SOC 2 Compliance for Manufacturers: What Most Are Getting Wrong

Misconceptions That Undermine Risk, Revenue, and Reputation

For years, many manufacturers dismissed SOC 2 compliance as something only SaaS or cloud providers needed to worry about. The assumption was that if your systems ran on the plant floor rather than in the cloud, SOC 2 didn’t apply.

That belief is not only outdated—it’s dangerous.

As manufacturers digitize operations, adopt IoT-enabled equipment, and integrate with enterprise clients through APIs and cloud platforms, their attack surface has expanded dramatically. Systems that were once isolated are now interconnected, monitored remotely, and increasingly targeted by cybercriminals.

The reality is clear: SOC 2 compliance is no longer optional for manufacturers that want to remain competitive, protect their supply chain, and retain customer trust.

Common Misconceptions About SOC 2 in Manufacturing

“We don’t store customer data, so SOC 2 doesn’t apply.”

Even if you don’t directly host customer records, your networks, devices, and APIs often touch customer systems. SOC 2 evaluates how you secure those connections and ensure data integrity—not just whether you house sensitive information.

“Our IT team can handle it if needed.”

SOC 2 readiness isn’t a quick IT project. It requires governance frameworks, risk assessments, vendor oversight, documented controls, and executive sponsorship. Treating it as a reactive IT issue almost guarantees delays, gaps, and audit failures.

“Our customers haven’t asked for it yet.”

They will. SOC 2 reports are rapidly becoming a minimum requirement in procurement cycles, especially for Tier 1 and Tier 2 vendors in regulated industries like aerospace, healthcare, and defense. Waiting until a client demands it often means losing the deal to a competitor that’s already certified.

Why SOC 2 Matters for Manufacturers

• Industrial networks are no longer air-gapped. From ERP and MES platforms to cloud-based analytics, manufacturing environments are interconnected and vulnerable. SOC 2 provides assurance that those systems are governed by enforceable security controls.
• Procurement teams are under pressure. Enterprise clients must prove their vendors are secure. Without SOC 2, you represent unnecessary risk—and risk doesn’t make it through supplier onboarding.
• Cyber incidents are escalating. Manufacturers are a top target for ransomware and supply chain disruption. A SOC 2 framework demonstrates resilience and preparedness, which regulators, insurers, and customers now expect.
• Critical systems must be protected. ERP and MES solutions manage everything from inventory to production scheduling. A breach there impacts not just compliance—but your entire ability to operate.

Questions Executives Should Be Asking

For manufacturing leaders in operations, security, or finance, the key question is no longer “Do we need SOC 2?” but rather:

• What risks are we accepting by not having validated controls in place?
• How could lack of certification impact customer renewals or new business opportunities?
• Are our suppliers and partners relying on us to be secure—and do we have the proof to back it up?

SOC 2: More Than Passing an Audit

For manufacturers, SOC 2 compliance is a competitive weapon. It delivers:

• A defensible framework for security and governance
• A clear advantage in B2B procurement and contract renewals
• A foundation for pursuing certifications like ISO 27001 or CMMC 2.0 (critical for defense contractors)
• Stronger collaboration between IT, operations, and compliance functions

Margins in manufacturing are already tight. SOC 2 is no longer just a cost of doing business—it’s a way to win business.

How Alchemi Advisory Group Helps Manufacturers

At Alchemi Advisory Group, we help manufacturers design and implement SOC 2 programs that fit their unique operational realities. From scope definition and readiness assessments to policy development and remediation support, we align compliance requirements with your production environment.

We don’t impose rigid SaaS-centric models on physical systems. Instead, we build practical, audit-ready compliance programs that work with your operations—not against them.

If you want to stay ahead of procurement requirements, reduce risk exposure, and strengthen client trust, now is the time to act.