Best Practices for Assessing Supply Chain Cybersecurity Risks

AVATAR (Assessing and Validating Attack and Threat-based Risks) offers a comprehensive methodology for evaluating and managing supply chain cybersecurity risks. While not a widely recognized term in the industry, the principles behind AVATAR and established cybersecurity frameworks provide valuable guidance. Here are key best practices for assessing supply chain cybersecurity risks:

Identify Critical Suppliers and Partners

• Map Dependencies: Identify all third-party suppliers, partners, and contractors contributing goods, services, or critical components to your organization.
• Assess Importance: Classify suppliers based on the significance of their offerings, focusing on high-value or high-risk suppliers that impact core operations.

Conduct Threat and Vulnerability Assessments

• Understand Threat Landscape: Evaluate potential cybersecurity threats to the supply chain, such as data breaches and ransomware.
• Vulnerability Scanning: Utilize automated tools and manual testing to uncover supplier system vulnerabilities.
• Attack Simulations: Conduct simulated attacks to assess the resilience of your supply chain against cyber threats.

Assess Supplier Security Posture

• Security Certifications: Verify whether suppliers hold relevant cybersecurity certifications, such as ISO 27001 or SOC 2.
• Cyber Hygiene Practices: Evaluate suppliers’ cybersecurity hygiene, including patch management and incident response readiness.
• Third-party Audits: Ensure suppliers undergo regular independent audits of their security practices.

Integrate Risk Management Frameworks

• Leverage Established Frameworks: Utilize frameworks like NIST SP 800-161 or ISO 28000 for standardized risk assessments.
• Risk Tiers: Categorize suppliers based on risk exposure, prioritizing high-risk vendors for more rigorous assessments.

Monitor Supplier Behavior and Data Flows

• Continuous Monitoring: Monitor supplier networks and data transactions continuously to detect unusual activities.
• Data Security Practices: Ensure suppliers adhere to robust data protection measures like encryption and access controls.
• Third-Party Risk Monitoring Tools: Automate tools to track supplier risk profile changes.

Ensure Incident Response and Recovery Plans

• Joint Incident Response Plans: Collaborate with key suppliers to develop aligned incident response and recovery plans.
• Business Continuity: Confirm that critical suppliers have continuity and disaster recovery plans.
• Supply Chain Resilience Testing: Periodically test the supply chain’s resilience through simulated cyber incidents.

Perform Contractual Security Due Diligence

• Cybersecurity Clauses: Include clear cybersecurity obligations in supplier contracts, covering data protection and incident reporting.
• SLAs and Penalties: Define service level agreements and penalties for non-compliance with security standards.

Utilize Vendor Risk Management Software

• Automation Tools: Employ risk management software for continuous assessment, monitoring, and risk scoring of suppliers.
• Data Aggregation: Centralize data from vendors to automate workflows and risk assessments.

Foster Supply Chain Security Awareness and Training

• Awareness Programs: Train internal teams on supply chain cybersecurity risks, particularly those associated with high-risk suppliers.
• Collaborative Security Practices: Encourage knowledge-sharing about security best practices with suppliers handling sensitive data.

Ensure Regulatory Compliance and Standards

• Compliance Checks: Verify suppliers comply with relevant cybersecurity regulations and industry standards.
• Due Diligence in High-Risk Jurisdictions: Exercise extra diligence for suppliers in regions with known cyber threats.

Enhance Supply Chain Security Resilience

• Diversification: Avoid reliance on a single supplier by diversifying sources or establishing contingency plans.
• Redundancy Plans: Ensure critical services can be sourced from alternate suppliers if primary ones are compromised.

Engage in Data Sharing and Intelligence Gathering

• Threat Intelligence: Share threat intelligence with suppliers to enhance collective security.
• Industry Partnerships: Collaborate with industry groups to stay informed about emerging threats and mitigation strategies.

Implementing these best practices can significantly reduce organizations’ exposure to supply chain cybersecurity risks and establish robust safeguards to protect critical operations.