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== Executive Summary ==
== 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.
Supply chains have become a strategic focus area for utilities and critical infrastructure operators. Globally sourced hardware, software, and connected technologies introduce cybersecurity, operational, and geopolitical risks that can impact reliability, resilience, and business operations.


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.
At the same time, utilities are investing in advanced visibility and decision-support capabilities including Artificial Intelligence (AI), Supply Chain Control Towers, Digital Twins, and supplier-risk monitoring. These capabilities help organizations improve situational awareness, identify disruptions earlier, and strengthen long-term resilience.


{| class="wikitable"
{| class="wikitable"
|+ Why Utilities Care
|-
|-
! Area
! Area
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|-
|-
| Reliability
| Reliability
| Equipment shortages, supplier outages, and logistics disruptions can affect maintenance schedules and capital projects.
| Equipment shortages, supplier outages, and logistics disruptions can affect maintenance schedules, project timelines, and grid modernization efforts.
|-
|-
| Cybersecurity
| Cybersecurity
| Third-party technologies may introduce new attack surfaces and supply chain vulnerabilities.
| Third-party technologies may introduce new attack surfaces, software vulnerabilities, and unauthorized access pathways.
|-
|-
| Operations
| Operations
| Limited visibility into suppliers and dependencies can delay disruption response.
| Limited visibility into suppliers and dependencies can delay the identification and resolution of operational disruptions.
|-
|-
| Resilience
| Resilience
| Organizations need the ability to anticipate and adapt to changing market, geopolitical, and operational conditions.
| Organizations require the ability to anticipate, withstand, and recover from changing operational, geopolitical, and market conditions.
|}
|}


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== Industry Context ==
== 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.
Historically, supply chain management focused primarily on procurement, logistics, and cost optimization. Today, utilities increasingly recognize supply chains as critical business systems that directly influence operational reliability, cybersecurity, compliance, and resilience.


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.
The rapid growth of Inverter-Based Resources (IBRs), Battery Energy Storage Systems (BESS), cloud-enabled platforms, and third-party service providers has expanded the number of technologies and external organizations supporting utility operations.<ref>EPRI Supply Chain Assessment Research Program (112046).</ref>
 
As these technologies become increasingly interconnected, organizations must evaluate not only functionality and performance, but also communications pathways, software integrity, supplier dependencies, and operational risks throughout the asset lifecycle.<ref>EPRI Security Design Architecture Review: Solar Inverters (3002029720).</ref>


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=== Technology & Asset Assurance ===
=== Technology & Asset Assurance ===


Recent industry assessments have demonstrated the importance of validating hardware, software, firmware, and communications capabilities throughout the asset lifecycle.
Recent industry assessments have highlighted the importance of understanding communications protocols, data flows, vendor connectivity, and remote access capabilities associated with modern energy technologies.<ref>EPRI Security Design Architecture Review: Solar Inverters (3002029720).</ref>
 
Examples include:


Organizations have identified concerns related to undocumented communications pathways, vendor remote access capabilities, and limited visibility into component origins.
* Cellular communications modules
* Wi-Fi connectivity
* Bluetooth interfaces
* Vendor remote-access capabilities
* Undocumented communications pathways


'''Why It Matters'''
'''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.
For utilities, uncertainty surrounding deployed technologies can complicate asset management, cybersecurity monitoring, incident response, and overall operational awareness. 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 ===
=== Software Supply Chain Risk ===


Modern utility operations depend on a growing ecosystem of software vendors, cloud providers, open-source components, and embedded firmware.
Modern utility operations depend on software vendors, cloud providers, embedded firmware, open-source components, and third-party integrators.
 
Compromise of a trusted software supplier can potentially affect multiple organizations simultaneously. As software ecosystems grow increasingly complex, visibility into software dependencies becomes more important.


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.
EPRI's Technical Assessment Methodology (TAM) emphasizes evaluating attack surfaces, identifying security gaps, and validating security controls throughout technology deployments.<ref>EPRI Technical Assessment Methodology (3002012752).</ref>


=== Geopolitical & Supplier Risk ===
=== Geopolitical & Supplier Risk ===


Supply chains remain susceptible to geopolitical developments, manufacturing concentration, transportation constraints, and evolving trade regulations.
Global supply chains remain vulnerable to geopolitical developments, manufacturing concentration, transportation constraints, and evolving trade regulations.
 
Examples include:
 
* Trade restrictions and tariffs
* Export controls
* Semiconductor shortages
* Critical mineral dependencies
* Transportation disruptions


Events affecting semiconductor manufacturing, critical minerals, transportation corridors, or international trade can influence equipment availability and project timelines throughout the utility sector.
These events can affect equipment availability, increase lead times, and delay infrastructure investments across the utility sector.


