How much do you really know about the security practices of your suppliers? Can you be sure that every third-party service or software your business relies on is fully secure? Attackers are betting that you can’t.
In fact, 91% of organizations have experienced a software supply chain attack in the past 12 months. Why is this happening? Because malicious actors know that businesses often overlook their vendors, suppliers, and partners when securing their systems. It’s the perfect blind spot – one that’s being exploited more than ever.
In this post, we’ll uncover the tactics used in sophisticated supply chain attacks, outline strategies to defend against them, and highlight the prevention measures you need to take in safeguarding your supply chain.
Understanding Supply Chain Attacks
It starts with a routine software update. You trust the vendor; their product is critical to your business operations. But what you don’t know is that attackers have already breached the vendor’s systems. That update? It’s carrying malicious code, silently opening the door to your network to capture system control. Now, your sensitive data is at risk, and your business is exposed.
This is how digital supply chain attacks work – they exploit trust and relationships within your network. Instead of targeting your organization directly, malicious actors look for weaknesses in the security controls of the third-party vendors, suppliers, or service providers you depend on.
To better understand these threats, let’s explore the types of supply chain attacks, the methods attackers use, and their potential impact.
Types of Supply Chain Attacks
- Software Supply Chain Attacks
Software supply chain attacks involve tampering with malicious code at any stage of the software development life cycle, from development to deployment and relying on any kind of software vulnerabilities. Attackers often embed malicious code in third-party libraries, plugins, or even software updates, making the compromise appear as a legitimate part of the product. Once installed, the malware can let threat actors gain unauthorized access, steal data, or disrupt operations, often affecting multiple organizations (even entire industries) due to the trust placed in the compromised software vendor.
- Hardware Supply Chain Attacks
Hardware supply chain attacks occur during the manufacturing or distribution of physical components. Malicious firmware or vulnerabilities may be embedded into devices like servers, motherboards, or chips. These alterations often go undetected until deployed, giving attackers long-term access to critical systems and compromising supply chain integrity.
- Service-Based Supply Chain Attacks (Third-Party Attacks)
These attacks exploit vulnerabilities in third-party service providers, such as managed IT services or cloud platforms. Since these vendors often have direct or privileged access to systems or data, compromising one provider can give threat actors indirect access to multiple organizations.
Common Methods Used by Attackers
Attackers exploit supply chains through a variety of methods, such as injecting malicious code into software components or open-source libraries, tampering with hardware during manufacturing, or stealing credentials from third-party vendors. They may also use social engineering tactics, like phishing, to manipulate supplier employees, or deploy watering hole attacks by compromising websites frequented by vendors. These methods capitalize on trust, enabling attackers to bypass direct defenses and infiltrate organizations through their supply chain.
Impact of Supply Chain Attacks
No matter the type of supply chain risk or the method used, the impact is devastating. It can begin with operational disruptions and escalate to significant financial losses, reputational damage, and even regulatory penalties. In 2024, the global average cost of a data breach reached $4.88 million – a staggering 25% increase over the past four years. The ripple effect often extends beyond the initial target, impacting entire networks of partners and clients. Recognizing the severity of these threats, 44% of organizations plan to significantly increase their investment in supply chain cybersecurity.
Strategies to Prevent Supply Chain Attacks
So, the big question: How can you safeguard your organization from supply chain attacks? Shortly, by adopting a proactive approach and staying vigilant. But let’s extend this answer with a practical, step-by-step guide to securing your supply chain against evolving cyber threats.
1. Conduct Supply Chain Security Audits
The first step in prevention is recognizing the security risks in your supply chain and addressing them through thorough security controls and audits.
Map Supply Chain Dependencies: Identify all suppliers, vendors, and partners with access to sensitive data or systems.
Assess Risk: Risk assessments are the foundation of a strong supply chain security strategy. Evaluate the vendor’s software security posture and how well they protect their systems, including data storage, and incident response capabilities. Check if there are any misconfigured account access controls and if multi-factor authentication is applied.
Check Compliance: Verify that vendors align with recognized security standards like ISO 27001, SOC 2, or NIST2.
Verify Incident Reporting: Ensure vendors have clear procedures for promptly notifying you about security incidents.
