Supply Chain Security and Legal Implications

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Table of Contents

Introduction
Elements of a Secure Supply Chain
Challenges of Supply Chain Security
Legal Implications of Supply Chain Security
Conclusion
References

Introduction

The core task of actors behind supply chains is to ensure that consumers are going to get the required products and services at the right time and price. Therefore, data privacy and transaction security are essential if the supply chain organization expects to avoid any breaches and interior or exterior attacks. In a world where a localized attack could significantly disrupt supply chain operations, it can be deemed essential to mitigate risks and respond to the ever-increasing complexity of global networks (Gupta et al., 2020). Thus, it should be stressed that the growing impact on the budget and staff makes it almost impossible to cover the field of supply and demand while responding to the state of urgency. Without a doubt, consumers are becoming more demanding and socially conscious nowadays. It also represents a challenge for supply chain security because of the need to maintain transparency.

Elements of a Secure Supply Chain

The first element that plays an important role in assessing the effectiveness of supply chain security is the presence of timely strategic evaluations. The team is required to ensure that all risks are considered, and compliance with essential regulatory and data privacy regulations is maintained (Simon & Omar, 2020). This helps organizations develop their security programs while educating employees on the topic of cybersecurity and providing them with enough training opportunities.

Another element to include is penetration testing, as it strengthens supply chain security measures and mitigates numerous vulnerabilities. Organizations running obsolete database structures and applications could benefit from this strategy and eliminate dangerous network elements with minimal monetary losses (Banga, 2020). This will also help the team preserve productivity and focus on the infrastructure.

The next strategy in line is a modernization plan that is going to aid the team in terms of tracking the process of digitization and highlighting the weakest spots across the supply chain. Business transactions require safe data movement when it occurs online because many hackers are ready to take advantage of undeveloped software and internal processes (Gupta et al., 2020). Therefore, security awareness and training have to be paired with respective technologies for maximum effect.

The ultimate segment in supply chain security is data encryption and identification. Every organization that intends to protect its communications with stakeholders and transaction history should classify all the sensitive information and set up a relevant defense. In accordance with Kshetri (2017), this could be achieved with the help of the Internet of Things, blockchain, session breaks, and digital signatures.

Challenges of Supply Chain Security

There are two significant challenges that can be mentioned to characterize the existing state of affairs in the field of supply chain security. The first is the inability of a large number of organizations to ensure proper data protection and secure business transactions (Banga, 2020). Therefore, there are huge amounts of corporate data that are transferred with no proper protection against tampering and breach, allowing insiders and hackers to steal information and inflict serious damage.

The lack of control over supply chain security reduces the level of trust consumers, and stakeholders might have, especially if it is an e-commerce business or a third-party organization that depends on its public image (Nagurney et al., 2017). Many organizations tend to fail to approach their security measures properly because of the inexistence of adequate storage and management guidelines. Consistent with Simon and Omar (2020), the absence of compliance with government mandates and industry standards is a challenge that many supply chain managers have to cope with because of obsolete cybersecurity strategies.

The second crucial challenge in the field of supply chain security is the inability of organizations to prevent fraud and track all the data changes within the system. Without a roadmap, the majority of steps within the order-to-cash cycle become unavailable for review quickly (Sawik, 2021). This challenge eventually deprives any given organization of the opportunity to exchange relevant data in a timely manner and make necessary adjustments to strengthen preventive and protective measures across the whole supply chain. Owing to the omnipresent nature of human error, inadvertent and malicious data breaches might occur, resulting in major monetary losses (Kshetri, 2017).

The increasing level of sophistication of supply chains makes it harder to implement correct digital security policies. Supply chain cybersecurity has to be considered a multifaceted problem, whereas many organizations only view it from just one angle (Sawik, 2021). Digital vulnerabilities can be managed correctly only in the case where the given organization preserves access to all the vital data and gains valuable insight into trends in risk management.

Legal Implications of Supply Chain Security

The majority of legal implications associated with supply chain security can be associated with insider threats. For instance, suppliers could engage in constant instances of corruption in order to help their consumers obtain certain benefits in exchange for illicit payments (Gupta et al., 2020). Since the majority of businesses are establishing a stronger online presence nowadays, cases of passive and active bribery could be exceptionally hard to identify and prevent. The same goes for procurement activities, as malicious employees can generate fake invoices and introduce fake suppliers to funnel assets out of the company (Banga, 2020).

As noted by Nagurney et al. (2017), digital fraud cases could involve third-party actors as well, allowing insiders to hide funds and utilize them for illicit purposes within the supply chain. A business that is unable to align its global supply chain against related cyber laws is most likely to fail to adhere to its due diligence standards (Simon & Omar, 2020). Therefore, supply chain security would have to be in place to regulate network transparency and prevent insiders and external attackers from breaking the law.

Conclusion

Within the framework of supply chain security, the process of risk mitigation is going to remain an essential problem due to the increasing number of procurement businesses. Companies involved in supply chain management have to prioritize their activities differently in order to consider all the stakeholder expectations and regulatory requirements. Therefore, even the environment itself is pressing organizations to develop and deploy tools that are going to be more sophisticated than their contemporary alternatives. The growing impact of cybersecurity attacks also creates enough room for supply chain security specialists to scan for bigger risks and collect data from even more sources than today.

The existing data suggest that the quantity and quality of tools available to attackers and defenders keep intensifying. Therefore, the number of dimensions related to supply chain sustainability cannot be stopped from growing as well. The advent of environmental, human rights, and ethical concerns make it safe to say that the capabilities of supply chain security instruments have to be enhanced as soon as possible to allow for better interoperability.

References

Banga, G. (2020). Why is cybersecurity not a human-scale problem anymore? Communications of the ACM, 63(4), 30-34. Web.

Gupta, N., Tiwari, A., Bukkapatnam, S. T., & Karri, R. (2020). Additive manufacturing cyber-physical system: Supply chain cybersecurity and risks. IEEE Access, 8, 47322-47333. Web.

Kshetri, N. (2017). Blockchain’s roles in strengthening cybersecurity and protecting privacy. Telecommunications Policy, 41(10), 1027-1038. Web.

Nagurney, A., Daniele, P., & Shukla, S. (2017). A supply chain network game theory model of cybersecurity investments with nonlinear budget constraints. Annals of Operations Research, 248(1-2), 405-427. Web.

Sawik, T. (2021). Balancing cybersecurity in a supply chain under direct and indirect cyber risks. International Journal of Production Research, 1-17. Web.

Simon, J., & Omar, A. (2020). Cybersecurity investments in the supply chain: Coordination and a strategic attacker. European Journal of Operational Research, 282(1), 161-171. Web.

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