{| class="wikitable"
{| class="wikitable"
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As utilities continue their digital transformation efforts, cybersecurity considerations increasingly extend beyond organizational boundaries and into supplier ecosystems.
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.
Industry supply chain security programs focus on understanding software integrity, vendor access, communications pathways, and architectural risks before technologies are deployed.<ref>EPRI Security Design Architecture Review: Solar Inverters (3002029720).</ref>
 
EPRI's Defensible Network Architectures guidance provides criteria for securely deploying operational technologies and reducing exposure to unauthorized access pathways.<ref>EPRI Defensible Network Architectures: Criteria for Secure OT Deployment in Power Systems (3002027430).</ref>


Organizations are increasingly strengthening their programs through:
'''Leading Practices'''


* Supplier cybersecurity assessments
* Supplier cybersecurity assessments
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* Multi-Factor Authentication (MFA)
* Multi-Factor Authentication (MFA)
* Network segmentation
* Network segmentation
* Continuous supplier monitoring


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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]]


Artificial Intelligence is helping supply chain organizations move beyond reactive management approaches toward predictive and data-driven operations.
Artificial Intelligence is helping organizations move beyond reactive supply chain management by improving forecasting, disruption analysis, inventory planning, and supplier-risk identification.
 
Current implementations are commonly focused on:
 
* Demand forecasting
* Inventory optimization
* Supplier risk monitoring
* Predictive maintenance
* Transportation optimization
* Procurement analytics


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.
As supply chains become increasingly complex, digital tools are being adopted to improve operational awareness and support planning activities across utility operations.<ref>EPRI Inverter-Based Resources and Grid Interconnection Research Area.</ref>


=== Emerging Trend: Agentic AI ===
=== 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.
Industry leaders are evaluating AI systems capable of performing approved actions on behalf of supply chain personnel. Potential applications include supplier evaluation, inventory balancing, logistics optimization, and disruption-response activities.


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


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[[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]]


A Supply Chain Control Tower provides a centralized view of suppliers, inventory, logistics networks, and risk information.
A Supply Chain Control Tower provides a centralized view of suppliers, inventory, logistics networks, external risks, and operational dependencies.
 
Rather than relying on disconnected data sources, organizations can monitor critical supply chain activities from a single operational picture and identify disruptions earlier.


Rather than relying on siloed data sources, organizations can monitor critical dependencies from a single operational picture and identify disruptions earlier.
The same industry drivers accelerating adoption of digital twins, advanced analytics, and operational visibility platforms are also increasing demand for comprehensive supplier awareness and dependency mapping.<ref>EPRI Supply Chain Assessment Research Program (112046).</ref>


'''Common Benefits'''
'''Common Benefits'''


* Improved visibility across suppliers and assets
* Improved visibility across suppliers and assets
* Faster response to disruptions
* Faster disruption response
* Enhanced executive reporting
* Enhanced executive reporting
* Better risk awareness
* Better risk awareness
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== Digital Twins & Scenario Planning ==
== Digital Twins & Scenario Planning ==


Digital Twins extend supply chain visibility by creating virtual representations of suppliers, transportation networks, inventory, and operational dependencies.
[[File:DigitalTwinSupplyChain.jpg|thumb|right|500px|Supply Chain Digital Twin Example]]
 
Digital Twins create virtual representations of suppliers, transportation networks, inventory, and operational dependencies.
 
These environments allow organizations to evaluate potential disruptions before they occur and better understand downstream operational impacts.
 
As utilities adapt to increasing levels of inverter-based resources, distributed energy resources, and interconnected technologies, advanced modeling and simulation capabilities are becoming essential tools for planning, resilience analysis, and operational decision-making.<ref>EPRI Inverter-Based Resources and Grid Interconnection Research Area.</ref>
 
Examples include:


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.
* Supplier failures
* Transportation disruptions
* Severe weather events
* Equipment shortages
* Grid modernization delays


