Why Supply Chain Cyberattacks Are a Growing Threat—and How to Protect Your Business

Why Supply Chain Cyberattacks Are a Growing Threat—and How to Protect Your Business

 

Supply chain cyberattacks have emerged as one of the most dangerous and far-reaching threats to businesses today. Unlike traditional cyberattacks, which target a single organization, supply chain attacks exploit vulnerabilities in third-party suppliers—digital or non-digital—to create a “one-to-many” impact. This means that a breach at one supplier can cascade across multiple organizations, causing widespread disruption.

The rise in supply chain attacks has made them a top concern for businesses of all sizes. With 42% growth in supply chain attacks during the first quarter of 2021 alone, and 97% of companies reporting impacts from supply chain breaches , it’s clear that no organization is immune. Here’s what you need to know about this growing threat and how to prepare your business.

 

 

Why Supply Chain Attacks Are Particularly Dangerous

Supply chain attacks are especially devastating because they exploit trust relationships between organizations and their vendors. These attacks often go undetected for long periods, allowing attackers to infiltrate multiple systems before being discovered.

• One-to-Many Impact:
  A single breach can affect not only the initial target but also its customers, partners, and stakeholders. For example:
  • Colonial Pipeline (2021): A ransomware attack forced the shutdown of a major U.S. gas pipeline, causing fuel shortages and panic buying across the East Coast.
  • JBS (2021): The world’s largest meat supplier was hit by ransomware, shutting down plants in multiple countries and disrupting global food supply chains.
  • Kaseya (2021): A compromised software update spread ransomware to IT service providers and over 1,500 of their small business clients.
• Exploiting Weak Links:
  Attackers often target smaller suppliers or vendors with weaker cybersecurity defenses, using them as gateways to larger, more secure organizations.
• Widespread Consequences:
  A single breach can lead to operational disruptions, financial losses, reputational damage, and regulatory penalties—not just for the supplier but for all connected entities.

 

Key Statistics Highlighting the Threat

The data underscores the urgency of addressing supply chain risks:

• 97% of companies have been impacted by a supply chain breach.
• 93% of organizations have suffered a direct breach due to a vulnerability in their supply chain.
• 42% increase in supply chain attacks during Q1 2021 compared to the previous year.

These numbers reveal that supply chain attacks are not just a possibility—they’re a near certainty. Businesses must take proactive steps to mitigate these risks.

 

How Can You Mitigate Your Risk of Losses Due to an Attack on Your Supply Chain?

Supply chain cyberattacks can have devastating consequences, but with proactive measures, you can significantly reduce your risk. Here’s a step-by-step guide to mitigating losses and protecting your business:

 

1. Identify Your Supplier Risk

You can’t address risks you don’t know exist. Start by mapping out your supply chain to understand where vulnerabilities may lie.

• Steps to Take:
  • Create a comprehensive list of all vendors and suppliers, including both goods and services. This could range from cloud service providers to raw material suppliers or office product vendors.
  • Assess the cybersecurity posture of each vendor. Consider sending them a survey to evaluate their security practices or collaborating with your IT partner to conduct a review.
  • Prioritize high-risk vendors—those with access to sensitive data or critical systems—and focus on mitigating risks associated with them.
• Why It Matters:
  Understanding your supplier risk helps you identify weak links in your supply chain and take steps to protect your organization.

 

2. Create Minimum Security Requirements for Digital Vendors

Set clear expectations for your vendors when it comes to cybersecurity. Establishing minimum security standards ensures that all partners meet a baseline level of protection.

• How to Do It:
  • Use established data privacy frameworks as benchmarks, such as GDPR, ISO 27001, or SOC 2 compliance.
  • Require vendors to demonstrate adherence to these standards through audits or certifications.
  • Include cybersecurity requirements in contracts and regularly verify compliance.
• Example:
  If a vendor is GDPR-compliant, you can be confident they’ve implemented key security measures like encryption, access controls, and incident response protocols.

3. Conduct an IT Security Assessment

An IT security assessment helps you identify vulnerabilities in your own systems that could be exploited during a supply chain attack.

• Key Areas to Review:
  • Are software updates and patches applied promptly?
  • Is your network segmented to limit third-party access?
  • Do you have robust threat detection and monitoring tools in place?
• Why It’s Important:
  Even if a vendor is compromised, strong internal defenses can prevent attackers from moving laterally into your systems.
• Action Step:
  Schedule an IT security assessment if you haven’t done one in over a year. Work with your IT team or a trusted partner to identify and address gaps.

 

4. Put Backup Vendors in Place Where Possible

Relying on a single supplier for critical components or services increases your risk of operational disruption. Diversifying your supply chain reduces this risk.

• What to Do:
  • Identify critical suppliers and explore alternative vendors for backup options.
  • For example, if you rely on a single ISP for internet connectivity, consider adding a secondary provider to ensure continuity.
  • Regularly test relationships with backup vendors to ensure they can step in seamlessly during an emergency.
• Why It Helps:
  Having backup vendors minimizes downtime and ensures your operations can continue even if a key supplier is hit by a cyberattack.

 

6. Schedule a Supply Chain Security Assessment

A supply chain security assessment provides a clear picture of your vulnerabilities and helps you prioritize mitigation efforts.

• What to Expect:
  • Evaluate the security practices of your suppliers.
  • Identify potential points of failure in your supply chain.
  • Develop a plan to address identified risks, such as improving vendor vetting processes or enhancing internal defenses.
• Why It’s Essential:
  Staying informed about your supply chain risks allows you to take proactive steps to protect your business. Don’t wait for an attack to expose weaknesses—act now to strengthen your defenses.

 

Final Thoughts

Supply chain cyberattacks are a growing threat, but with proper preparation, you can minimize your risk of losses. By identifying supplier risks, setting security standards, conducting assessments, diversifying vendors, backing up data, and staying vigilant, you can build resilience against attacks.

Remember: Cybersecurity is a shared responsibility. Work closely with your vendors, IT team, and industry partners to create a secure and resilient supply chain.

Don’t leave your business vulnerable—schedule a supply chain security assessment today to stay ahead of potential threats.