Network security: how logistics partners can help

Oct. 14, 2015
Executives realize it is crucial to organizational security to vet and monitor suppliers along the supply chain

Businesses around the world are becoming increasingly interconnected. This is a positive trend for the global economy but one that heaps pressure on network security providers to protect data from breaches that harm consumers and inflict massive costs and reputational damage on companies.

Traditional network upgrades, ubiquitous mobile devices and apps, wireless connections, social media and cloud computing continue to fuel this risk even as they redefine the way the industry conducts business.

It’s a complicated problem that demands constant vigilance and a network of industry partners – including logistics partners – who can react quickly when a problem arises.

According to the Fifth Annual UPS Change in the Chain Survey (2015) of high-tech industry executives, respondents ranked cybersecurity in the top five areas of risk concern, and 26.2 percent of respondents said improving internal cybersecurity capabilities was a future focus of risk management.

Unfortunately, there’s no silver bullet to end data breaches once and for all. But a fast response is crucial when systems are under attack. That’s especially true when the breach is the result of a hardware failure and security providers need replacement parts right away. We in the supply chain business know that strong logistics support can mitigate the severity of risks and the impact of data breaches.

Our data show high-tech companies know this, too. Clearly, they view improving collaboration with suppliers as a top priority.

There are several ways that logistics providers can help mitigate the risk of data breaches. Here are three very important ones:

  • Vetting and monitoring suppliers along the supply chain. This is a good way to blunt potential cybersecurity risks throughout the value chain.
  • Ensuring that all software security updates are completed and audited with suppliers. Additionally they can mandate that security clauses apply to sub-contractors in the supply chain.
  • Ensuring that inventory stocking levels are always adequate for high-risk network security systems. Field stocking locations are an excellent way to keep critical inventory within a few hours of sites where it might be needed in an emergency. This will help customers recover faster.

A Growing Problem

Data breaches have become far too common. We’ve seen them at major brand-name companies in recent years. And, sadly, such occurrences are on the rise, especially as hackers get better at finding weak links in organizations to use as entry points to their systems.

PwC’s Global most recent State of Information Security Survey of 9,700 security, IT and business executives in 154 countries found the total number of security incidents detected by respondents rose in 2014 by a staggering 48 percent year over year to 42.8 million. The number of survey respondents reporting losses of $20 million or more nearly doubled.

This environment magnifies the challenge that network security providers face, and it underscores the demand for their services. Worldwide spending on information security was expected to jump nearly 8 percent last year to $71.1 billion, according to Gartner Inc. Spending is expected to grow similarly this year to nearly $77 billion.

Moreover, the Wall Street Journal reported in April that cybersecurity companies backed by venture capitalists raised a record $1.9 billion last year globally. In fact, Bain Capital is acquiring cyber security company Blue Coat Systems for about $2.4 billion.

So, let’s be clear: Data breaches are a constant risk for companies of any size and type. They are a scourge on the global economy.

The stakes have never been higher for security providers. And they must be nimble and vigilant to guard data against hackers, cybercrime rings and others who can wreak havoc.

We all have a role to play in preventing data breaches. But logistics partners like UPS are well-positioned to help minimize the risk. The key – from one end of the supply chain go the other – is innovative thinking and technologies. That’s what helps us stay a few steps ahead of the bad guys.

About the Author:

David is a 20-year veteran in strategic marketing and currently serves as the Marketing Director for the UPS’s High Tech segment. David directs a team responsible for marketing UPS's portfolio of best-in-class logistics and transportation solutions to serve the unique needs of customers in the high tech sector. Dave has in-depth knowledge of how customers can use logistics to save money, improve efficiency and grow their business.