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== Executive Summary ==
== Executive Summary ==


Supply chains have become a strategic risk area for utilities and critical infrastructure operators. Globally sourced hardware, software, and connected technologies introduce cybersecurity, operational, and geopolitical risks that can impact reliability and business operations.
Supply chains have become a strategic focus area for utilities as equipment, software, and supporting services become increasingly connected and globally sourced. Recent industry assessments have highlighted the importance of understanding supplier dependencies, communications pathways, software provenance, and third-party access in order to maintain operational resilience and cybersecurity.


At the same time, organizations are investing in advanced visibility and risk management capabilities using Artificial Intelligence (AI), Supply Chain Control Towers, Digital Twins, and supplier monitoring programs.
At the same time, utilities are investing in advanced visibility capabilities such as Supply Chain Control Towers, Digital Twins, and AI-enabled analytics to improve situational awareness and support more informed decision-making.


{| class="wikitable"
{| class="wikitable"
|+ Why Utilities Care
|+ Why Utilities Care
|-
|-
|
! Area
* Reliability and resiliency of grid operations
! Potential Impact
* Visibility into vendor and supplier dependencies
|-
* Cybersecurity risks from connected technologies
| Reliability
* Long-term availability of critical equipment and components
| Equipment shortages, supplier outages, and logistics disruptions can affect maintenance schedules and capital projects.
|-
| Cybersecurity
| Third-party technologies may introduce new attack surfaces and supply chain vulnerabilities.
|-
| Operations
| Limited visibility into suppliers and dependencies can delay disruption response.
|-
| Resilience
| Organizations need the ability to anticipate and adapt to changing market, geopolitical, and operational conditions.
|}
|}
=== Key Priorities ===
* Supply Chain Cybersecurity
* Supplier Risk Management
* End-to-End Visibility
* AI-Enabled Decision Support
* Supply Chain Resilience
* Secure Procurement


----
----


== Why It Matters ==
== Industry Context ==


Modern utility supply chains are increasingly:
Historically, supply chain management was largely centered on cost, procurement, and logistics. Today, utilities increasingly view supply chains as critical business systems that directly influence reliability, security, and operational performance.


* Globally distributed
The rapid growth of inverter-based resources (IBRs), battery energy storage systems (BESS), cloud-connected platforms, and third-party service providers has expanded the number of external organizations and technologies that support utility operations. As a result, supply chain assurance is becoming a key component of enterprise risk management programs.
* Digitally connected
* Dependent on third-party suppliers
* Exposed to cyber and geopolitical risks
 
Disruptions involving suppliers, software providers, logistics partners, or manufacturers can directly impact reliability, operations, and security.
 
For utilities, supply chain risk extends beyond procurement and can affect generation assets, transmission systems, distributed energy resources, battery storage systems, and critical operational technology environments.


----
----


== Key Risks ==
== Key Supply Chain Risks ==


=== Hardware & Communications Risks ===
=== Technology & Asset Assurance ===


Recent EPRI assessments highlight the importance of understanding communications pathways, undocumented functionality, third-party connectivity, and remote access capabilities within modern energy technologies.<ref>EPRI Security Design Architecture Review: Solar Inverters (3002029720).</ref>
Recent industry assessments have demonstrated the importance of validating hardware, software, firmware, and communications capabilities throughout the asset lifecycle.


Examples include:
Organizations have identified concerns related to undocumented communications pathways, vendor remote access capabilities, and limited visibility into component origins.


* Cellular communications
'''Why It Matters'''
* Wi-Fi connectivity
* Bluetooth interfaces
* Vendor remote access capabilities
* Undocumented communications pathways


'''Utility Impact'''
For utilities, uncertainty surrounding deployed technologies can complicate asset management, cybersecurity monitoring, and incident response activities. The challenge is often less about a specific technology and more about understanding exactly what has been deployed and how it communicates.


* Reduced visibility into deployed technologies
=== Software Supply Chain Risk ===
* Expanded attack surface
* Challenges validating asset configurations
* Increased monitoring and incident response complexity


=== Software Supply Chain Risks ===
Modern utility operations depend on a growing ecosystem of software vendors, cloud providers, open-source components, and embedded firmware.


Modern energy infrastructure depends heavily on firmware, embedded software, cloud platforms, and third-party applications.
A vulnerability or compromise within a trusted supplier can potentially affect multiple organizations simultaneously, making software supply chain security a major area of industry focus.


Examples include:
=== Geopolitical & Supplier Risk ===


* Compromised software updates
Supply chains remain susceptible to geopolitical developments, manufacturing concentration, transportation constraints, and evolving trade regulations.
* Vulnerable third-party components
* Unauthorized firmware modifications
* Software supply chain attacks


'''Utility Impact'''
Events affecting semiconductor manufacturing, critical minerals, transportation corridors, or international trade can influence equipment availability and project timelines throughout the utility sector.


