The Growing Menace of Supply Chain Cyberattacks — A Call to Action for North Carolina Businesses

Why Supply Chain Cyberattacks Are Increasing

1. The Expanding Attack Surface of Interconnected Systems

Firms rely on external suppliers for software modules, cloud services, managed infrastructure, component manufacturing, logistics software, and more. Each link in that network is a potential weak point. As one analysis put it, “modern institutions rely heavily on connected third-party vendors, which creates multiple entry points for cyber criminals”.

Between 2021 and 2023, supply chain attacks surged by roughly 431 %, according to a Cowbell cyber risk report. That rate of growth is alarming, and it is projected to continue escalating through 2025 and beyond.

2. Leverage and Multiplicative Impact

Attackers see enormous leverage in supply chain infiltration. Infiltrate a single widely trusted vendor or software library, and you gain access downstream to many organizations. This multiplicative impact attracts sophisticated threat actors who prefer to scale their efforts. As Gartner has indicated, “growing cybersecurity risks in global supply chains” warrant special scrutiny.

3. Poor Visibility and Trust Models

Organizations often lack full visibility into their extended supply chains—especially beyond first or second-tier vendors. Many trust the assurances of their vendors without independently auditing or verifying controls. This “trust but don’t verify” posture can backfire when a vendor that seemed benign turns out to harbor vulnerabilities.

In fact, supply chain network attributes have been shown to significantly improve predictive models for breach risk, beyond what internal security metrics alone can deliver.

4. The Rise of DevOps, Rapid Updates & Open Source Dependencies

The adoption of agile, continuous deployment practices, microservices architectures, and open source software has further increased complexity and speed. Attackers exploit dependencies, versioning, update pipelines, open source components, package managers, and repository mirrors. The more automation and interconnectedness, the more points of ingress.

Open source software (OSS) is particularly attractive to attackers because it is nearly ubiquitously used; estimates suggest OSS comprises 70–80 % of modern codebases.

5. Sophisticated Tactics and Nation-State Involvement 

Many supply chain cyberattacks are not random: they are carefully planned, sometimes sponsored by state or state-aligned actors. The ability to infiltrate a target through upstream suppliers or software providers is a strategic tool for espionage, disruption, or geopolitical leverage.

In short: as our chains grow more intertwined and technology stacks more layered, the hidden pathways for attack multiply.

Anatomy of a Supply Chain Cyberattack: How They Operate

To grasp the threat concretely, it helps to understand common tactics and methods. Below is a generalized “attack lifecycle” for a supply chain breach, with illustrative possibilities:

1. Reconnaissance & mapping
   The attacker researches a target’s vendor ecosystem, identifies critical providers, software modules, libraries, infrastructure dependencies, and weak links (e.g. small vendors with poor security).
2. Initial compromise (upstream)
   They breach a vendor’s system, repository, build server, or update mechanism. For example, inserting malicious code into a software package, corrupting firmware, or manipulating update channels.
3. Propagation downstream
   The malicious code or exploit propagates through updates, vendor-client integrations, or shared libraries. The customer systems unknowingly import the compromised component.
4. Lateral movement & privilege escalation
   Once inside the target, the attacker escalates privileges, probes for valuable systems, exfiltrates data, or deploys ransomware or backdoors.
5. Persistence & stealth
   Attackers often hide well—some supply chain attacks may go undetected for months. They may embed themselves subtly, mask behavior, or trip audit thresholds.
6. Detection & mitigation
   Eventually, the breach is discovered (through anomaly detection, third-party notification, or incident response). The response then involves isolating, patching, restoring, and auditing.

Because the entry point lies upstream, victims often take much longer to detect supply chain breaches. Some analyses estimate the average time to identify and contain such incidents is 267 days—a much longer dwell time than many direct attacks.

Example Techniques and Vectors

• Typosquatting / dependency confusion: Attackers publish malicious versions of popular libraries under similar names so they are inadvertently included in builds.
• Compromised build pipelines: Insertion of malware or backdoors during the software build or compilation phase.
• Malicious updates / patches: A legitimate vendor’s update mechanism is hijacked to deliver malicious code.
• Firmware or hardware tampering: Less common but more severe—e.g. a component’s firmware is altered during manufacturing.
• Third-party service providers: Managed IT, DevOps, cloud providers, or analytics services could be the vector.
• Open source repository compromise: Attacking maintainers or maintainership credentials to introduce malicious code.

A tragic irony: the chain of trust, once meant to improve efficiency and collaboration, becomes the conduit for compromise.

Real-World Incidents and Lessons Learned

To bring this threat into sharper relief, here are notable examples of supply chain security failures and what they teach us.

