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What is a Digital Supply Chain and What are Risk Types?


A digital supply chain is an electronic system that allows companies to deliver goods and services without human intervention. It benefits companies by reducing the cost of operation, making the functions less labour-intensive, and ushering in higher production efficiencies. While it is a transformative and sustainable process, it is susceptible to digital attacks. Digital supply chain risk factors include data breaches and fraudulence, among others.

What are the types of risks associated with a digital supply chain?

Digital supply chains are susceptible to various threats. The most common are: 

1. Data security risks, including unauthorized access, hacking, and malware attacks.

2. Operational risks include system failures, process, and human errors.

3. Compliance risks include regulatory changes and non-compliance with internal policies.

4. Financial risks arise from currency fluctuations, credit risks, and price changes.

5. Reputational risks because of negative publicity, customer churn, and loss of market share.

How is digital supply used today?

A digital supply chain describes managing the flow of information, goods, and services between businesses and consumers using digital technologies. It encompasses everything from procuring raw materials and components to manufacturing, warehousing, and logistics. It also includes customer service and after-sales support. 

Consumers increasingly demand faster delivery times and greater transparency about where their products come from and how they are made. This puts pressure on businesses to rethink their supply chains and use digital technologies to improve efficiency and responsiveness.

There are different types of digital technologies used in the supply chain. Here are a few:

  • Procurement systems

    comprise various enabling technologies that help businesses source materials and components more efficiently.

  • Manufacturing systems

    include technological tools and solutions, which use data to optimize production processes.

  • Warehouse management systems

    help manufacturers track inventory levels and order picking processes.

  • Transportation management systems

    comprise many digital tools that help plan and optimize shipping routes.

  • Customer relationship management (CRM) systems

    help manage customer orders and queries.

Digital supply chain management is essential to any business's digital transformation strategy. Companies can gain a competitive advantage in today's fast-paced marketplace by using digital technologies to improve supply chain efficiency.

How does a digital supply chain work?

In a digital supply chain, all the steps and processes involved in moving goods from supplier to customer are digitized and integrated. This allows for real-time data collection and analysis, which leads to more efficient and effective decision-making throughout the supply chain. Additionally, digital supply chains are often more responsive to changes in customer demand, which can help reduce stockouts and other disruptions, including fraudulent access to the systems. 

The importance of a digital supply chain

Organizations today are under immense pressure to do more with less. They need to optimize their operations and supply chains to be efficient and effective. A digital supply chain can help organizations meet these challenges. 

A digital supply chain is a supply chain that uses digital technologies to manage the flow of information, goods, and services. By digitizing the supply chain, organizations can gain more visibility into their operations, identify inefficiencies, and make real-time adjustments to improve performance. 

Digital supply chains also help organizations reduce costs and increase agility. Organizations can eliminate manual errors and improve decision-making by automating processes and data analytics. Additionally, digital supply chains can enable organizations to adapt to demand or market conditions quickly. 

The benefits of a digital supply chain are clear. However, implementing a digital supply chain can be a challenge. Organizations need to have the right technology infrastructure and ensure that their data is accurate and up to date. Additionally, they need the right people to manage and operate the digital supply chain. 


The digital supply chain is an integral part of business today. It allows companies to manage their supply chains more effectively and efficiently. However, like any digital technology, digital supply chains are susceptible to cyberattacks. An excellent strategy to improve security posture involves conducting penetration testing to identify the inherent weaknesses and addressing them before malicious players can exploit them.

Need a pentest? Contact the Packetlabs team today!