Clorox IT Breach Stalled Automated Supply Chain Operations

Clorox reported that a previously announced breach to its IT systems have resulted in slowed order processing, prompting increased consumer product availability issues.

The breach damaged portions of the company’s IT infrastructure and caused “widescale disruption,” according to the CPG company in an 8-K filing. It impacted several functions across the supply chain, including automated order and processing. Clorox has had to take systems offline, resorting to manual efforts.

IT integrity is critical to the company, which depends on a solid infrastructure to deliver on tech-powered initiatives, such as its data clean rooms. While the company has not announced any further IT-related repercussions, a hit to infrastructure can have detrimental effects to consumer goods supply chains and data- and automation-powered processes. 

According to a GlobalData report, “Cybersecurity in Consumer Goods,” as CG companies have increasingly digitized their operations, more data is collected and transmitted between internet and network-connected devices before being stored in company databases. This increases opportunities for hackers to attack networks of connected devices and “the amount of data up for grabs.”

This is not the first time empty shelves have plagued the consumer goods company. During the pandemic, Clorox wipes were an iconic symbol of the stress COVID-19 put on the CPG supply chain. 

As an answer to that challenge, Clorox invested in forecasting frequency to better adapt to consumer and cost environment signals in the market. Additionally, the company increased its focus on automation as it relates to scenario planning. 

Using Clorox's phrasing, “widescale disruption” is certainly one of the biggest concerns related to IT and cybersecurity vulnerabilities. However, the company reports normalcy is on the horizon. Clorox plans to transition to automated order processing starting September 25 once systems are reintegrated and IT repairs made. While most manufacturing production has resumed, Clorox said the ramp up to full operations will occur over time, and cannot currently provide an estimated timeline. 

Clorox expects to see a material impact on Q1 financial results due to the product and processing delays.