A compromise affecting a software vendor, service provider, or technology integrator may impact multiple organizations simultaneously.
{| class="wikitable"
 
|+ Common Supply Chain Risk Drivers
=== Geopolitical & Supplier Risks ===
|-
 
! Risk Area
Global supply chains remain vulnerable to:
! Examples
 
|-
* Trade restrictions
| Cybersecurity
* Export controls
| Third-party compromise, ransomware, software supply chain attacks
* Semiconductor shortages
|-
* Critical mineral dependencies
| Technology
* Transportation disruptions
| Undocumented communications, firmware integrity concerns, unsupported products
 
|-
'''Utility Impact'''
| Geopolitical
 
| Export controls, tariffs, regional instability
Supply disruptions can delay:
|-
 
| Logistics
* Grid modernization initiatives
| Shipping delays, port disruptions, inventory shortages
* Renewable energy projects
|}
* Battery storage deployments
* Equipment replacement programs
* Capital improvement projects


----
----
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[[File:SupplyChainCyber.jpg|thumb|right|450px|Cybersecurity Within Connected Supply Networks]]
[[File:SupplyChainCyber.jpg|thumb|right|450px|Cybersecurity Within Connected Supply Networks]]


Digital transformation has expanded the attack surface across the supply chain ecosystem.
As utilities continue their digital transformation efforts, cybersecurity considerations increasingly extend beyond organizational boundaries and into supplier ecosystems.
 
=== Common Threats ===


* Third-party compromise
Industry programs focused on supply chain security emphasize the importance of understanding vendor connectivity, software integrity, and third-party access pathways.
* Ransomware
* Software supply chain attacks
* Vendor remote access
* Connected IoT device vulnerabilities
* Operational Technology (OT) targeting


=== Industry Response ===
Organizations are increasingly strengthening their programs through:
 
Leading organizations increasingly implement:


* Supplier cybersecurity assessments
* Supplier cybersecurity assessments
* Software Bills of Materials (SBOMs)
* Hardware Bills of Materials (HBOMs)
* Vendor access reviews
* Multi-Factor Authentication (MFA)
* Multi-Factor Authentication (MFA)
* Network segmentation
* Network segmentation
* Continuous supplier monitoring
* Software Bills of Materials (SBOMs)
* Hardware Bills of Materials (HBOMs)


----
----
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[[File:Audit AI Agent.jpg|thumb|right|450px|AI-Enabled Supply Chain Analytics]]
[[File:Audit AI Agent.jpg|thumb|right|450px|AI-Enabled Supply Chain Analytics]]


AI is helping organizations move from reactive to predictive supply chain management.
Artificial Intelligence is helping supply chain organizations move beyond reactive management approaches toward predictive and data-driven operations.
 
=== Current Applications ===


* Demand forecasting
Current implementations are commonly focused on forecasting, inventory optimization, supplier monitoring, and disruption analysis. Emerging solutions are beginning to support scenario planning and automated decision support.
* Inventory optimization
* Supplier risk monitoring
* Predictive maintenance
* Transportation optimization
* Procurement analytics


=== Emerging Trend: Agentic AI ===
=== Emerging Trend: Agentic AI ===


Organizations are evaluating AI systems capable of performing approved supply chain actions, including:
Industry leaders are evaluating AI systems capable of performing approved actions on behalf of supply chain personnel. Examples include supplier evaluation, inventory balancing, logistics optimization, and risk investigation workflows.


* Supplier identification
While still emerging, these technologies are expected to become a major area of investment over the next several years.
* Inventory rebalancing
* Logistics rerouting
* Risk investigation
* Scenario planning support


----
----


== Supply Chain Visibility ==
== Supply Chain Visibility & Control Towers ==


[[File:Supply Chain Control Tower.png|thumb|right|800px|Supply Chain Control Tower]]
[[File:Supply Chain Control Tower.png|thumb|right|800px|Supply Chain Control Tower]]


Supply Chain Control Towers and Digital Twins are becoming key technologies for improving visibility and resilience.
A Supply Chain Control Tower provides a centralized view of suppliers, inventory, logistics networks, and risk information.


=== Benefits ===
Rather than relying on siloed data sources, organizations can monitor critical dependencies from a single operational picture and identify disruptions earlier.


* Real-time visibility
'''Common Benefits'''
* Supply disruption monitoring
 
* Supplier performance tracking
* Improved visibility across suppliers and assets
* Inventory awareness
* Faster response to disruptions
* Scenario planning
* Enhanced executive reporting
* Risk analysis
* Better risk awareness
* Improved operational coordination


=== Key Question ===
=== Key Question ===
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----
----


== Recommendations ==
== Digital Twins & Scenario Planning ==


=== Procurement ===
Digital Twins extend supply chain visibility by creating virtual representations of suppliers, transportation networks, inventory, and operational dependencies.


