What Is the Supply Chain Threat and How Does it Impact Businesses Everywhere?

What Is a Supply Chain Attack?

A supply chain attack is a type of cyberattack that targets the software and hardware components of a supply chain. A supply chain is a network of organizations, people, activities, information, and resources involved in the creation and delivery of a product or service. In a supply chain attack, an attacker targets a supplier of a company or organization to gain access to the targeted organization's network or data.

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The goal of a supply chain attack is to compromise the security of the targeted organization by exploiting vulnerabilities in the supply chain. Attackers may use various tactics, such as tampering with the software or hardware components of the supply chain, introducing malware into the supply chain, or stealing sensitive information from suppliers.

Supply chain attacks are becoming increasingly common, as they provide attackers with a way to compromise multiple organizations through a single point of entry. Such attacks can be difficult to detect and defend against, as the affected organization may not be aware of the compromise until it's too late. Therefore, it's important for organizations to assess the security of their supply chains, implement appropriate security measures, and monitor their supply chain for potential vulnerabilities and threats.

How the Supply Chain Threat Impacts Businesses

Supply chain threats can have a significant impact on businesses, including the following:

• Financial impact: Supply chain threats can result in significant financial losses for businesses. For example, if a key supplier experiences a disruption or outage, it can result in production delays, missed delivery deadlines, and lost revenue.
• Reputation damage: Supply chain threats can also damage a business's reputation, particularly if they result in customer dissatisfaction or negative media coverage. Customers may lose confidence in the business's ability to deliver products and services, leading to lost sales and reduced brand value.
• Operational disruption: Supply chain threats can disrupt business operations, leading to delays, cancellations, and other issues. For example, if a supplier experiences a cybersecurity breach, it can result in downtime, lost productivity, and other operational challenges.
• Regulatory and compliance issues: Supply chain threats can also lead to regulatory and compliance issues, particularly if they result in data breaches or other security incidents. This can result in fines, legal action, and other penalties that can have a significant impact on a business's bottom line.

Research from BlackBerry revealed that in 2022, four out of five (80%) organizations were alerted of a vulnerability or attack in their software supply chain. The survey, which collected information from 1500 IT and cybersecurity decision-makers across the US, UK, and Australia, sheds light on the impact of supply chain attacks on businesses.

Over half of the organizations under attack experienced data loss (58%), operational disruption (58%), intellectual property loss (55%), and reputational loss (52%), and nearly half (49%) suffered financial loss. 53% of these organizations recovered within a week, 37% took an entire month, and 10% needed as much as three months to recover.

Types of Supply Chain Attacks

Supply chains can target any organization using third-party vendors for software and infrastructure. These attacks can be grouped into the following categories:

Physical supply chain threats

This type of attack involves compromising the physical security of the supply chain. It can include theft, tampering, or interception of goods during transportation or storage. Attackers can gain access to the supply chain by posing as suppliers, using fake documents or exploiting vulnerabilities in logistics systems.

Software supply chain threats

Software supply chain threats involve attacking the software components of the supply chain, such as the tools, libraries, or frameworks used in software development. Attackers can introduce malware, backdoors, or other malicious code into the software components, which can then spread to other systems in the supply chain. This can be done by exploiting vulnerabilities in the CI/CD pipeline, using fake or compromised software packages, or exploiting weaknesses in software update processes.

Digital supply chain threats

Digital supply chain threats involve attacking the digital assets used in the supply chain, such as the data or communication systems. Attackers can use various techniques, such as social engineering or ransomware, to gain access to the digital assets of the supply chain. This can result in data theft, system downtime, or financial losses.

Business email compromise

Business email compromise (BEC) attacks involve impersonating a trusted supplier or vendor to gain access to sensitive information or payment details. Attackers can use phishing emails or other social engineering techniques to trick employees into revealing information or transferring funds to fraudulent accounts.

Insider threats

Insider threats involve employees or contractors of a supplier who intentionally or unintentionally compromise the security of the supplier's network. This can include stealing data, installing malware, or providing unauthorized access to third parties.

How to Ensure Supply Chain Security

Conduct Asset and Access Inventories

Conducting asset and access inventories is an important step in ensuring supply chain security. It involves identifying and cataloging all the hardware, software, and data assets within a supply chain, as well as defining who has access to them.

The purpose of conducting asset and access inventories is to gain a comprehensive understanding of the supply chain and to identify potential vulnerabilities that may exist. For example, if a supplier has access to sensitive information, but their security controls are weak, it can pose a risk to the security of the entire supply chain.

To conduct an asset and access inventory, organizations should follow these steps:

1. Identify all the assets within the supply chain: This includes hardware, software, and data assets. Organizations should have a clear understanding of what assets are in the supply chain, where they are located, and who has access to them.
2. Categorize assets by their level of criticality: Not all assets within the supply chain are equally important. Organizations should categorize assets based on their level of criticality to the business, such as sensitive data or mission-critical systems.
3. Identify who has access to the assets: Organizations should have a clear understanding of who has access to each asset, including employees, contractors, and third-party suppliers. Access should be defined based on roles and responsibilities, and organizations should have processes in place to manage access.
4. Assess the security controls in place: For each asset, organizations should assess the security controls that are in place to protect it. This may include physical security measures, such as locks or surveillance cameras, as well as technical security controls, such as firewalls or encryption.
5. Identify potential vulnerabilities: By assessing the assets and access controls in place, organizations can identify potential vulnerabilities and gaps in their supply chain security. This information can be used to develop a plan to address these vulnerabilities and reduce the risk of supply chain attacks.

