In an era dominated by technological advancements, the Air Force Research Laboratory (AFRL) recognizes the pressing need to assess and mitigate cyber-related risks within its defense-industrial supply chains. Collaborating with RAND Project AIR FORCE (PAF), the AFRL sought to understand how cyber threats compare with other risks in the realm of supply chain management, particularly in the context of hardware. The analysis delves into potential avenues of cyberattacks, such as through malicious code, and considers the supply chain itself as a target for disruptive actions.

Key Findings

The report unveils critical findings that underscore the severity and distinctiveness of cyber-related risks within supply chain management:

Uniqueness of Cyber Risks:

Cyber-related risks stand out as potentially more severe and distinct from other types of supply chain risks. These events can mirror conventional hazards in terms of onset, duration, visibility, and reach.

Challenges Posed by Cyber Events:

Cyber events present challenges exceeding those posed by nondigital threats. The potential for strategic adversaries to inflict harm at a low cost, without fear of punishment for repeated attempts, poses a unique and formidable challenge.

Limitations of Preventive Measures:

Relying solely on preventive measures is insufficient. The report emphasizes that impenetrable defenses are infeasible and that overemphasis on prevention may neglect the importance of response, recovery, and resilience.

Holistic Approach to Cyber SCRM:

Cyber Supply Chain Risk Management (SCRM) demands a holistic approach, beyond a mere combination of cybersecurity and SCRM. Traditional responses to supply chain risks may not adequately address the potency of cyber threats relative to other risks.

National Security Concerns:

Private-sector efforts to manage risk may not align with national security needs. Strategic interactions between suppliers and potential attackers could lead to underinvestment in security, particularly without effective coordination among suppliers.

Recommendations

The report puts forth several recommendations to address the intricate challenges posed by cyber-related risks in supply chain management:

Outcome-Focused Framing:

Frame potential consequences of cyberattacks in terms of the availability, quality, and cost of defense industrial products that play mission-critical roles, expanding the scope beyond information security.

Priority Setting:

Establish priorities among the consequences of cyber and SCRM based on their implications for mission attainment. This ensures a targeted and effective approach to risk management.

Comprehensive Cyber SCRM Strategies:

Develop cyber SCRM strategies that give equal weight to response, recovery, and resilience. Consider concerns about information security, supply chain functionality, differences in interests between defense agencies and the private sector, and potential trade-offs among risk-reduction objectives.

Conclusion

As the digital landscape continues to evolve, the risk of cyberattacks on supply chain management emerges as a complex and multifaceted challenge. The findings and recommendations provided in the AFRL and RAND Project AIR FORCE collaboration offer valuable insights for defense agencies and private-sector entities alike, urging a comprehensive and adaptive approach to cyber SCRM. The report underscores the importance of understanding the distinct nature of cyber threats and the need for proactive measures that extend beyond conventional risk management strategies.