* Require SBOMs and HBOMs
These environments allow organizations to evaluate potential disruptions before they occur and better understand the downstream impacts of events such as supplier failures, weather disruptions, or transportation constraints.
* Assess supplier cybersecurity practices
* Review third-party connectivity
* Validate vendor security programs


=== Visibility ===
----


* Maintain supplier and asset inventories
== Recommendations ==
* Identify critical dependencies
* Conduct wireless assessments
* Improve component traceability


=== Security ===
{| class="wikitable"
 
|+ Recommended Focus Areas
* Eliminate default credentials
|-
* Restrict unnecessary remote access
! Area
* Implement MFA
! Recommended Actions
* Segment operational networks
|-
* Validate firmware integrity
| Procurement
| Require SBOMs and HBOMs, assess supplier security practices, review remote access capabilities.
|-
| Visibility
| Maintain supplier inventories, map dependencies, improve traceability and transparency.
|-
| Monitoring
| Continuously assess supplier risks, geopolitical developments, and emerging threats.
|-
| Security
| Eliminate default credentials, implement MFA, restrict remote access, and segment networks.
|}


----
----


== Emerging Trends (2026-2027) ==
== Emerging Trends (2026–2027) ==


=== High Priority ===
The following topics are receiving increasing attention across the utility and critical infrastructure sectors:


{| class="wikitable"
|+ Industry Watchlist
|-
! High Priority
! Emerging Areas
|-
|
* Agentic AI
* Agentic AI
* Supply Chain Control Towers
* Supply Chain Control Towers
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* Software Supply Chain Security
* Software Supply Chain Security
* Third-Party Risk Monitoring
* Third-Party Risk Monitoring
 
|
=== Emerging Topics ===
* Autonomous Logistics
 
* Autonomous logistics
* Robotics
* Robotics
* IoT asset tracking
* IoT Asset Tracking
* Digital Product Passports (DPPs)
* Digital Product Passports
|}


'''Digital Product Passports (DPPs)'''
'''Digital Product Passports (DPPs)'''


An emerging traceability capability driven primarily by international regulatory initiatives that may influence future supply chain transparency, procurement processes, and asset lifecycle management.
Digital Product Passports are emerging as a method for improving product traceability and lifecycle transparency. While currently driven primarily by international regulatory initiatives, they may influence future procurement, asset management, and supplier reporting requirements.


----
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* EPRI Defensible Network Architectures: Criteria for Secure OT Deployment in Power Systems (3002027430)
* EPRI Defensible Network Architectures: Criteria for Secure OT Deployment in Power Systems (3002027430)
* EPRI Inverter-Based Resources and Grid Interconnection Research
* EPRI Inverter-Based Resources and Grid Interconnection Research
* DOE Energy Sector Supply Chain Risk Management Resources
* NERC Supply Chain Risk Management Guidance
* CISA Supply Chain Risk Management Resources

Revision as of 15:26, 4 November 2026

Supply Chain Security, Resilience & Industry Trends

EPRI Supply Chain Model[1]

Executive Summary

Supply chains have become a strategic focus area for utilities as equipment, software, and supporting services become increasingly connected and globally sourced. Recent industry assessments have highlighted the importance of understanding supplier dependencies, communications pathways, software provenance, and third-party access in order to maintain operational resilience and cybersecurity.

At the same time, utilities are investing in advanced visibility capabilities such as Supply Chain Control Towers, Digital Twins, and AI-enabled analytics to improve situational awareness and support more informed decision-making.

Why Utilities Care
Area Potential Impact
Reliability Equipment shortages, supplier outages, and logistics disruptions can affect maintenance schedules and capital projects.
Cybersecurity Third-party technologies may introduce new attack surfaces and supply chain vulnerabilities.
Operations Limited visibility into suppliers and dependencies can delay disruption response.
Resilience Organizations need the ability to anticipate and adapt to changing market, geopolitical, and operational conditions.

Industry Context

Historically, supply chain management was largely centered on cost, procurement, and logistics. Today, utilities increasingly view supply chains as critical business systems that directly influence reliability, security, and operational performance.

The rapid growth of inverter-based resources (IBRs), battery energy storage systems (BESS), cloud-connected platforms, and third-party service providers has expanded the number of external organizations and technologies that support utility operations. As a result, supply chain assurance is becoming a key component of enterprise risk management programs.

Key Supply Chain Risks

Technology & Asset Assurance

Recent industry assessments have demonstrated the importance of validating hardware, software, firmware, and communications capabilities throughout the asset lifecycle.

Organizations have identified concerns related to undocumented communications pathways, vendor remote access capabilities, and limited visibility into component origins.

