At the same time, the novel challenges and opportunities of the digital virtual world once again proved that secure and sufficiently resistant supply chains are more important than ever. In this fast-growing era of technological infrastructure, the supply chain networks are vulnerable to many challenges such as cyber threats or even geopolitical tensions.
The Evolution of Supply Chain Risks
Supply chain had been defined as a chronological and geographical sequence of operations that transform material inputs into finished goods, but it is no longer so. Ecological change, while efficient economically and in terms of the cost saving, has incorporated new risks. The undeniable processes of the digital era have made these risks more persistent and more dangerous as supply chains are targets of cyber-attacks and data leakage, not to mention being sensitive to a geopolitical confrontation (Ivanov and Dolgui, 2020).
Cybersecurity Threats
One of the greatest contemporary challenges in SM supply chains is cybersecurity. Threat actors gain access to a company’s supply chain with the aim of taking advantage of the interconnectivity that exists with other players in the same chain, mostly third-party contractors. For instance, the Solar Winds attack in 2020 demonstrated the interconnected system of various organizations suffering from a single polluted vendor (Mayo and Reed, 2021). To guard against such threats, companies must invest in advanced cybersecurity support tailored to today’s interconnected environments.
Geopolitical Risks
Trade tensions and others such as Brexit has posted a major challenge to supply chains due to geopolitical instability. They can lead to scarcity of supply, high tariffs, and even disruption of supply chain among others. The COVID-19 pandemic also showed that the circumstances of global crises directly impact the functionality of the supply chains and create issues in numerous industries (Handfield et al. , 2020). For companies in the UAE, legal risk preparedness starts with understanding and aligning with regulatory compliance and legal defense services.
Strategies for Mitigating Supply Chain Risks
To ensure that these risks do not occur it is necessary for organizations to develop a comprehensive security strategy in supply chain operations. This relates to effective incorporations of new technologies, establishing strong partnerships, and effective management of risks.
1. Leveraging Advanced Technologies
Block chain Technology
We have seen how through the use of block chain technology one has a distributed but highly secure and tamper prove record keeping system thus improving on the traceability of products in supply chain. In other words, through its digital features of incorruptibility, the block chain will be able to minimize the occurrences of fraud, counterfeiting, and unauthorized changes in transactions (Saberi et al. , 2019).
Artificial Intelligence and Machine Learning
There is a great opportunity to use AI and ML in increasing supply chain security as it may predict and avoid the risks. Artificial intelligence can reveal potential disturbances that may negatively impact business affairs and suggest the necessary actions in response to them. Despite cyberspace threats, ML models are capable of discovering anomalies and frauds that will allow organizations to prevent or respond to cyber threats instantly (Qiu et al. , 2021).
Internet of Things (IoT)
The use of IoT devices is very relevant in today’s world especially in giving real-time visibility to the supply chain. Smart containers or pallets that include sensors and RFID tags can monitor the location, state, and shifts of products, which is useful to guard against theft, alteration, and other undesirable scenarios. IoT enabled smart prediction can also reduce equipment down times hence allow for seamless running (Moghaddam et al. , 2021).
2. Strengthening Collaborative Partnerships
Integrated communication and cooperation between supply chain clients is critical in reducing risk. It is necessary to stress the importance of the proper management of relationships with key suppliers, logistics service providers and customers and build trust.
Supplier Audits and Assessments
Supplier specific audits and assessments would be able to recognize current threat scenarios and Supplier security compliance. Through proper due diligence, one can identify suitable partners who can work together with them by addressing all the security issues and risks properly.
Information Sharing and Threat Intelligence
The threat intelligence of such risks can be beneficial when shared among the participants within the supply chain setting hence improving their securitization. ISACs, consortiums, and industry associations share cybersecurity threats, countermeasures and best practices, to develop a well-coordinated approach to threats’ exploration and counteraction (U. S. Cybersecurity and Infrastructure Security Agency, 2021).
3. Implementing Robust Risk Management Frameworks
Risk management is a critical activity in supply chain that should involve processes that will help in the identification and evaluation of risk and the development of measures for managing the risks effectively. This involves the following steps:
Risk Identification
The internal and external environment that organizations require must conduct a risk assessment to determine risks such as cyber threats, geopolitical risk, and disruptions due to natural disasters in supply chains. This implies that there is need for proper analysis that takes into consideration the whole supply chain network and interconnectivity. Organizations operating in the UAE must also factor in evolving data privacy regulations like the PDPL when assessing risk exposure across digital supply chains.