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{| class="wikitable"
{| class="wikitable"
|+ Recommended Focus Areas
|-
|-
! Area
! Area
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|-
|-
| Procurement
| Procurement
| Require SBOMs and HBOMs, assess supplier security practices, review remote access capabilities.
| Require SBOMs and HBOMs, assess supplier security practices, review remote access capabilities, and validate vendor security programs.
|-
|-
| Visibility
| Visibility
| Maintain supplier inventories, map dependencies, improve traceability and transparency.
| Maintain supplier inventories, map critical dependencies, improve traceability, and understand technology communications pathways.
|-
|-
| Monitoring
| Monitoring
| Continuously assess supplier risks, geopolitical developments, and emerging threats.
| Continuously assess supplier risks, geopolitical developments, software vulnerabilities, and emerging threats.
|-
|-
| Security
| Security
| Eliminate default credentials, implement MFA, restrict remote access, and segment networks.
| Eliminate default credentials, implement MFA, restrict remote access, validate firmware integrity, and segment networks.
|}
|}


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* Robotics
* Robotics
* IoT Asset Tracking
* IoT Asset Tracking
* Digital Product Passports
* Digital Product Passports (DPPs)
|}
|}


'''Digital Product Passports (DPPs)'''
'''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.
Digital Product Passports are emerging as a mechanism 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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<references />
<references />


== Additional Resources ==
== EPRI Resources ==


* EPRI Supply Chain Assessment Research Program (112046)
* EPRI Supply Chain Assessment Research Program (112046)
* EPRI Security Design Architecture Review: Solar Inverters (3002029720)
* EPRI Security Design Architecture Review: Solar Inverters (3002029720)
* EPRI Technical Assessment Methodology (3002012752)
* EPRI Technical Assessment Methodology (TAM) (3002012752)
* 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 Area
* EPRI Screening Metrics and Stability Risk Identification Procedures for Networks with High Inverter-Based Resources (3002029824)
 
== Related Topics ==
 
* Inverter-Based Resources (IBRs)
* Battery Energy Storage Systems (BESS)
* Supply Chain Cybersecurity
* Operational Technology (OT) Security
* Digital Twins
* Artificial Intelligence
* Supplier Risk Management
* Grid Modernization

Revision as of 15:32, 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 and critical infrastructure operators. Globally sourced hardware, software, and connected technologies introduce cybersecurity, operational, and geopolitical risks that can impact reliability, resilience, and business operations.

At the same time, utilities are investing in advanced visibility and decision-support capabilities including Artificial Intelligence (AI), Supply Chain Control Towers, Digital Twins, and supplier-risk monitoring. These capabilities help organizations improve situational awareness, identify disruptions earlier, and strengthen long-term resilience.

Why Utilities Care
Area Potential Impact
Reliability Equipment shortages, supplier outages, and logistics disruptions can affect maintenance schedules, project timelines, and grid modernization efforts.
Cybersecurity Third-party technologies may introduce new attack surfaces, software vulnerabilities, and unauthorized access pathways.
Operations Limited visibility into suppliers and dependencies can delay the identification and resolution of operational disruptions.
Resilience Organizations require the ability to anticipate, withstand, and recover from changing operational, geopolitical, and market conditions.

Industry Context

Historically, supply chain management focused primarily on procurement, logistics, and cost optimization. Today, utilities increasingly recognize supply chains as critical business systems that directly influence operational reliability, cybersecurity, compliance, and resilience.

The rapid growth of Inverter-Based Resources (IBRs), Battery Energy Storage Systems (BESS), cloud-enabled platforms, and third-party service providers has expanded the number of technologies and external organizations supporting utility operations.[2]

As these technologies become increasingly interconnected, organizations must evaluate not only functionality and performance, but also communications pathways, software integrity, supplier dependencies, and operational risks throughout the asset lifecycle.[3]


Key Supply Chain Risks

Technology & Asset Assurance

Recent industry assessments have highlighted the importance of understanding communications protocols, data flows, vendor connectivity, and remote access capabilities associated with modern energy technologies.[4]

Examples include:

  • Cellular communications modules
  • Wi-Fi connectivity
  • Bluetooth interfaces
  • Vendor remote-access capabilities
  • Undocumented communications pathways

Why It Matters

For utilities, uncertainty surrounding deployed technologies can complicate asset management, cybersecurity monitoring, incident response, and overall operational awareness. 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 software vendors, cloud providers, embedded firmware, open-source components, and third-party integrators.

Compromise of a trusted software supplier can potentially affect multiple organizations simultaneously. As software ecosystems grow increasingly complex, visibility into software dependencies becomes more important.

EPRI's Technical Assessment Methodology (TAM) emphasizes evaluating attack surfaces, identifying security gaps, and validating security controls throughout technology deployments.[5]

Geopolitical & Supplier Risk

Global supply chains remain vulnerable to geopolitical developments, manufacturing concentration, transportation constraints, and evolving trade regulations.

