Why is Blue Yonder’s Security Failing ?

Blue Yonder, a legacy provider of supply chain management software, has recently suffered a major ransomware attack that has crippled systems relied upon by major clients like Starbucks, Kimberly-Clark, Anheuser-Busch, Best Buy, Sainsbury’s and Morrisons, amongst several others. The breach, which began on November 21, has raised serious concerns about the company’s legacy tech stack, cybersecurity practices and the broader risks to tech companies relying on third-party providers for critical operations.

The Attack & its Aftermath

Blue Yonder experienced a ransomware attack on the company’s cloud hosted managed services. The Blue Yonder platform’s cloud infrastructure is hosted on Microsoft Azure, which  has a dedicated incident response and safeguards to handle such attacks. It can be estimated  that an attack on the managed services architecture could be because of running a custom implementation without the microservices safeguards of the Azure platform for specific clients that exposed them to this cyber attack. Blue Yonder’s parent Panasonic has also faced similar security breaches in the recent past including a similar ransomware attack.

Upon discovering the attack, Blue Yonder engaged external cybersecurity firms to help manage the situation and launched forensic investigations. The company emphasized its commitment to recovering systems, though no specific timeline for full recovery was provided. Blue Yonder’s response reveals serious vulnerabilities in its security framework. The company appears to lack sufficient internal expertise and protocols to prevent sophisticated cyberattacks, and its failure to implement an early warning system left it unprepared.

This incident acts as a reminder that any company that does not build the whole tech stack in-house is only masquerading as a tech company and a lot of legacy tech companies masquering as secured AI platforms do not really have reliable new age tech stack natively developed. The shockwaves of this event are being felt across the logistics and transportation industry as most of Blue Yonder’s 3000 clients prepare their alternate plans by potentially reaching out to new age AI tools that are natively more secure and reliable.

Impact on Clients & Customer Data Privacy

This attack is orchestrated specifically before the holiday season as retailers, ecommerce companies & QSR chains that are Blue Yonder’s customers rely heavily on its supply chain technology are crippled by this attack. The timing of the attack underscores the vulnerability of IT operations during holidays and weekends.

Research shows that many organizations struggle to keep up with  their cybersecurity staffing during these periods, making them more susceptible to attacks. The Blue Yonder security incident highlights the need for continuous, round-the-clock security operations, especially during high-risk times like holidays. Ransomware attacks are a grave danger to data privacy and security as attackers steal key Personal protected information and can even use the data after the ransom has been paid.

As Blue Yonder serves close to 3000 Corporate clients, customer data privacy and adhering to security standards is even more vital. We have captured the impact of some key customers undergoing recovery operations due to the attack.

Key Affected Entities and Impact

Retail and Supply Chain Disruptions:

Major UK supermarket chains, including Morrisons and Sainsbury’s, experienced issues related to product availability and delivery schedules, with some wholesale locations reporting as low as 60% product availability. This was particularly critical during the busy holiday season. Katherine Woodhouse, a spokesperson for Morrisons, which has almost 500 grocery stores across the U.K., said that the “outage” at Blue Yonder had affected its warehouse management systems for fresh produce. “We are currently operating on our backup systems and we’re working very hard to deliver for our customers across the country,” said Morrisons’ spokesperson.

Other Affected Customers in the US:

The attack disrupted backend processes for Starbucks, particularly affecting employee scheduling and time-tracking systems. Although Starbucks took steps to mitigate the impact (such as manual workarounds), Spokesperson for Starbucks reports that they will have to Manually reconcile payroll for this outage leading to disruption & employee dissatisfaction.Blue Yonder’s US customers, including Kimberly-Clark, Anheuser-Busch, and Best Buy, were also impacted, though the extent of disruption is not fully clear. Affected companies reported operational setbacks in areas related to scheduling, supply chain tracking, and workforce management. Some of the biggest US grocery chains also use Blue Yonder, including Albertsons — the parent company of chains like Safeway and Jewel-Osco — and Kroger, the parent company of chains like Ralphs and Fred Meyer.

Experts Speak out on Need for Robust Security Measures

We also spoke to various industry leaders & peers of Blue Yonder to ask for their thoughts on the matter. “44 Billion dollars of client revenue has been lost since 2019 to cyber security attacks. The recent ransomware attack on Blue Yonder highlights the growing risks of relying on third-party platforms without robust security measures. As businesses increasingly depend on such systems for critical operations, it’s vital to prioritize data security at every level”

“At LogiNext, we ensure that our platform, LogiNext MILE, meets the highest security standards, including but not limited to, oAuth, end to end encryption and regulations like GDPR and CCPA with rigorous testing, compliance, and continuous monitoring in place.”mentioned Dhruvil Sanghvi, Founder & CEO, LogiNext. He further elaborates what they have done at LogiNext to implement a robust system.

“Our platform adheres to the highest standards of compliance, including SOC 1, 2, 3 and ISO certifications. Our commitment to rigorous Vulnerability Assessment and Penetration Testing (VAPT), Dynamic and Static Application Security Testing, and continuous monitoring ensures that our systems, data, and user experience remain secure. Data security must be woven into the very fabric of technology solutions, without compromising on performance or user experience.”

The Urgency To Replace Legacy Systems

The logistics and supply chain industry is plagued with legacy technology solutions that have not been updated to address evolving cyber threats. These modern risks require swift, proactive mitigation, which can only be achieved through significant upgrades to security measures integrated within technology platforms. This is precisely why new age and agile tech companies, like LogiNext, invest heavily in building technological robustness, while legacy players often focus more on sales and marketing, leaving critical security gaps that expose businesses to potential breaches.

It is suspected that even if the situation is diffused by working with the attacker to find an amicable solution, there remain high chances of the customer data being stolen and internal vulnerabilities remain exposed to the attackers, leading to high probability of another attack taking place in near future. This leaves enterprises with only one option to replace the system. LogiNext claims to be discussing replacement of legacy systems like Blue Yonder with more than 200 such companies at the moment.