Top Supply Chain Cybersecurity Risks

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Supply chains, with all the countries, partners, and systems they involve, are particularly vulnerable to cyberattacks. And the global market migrating to hybrid or cloud-based environments has only increased the risks for supply chain organizations. An IBM Security X-Force survey highlights that manufacturing has become the world’s most attacked industry over finance and insurance. In this blog post, we will explore the top supply chain cybersecurity risks, from what these main cyber risks are to some of the best practices that can help protect against them.

What are the top supply chain cybersecurity risks?

The U.S. National Institute of Standards and Technology (NIST) has identified the following main categories of supply chain cybersecurity risks:

Third-party service providers or vendors

Third-party service providers or vendors, such as those that supply software, hardware, or cloud services, can introduce new vulnerabilities into the supply chain. This can leave organizations vulnerable to cyberattacks that exploit these weak points, which can range from phishing vulnerabilities to malware attacks.

Poor information security practices by lower-tier suppliers

Lower-tier suppliers may not have adequate security measures in place to protect the data and systems they are responsible for. These security measures can range from basic things like password protection to more advanced measures like data encryption, two-factor authentication, and intrusion detection/prevention systems.

Compromised software or hardware purchased from suppliers

Compromised software or hardware purchased from suppliers can introduce malware or other malicious code into an organization’s systems, which can then be used to carry out cyberattacks. This is a particularly serious risk if the supplier is located in a country with weak cybersecurity laws and regulations. Examples of compromised software or hardware include counterfeit products and pirated software.

Supply chain software security vulnerabilities

Supply chain software security vulnerabilities can be exploited by attackers to gain access to an organization’s systems and data. These vulnerabilities can exist in the supply chain management software itself or in the interfaces between different supply chain software applications.

Counterfeit hardware or hardware with embedded malware

Counterfeit hardware or hardware with embedded malware can be used to carry out cyberattacks, such as data breaches and Distributed Denial-of-Service attacks (DDoS). The malware can also be used to remotely control the devices or exfiltrate data from the supply chain organization. This type of supply chain cybersecurity risk is often difficult to detect, as the counterfeit hardware or malware may not be detectable by traditional security measures.

Third-party data storage or aggregators

Third-party data storage or aggregators can also pose a risk to supply chain security. This is because these third-party services may not have adequate security measures in place to protect the data they are storing. This can leave organizations vulnerable to cyberattacks that exploit these weak points, allowing sensitive data to be compromised. Adequate security measures could range from data encryption to two-factor authentication.

What are supply chain cybersecurity best practices?

The NIST has listed many best practices supply chain organizations can adopt to mitigate their cyber risks, including the following:

Include security requirements in every RFP and contract

Organizations should include security requirements in every Request For Proposal (RFP) and contract. This will ensure that suppliers understand the organization’s security expectations and requirements; for instance, specifying that the supplier must use only encrypted communications when transmitting data.

Address any vulnerabilities and security gaps with vendors

Organizations should address on-site any vulnerabilities and security gaps with a vendor once accepted in the formal supply chain. This can be done through on-site audits or by asking vendors to provide proof of their compliance with the organization’s security requirements.

Apply “One strike and you’re out” policies for counterfeit vendor products

Organizations should apply “one strike and you’re out” policies for counterfeit products or products that do not meet the required specifications. This means that if a vendor is found to be selling counterfeit products, the organization should stop doing business with that vendor.

Ensure tighter control of purchases from approved vendors

Component purchases from approved vendors should be prequalified; Parts purchased from other vendors should be unpacked, inspected, and X-­rayed before being accepted. Tighter control of purchases from approved vendors helps reduce the supply of counterfeit products and the risks of cyberattacks.

Secure software lifecycle development programs and training for all engineers

This means establishing and following secure software development processes and training all engineers on these cybersecurity processes. A software lifecycle development program helps ensure that software is developed securely and that any vulnerabilities are found and fixed before the software is deployed.

Obtain the source code for all purchased software

Obtaining the source code for all purchased software will allow organizations to review the code for security vulnerabilities and ensure that it meets their security requirements. Implementing this best practice will help mitigate the risk of supply chain cyberattacks, such as data breaches.

Ensure a software-hardware security handshake

This means that the organization will verify that the software and hardware are from a trusted source; it also means that the booting process, whenever applicable, is effectively applied. To avoid cybersecurity risks, the security handshake must take place and the booting process secured through authentication codes.

Increase automation and testing to reduce the risk of human error

Automation and testing in manufacturing, namely through the use of robotics, can help reduce the risk of human intervention and error leading to security vulnerabilities. For instance, supply chain processes that are automated and tested can help reduce the risks of data breaches.

Track and trace the provenance of all parts, components, and systems

Track-and-trace programs will help establish the provenance of all parts, components, and systems; This will allow supply chain organizations to verify that these parts, components, and systems are from a trusted source and that they haven’t been compromised, namely through cyberattacks.

Capture and link “as built” component identity data for each assembly

Use programs to capture “as built” the component identity data for each assembly and automatically link to the component identity data to its sourcing information. This means that supply chain organizations will have a complete and up-to-date record of all the components used for each assembly.

Make cybersecurity a part of suppliers’ and developers’ employee experience, processes, and tools

Personnel in charge of supply chain cybersecurity should partner with every team that touches any part of the product during its development lifecycle. This means that supply chain cybersecurity should be embedded in the employee experience, processes, and tools used by both suppliers and developers.

Ensure legacy support for end-­of‐life products and platforms – Assure continued supply of authorized IP and parts

Organizations should ensure legacy support for any end-of-life products and platforms, and assure continued supply of authorized intellectual property (IP) and parts. If these end-of-life products and platforms cannot be replaced, they should be adequately supported and protected against any publicly-known vulnerabilities.

Impose tight controls on access by service vendors – Limit access to software

Organizations should impose tight controls on the access by service vendors. This includes limiting access to software, firmware, and configurations. Hardware vendors should be limited to mechanical systems with no access to control systems; All vendors should be authorized and escorted by supply chain personnel.

What are supply chain cybersecurity principles?

The NIST also suggests some basic or big-picture principles to keep in mind to help reduce cybersecurity risks in the supply chain:

Prepare your defenses based on the principle that your systems will be breached

Considering that a breach is inevitable will not only help you effectively prevent a system breach, namely by conducting real-world penetration testing simulations, but also enable you to help mitigate an attacker’s ability to exploit any information they have accessed and how you can recover from it.

Cybersecurity is also a people, processes, and knowledge problem

Security breaches tend be less about a technology failure than human error. IT security systems alone cannot secure critical information and intellectual property unless employees throughout the supply chain use proper cybersecurity practices. These practices can range from using a password manager and two-factor authentication to identifying and reporting suspicious emails.

Implement security across the board

Physical and cybersecurity should form one impenetrable fortress. Attackers can exploit weaknesses in physical security to launch a cyber attack; conversely, an attacker seeking ways to break into a physical location might exploit cyber vulnerabilities to gain unauthorized access.

Final words

To be successful in the ever-changing global market ecosystem, supply chain organizations need to double down on their cybersecurity effort. This means understanding the current and emerging threats, as well as implementing comprehensive security solutions to mitigate these risks. One way of achieving this is through SCADA/ICS penetration testing. This type of assessment allows you to determine how your industrial networks and devices could be hacked, providing actionable and tailored recommendations to secure your installations from cyberattacks. These testing solutions can be performed on environments in production without impacting your normal operations.

Contact us if you need help with your industrial penetration testing project.

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