Vendor Management for Supply Chain Security

With vendor management for supply chain security, organizations secure their supply chain to better serve customers and lower operating costs.


Supply chains have become increasingly targeted for ransomware and state-sponsored attacks. The potential impact of these attacks has far-reaching consequences for our supply chains. Organizations may become nonoperational for days or weeks, not to mention the vast physical safety implications these attacks impose on critical infrastructure. Risk management that allows organizations to identify vulnerabilities and set responsive policies is crucial for resilient supply chain security.

Supply chain attacks occur because hackers are looking for a weak link to get to their real target. Because organizations that realize the risk often have sophisticated network security, cybercriminals look for vulnerabilities elsewhere. They often find it in a software supply chain partner or vendor, then upload malicious code to distribute to connected companies. Organizations of all sizes must develop a formal vendor management strategy to strengthen the supply chain.

Vendor Management Strategy Components

Identify the information vendors will access.

Understanding how a vendor accesses your data is critical to understanding the risks they pose. To accomplish this, list the systems, information, and networks a vendor will require access to. Ask: how does the vendor fit into the organization’s business objectives?

Establish risk tolerance per vendor.

To create a picture of risk, align the information from Step 1 with the organization’s business goals. As a result, the organization will develop an information risk tolerance. This determines which risks the organization is willing to accept, transfer, mitigate, or refuse. Ask: How critical is this vendor to operations? How much information do they need? How many critical systems and networks do they have access to?

Make good contracts.
Defining business relationships benefits all parties involved. Developing a service level agreement (SLA), for example, helps distinguish vendor responsibilities, requirements, and how they relate to the organization. Consequently, SLA should include protocols, controls, and requirements for:

  • Access authorization
  • Employee security awareness training
  • Encryption and decryption
  • Endpoint security
  • Information access
  • Password management
  • Network and system security protections and updates
  • Security incident liability
  • Sustained vendor monitoring.

Vendor management isn’t a one-and-done check. Only continuous monitoring will ensure vendors’ security postures are aligned with the organization’s business goals and risk tolerance over time. Organizations should monitor:

  • IT diagrams and architecture
  • Physical security
  • Security documentation
  • SOC reports
  • Vendor audits and internal audit reviews


As businesses become more interconnected, examining each link in the supply chain closely becomes more critical than ever. Establishing a comprehensive vendor management plan will strengthen vendor partnerships, help protect company, customer, and employee data, and stop cyber criminals from demanding impossible ransoms. To learn more about how companies secure their supply chain to better serve customers and lower operating costs, contact us for a free consultation.