Validating Supply Chain Cybersecurity

December 17, 2015

Steve Grobman

You’ve got your organization protected as best you can, but what about your supply chain? Like any type of chain, the security in your supply chain is only as good as the weakest link. Can malicious software find its way into your company or your products through your supply chain? Can a weak downstream link lead to an opportunity for exploits that take advantage of your intellectual property? Or can disruption of one link disrupt your profitability?

Almost every business is dependent on far-reaching supply chains, and we have already seen some serious cyber incidents from security lapses. Historically, supply chain professionals focused on protecting links through supplier qualification, insurance, and physical security, protecting against risks ranging from theft to delayed deliveries. While those practices remain essential, today’s supply chain professional must add a focus on information security to their defensive strategy. New efforts must focus on protecting intellectual property, defending against hacktivism and espionage, detecting embedded malware, and ensuring continuity of operations.

Managing security risk in your supply chain is new, but you have probably already been through a similar process with quality. First, you identify and classify each of your suppliers with regard to what they do now and the critical aspects of their contractual obligations. Then you define a clear baseline of security and privacy requirements for the group. Standards tools such as ISO/IEC 27036 (information security for supplier relationships) can provide a solid baseline.

With a baseline established, the next step is regular validation of security and privacy controls. Validation can be challenging, full of competing acronyms, contractual issues, and resource constraints. Doing this for every supplier in your chain is unrealistic for most companies, so it is important to prioritize. And fortunately there are standards and processes emerging for various industries that range from self-assessment to third-party certification.

One example is the Cloud Security Alliance’s Security, Trust, and Assurance Registry (STAR) for various cloud computing offerings. STAR is a straightforward three-level certification, accompanied by a publicly accessible registry. STAR provides important information about product certifications, including the date, country, term, and level of certification. Decisions can be based on a simple cost and risk comparison, or on more thorough analysis of the strengths and weaknesses of current or potential suppliers. Analogous to ratings systems in other industries such as banking or tourism, STAR requires little technical training to understand the difference between level 1, 2, and 3 certifications.

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