with inventory and other supply chain infrastructure.
Security experts recommend stronger screening methods be used in hiring potential supply chain workers. They further recommend standardizing identification and credentials for all participants in a particular supply chain.
Companies can also minimize physical supply chain security risks by ensuring all shipments can be tracked and traced at any point in transit. Finding the right logistics partner can accomplish this. iGPS plastic pallets, for example, incorporate smart features like standardized identifying numbers that not only make them readable by all types of automated systems, but traceable at any point in the supply chain.
Supply chain companies continue to face numerous challenges, including a resurgent pandemic, rising inflation and labor shortages. But they can weather these challenges, and stay competitive, by minimizing the constant supply chain security risks they also face.
Companies can minimize supply chain risks by using iGPS plastic pallets for all their shipping needs. Our pallets are traceable, ideal for all types of warehouse automation, and help reduce your Total Cost of Business. For more information, contact us at 1-866-557-0047, email a specialist at [email protected], or visit our contact page.