SolarWinds / SunBurst (2020)

Perhaps the most infamous example: attackers inserted malicious code into a routine update of SolarWinds’ Orion software, which then propagated to thousands of government and enterprise customers. The result was an expansive, stealthy compromise of multiple networks. This incident thrust supply chain security into public and regulatory view.

MOVEit Data Breach (2023)

A critical vulnerability in the managed file transfer software MOVEit allowed exploitation by the CL0P ransomware group. Over 2,700 organizations were affected, and data of more than 93 million individuals was exposed. This is a stark example of how one software flaw, when embedded into many organizations’ workflows, cascades widely.

Blue Yonder / Ransomware Disruption

A ransomware attack on Blue Yonder, a provider of supply chain and logistics software, disrupted operations for clients like Starbucks and retail chains. Because Blue Yonder services numerous clients, one attack rippled outward.

Jaguar Land Rover Supply Chain Disruption (2025)

In mid-2025, Jaguar Land Rover was forced to halt production at several sites after a cyberattack that had supply chain implications. Production lines were paused for weeks, affecting many suppliers downstream and jeopardizing tens of thousands of jobs. While the exact vector is still under investigation, the case illustrates how a breach at one company can ripple outward across a manufacturing ecosystem.

Aggregate Impact

• According to Foley & Lardner, supply chain attacks have increased by 2,600 % since 2018, and 2023 saw victims across sectors, with average losses in critical industries exceeding $82 million per organization.
• Cybersecurity Ventures estimates that by 2025, software supply chain attacks will cost the global economy $60 billion, rising further to $138 b by 2031.
• Gartner has warned that by 2025, up to 45 % of organizations will suffer an attack through their software supply chains—three times the rate in 2021.

In short: the risk is no longer theoretical. It is material, pervasive, and escalating.

Why North Carolina Businesses Must Pay Attention

North Carolina is home to diverse industry sectors—manufacturing (textiles, chemicals, aerospace), agriculture, technology, logistics, pharmaceuticals, and more. Many local companies are embedded in broader national and global supply chains. For them, the supply chain cyberattack threat is direct and immediate.

1. Manufacturing & Industrial Firms

A mid-tier manufacturer in Winston-Salem or Greensboro may source control systems, robotics, or embedded firmware from outside vendors. If a component arrives with hidden malware or a compromised build process, it may propagate into the firm’s control systems, potentially damaging machinery or leaking proprietary data.

2. Technology and Software Service Firms

Eastern and central North Carolina have burgeoning tech and software firms. Many of these depend on open source libraries and cloud infrastructure. A compromised library or build pipeline upstream could slip a backdoor into code shipped to clients.

3. Logistics, Distribution & Agriculture

Companies in logistics and supply chain operations (warehousing, trucking, cold storage) interface with software providers and connected IoT devices (sensors, tracking, data feeds). A breach in one logistics software provider can cascade widely. Similarly, agricultural supply chains (fertilizer, feed, seed distribution) often rely on software and data services too.

4. Regulatory, Reputation, and Contractual Risk

Many North Carolina firms participate in contracts that require cybersecurity compliance (e.g., defense, energy, critical infrastructure). A supply chain data breach may compromise contractual obligations or regulatory compliance. Moreover, reputational damage might undermine customer trust.

5. Ecosystem Vulnerability

Even if a local firm is not the primary target, it might become collateral damage. Imagine a software vendor in California used by a North Carolina company is compromised—the breach tunnels downstream. Hence, the risk is not isolated.

I recall working with a Triangle-based software startup: they used multiple open source libraries and one obscure dependency. A compromised version of that dependency was pulled in during a routine build, exposing their customers to a hidden backdoor. They were fortunate to catch it early. Not every firm is so lucky.

How to Build Resilience: Best Practices for Supply Chain Security

Understanding the threat is vital. But defusing it requires strategic, disciplined action. Below are a range of practical steps organizations—whether large or small—can take to guard against supply chain cyberattacks:

1. Map and Prioritize Your Supply Chain

• Inventory all critical vendors and suppliers, including software and hardware dependencies, third-party services, cloud providers, and subcontractors.
• Rank them by criticality (i.e. how damaging a breach would be) and by trust surface (i.e. how much access they have).
• Focus first on the most heavily privileged or deeply embedded vendors.

2. Require Security Assurance from Vendors

• Security questionnaires and audits: demand security controls evidence (e.g. SOC reports, penetration test reports, secure coding practices).
• Contractual security clauses: include rights to audit, breach notification, remediation, liability limitations, and minimum cybersecurity requirements.
• Zero trust for vendor access: minimize vendor access to systems, use least privilege, segregate, monitor.