Why It Matters

For utilities, uncertainty surrounding deployed technologies can complicate asset management, cybersecurity monitoring, and incident response activities. The challenge is often less about a specific technology and more about understanding exactly what has been deployed and how it communicates.

Software Supply Chain Risk

Modern utility operations depend on a growing ecosystem of software vendors, cloud providers, open-source components, and embedded firmware.

A vulnerability or compromise within a trusted supplier can potentially affect multiple organizations simultaneously, making software supply chain security a major area of industry focus.

Geopolitical & Supplier Risk

Supply chains remain susceptible to geopolitical developments, manufacturing concentration, transportation constraints, and evolving trade regulations.

Events affecting semiconductor manufacturing, critical minerals, transportation corridors, or international trade can influence equipment availability and project timelines throughout the utility sector.

Common Supply Chain Risk Drivers
Risk Area Examples
Cybersecurity Third-party compromise, ransomware, software supply chain attacks
Technology Undocumented communications, firmware integrity concerns, unsupported products
Geopolitical Export controls, tariffs, regional instability
Logistics Shipping delays, port disruptions, inventory shortages

Supply Chain Cybersecurity

File:SupplyChainCyber.jpg
Cybersecurity Within Connected Supply Networks

As utilities continue their digital transformation efforts, cybersecurity considerations increasingly extend beyond organizational boundaries and into supplier ecosystems.

Industry programs focused on supply chain security emphasize the importance of understanding vendor connectivity, software integrity, and third-party access pathways.

Organizations are increasingly strengthening their programs through:

  • Supplier cybersecurity assessments
  • Software Bills of Materials (SBOMs)
  • Hardware Bills of Materials (HBOMs)
  • Vendor access reviews
  • Multi-Factor Authentication (MFA)
  • Network segmentation

Artificial Intelligence in Supply Chains

AI-Enabled Supply Chain Analytics

Artificial Intelligence is helping supply chain organizations move beyond reactive management approaches toward predictive and data-driven operations.

Current implementations are commonly focused on forecasting, inventory optimization, supplier monitoring, and disruption analysis. Emerging solutions are beginning to support scenario planning and automated decision support.

Emerging Trend: Agentic AI

Industry leaders are evaluating AI systems capable of performing approved actions on behalf of supply chain personnel. Examples include supplier evaluation, inventory balancing, logistics optimization, and risk investigation workflows.

While still emerging, these technologies are expected to become a major area of investment over the next several years.

Supply Chain Visibility & Control Towers

Supply Chain Control Tower

A Supply Chain Control Tower provides a centralized view of suppliers, inventory, logistics networks, and risk information.

Rather than relying on siloed data sources, organizations can monitor critical dependencies from a single operational picture and identify disruptions earlier.

Common Benefits

  • Improved visibility across suppliers and assets
  • Faster response to disruptions
  • Enhanced executive reporting
  • Better risk awareness
  • Improved operational coordination

Key Question

Can we identify and respond to supply chain disruptions before they impact operations?

Digital Twins & Scenario Planning

Digital Twins extend supply chain visibility by creating virtual representations of suppliers, transportation networks, inventory, and operational dependencies.

These environments allow organizations to evaluate potential disruptions before they occur and better understand the downstream impacts of events such as supplier failures, weather disruptions, or transportation constraints.

Recommendations

Recommended Focus Areas
Area Recommended Actions
Procurement Require SBOMs and HBOMs, assess supplier security practices, review remote access capabilities.
Visibility Maintain supplier inventories, map dependencies, improve traceability and transparency.
Monitoring Continuously assess supplier risks, geopolitical developments, and emerging threats.
Security Eliminate default credentials, implement MFA, restrict remote access, and segment networks.

Emerging Trends (2026–2027)

The following topics are receiving increasing attention across the utility and critical infrastructure sectors:

Industry Watchlist
High Priority Emerging Areas
  • Agentic AI
  • Supply Chain Control Towers
  • Digital Twins
  • Software Supply Chain Security
  • Third-Party Risk Monitoring
  • Autonomous Logistics
  • Robotics
  • IoT Asset Tracking
  • Digital Product Passports

Digital Product Passports (DPPs)

Digital Product Passports are emerging as a method for improving product traceability and lifecycle transparency. While currently driven primarily by international regulatory initiatives, they may influence future procurement, asset management, and supplier reporting requirements.

References

  1. ↑ https://www.epri.com/research/programs/112046/results/3002012753

Additional Resources

  • EPRI Supply Chain Assessment Research Program (112046)
  • EPRI Security Design Architecture Review: Solar Inverters (3002029720)
  • EPRI Technical Assessment Methodology (3002012752)
  • EPRI Defensible Network Architectures: Criteria for Secure OT Deployment in Power Systems (3002027430)
  • EPRI Inverter-Based Resources and Grid Interconnection Research
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