Management of supplier risks

In the ever-changing business world, companies are increasingly reliant on external suppliers to fulfil their diverse requirements. While this trend has undoubtedly brought with it greater efficiency and specialisation, it has also ushered in a new era of risk – supplier risk.

Managing such risks is becoming an increasingly important aspect, and organisations are turning to modern tools such as LocateRisk to help them navigate these uncharted waters.

Practical relevance

The cyberattacks on Xplain, Concevis, the Microsoft Masterkey and the well-known case involving SolarWinds have two things in common:

1. they were successful!
2. in addition to the companies directly attacked, they particularly affected their customers and customer data.

From the perspective of the affected customers, this represents a realised supplier risk – they bear the damage, even if the exploited vulnerability was not on their systems. These cases impressively demonstrate that the management of supplier risks is not a purely theoretical concern, but is also relevant in practice.

New legal obligations

Both in Switzerland and in Europe, several pieces of legislation have recently been passed that require companies and authorities to actively manage their supply chains with regard to information security risks. In addition to the new data protection requirements, this also includes legislation such as the Swiss Information Security Act (ISG) and the European Directive NIS2 (Directive on measures for a high common level of cybersecurity across the Union)

Understanding risk management in the supply chain

Supply chain risk management (SCRM) is by no means a new discipline. However, it has become increasingly relevant in relation to cyber risks in recent years – not least due to the emergence of a wide variety of cloud offerings. In essence, SCRM is a comprehensive approach that involves assessing, monitoring and mitigating the risks associated with outsourcing various services to third-party providers. These risks can range from data security breaches and compliance issues to business disruption and reputational damage. Effective SCRM is critical to maintaining the integrity of an organisation’s business operations, ensuring data privacy and protecting reputation in a networked business environment.

The challenges

The complexity of modern supply chains and the dynamic nature of business relationships make managing supplier risk a challenging task. Organisations must contend with a variety of factors, including regulatory compliance, cyber security threats and the overall financial health of their suppliers. Traditional methods of risk management are often inadequate to address these multi-layered challenges, necessitating the introduction of innovative solutions.

Opportunities for automation

Solutions such as those from our new partner LocateRisk can provide support here. LocateRisk offers a comprehensive and user-friendly platform that can simplify the entire process.

• From the initial assessment of a potential new partner, to the final evaluation,
• ongoing monitoring of critical suppliers, through to the
• active cooperation with a partner in the elimination of IT security chess points and compliance problems

At the heart of this is a combination of digital questionnaires and non-invasive system scans. The scans detect software vulnerabilities and compliance issues in systems accessible from the internet and analyse them fully automatically.

With the help of such tools, it is possible to keep an eye on the IT security of the entire supply chain and to use valuable time to jointly manage the greatest risks at the most critical suppliers instead of merely superficially operating manual SCRM processes.

From the supplier’s perspective

For companies that often find themselves in the role of the audited supplier, it may well be advisable to make use of corresponding offers themselves. In this way, they can get an idea of their digital image and work on improving their visible risks. This is particularly worthwhile if the assessments determined in this way are used by customers to help decide on supplier selection. Minimising the attack surface is of course also in the company’s own interests.

Conclusion

Supply chain risk management is no longer an option, but a necessity in today’s world. Tools such as LocateRisk enable organisations to navigate the complexities of supplier relationships with confidence. Through the use of modern technology and a user-centric approach, LocateRisk empowers organisations to turn supplier risk management into a strategic advantage, demonstrate compliance with the latest legislation and sail into a secure future.

Try LocateRisk now for free!

Are you interested in testing LocateRisk free of charge and without obligation?
We would be happy to present the product to you in a short meeting and create an automated report for your company.

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