A vCISO (Virtual Chief Information Security Officer) plays a critical role in this process, helping your business identify and assess risks associated with suppliers, evaluating the security posture of your vendors and ensuring third-party compliance.
2. Implement a Third-Party Risk Management Program
Supply chain security is not a one-time task. Ongoing risk management helps mitigate cyber threats from third-party vendors, contractors, and suppliers.
Vendor Risk Assessments: Evaluate vendors’ security postures during onboarding and periodically thereafter using structured tools or questionnaires.
Contractual Security Clauses: Ensure vendor contracts include detailed security obligations, such as adherence to Service Level Agreements (SLAs), minimum encryption standards, and incident reporting requirements.
Access Controls: Limit vendors’ access to only what’s necessary for their tasks (principle of least privilege) and monitor their activities.
3. Monitor and Evaluate Vendors Continuously
Staying vigilant requires continuous oversight of your entire supply chain and its business processes towards information security.
Use Monitoring Tools: Use services like Managed Extended Detection and Response (MXDR) or Security Information and Event Management (SIEM) systems to detect vulnerabilities, security breaches and anomalies in real-time.
Conduct Periodic Audits: Regularly verify vendors’ compliance with security requirements and contractual obligations.
4. Enforce Robust Vendor Evaluation Processes
Prevent insecure vendors from entering your supply chain by adopting structured evaluation practices for detecting vulnerable systems and operating critical systems.
Pre-Engagement Questionnaires: Assess vendors’ security measures, system controls, security patches, certifications, and compliance with standards.
Certifications and Audits: Require vendors to provide evidence of adherence to standards like ISO 27001, SOC 2, or independent audits.
Background Checks: Research vendors’ reputations and histories, including past breaches or security incidents.
Defined Security Standards: Set clear baseline requirements that all vendors must meet to work with your organization.
5. Require Secure Development Practices
When dealing with software vendors, ensure they follow secure software development lifecycle practices to prevent vulnerabilities and attacks from malicious software.
Secure Software Development Lifecycle (SDLC): Confirm that vendors incorporate security at every stage of the software development life cycle process.
Automated Code Scanning: Require software vendors to use tools and essential services to identify and fix vulnerabilities before deploying software.
Transparency in Practices: Discuss vendors’ development and testing processes to better understand their approach to risk management and cyber attacks.
6. Develop an Incident Response Plan
Even with strong prevention measures, incidents (especially a vendor breach) can happen. A robust incident recovery plan minimizes damage.
Define Roles and Protocols: Clearly outline responsibilities and response steps for your organization and vendors.
Collaborative Planning: Align response efforts with vendors to ensure seamless communication during a breach.
Regular Testing: Test and refine your plan regularly to ensure its effectiveness in reducing downtime, critical infrastructures damage and network connection problems.
“Get ready for the worst case scenarios because eventually you can be in that situation no matter you want it or not.” – Boris Goncharov, AMATAS’ Chief Strategy Officer
7. Regularly Update Security Policies
Supply chain threats are constantly evolving, and your policies to protect sensitive information should evolve with them.
Adapt to Emerging Risks: Security teams must periodically review and revise your policies to address new vulnerabilities.
Learn from Incidents: Use insights from past attacks or audits to improve security measures and protect from threat actors.
Promote Awareness: Train employees, vendors, key suppliers and customer networks on updated policies to ensure they’re effectively implemented.
Practical Next Steps
If you’re ready to take actionable steps to improve your supply chain security, here’s a clear roadmap to guide your efforts:
Evaluate Your Current Supply Chain Security: Take stock of your existing practices and security controls regarding your supply chain. Are your vendors meeting compliance standards? Are your access controls and encryption protocols robust enough?
Strengthen Collaboration with Vendors: Work closely with your suppliers to ensure they incorporate security practices aligned with your expectations to protect intellectual property. Share threat intelligence and set clear security requirements in contracts.
Invest in Continuous Monitoring: Leverage tools like XDR or SIEM systems to maintain visibility over your entire supply chain in real time. Configure these tools to alert you to unauthorized system access, vulnerabilities, or suspicious activities.
Manage Access: Limit the privileged access of your suppliers to only what they need to perform their tasks. Conduct periodic audits of vendor access rights to ensure they remain appropriate. That way you can protect your critical infrastructures and data from malicious actors.
