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Cybersecurity breaches inflict
costs to consumers and businesses (Gordon,
Loeb, Lucyshyn, & Zhou, 2015). According to a report by
leading analyst firm in the mobile and digital technology sector, Juniper
Research, the cost of data breaches estimated by 2019 globally is $2.1 trillion
dollars, increasing to almost four times the estimated cost of breaches in 2015
(Juniper Research, 2015). Further analyst studies have revealed that
cyberattacks targeting manufacturing companies are on the rise. Verizon’s Data
Breach Investigation Report (2017) ranked manufacturing as the top industry
that was targeted for cyber espionage and manufacturing is also named the third
most targeted industry for cyber-attacks in 2016 according to IBM’s X-Force
Research (IBM, 2017). As manufacturing is becoming advanced with interconnected
systems and increasingly driven by digital technologies; the unprecedented complexities, uncertainties and
vulnerability of the supply chain has rendered cyber supply chain
security as a topic that has catapulted to the top of the list of priorities
and responsibilities for practitioners. Therefore, implementation of resilience
practices to mitigate these risks can be one e?cient and important strategy for
enterprises to create competitive advantage (Pires
Ribeiro & Barbosa-Povoa, 2017).

 

The advancements in technology
has been pivotal in transforming the physical supply chain into an integrated
cyber supply chains (CSC). A cyber supply chain (CSC) is a supply chain
enhanced by cyber-based technologies (e.g. IT) that provides tremendous
advances in efficiency and effectiveness (Linton,
Boyson, & Aje, 2014).  In emerging industrial revolutions such as
Industry 4.0 (the digitization of the manufacturing sector) and Internet of
Things (IoT ; increased machine-to-machine communication) digitization,
intelligence and robotics is the key design element that would enable remote
monitoring of factory processes, resulting in smart manufacturing or
intelligent factories. (Ooi,
Lee, Tan, Hew, & Hew, 2017). Notwithstanding the
advantages, however, the cybersecurity risks is still a force to be reckoned
with. The more interconnected the enterprise IT systems and the Internet, the
more the manufacturing operations are exposed to cyberattacks. Data security
issues are greatly increased with new systems integration and remote access to
those systems. NTT Security, a specialized security
company observed a notable increase in the number of security events during Q3
’17 where manufacturing was ranked second highest in malicious activity
detection. Ponemon Institute, a pre-eminent research center, conducted survey
in 2016 found that manufacturing sectors spent an average of $5 million because
of insider threats (Ponemon, 2016). Recognizing the devastating effects
of cybersecurity breach to the organization revenue and performance, field
experts are calling for a holistic approach to mitigate the risks to achieve
resilient supply chain.

 

Supply chains
complexities and uncertainties does not only increases supply chains risk, but
also reduces visibility that, in turn, makes supply chain operations more
vulnerable to unforeseen disruptions.(Park, Min, & Min, 2016). Cyberattacks can cause manufacturing disruptions, leading to
defective products, production downtime, and physical damage and even threaten
lives. Fundamentally, because a cyberattack may affect a business’s operations,
financial statements and legal exposure, its reputation is on the line. The use
of technology resources or tools alone to control the malevolence and
intentional destructiveness is no longer sufficient (Boyson, 2014). Achieving a
secure and resilient supply chain involves developing a broader understanding
on how to reduce risk when supply chains are open to inputs from external
parties and uncertainties (Linton, Boyson and Aje, 2014). Rather than relying
on technical forefront alone, an effective cybersecurity risk management
program requires a governance structure and joint effort which spans the
organization to its extended supply chain from suppliers to customers (Boyson,
2014).

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