KALA

Cyber incidents can be defined as breaching the security of a system with the purpose of gaining unauthorized access. More specific activities include the stealing/processing/storing of data, altering software without the owner’s consent and disrupting online services. (National Cyber Security Centre, 2018)

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How can Kala protect itself from Cyber incidents in the best way?

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Kala should train all employees in regards to cyber incidents. Everyone should be aware of the issue. Strict firm regulations and principles regarding data and software should be treated carefully. All devices that are used for company-related tasks should be equipped with antivirus as well as antispyware. The office should also have its own wifi with security measures and back-up copies of all data should be kept as a safety procedure. Only employees who are in need of certain information should have access and it would really help if every employee has their own login to monitor any unauthorized behavior. (The Capacity Group, 2019)

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2. Transport Delay

Transport DelaysTransport delays can have many reasons and are basically a so-called business interruption. As previously mentioned, Allianz (2019) has identified business interruptions as one of the major risks worldwide. However, the causes of such interruptions have been evolving over the last years. Whilst a lot of transport companies rely on a digital system to guide their orders, an IT outage, for instance, would cause the whole logistic system to stop. That would lead to major transport delays which interrupt the business for Kala. Also, natural causes such as storms, tsunamis, hurricanes can hinder the transport to arrive at its final destination or even accidents. (Allianz, 2019) 

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Kala can prevent transport delays by encouraging its logistical partners and suppliers to maintain all their vehicles and machinery regularly. Like that, one major contributor can be eliminated. It would also be an option to consider a redundant supply chain meaning that Kala is not dependent on one single company but has the option to chose. Additionally, security cameras and alarms can help to avoid external threats such as theft. Insurance is also a good way to avoid the loss of money, however, it does not keep the customers content. The safest way is to have safety stock available at any time to be able to cover around a week of business should new deliveries not come in. (Dun & Bradstreet, 2019)

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3. Stock Out

Stock outs can be defined as the situation when there is no inventory of a certain item that customers want to purchase. Stock outs are bad for business and lead to discontent customers that might not ever return. The costs of stock outs depend on the customer’s reaction. Should the customer decide to wait for the item regardless of the stock out, the company has to ensure that this product is being produced, packed and delivered as soon as possible. If the customer cancels the order, the company loses profit and potentially more than that if the project for a new item has already been initiated. Losing the customer completely is the worst outcome for the company, as it has to be replaced which is connected to financial difficulty. (Murray, 2018)

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In order for Kala to avoid stock outs, they should implement a modern system to monitor the inventory electronically. Like that they can keep track of orders, get notifications when re-orders are necessary which makes it more difficult for them to get to a stock out point. Radio Frequency Identification would be an option to track information about products with the help of scanners. Generally, it will help Kala to forecast the demand over the next upcoming quarters. Like that, preorders can be made way ahead and adjustments can always be made later. As mentioned above, Safety stock is another option to avoid stock outs should more than expected orders be placed. (Nicosia, 2018)

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References 

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Accenture. (2016). The Convergence of Operational Risk and Cyber Security. Retrieved from Accenture: https://www.accenture.com/t20180529T062306Z__w__/ie-en/_acnmedia/PDF-7/Accenture-Cyber-Risk-Convergence-Of-Operational-Risk-And-Cyber-Security-Infographic.pdf

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Allianz. (2019). Allianz Risk Barometer 2019: Cyber joins business interruption as a leading global risk for companies for first time. Retrieved from Allianz: https://www.agcs.allianz.com/news-and-insights/news/allianz-risk-barometer-2019.html

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National Cyber Security Centre. (2018). What is a cyber incident. Retrieved from National Cyber Security Centre: https://www.ncsc.gov.uk/information/what-cyber-incident

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The Capacity Group. (2019). 10 Ways to Prevent Cyber Attacks . Retrieved from The Capacity Group: https://capcoverage.com/index.php/10-ways-to-prevent-cyber-attacks/

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Dun & Bradstreet. (2019). OPERATIONAL RISKS Managing Business Interruption Risks. Retrieved from Dun & Bradstreet : https://www.dnb.com/resources/managing-business-interruption-risks.html

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MURRAY, M. (2018). Stockout Costs and Effects on the Supply Chain. Retrieved from The balance small business: https://www.thebalancesmb.com/stockout-costs-and-effects-2221391

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Nicasio, F. (2018). Avoiding Stockouts: 5 Preventable Causes of Out-of-Stocks and What to Do About Them. Retrieved from Vend: https://www.vendhq.com/blog/stockouts/

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