In June 2024, we asked members of our Indago supply chain research community — who are all supply chain and logistics executives from manufacturing, retail, and distribution companies — “How prepared are you today to keep your operations running as best as possible if your ERP or any of your supply chain or logistics systems (TMS, WMS, YMS, SCP) went down for many hours or days due to a cyberattack?”
More than half the respondents (56%) said that they are only “Somewhat Prepared” (28%) or “Not prepared at all” (28%) to keep their operations running as best as possible if their ERP were to go down for many hours or days due to a cyberattack. 40% said the same thing about their Supply Chain Planning and Warehouse Management solutions going down, and 32% about their Transportation Management System.
I can’t say if U.S. grocery distribution company United Natural Foods (UNFI) was among the survey respondents, but it is the latest example of what happens when a company isn’t prepared.
“[UNFI], which is the primary distributor for Amazon-owned Whole Foods, and supplies over 250,000 grocery store products, including frozen goods, disclosed on [June 9] that it had identified unauthorized access to its IT systems,” reported Zack Whittaker at TechCrunch. [UNFI chief executive Sandy Douglas] said on its [June 10] call that the company has since shut down its entire network. The company has not described the nature of the cyberattack, but it said the intrusion was causing ongoing disruptions to its operations, including its ability to fulfill and distribute customer orders.”
Not surprising, it didn’t take long for UNFI customers to start experiencing disruptions. In a follow-up article a few days later, Whittaker reported that “Whole Foods said in the communication to staff that the cyberattack is affecting UNFI’s ‘ability to select and ship products from their warehouses’ and that this will ‘impact our normal delivery schedules and product availability.’”
The good news is that things appear to be returning back to normal. UNFI released the following media statement yesterday (June 15):
“Over the past few days, we’ve made significant progress toward safely restoring our electronic ordering systems, which will allow us to serve the customers that order through these systems in a more automated way and continue to increase our operational capacity. We are also using alternative processes to ensure our customers receive the products they need while we continue making progress to restore our technology capabilities.
“Our customers, suppliers and associates remain our highest priority, and we are working closely with them every step of the way.
So, it appears that this was a relatively short-lived disruption, which is good news. That said, this incident is yet another reminder that the risk of experiencing a supply chain disruption due to a cyberattack remains very high.
I’ve written about this threat many times over the years, including:
- When A Cyberattack Takes Down Your Supply Chain Software
- The Hackers Inside Your Supply Chain
- The Day A Cyber Attack Brings The World’s Supply Chains To A Halt
- The WannaCry Cyberattack: Another Warning for Supply Chain Executives
- Cybersecurity: Is It A Priority In Your Supply Chain?
- You’ve Been Hacked! The Growing Threat of Supply Chain Cyber Attacks
- Preparing for Supply Chain Cyberattack (Insights from Indago)
Therefore, I’ll end with the three recommendations I’ve shared several times in the past:
- Make sure your IT systems are still supported by the vendors and continuously updated with the latest security patches.
- Make sure your cloud and software-as-a-service providers take cybersecurity seriously too, which means they’re investing the time, money, and resources to develop and deploy security processes and systems and they’re obtaining and maintaining relevant certifications.
- Don’t just focus on prevention, focus on minimizing the scope and scale of a disruption too. Your network will get breached. Unfortunately, most companies spend the vast majority of their time and resources trying to prevent an attack and not enough time and energy on developing processes and systems to minimize the impact of a breach when it eventually happens.
How prepared are you today to keep your operations running as best as possible if your supply chain or logistics systems went down for many days due to a cyberattack? If your honest answer is “We’re only somewhat prepared or not prepared at all,” then what are you waiting for?
