Third-party vendors are a critical component for todays modern business, helping to streamline supply chains, accelerate product deliveries, spur innovation, increase efficiency, and lower costs.

However, there is a price to these relationships and the benefits derived: every vendor introduces potential threats to your organization that could result in operational, reputational, and strategic risks. And in our rapidly evolving world, supply chains face ever-changing complexities and interdependencies, underscoring the critical need for effective risk mitigation.

From the surge in cyberattacks to geopolitical uncertainties shaping business landscapes, the modern supply chain faces a multitude of formidable threats. In fact, 59% of organizations have experienced a data breach caused by a third-party, according to Opus & Ponemon Institute.

However, many third-party risk management practices take a static approach to assessing risk. The lack of visibility into real-time risk remains a concern for many organizations. As the supply chain's size and complexity grow, involving more third and fourth parties, the need for change becomes necessary.

Why Change Is Imperative Now

The consequences of a supply chain attack can be significant and have only intensified. They can include downtime, data breaches, loss revenue, regulatory fines, damage customer trust, and more. Despite the increasing prevalence of supply chain attacks, many enterprises still lack the necessary defenses, leaving their operations vulnerable. Resource-constrained security teams struggle to keep up with the dynamic cyber and physical threat landscape, but the stakes have never been higher.

Traditional methods of managing third-party risk such as security questionnaires help to establish baseline security controls, but they often fail to stop breaches and business disruption. Even worse, third-party vendors are often slow to disclose security incidents, making it near-impossible for organizations to conduct effective incident response. And when physical and regulatory risks are layered on, access to reliable and up-to-date information that manages the complexity of risk factors becomes even more difficult for security teams to maintain.

The Regulatory Landscape Shaping Supply Chain Management

New regulatory frameworks are setting strict mandates for supply chain risk identification and mitigation worldwide, underscoring the importance of real-time insights into cyber and physical threats for security teams.

The NIS2 Directive provides guidance on the cybersecurity resilience of critical infrastructure and essential services, while the Digital Operational Resilience Act established by the European Union aims to harmonize the various IT security requirements specifically for the financial sector. More than ever before, its imperative for organizations to understand the full scope of their threat landscape, and be able to respond confidently to cyber, physical, and regulatory risks to their global operations.

As we navigate an era where supply chain threats clearly pose significant strategic and operational risks, proactively implementing effective mitigation strategies is imperative. The question is no longer if supply chain risks should be addressed, but rather, how quickly organizations can adapt to effectively mitigate these risks. By increasing visibility into third-party and location-based threats, organizations can build resilient supply chains capable of withstanding the challenges of our time.

The Importance of an Intelligence-Driven Approach to Mitigation

Enhancing visibility into the supply chain, extending down to third and 4th party suppliers, and understanding both the cyber and physical risks to the supply chain, is crucial to rectifying potential disruptions to business continuity. An intelligence-driven approach to supply chain risk mitigation offers the complete solution for organizations, enabling them to monitor, detect, and respond to supply chain risks.

With real-time monitoring of cyber and physical threats, organizations can strengthen their cybersecurity posture, and more effectively prevent and respond to supply chain attacks. Recorded Futures Supply Chain Risk Mitigation solution, for example, enables organizations to assess, compare, and monitor vendor and product risk with real-time alerts and risk scoring to maintain the resilience, security, and compliance of your business operations. Security teams can also be alerted to physical risk events occurring near their critical assets, ensuring they are always up-to-date on threats that could actually impact their operations.

To learn more about how organizations are taking a new, intelligence-driven approach to supply chain risk management, request a demo of Recorded Futures Supply Chain Risk Mitigation solution today.