Tuesday 24th May 2022
BLOG: How Continuous Risk Monitoring of Supply Chains is Key to Every Business
Building connections and relationships with third parties are great and can be beneficial for organisations, especially in allowing them to thrive within their sector. However, not adequately vetting these third parties is where the issue arises. Third-party risk can produce an exponential amount of loss for organisations, such as financial or reputational (to find out more about these risks, click here to learn more).
Third-party risk can also stem from the shared data between companies and these external parties.
It was a mere 2 years ago that 69% of firms said they do not have full visibility into their supply chains and 63% of organisations did not use any technology to analyse and monitor their supply chain performance. Third-party management can help reduce the risks associated with working with third parties.
Supply chain management is another factor of third-party involvement that businesses, especially manufacturers, need to consider. Supply chain management controls and manages the flow of goods and services throughout the supply chain’s entirety.
Third-party management allows companies to monitor their third parties while managing the risks that arise from interacting with the external parties involved with contractual and non-contractual business relationships. 99% of all companies have experienced a disruption in their supply chain over the past 5 years.
It is crucial to recognise and identify the risks that third parties may introduce. Having third party risk management can help assess whether a potential new business relationship is indeed worth it. Businesses can conduct third-party risk assessments to evaluate and identify the risks that can impact their business.
Many third-party organisations operate with unknown or undisclosed fourth parties, affecting their supply chain members. Fourth-party risk evaluates the effectiveness of your partners’, vendors’, and suppliers’ third-party risk programs to identify additional risk exposure that would otherwise go undetected. When businesses evaluate third parties, many areas are examined to identify not only the risks that the third party itself might face but how those risks may affect your business and supply chain partners.
Third-party risk management is a continuous process and this routine type of evaluation can reduce exposure time and help mitigate risks that organisations and businesses face when working alongside third parties. This process should be conducted regularly to evaluate third-party members of the supply chain and the possible risks they pose to organisations.
Regularly checking the overall security of the third-party’s environments and digital assets can help evaluate the potential risks that could affect organisations. Understanding how well a potential third party handles their duties of maintaining various compliance standards while handling or storing sensitive intellectual property and customer data can assist organisations in understanding what risks are associated with sharing data.
To understand how Orpheus cyber can protect your organisation, click here.
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