Engage External Cybersecurity Experts: Partner with experienced professionals to manage your risks more strategically. Penetration testers (especially CREST accredited pen testers) can help you assess vulnerabilities in your software supply chain. They can verify if components like libraries or dependencies have been tampered.
Another external expert you can rely on is a Virtual CISO, this roles is all-in-one for your business – strategic advisory, risk management, compliance oversight, incident response planning (Learn more about vCISO meaning and services in our previous blog). A vCISO can conduct a third-party security evaluation and assess your software supply chain for compliance and risks.
Conclusion: Secure Your Software Supply Chain, Protect Your Business
Supply chain attacks aren’t just a growing threat – they’re a reality for organizations worldwide – both state and private companies. As attackers continue to exploit blind spots in vendor relationships, it’s clear that businesses must take a proactive, strategic approach to security. Prevention isn’t about reacting to threats after the fact; it’s about building a resilient defense that anticipates and neutralizes risks before they cause harm.
By conducting thorough audits, implementing third-party risk management programs, enforcing robust evaluation processes, and maintaining continuous monitoring, you can strengthen your supply chain’s security posture. Limiting vendor access, updating security policies, and collaborating with trusted cybersecurity experts will further fortify your defenses against evolving threats.
The stakes are high, but so are the rewards of a secure supply chain: operational stability, data protection, regulatory compliance, and the trust of your clients and partners. Take the first step today – evaluate your current practices, strengthen collaboration with your vendors, and invest in the tools and expertise necessary to stay ahead of attackers. Because when it comes to protecting your business, a secure supply chain is no longer optional; it’s essential.
Learn how AMATAS vCISO and Penetration Testing services can help you protect your supply chain and future-proof your business – book a meeting with our team today:
FAQs
Why are supply chain attacks hard to prevent?
Supply chain attacks are hard to prevent because they exploit trust in vendors and third-party providers. Organizations often have limited visibility into their partners’ security practices and rely on external systems and software, which may have security risks or inadequate protections.
How can supply chain attacks be prevented?
Supply chain attacks can be prevented by conducting regular vendor risk assessments, enforcing strict access controls, implementing secure coding practices, and enforcing robust vendor evaluation. Monitoring vendor network and maintaining a comprehensive incident response plan also help reduce risks (and ensure business continuity).
How to mitigate supply chain vulnerability?
To mitigate supply chain vulnerabilities, map your attack surface, require vendors to adhere to security standards, and regularly monitor the regulatory compliance of their organization. Establish the use of penetration testing to identify weaknesses and enforce strong encryption and data protection measures.
Why should small businesses worry about supply chain attacks?
Small businesses should worry about supply chain attacks because they are often targeted as entry points to larger organizations. Attackers exploit smaller businesses’ weaker security defenses, causing financial losses, operational disruptions, and reputational damage.
How often should we conduct supply chain risk assessments?
Supply chain risk assessments should be conducted annually or whenever there is a significant change, such as onboarding a new vendor or updating critical software. Regular assessments help identify vulnerabilities, prevent unauthorized privileged and persistent access as well as ensure vendor compliance.
How does investing in supply chain security benefit our organization?
Investing in supply chain security reduces the likelihood of security breaches, protects sensitive data, and prevents costly disruptions. It also improves vendor relationships, ensures regulatory compliance, and enhances trust with customers and stakeholders.
What should be included in vendor contracts for cybersecurity?
Vendor contracts for cybersecurity should include clauses for regular security audits, breach notification timelines, compliance with industry standards, data encryption requirements, and access controls. SLAs should clearly define cybersecurity expectations and penalties for non-compliance.
What steps can we take to secure open-source software in our supply chain?
To secure open-source software, review and validate code before use, monitor for vulnerabilities, and ensure dependencies are up-to-date. Use automated tools to scan for security issues and limit reliance on unvetted or outdated components.
What features should I look for in supply chain monitoring tools?
Look for features like real-time threat detection, integration with existing systems, API monitoring, anomaly detection, and vendor risk scoring. Comprehensive dashboards and automated alerts are also crucial for effective supply chain risk monitoring.
