What is Inherent cyber risk? How to establish an acceptable level of supply chain risk?

With the advent of technology over the last decade, organizations work with thousands of vendors to stand strong in the competitive market. This unforeseen rise has given a hike in supply chain vulnerabilities that organizations have faced.

Over 71% of the companies examined under a survey, believed that supply chain risk has posed a great vulnerability to their organization and a good amount of 72% said that the future with supply chain risk is going to be more vulnerable.

There is a firm need to implement some strong supply chain policies to make sure that we fight with supply chain risk, or I must say inherent cyber risk with great potential. Now the question arises what is inherent cyber risk? Let us take an insight into inherent cyber risk before we proceed towards the approach to manage supply chain risk.

What is inherent cyber risk?

Inherent risks arise because of a threat that occurs due to an internal fault within an organization due to physical or human activity. You cannot combat inherent risks unless you know the source of them. They may be in the form of data loss, absence of antivirus software, unauthorized access, weak passwords, and the list has many in it.

You can think of inherent risk as a vulnerability that occurred due to the lack of countermeasures. There is a severe probability of the occurrence of a data breach when inherent cyber risks are overlooked by an organization. So, keep a set approach to overcome the mentioned crises and to help ease your process we have mentioned a few steps to keep in mind while ensuring supply chain security.

A structured approach to supply chain risk management

The list of vendors that are responsible to maintain your supply chain is innumerable and the ones willing to onboard the list are even more. This huge crowd cannot be structured through a set process. But based on your organization’s need and abiding by a common thought process a structured approach to fight supply chain risk management is mentioned below,

1.        Eye through each vendor’s network and data access in your organization

It is important to determine and keep an inventory of the vendors that you work with. The list should not be limited to only the top-level vendors but also encapsulate all the vendors in the digital supply chain.

A good understanding of inherent cyber risk can be maintained only by conducting an inventory of all the third-party relationships. The complex web of these interconnected businesses lets you know which vendor has access to your data and network and to what extent.

To ease the process, monitor your digital ecosystem periodically and track the flow of sensitive data and information within this business web.

2.        Know the vendor’s prior cybersecurity performance

Now, this might sound a bit troublesome and tricky, but it is mandatory to keep a note of your vendor’s cybersecurity history. You can conduct a cybersecurity questionnaire regarding the same and come up with a conclusion about the past data breach of your supply chain vendors.

Along with the current security measures and precautions regarding cybersecurity, past data is also important. This whole data gives you an insight into how diligently you need to work on the security measures with the ongoing vendor or the one that will be onboarding in future.

3.        Set the acceptable level for inherent cyber risk

Another way to look into the cyber risk of your vendors is to set an acceptable level of cyber risk. You can create a threshold value for cybersecurity and the vendors having a value below it are notified.

You can use certain apps to track the security level. These apps have a value range for security and your vendor needs to maintain that value throughout the period of the contract.

4.        A detailed understanding of the threat to the supply chain business

Your cybersecurity team should strategize on the best ways to know the threats to the supply chain vendors, the risks that they pose, the malware that is most devastating to the organization and the effect such malware can have on the organization.

This detailed study leads you to prevent certain data breaches and security attacks that you can have in the name of inherent cyber risks.

5.        Assess and work on your cybersecurity measures

The cybersecurity and risk management team needs to understand and assess the cybersecurity measures that the company is currently pursuing, and which measures are being missed. The assessment undertakes all the hardware and software components that are being used, the purchased tools and how these will affect the future of the organization.

After getting a firm assessment, it’s time to work on and improve cybersecurity measures. This includes incorporating a strong anti-virus and anti-malware protection software. A strong need to ensure smooth and intemperate data flow is the installation of an SSL certificate. These certificates are a must these days, especially, when you are talking about the cybersecurity of an organization. Few of them you can count are PositiveSSL certificate, DigiCert SSL certificate, GlobalSign SSL certificate.

6.        Treat cybersecurity as an ongoing process

Cybersecurity is not a one-time process. It needs your constant attention. It is not that once you have figured out a solution to a security breach you are free. Cybersecurity needs to be treated as an ongoing or I must say a never-ending process.

You need to come up with sophisticated techniques from time to time, to ensure that you stay a step ahead of intruders.


Cyber risk is an area of due diligence and needs robust programs to mitigate or at least lower the crises followed by both known and unknown supply chain risks. The looming globalization of the supply chain has further made the organizations concerned rise. But these global supply chain vulnerabilities are irreversible and cannot rely merely on government models. A deeply rooted approach to combat these risks can be brought in through a strong shift in cultural mind set as a whole.

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