Risk Assessment
Risk Analysis is carried out once the risks have been reviewed and it involves a determination of the likelihood of the risks and the consequences associated with these risks. This is beneficial to minimize and manage risks because through prioritizing, organizations can better determine which risks to tackle first based on their severity.
Risk Mitigation
Each risk ought to be accompanied with measures that will decrease its adverse effects. This includes measures such as cybersecurity measures, having multiple suppliers for supplies, and having back up plans so that in the event of these disruptions the supply of products is not affected.
Continuous Monitoring and Improvement
As mentioned before, supply chain risks are not standalone issues, and they evolve over time, and they need to be monitored and updated constantly. It is also important for organizations to update their risk management policies, from time to time to ensure that they are appropriately aligned to risks and conditions prevailing in the markets.
Case Studies: Successful Risk Mitigation in Supply Chains
Cisco Systems
Risk management has become critical for companies to ensure that their supply chains are protected, and Cisco Systems, a leading technology company, has not been left behind. That is why through the use of advanced analytics including alarms based on AI, Cisco is able to identify risks and possible disruptions in its supply chain. The company also takes frequent supplier assessments and work mutually with suppliers to ensure that they follow security measures (Cisco Systems, 2022).
Unilever
Another example comes from Unilever, a global manufacturer and distributor of fast-moving consumer goods that integrates blockchain into its supply chain to increase the level of transparency. One of the main benefits that can be provided by blockchain application is the ability of the company to locate sources of supply and to authenticate products. This not only enhances the quality of the products produced but also protects the company from fake or substandard products that may be checked into the market by quackers (Unilever, 2021).
References
Cisco Systems (2022) Supply Chain Risk Management. Available at: https://www.cisco.com/c/en/us/products/security/supply-chain-risk-management.html
Handfield, R.B., Graham, G. and Burns, L. (2020) ‘Corona Virus, Tariffs, Trade Wars and Supply Chain Evolutionary Design’, International Journal of Operations & Production Management, 40(10), pp. 1649-1660. Available at: https://eprints.whiterose.ac.uk/161923/1/PDF_Proof%20%282%29.PDF
Ivanov, D. and Dolgui, A. (2020) ‘Viability of intertwined supply networks: extending the supply chain resilience angles towards survivability’, International Journal of Production Research, 58(10), pp. 2904-2915. Available at: https://www.tandfonline.com/doi/full/10.1080/00207543.2020.1750727
Mayo, E. and Reed, P. (2021) ‘The SolarWinds hack—what we know so far’, Computers & Security, 103, p. 102188. Available at: https://www.techtarget.com/whatis/feature/SolarWinds-hack-explained-Everything-you-need-to-know
Moghaddam, F.M., Kebriaei, H. and Shojaei, A.A. (2021) ‘The role of IoT in the optimization of supply chain resilience’, Supply Chain Management: An International Journal, 26(6), pp. 722-738. Available at: https://www.linkedin.com/pulse/role-iot-supply-chain-optimization-drighnatech
Qiu, Y., Tai, H. and Zhang, Q. (2021) ‘Artificial intelligence in supply chain management: a survey of the state-of-the-art’, Journal of Industrial Information Integration, 23, p. 100224. Available at: https://www.researchgate.net/publication/376693139_Artificial_Intelligence_in_Supply_Chain_Management_A_Systematic_Literature_Review_and_Guidelines_for_Future_Research
Saberi, S., Kouhizadeh, M., Sarkis, J. and Shen, L. (2019) ‘Blockchain technology and its relationships to sustainable supply chain management’, International Journal of Production Research, 57(7), pp. 2117-2135. Available at: https://www.tandfonline.com/doi/full/10.1080/00207543.2018.1533261
U.S. Cybersecurity and Infrastructure Security Agency (2021) Information Sharing and Analysis Centers (ISACs). Available at: https://ecstech.com/solutions/cybersecurity/?utm_term=government%20cybersecurity%20services&utm_campaign=cyber&utm_source=adwords&utm_medium=ppc&hsa_acc=5084543196&hsa_cam=20557145405&hsa_grp=153157494429&hsa_ad=674187729830&hsa_src=g&hsa_tgt=kwd-819306805656&hsa_kw=government%20cybersecurity%20services&hsa_mt=p&hsa_net=adwords&hsa_ver=3&gad_source=1&gclid=EAIaIQobChMIvOrVhavyhgMVHS0GAB1BngDTEAAYAiAAEgLp5_D_BwE
Unilever (2021) Blockchain and Supply Chain Transparency. Available at: https://www.unilever.com/news/news-search/2022/how-were-using-tech-for-more-transparent-traceable-supply-chains/