3rdRisk in Action

In Spring 2021, a major food retailer was unable to deliver food products to its customers, leading to an incumbent financial loss. It happened when the organization’s service provider disrupted deliveries nation-wide: the firm was victim of a ransomware attack that made it impossible to supply supermarkets with food products for several days. Not long after, 500 grocery stores had to shut down, due to a massive cyber-attack affecting their point-of-sale systems (POS). The retailer was not able to receive card payments and the stores had to close for several hours.

When incidents occur in the supply chain, the effects can cascade down: that's why retailers need to determine whether their third parties have sufficient security measures in place. However, 70% of Dutch firms do not have sufficient visibility on this.

Supply chains are becoming more integrated and co-dependent. At the same time, regulatory pressure is rising, as governments and consumers expect more sustainable practices. Your firm's material supplier may be found to have heavily negative environmental impacts, leading to fines; or it could be found to have unacceptable working conditions, leading to consumer boycotts. The stakes are high, with risks of operational disruption, reputational loss, and deflated equity valuations. The good news is that there are ways in which businesses can increase the transparency of their supply chain and mitigate risks in time.