Cybersecurity

Trend Definition 

What is the essence of this trend? What is its impact? 

• Essence: Establishing a high level of cybersecurity in virtual supply chain environments is essential for protecting sensitive data, digital assets, and IoT devices against cyber threats
• Impact: High levels of cybersecurity reduce the risk of supply chain disruptions and legal trouble following data leaks, and facilitate an interaction between virtual and real-world environments, for instance, that digital inventory tracking connects to the physical movement of goods

Trend Drivers 

Why is this trend emerging now? What’s changing? 

• Rapid Digital Transformation: Due to the rising importance of digital technologies, companies are more prone to cyber-attacks since customer, supplier, and internal data is centrally collected, for instance, in data lakes, and stored, e.g., in cloud solutions
• Advancing Cyber Threats: Cyber-attacks showed an increase in amount and severity. Production lines had to be shut down in the past due to major cyber-attacks on suppliers as can be seen in the case of Kojima-Toyota. It became obvious that those attacks not only pose legal risks through the loss of data but also directly impact procurement and production operations

Use Cases 

How to apply this trend? 

• Preventing Back-door Cyber-Attacks: Value chain partners of big players present serious risks for cyber-attacks
  Example: AI can serve as a safeguard, greatly reducing the costs and complexities of defending against these threats. A possible tool in this context is IBM’s Security QRadar SIEM
• Digital Asset Protection: Software including strong encryption, network security, and real-time monitoring, is crucial for protecting IoT devices
  Example: General Motors uses AT&T’s 5G and Microsoft Azure Sphere for layered IoT device security besides its cybersecurity protocols to safeguard its procurement and manufacturing IoT networks

Procurement Relevance & Response Strategies 

How should Procurement adapt its Processes, Organisation, and Strategy?

• Regular Cybersecurity Assessments: Develop cybersecurity strategies across the supply chain and conduct periodic security audits to identify as well as mitigate vulnerabilities
• Educating Employees: Since humans are potential entry points for hackers, companies must sensitise their employees towards cyber-attacks and social engineering