Supply Chain and Third-Party Risks
- Tech Brief
- Jan 2
- 2 min read
Supply chain and third-party risks have become increasingly prominent, impacting various industries and highlighting the need for robust risk management strategies. Key developments include:
1. Weaponization of Supply Chains
Pager Attacks in Lebanon: In September 2024, wireless devices linked to Hezbollah in Lebanon and Syria were targeted, resulting in explosions that killed at least 32 people and injured over 3,000. These attacks exemplify how adversaries can weaponize supply chains for everyday items, raising significant concerns about vulnerabilities in the global electronics supply chain.
2. Cybersecurity Regulations Impacting Supply Chains
Automotive Industry Concerns: The auto industry, including companies like Ford and Volkswagen, has expressed concerns over upcoming cybersecurity regulations aimed at restricting the use of technology from certain foreign firms. Automakers warn that replacing partners due to these restrictions could disrupt supply chains and increase costs.
3. Supply Chain Disclosure and ESG Compliance
LVMH's Dior Under Scrutiny: LVMH's fashion brand Dior faced scrutiny for not complying with the UK's Modern Slavery Act, as its website displayed outdated anti-slavery and sustainability-related statements unt
4. Expansion Plans Raising Cybersecurity Risks
Shein's U.S. Expansion: Chinese fast-fashion company Shein's plans to expand its supply chain in the U.S. have raised cybersecurity concerns. Experts warn that this could lead to espionage and unauthorized data access due to Chinese laws requiring cooperation in data sharing.
5. Global Trade and Supply Chain Shocks
Recent Disruptions: Global trade and supply chains have faced significant challenges, including port congestion, geopolitical tensions, and climate change impacts. These disruptions have prompted businesses to stockpile inventory earlier and seek closer, more reliable supply chains, indicating a transformation in global trade logistics.
These developments underscore the critical importance of effective third-party risk management in maintaining supply chain security and resilience.
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