Toyota Faces Potential Cyberattack Disrupting Global Production

Toyota Hit by Potential Cyberattack on Supplier, Shutting Down Production at 14 Factories

In a striking incident affecting global supply chains, Toyota announced a production halt at approximately 14 of its factories following a reported malfunction in a supplier’s system. Although Toyota initially labeled it a “malfunction of the dealer system,” many suspect the disruption stems from a cyberattack. This shutdown could mean a drastic 13,000-vehicle production loss, underscoring the growing risk cyber threats pose to the manufacturing sector.

Cyberattack or System Malfunction? Toyota’s Struggles with Supply Chain Disruptions

The affected supplier, Kojima Industries Corp, plays a critical role in Toyota’s operations by supplying essential parts like plastic components and electronic systems. Toyota’s Just-in-Time (JiT) manufacturing model, which keeps inventory levels low to streamline production, means disruptions hit production lines almost immediately when suppliers are compromised. For a manufacturing giant like Toyota, which operates on JiT, even a short-lived supply chain breakdown can have a major impact.

Why Just-in-Time Manufacturing Heightens Cybersecurity Risks

Toyota’s JiT model is highly efficient but inherently risky, as it leaves no room for production delays. Without backup stockpiles, any interruption in the supply chain has an immediate effect on production capacity. In recent years, cybersecurity experts have been emphasizing the vulnerabilities this model poses, particularly in an era where supply chains are under constant threat from cyberattacks.

Cyberattacks on supply chains, like the one suspected in this incident, can lead to:

• Production delays: Without inventory buffers, a single point of failure can halt entire production lines.
• Financial losses: Production stoppages translate to lost revenue, which can be especially damaging if the issue persists.
• Reputation damage: Persistent supply chain interruptions can erode customer trust and harm brand reputation.

Given that supply chains have already been stressed by the pandemic, this potential cyber incident demonstrates just how fragile global manufacturing systems have become.

Cybersecurity and Supply Chain Vulnerability in Manufacturing

As supply chains increasingly rely on digital interconnectivity, vulnerabilities at any point in the network become a risk to the entire chain. Attacks on key suppliers, such as those providing parts or materials, can quickly escalate into full-blown crises for companies like Toyota.

In 2020, Toyota faced another cyber-related disruption when an Australian subsidiary was hacked, forcing the company to send workers home and undergo a costly restructuring of its IT systems. Now, experts warn that this latest incident could further strain Toyota’s resources if it requires another round of cybersecurity overhauls. The implications for supply chain security are far-reaching:

• Single-point failure risk: A single vulnerable supplier can disrupt production across global operations.
• Costly response measures: Cyberattacks require extensive cleanup, both to restore operations and implement stronger security controls.
• Urgency for OT cybersecurity: Operational Technology (OT) cybersecurity is now essential to ensure the safety of physical manufacturing processes, which is a growing focus for companies across industries.

Daniel Jablanski, an OT security strategist at Nozomi Networks, noted that supply chain incidents emphasize “the only point of failure before the interruption of work,” highlighting the pressing need to secure these weak points.

Lessons from Toyota: Why Cybersecurity Needs to Be a Priority

This incident is a stark reminder for manufacturers: cybersecurity is no longer an optional part of the manufacturing landscape. With an increase in cyberattacks targeting critical infrastructure and essential suppliers, companies must take immediate action to protect both IT and OT systems from future incidents.

Key actions for manufacturing companies to bolster cybersecurity include:

1. Establishing supply chain resilience: Manufacturers should evaluate and reinforce backup supplier relationships, minimizing the impact of single points of failure.
2. Adopting OT cybersecurity measures: Operational technology needs robust security to protect production lines and maintain seamless operations.
3. Investing in continuous employee training: Security awareness training for employees, suppliers, and partners helps create a secure culture and reduce human error in critical processes.

For example, implementing Security Awareness Training can significantly reduce the risk of cyberattacks through phishing simulations and other strategies tailored to the manufacturing sector. Toyota’s recent issues underscore the importance of Phishing Simulators and Human Risk Management Platforms as essential tools to prevent cyber incidents at every level of the organization.

Editor’s note: This blog was updated November 7, 2024