Using Automated Security Testing Tools

Automated security testing tools can help organizations to identify and fix potential security issues before they can be exploited by attackers, including potential vulnerabilities in software components used in the supply chain, such as libraries, frameworks, and applications.

Here are some examples of automated security testing tools:

• Static application security testing (SAST): SAST tools analyze the source code of an application to identify potential vulnerabilities, often by using a set of rules to detect coding errors such as buffer overflows. SAST tools can help developers identify security issues early in the development process, reducing the risk of security flaws being introduced later in the supply chain.
• Dynamic application security testing (DAST): DAST tools test running applications to identify security vulnerabilities. These tools simulate attacks against an application and identify vulnerabilities that can be exploited by attackers, such as SQL injection or cross-site scripting (XSS). DAST tools can help identify security issues that may be missed by SAST tools.
• Software composition analysis (SCA): SCA tools analyze the software components used in an application to identify known vulnerabilities. These tools check the software components against a database of known vulnerabilities and provide a report on any issues found. SCA tools can help identify vulnerabilities introduced by third-party components used in the supply chain.
• Interactive application security testing (IAST): IAST tools combine the features of SAST and DAST tools to analyze the running application's code and identify potential security issues. IAST tools can identify vulnerabilities such as code injection or authentication bypass by monitoring the application's code while it's running. This provides a more comprehensive assessment of the application's security posture.

Beware of Dependency Confusion Attacks

Dependency confusion attacks are a type of software supply chain attack that target software development pipelines by exploiting the use of third-party dependencies. Many software development projects rely on third-party libraries and components, which are often obtained from public package repositories. Dependency confusion attacks take advantage of the fact that these repositories are not authenticated, and there is no mechanism in place to prevent the use of malicious or unauthorized packages.

In a dependency confusion attack, attackers upload malicious packages to public package repositories, which are designed to mimic the names and version numbers of legitimate packages used in software development projects. When the software development pipeline runs, it downloads the malicious package instead of the legitimate one. This can lead to the introduction of malicious code into the software, which can compromise the security of the system and allow attackers to gain access to sensitive information.

To protect against dependency confusion attacks, organizations should take the following steps:

• Use reputable sources for dependencies: Organizations should use reputable sources for third-party dependencies, such as the official websites of the package providers, rather than relying on public repositories.
• Use checksums to ensure package integrity: Developers should use checksums to verify the integrity of the packages they download. Checksums are a type of digital fingerprint that can be used to ensure that a package has not been tampered with or corrupted.
• Use explicit dependencies: Organizations should use explicit dependencies to ensure that the software development pipeline only uses the packages that have been explicitly specified. This reduces the risk of using unauthorized or malicious packages.
• Monitor package usage: Organizations should monitor the usage of packages in their software development pipelines to identify any unusual or unauthorized packages. This can help detect and prevent dependency confusion attacks.

Elevate Third-Party Risk Management

Third-party risk management involves assessing the security practices of third-party suppliers and vendors that provide goods or services to the organization. To elevate third-party risk management, organizations should take the following steps:

• Security assessments: Organizations should conduct thorough security assessments of third-party suppliers and vendors to identify potential vulnerabilities and risks. This can include reviewing security policies and procedures, conducting security audits, and assessing the suppliers' security practices.
• Contractual security obligations: Organizations should establish clear contractual security obligations with third-party suppliers and vendors. This can include requirements for data protection, security controls, and incident response. These obligations should be clearly defined and enforceable to ensure that suppliers and vendors take security seriously.
• Monitoring third-party security: Organizations should implement ongoing monitoring of third-party security practices to ensure that suppliers and vendors are maintaining the required security standards. This can include regular security assessments, vendor reviews, and audits.
• Security certifications: Organizations should require third-party suppliers and vendors to provide security certifications and attestations, such as ISO 27001 or SOC 2. These certifications and attestations provide assurance that the supplier or vendor has implemented a comprehensive security program.
• Incident response: Organizations should establish incident response procedures for third-party security incidents. These procedures should define how to detect, respond, and report incidents involving third-party suppliers and vendors.

Conclusion

As the complexity and interconnectedness of supply chains continue to increase, so does the risk of supply chain attacks. It's critical for businesses to take proactive steps to protect their supply chains, including conducting asset and access inventories, using automated security testing tools, elevating third-party risk management, and implementing other security best practices.

Organizations that fail to take supply chain security seriously are at risk of experiencing severe consequences, including data breaches, business disruptions, financial losses, intellectual property theft, compliance violations, and reputational damage. By taking a comprehensive and proactive approach to supply chain security, organizations can reduce the risk of supply chain attacks and protect their operations and customers from potential harm.