Examples include:

  • Trade restrictions and tariffs
  • Export controls
  • Semiconductor shortages
  • Critical mineral dependencies
  • Transportation disruptions

These events can affect equipment availability, increase lead times, and delay infrastructure investments across 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 supply chain security programs focus on understanding software integrity, vendor access, communications pathways, and architectural risks before technologies are deployed.[6]

EPRI's Defensible Network Architectures guidance provides criteria for securely deploying operational technologies and reducing exposure to unauthorized access pathways.[7]

Leading Practices

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

Artificial Intelligence in Supply Chains

AI-Enabled Supply Chain Analytics

Artificial Intelligence is helping organizations move beyond reactive supply chain management by improving forecasting, disruption analysis, inventory planning, and supplier-risk identification.

Current implementations are commonly focused on:

  • Demand forecasting
  • Inventory optimization
  • Supplier risk monitoring
  • Predictive maintenance
  • Transportation optimization
  • Procurement analytics

As supply chains become increasingly complex, digital tools are being adopted to improve operational awareness and support planning activities across utility operations.[8]

Emerging Trend: Agentic AI

Industry leaders are evaluating AI systems capable of performing approved actions on behalf of supply chain personnel. Potential applications include supplier evaluation, inventory balancing, logistics optimization, and disruption-response activities.

While still emerging, Agentic AI is 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, external risks, and operational dependencies.

Rather than relying on disconnected data sources, organizations can monitor critical supply chain activities from a single operational picture and identify disruptions earlier.

The same industry drivers accelerating adoption of digital twins, advanced analytics, and operational visibility platforms are also increasing demand for comprehensive supplier awareness and dependency mapping.[9]

Common Benefits

  • Improved visibility across suppliers and assets
  • Faster disruption response
  • 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

File:DigitalTwinSupplyChain.jpg
Supply Chain Digital Twin Example

Digital Twins create virtual representations of suppliers, transportation networks, inventory, and operational dependencies.

These environments allow organizations to evaluate potential disruptions before they occur and better understand downstream operational impacts.

As utilities adapt to increasing levels of inverter-based resources, distributed energy resources, and interconnected technologies, advanced modeling and simulation capabilities are becoming essential tools for planning, resilience analysis, and operational decision-making.[10]

Examples include:

  • Supplier failures
  • Transportation disruptions
  • Severe weather events
  • Equipment shortages
  • Grid modernization delays

Recommendations

Recommended Focus Areas
Area Recommended Actions
Procurement Require SBOMs and HBOMs, assess supplier security practices, review remote access capabilities, and validate vendor security programs.
Visibility Maintain supplier inventories, map critical dependencies, improve traceability, and understand technology communications pathways.
Monitoring Continuously assess supplier risks, geopolitical developments, software vulnerabilities, and emerging threats.
Security Eliminate default credentials, implement MFA, restrict remote access, validate firmware integrity, 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 (DPPs)

Digital Product Passports (DPPs)

Digital Product Passports are emerging as a mechanism 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
  2. ↑ EPRI Supply Chain Assessment Research Program (112046).
  3. ↑ EPRI Security Design Architecture Review: Solar Inverters (3002029720).
  4. ↑ EPRI Security Design Architecture Review: Solar Inverters (3002029720).
  5. ↑ EPRI Technical Assessment Methodology (3002012752).
  6. ↑ EPRI Security Design Architecture Review: Solar Inverters (3002029720).
  7. ↑ EPRI Defensible Network Architectures: Criteria for Secure OT Deployment in Power Systems (3002027430).
  8. ↑ EPRI Inverter-Based Resources and Grid Interconnection Research Area.
  9. ↑ EPRI Supply Chain Assessment Research Program (112046).
  10. ↑ EPRI Inverter-Based Resources and Grid Interconnection Research Area.

EPRI Resources

  • EPRI Supply Chain Assessment Research Program (112046)
  • EPRI Security Design Architecture Review: Solar Inverters (3002029720)
  • EPRI Technical Assessment Methodology (TAM) (3002012752)
  • EPRI Defensible Network Architectures: Criteria for Secure OT Deployment in Power Systems (3002027430)
  • EPRI Inverter-Based Resources and Grid Interconnection Research Area
  • EPRI Screening Metrics and Stability Risk Identification Procedures for Networks with High Inverter-Based Resources (3002029824)

Related Topics

  • Inverter-Based Resources (IBRs)
  • Battery Energy Storage Systems (BESS)
  • Supply Chain Cybersecurity
  • Operational Technology (OT) Security
  • Digital Twins
  • Artificial Intelligence
  • Supplier Risk Management
  • Grid Modernization