Supplier Dependency Risk Management Policy

The Supplier Dependency Risk Management Policy (P41) is crafted to address rising regulatory and operational scrutiny of supply chain vulnerabilities. With supply chain attacks and systemic outages increasingly affecting organizations worldwide, the policy goes beyond baseline compliance by instituting a structured, risk-driven process to manage supplier dependencies. Its core purpose is to provide the organization with clear procedures to identify, assess, and mitigate the risks associated with over-reliance on external suppliers, especially those that underpin critical ICT operations. The policy responds directly to major legislative drivers, such as the NIS2 Directive’s Articles 21(3) and 22, by requiring pivotal controls: first, that all essential suppliers (hardware, software, cloud, telecom, managed services, etc.) are categorized by their criticality; second, that a supplier dependency register is established and continually updated to log key information, including whether a supplier is a sole source or if substition is feasible. Annual and event-driven risk assessments are mandated for each key supplier, with clear scoring models to rate dependency and concentration risk. If authorities or sector-wide risk assessments highlight a provider or technology as high risk, this policy ensures the organization’s leadership is informed, and adaptive risk strategies are promptly applied. Operationally, the policy distributes responsibilities among Vendor Management (who own the register and direct evaluations), Risk Management (who integrate findings into enterprise risk decisions), Procurement (who embed diversification into contracts), IT/Operations (who design contingency plans), and the suppliers themselves (who provide assurance data and notifications). For high-dependency areas, the policy requires documented contingency measures, ranging from engaging alternate suppliers, maintaining emergency inventory, ensuring data portability from SaaS vendors, to integrating supplier failure into business continuity plans. A central strength of P41 is its requirement for continuous monitoring: supplier news, security attestation requests (such as receiving SOC reports), and incident alerts feed directly into reassessment routines. Internal Audit annually verifies compliance and tests contingency effectiveness (e.g., simulated supplier outages). At least annually, dependencies, trends, and mitigation progress are presented to top management and reflected in ISMS review cycles. These provisions demonstrate the policy’s ambition: not only to protect against known risks, but to build a framework that swiftly integrates external advisories or regulatory changes. By codifying internal thresholds (like limits on cloud workload concentration) and enforcing robust contract language around notifications, transitions, and subcontractor disclosure, it embeds resilience at every step of the supply chain relationship. Finally, P41 is explicitly positioned as an advanced, value-added policy, optional for some organizations, but offering competitive advantage by signaling mature supply chain risk governance. It is intended for use by all departments interfacing with suppliers, and its alignment with best practices (ENISA, ISO/IEC 27001/27002:2022, DORA) makes it adaptable for industry compliance and audit needs.