The Centre for the Protection of National Infrastructure (CPNI) has issued a new Good Practice Guide for organisations designed to mitigate security risks for both themselves and their assets arising from vulnerabilities in their supply chain.
The 11-page document – entitled: ‘Mitigating Security Risk in the National Infrastructure Supply Chain’ – examines supply chain security risk scenarios, first steps and good governance, security risk mitigation methodologies and the implementation of risk mitigation plans.
Most organisations have multi-tiered supply chains which are likely to be both upstream (supply) (ie between the organisation and the organisation’s suppliers or suppliers’ suppliers) and downstream (demand) (ie between the organisation and its market). Vulnerabilities in these supply chains can introduce vulnerabilities to the organisation itself and to its assets.
Those vulnerabilities can expose the organisation and its assets to risk from national security threats, principally terrorism, hostile cyber attacks by foreign states and large-scale cyber crime.
Supply chain security risk is a business risk which can only be mitigated through a holistic risk mitigation plan. This is a business risk which has to be addressed by way of a collaborative approach involving leadership within the business together with specialist functions such as procurement, security and IT, etc.
Supply chain security risk can never be outsourced to upstream or downstream suppliers – it will always remain owned by the business. Business risks of this sort demand Board oversight and the Board will ultimately be responsible for failures of the organisation’s supply chain security risk mitigation arrangements.
In addition, supply chain security risk mitigation will invariably bring additional business benefits such as countering data protection or fraud risks resultant from vulnerabilities in the organisation’s supply chain.
While supply chain security risk mitigation arrangements are not intended to address issues of business continuity or resilience of the supply chain to hazards, it’s likely that there will be business benefit in addressing all these issues in a complementary way. The CPNI recommends that organisations should view supply chain security risk as being an extension of existing arrangements to mitigate security risk within the organisation itself.
Security Risk Mitigation Implementation Plan
To achieve this extension requires a supply chain Security Risk Mitigation Implementation Plan which includes:
*Comprehensive mapping of all tiers of the upstream and downstream supply chains to the level of individual contracts
*Risk scoring each contract to link in with the organisation’s existing security risk assessment
*Due diligence/accreditation/assurance of suppliers (and potential suppliers) and the adoption – through contracts – of proportionate and appropriate measures designed to mitigate risk
*Audit arrangements and compliance monitoring
*Contract exit arrangements
Establishing a supply chain security risk mitigation plan is a non-trivial task and requires appropriate resourcing. The investment of time, effort and money needs to be proportionate to the potential impact of the risks being mitigated. This requires a Board level judgement which can only be taken if the Board itself properly understands the risks in the first place.
It will also be affected by the maturity of the organisation’s existing approach to security risk mitigation, by the complexity of its supply chain and by the prevailing threat picture.
For some organisations this will amount to reviewing and perhaps enhancing existing arrangements. For others, states the CPNI, this will be a major new area of activity to address risks which have either not previously been understood or which have been negligently ignored.
*The new report may be downloaded as a PDF by accessing the CPNI’s website