What is a Supply Chain Attack? Types, Examples, and Prevention

Supply chain attacks are on the rise, affecting organizations across industries. The 2020 SolarWinds attack alone compromised over 18,000 organizations, including major U.S. government agencies and Fortune 500 companies.

According to Cybersecurity Ventures, the annual cost of software supply chain attacks is projected to hit $138 billion by 2031, up from $60 billion in 2025. These escalating costs highlight the urgent need for businesses to address third-party vulnerabilities.

These attacks reveal a critical truth: your cybersecurity is only as strong as your least secure vendor. A single breach can lead to operational disruption, data theft, and reputational damage.

In this blog, we’ll define supply chain attacks, break down their types, review real-world cases, and share best practices to help you defend your organization.

What is a Supply Chain Attack?

A supply chain attack occurs when hackers infiltrate an organization by exploiting vulnerabilities in third-party suppliers, software, or service providers. Instead of directly attacking the target organization, they compromise a trusted vendor to gain access to the target’s network.

This indirect approach makes supply chain attacks particularly dangerous and hard to detect. They often involve malware, data theft, or service disruption that can impact thousands of businesses at once.

Why are Supply Chain Attacks Increasing?

Several factors are contributing to the rise of supply chain attacks:

• Growing Reliance on Third-Party Vendors: Modern businesses depend heavily on external partners and suppliers.
• Complex Software Ecosystems: Software updates and dependencies create new attack vectors.
• Weaker Security Controls in Vendors: Many third parties lack robust security practices.
• Globalization: International supply chains introduce more points of vulnerability.

These factors give attackers multiple opportunities to breach organizations through their supply chain.

Types of Supply Chain Attacks

Understanding the different types of supply chain attacks is crucial for effective defense. Here are the most common categories:

• Software Supply Chain Attacks: Hackers compromise legitimate software by injecting malware into updates or patches. For example, the SolarWinds breach involved malicious code hidden in a routine software update.
• Hardware Supply Chain Attacks: Cybercriminals tamper with hardware components during manufacturing or distribution. For instance, a compromised USB drive or network device can introduce malware once connected to a system.
• Third-Party Service Attacks: Attackers exploit vulnerabilities in third-party service providers, such as cloud services, IT support, or payment processors. If your cloud storage provider is breached, your data could be at risk.
• Open-Source Component Attacks: Open-source libraries are widely used in software development. If a hacker injects malicious code into an open-source component, it can spread to multiple applications that use the same library.

Notable Supply Chain Attack Examples

Supply chain attacks have become increasingly sophisticated, exploiting vulnerabilities in trusted vendors to reach their targets. The following real-world cases highlight the devastating impact these breaches can have on businesses and government agencies.

1. SolarWinds (2020)

One of the largest supply chain attacks in history, the SolarWinds breach compromised a software update affecting 18,000 organizations, including U.S. federal agencies and Fortune 500 companies. Hackers installed a backdoor, giving them access to sensitive networks.

2. Kaseya Ransomware Attack (2021)

Cybercriminals exploited a vulnerability in Kaseya’s IT management software, deploying ransomware to over 1,500 businesses. This attack highlighted how a single breach in a service provider can impact hundreds of downstream clients.

3. Target Data Breach (2013)

Hackers accessed Target’s network through a compromised HVAC vendor, leading to the theft of 40 million credit card records. This breach emphasizes the need for robust third-party security controls.

Risks of Supply Chain Attacks

Supply chain attacks can have devastating consequences:

• Data Breaches: Exposing sensitive customer and business data.
• Financial Losses: Costs related to downtime, fines, and potential lawsuits.
• Reputational Damage: Losing customer trust and business credibility.
• Operational Disruption: Interrupting critical business processes and supply chain operations.

Given these risks, it’s essential to implement proactive measures to protect your organization.

How to Prevent Supply Chain Attacks

Here are key strategies to reduce your risk of supply chain attacks:

• Conduct Regular Vendor Security Assessments: Evaluate third-party security practices using frameworks like NIST or ISO 27001.
• Use a Phishing Simulator: Train employees to recognize phishing attempts with a Phishing Simulator.
• Implement Security Awareness Training: Educate employees about supply chain risks with Security Awareness Training.
• Monitor Vendor Activity: Use Threat Intelligence to detect unusual activity and identify vulnerabilities.
• Enforce Multi-Factor Authentication (MFA): Strengthen access controls and test readiness with MFA Phishing Simulations.
• Adopt a Zero Trust Model: Continuously verify all connections to reduce the risk of unauthorized access.
• Track Human Risk Factors: Utilize the Human Risk Management Platform to measure and manage human-related vulnerabilities.

How Keepnet Tools Secure Your Organization Against Supply Chain Attacks

Keepnet offers a suite of tools to protect your organization from supply chain attacks:

• Phishing Simulator: Trains employees to recognize phishing attempts, a common entry point in supply chain breaches.
• Security Awareness Training: Educates employees on supply chain risks with interactive modules.
• Incident Responder: Detects and contains supply chain breaches quickly, minimizing damage.
• Threat Intelligence: Monitors vulnerabilities in third-party services and keeps you ahead of emerging threats.
• Human Risk Management Platform: Identifies risky behaviors to reduce human-related vulnerabilities.

With these tools, you can strengthen vendor security, improve employee resilience, and minimize the risk of third-party breaches.