3. Use Software Bill of Materials (SBOMs)

An SBOM is a machine-readable inventory of components (libraries, packages, modules) used in a software product. SBOMs allow transparency and traceability of all software dependencies.
Maintaining and requiring SBOMs helps organizations quickly identify if compromised components are present in their systems. While adoption is still nascent, SBOMs are emerging as a key defense tool.

4. Harden Build and Deployment Pipelines

• Segment and secure build servers.
• Use integrity checks, code signing, reproducible builds, and checksums.
• Monitor for anomalies in build outputs.
• Separate privilege domains: don’t let the build process itself execute untrusted code.

5. Continuous Monitoring, Threat Intelligence & Anomaly Detection

• Use monitoring tools to detect anomalous behavior, lateral movement, or unusual outbound traffic.
• Subscribe to threat intelligence feeds about vulnerable libraries or vendor breaches.
• Engage in proactive scanning and audits, beyond reactive measures.

6. Incident Planning and Preparedness

• Draft a supply-chain–aware incident response plan (IRP).
• Run tabletop exercises that incorporate vendor breaches and transitive compromises.
• Include vendor coordination, communication policies, fallback procedures, and forensic readiness.

7. Vendor Tiering and Segmentation

Not all vendors deserve equal trust. Classify vendors by risk tiers and apply layered controls accordingly. High-risk or high-privilege suppliers should undergo stricter scrutiny and access limitations.

8. Redundancy and Resilience

Don’t rely solely on a single vendor or path. Maintain alternative suppliers, fallback components, or roll-back options. That way, if one vendor is compromised, operations can continue with minimal disruption.

9. Governance, Training & Culture

• Establish executive oversight of supply chain cybersecurity.
• Train procurement, legal, and vendor-management teams to understand cyber risk.
• Embed security as a nonnegotiable part of onboarding or vendor selection processes.

10. Leverage Insurance and External Expertise

Cyber insurance policies may now include supply chain risk coverage—though careful review of terms is needed. External audits, red teaming, and third-party cybersecurity consultants can also provide fresh perspectives.

Trends & Emerging Risks to Watch through 2025 and Beyond

To stay ahead, it’s critical to anticipate evolving threats. Here are some key trends:

1. Rise of AI-Enabled Attacks

As generative AI evolves, attackers may automate the generation of malicious code, smarter phishing, or more efficient exploit generation targeting supply chain dependencies.

2. Quantum Computing Pressure on Encryption

Quantum computing may threaten classical cryptographic protections. Supply chains that rely on older encryption or key management systems could be vulnerable.

3. Deepening Geopolitical and Nation-State Influence

Tensions between global powers may push supply chain attacks as instruments of statecraft—sabotage, espionage, or infrastructure disruption.

4. Regulation, Compliance & Cyber Governance

Governments and regulatory bodies are taking note. In the U.S., new rules (such as ICTS in technology supply chains) are emerging to enforce security standards. Firms will need to tread carefully and anticipate compliance obligations.

5. Supply Chain Attack as Service & Toolkits

Just as ransomware-as-a-service evolved, “supply chain attack as a service” may emerge. Attack toolkits targeting build systems, package repositories, or vendor pipelines may become commoditized.

6. Broader adoption and expectation of SBOMs

As standards evolve, SBOMs may become regulatory required in many sectors, especially critical infrastructure, healthcare, and government contracting.

7. More Zero-Day and Stealth Attacks

Because of the high payoff, attackers will continue innovating stealth techniques, longer dwell time exploits, and zero-day dependencies especially in open source ecosystems.

Structuring Your Defense Roadmap: A Suggested Timeline

For organizations in North Carolina (or anywhere), here’s a suggested 12- to 24-month roadmap:

Phase	Key Focus	Actions
Months 1–3	Visibility & Inventory	Map vendor ecosystem, categorize by criticality, require vendor security questionnaires
Months 4–6	Build Controls & Monitoring	Harden build servers, enable SBOM generation, deploy anomaly detection tools
Months 7–12	Governance & Contracts	Upgrade contracts, embed vendor audit rights, assign executive oversight
Months 12–18	Testing & Simulation	Run red-team & tabletop exercises, stress-test incident plan
Months 18–24	Review & Expansion	Audit controls, expand to deeper tiers of the supply chain, continue monitoring and adaptation

Each stage should be iterative. Risks evolve, vendors change, and so continuous reassessment is critical.

Final Thoughts: Vigilance, Not Complacency

Supply chain cyberattacks represent a paradigm shift in how cyber risk manifests. For businesses in North Carolina, the message is clear: even if you believe your internal controls are strong, your security is only as robust as your weakest vendor, library, or upstream link.