A recent cyber attack that disrupted the production process at Clorox, including bleach and other products from the brand, may make it difficult for those looking to stock up on the brand's bleach or other products in the upcoming months.
In the last two months, Clorox, the company responsible for the creation of many items such as these and many others, has had to pick up the pieces after suffering a devastating cyber attack. In late September, the company revealed that it had been experiencing automated ordering difficulties for weeks, including the inability to process orders from stores such as Walmart and Target for its vendors.
There were outages and shortages caused by this, all of which slowed down sales.
The cybersecurity researcher Allan Liska at Recorded Future speculated as to what damage Clorox suffered as a result of the cyberattack on its manufacturing operations: "When [Clorox] couldn't take in orders, even though the production lines themselves could run, they could not tell [Clorox] what products they needed or where they should send them."
Clorox disclosed in a filing to the Securities and Exchange Commission on Monday that the cybersecurity violation came to light as a result of unauthorized activity that was detected on several IT systems on Aug. 14.
It was revealed in a statement on August 14 that Clorox-which is not only a leading bleach manufacturer but also a company that produces Glad trash bags and Burt's Bees skin care products discovered in its computer systems some "unauthorized activity."
There was another disclosure by the company more than a month later, on September 18, indicating that the attack had caused many of its automated systems to be unavailable -- including those that were used to place orders at large retailers using self-service portals.
There has been a slowdown in Clorox's operations as a result of placing orders manually through big box retailers such as Walmart and Target, which has resulted in fewer products reaching store shelves because Clorox has had to process those orders manually.
During the first quarter of last year, Clorox had revenue of $1.74 billion, and it was in early August that the company announced a cyberattack. At the time, the company said it was expecting to grow sales by mid-single digits in the first quarter.
In a similar scenario, if the company had grown sales by 5% from last year's totals, that would have generated a revenue of $0.83 billion. Instead, the company predicted last week that sales would fall by 23% to 28% compared to last year.
Taking that into account, Clorox's revenue could drop by between $1.25 billion and $1.34 billion instead of what it anticipated before the breach was discovered. This would constitute a drop of at least $500 million compared to what Clorox had anticipated before the discovery was made.
Several hours after the move, officials at Clorox expect to return to the automated order processing system next week, and they expect to increase production rates over time. There are a number of household cleaning products, foods and other goods that this Oakland, Calif., company manufactures, including Pine-Sol bleach, Fresh Step cat litter and Clorox bleach.
According to the original filing of the company, the company notified law enforcement of the incident and hired third-party experts to investigate the matter and provide assistance in the recovery process. It was stated at the time that Clorox would try and maintain production by implementing workaround strategies. However, Clorox warned of potential disruptions at the time.
The company switched to manual ordering processing immediately after discovering the unauthorized activity on its network, which, according to Clorox, slowed down the company's ability to produce the goods. As of right now, most of Clorox's production facilities have resumed production, as the company is in the process of repairing those systems.
There have been significant improvements to the ‘vast majority’ of Clorox’s manufacturing sites, and the company’s production is projected to ramp up soon to full capacity. It is not possible for the company to tell when normal operations can resume.
The wipes produced by Clorox were in high demand during the peak of the COVID-19 epidemic, when cleaning products flew off the shelves. While the company ramped up production in August 2020 to meet the demand, there were still shortages into 2021 as a result of the shortages.
