What Is SOC 2 Compliance — And Why Does It Matter for Manufacturers?
.webp)
published
July 27, 2026
Key Takeaways
SOC 2 is a voluntary security framework that verifies how well a software or cloud vendor protects your data. Manufacturers should require it from every technology vendor they work with.
Manufacturing is the most cyberattacked industry, and third-party software vendors are a leading entry point for breaches. SOC 2 certification is a critical line of defense.
SOC 2 Type II is the higher standard. It validates that a vendor's security controls work over time, not just that they exist on paper.
When evaluating vendors, ask for SOC 2 Type II certification, encryption details, uptime guarantees, and whether their cloud hosting providers are also compliant.
What Is SOC 2 Compliance?
SOC 2 (which stands for "System and Organization Controls 2") is a compliance framework for auditing how web-based service vendors' systems manage and secure sensitive customer data. Developed by the American Institute of Certified Public Accountants (AICPA), SOC 2 is focuses on five Trust Services Criteria: security, availability, processing integrity, confidentiality, and privacy.
SOC 2 is voluntary and it doesn’t dictate exactly how service providers should store, process, or transmit customer information. Rather, it helps auditors assess whether a software-as-a-service (SaaS), cloud storage, or other web-based service provider's controls and processes meet SOC 2 criteria in an appropriate way for its business.
Why SOC 2 Matters to Manufacturers
Manufacturing is the most targeted industry for cyberattacks, which surprises many people. But it explains why SOC 2 for manufacturing is so important.
In 2025, the manufacturing industry accounted for almost 28% of cybersecurity incidents, according to IBM. Attackers target operational technology (OT), such as PLCs or automation computers; connected products, like IoT or remote-monitoring sensors; or business IT systems, including accounting and HR software.
A successful cybersecurity attack can shut down a factory. For as long as it takes the company to regain access to its data and machines, the factory is idle, missing customer deadlines and — with unplanned downtime costing manufacturers $125,000 per hour according to ABB — losing revenue quickly.
Here are some other facts and figures that explain why cybersecurity must be a top priority for manufacturing operations leaders:
- Manufacturers experienced more than 1,600 confirmed data breaches in 2025, double that of 2024. (2025 Verizon Data Breach Investigations Report)
- 42% of manufacturing breaches resulted from third-party access vulnerabilities. (2025 Imprivata Ponemon report)
- A single data breach costs a manufacturer $5.5 million, 13% more than the global average. (2025 Imprivata Ponemon report)
- Manufacturing accounted for 68% of 708 industrial ransomware incidents confirmed in Q1 2025. (Dragos Industrial Ransomware Analysis: Q1 2025)
- It takes an average of 24 days to fully recover from a ransomware attack, although many critical systems can be restored within a few days. (SQ Magazine)
A SOC 2 report is independent validation that a software or storage vendor's data security controls are strong. Requiring software and cloud vendors to be SOC 2 compliant can help manufacturers protect against cyber risks and comply with their vendors' SOC 2 requirements.
{{callout1}}
What Are the Requirements for SOC 2 Compliance?
SOC 2 compliance is based on the five Trust Services Criteria (TSC) defined by AICPA.
* Note that the only TSC required for a complete SOC 2 report is security, but the other four can help establish a vendor's credibility.
To achieve SOC 2 compliance, an independent, third-party certified public accountant (CPA) must audit a SaaS or cloud service provider's controls against the TSCs. Auditors need provide proof of compliance in the form of logs, monitoring data, access control policies, vulnerability testing, incident response planning, HR security policies, and more.
After the audit, the CPA provides a SOC 2 report detailing how well the vendor meets the criteria. An audit is generally valid for one year, so companies usually undergo an annual audit to maintain SOC 2.
What's the Difference Between SOC 2 Type I and Type II?
There are two levels of SOC 2 compliance.
- Type I checks whether controls are designed well — not how well they work in practice. Because it only evaluates a single point in time, it's simpler to achieve than Type II.
- Type II verifies that controls work effectively over a period of three to 12 months. It is more challenging because the audit lasts longer and evaluates whether the controls are effective.
{{callout2}}
Checklist for Evaluating Software Security
It's crucial to vet a vendor's security controls carefully. Here are some questions to ask a manufacturing SaaS or cloud services vendor about security:
- Are you SOC 2 Type II certified?
- Type I is less rigorous and doesn't guarantee the effectiveness of the vendor's security controls.
- How do you encrypt data at rest and in transit?
- Data must be encrypted whether it's sitting on-site or being transmitted to cloud storage so that no one can read the data at any time.
- What is your uptime guarantee and disaster recovery (DR) plan?
- Critical systems should be available 99.99% of the time, which is about 52 minutes of unplanned downtime per year. For non-critical systems, 99.5%, or 3.65 days per year, is standard.
- A DR plan should define how quickly a system must be up and running (recovery time objective), the backup strategy (recovery point objective, redundant storage, data accessibility), how outages are communicated, and DR testing protocols.
- Do you have a security operations center (SOC) and is it always open and available?
- Outages can happen anytime. The vendor's SOC should be available 24/7 to handle incidents.
- How do you handle a data breach notification?
- You should be notified within 72 hours of a breach discovery, which is the EU's GDPR requirement.
- Are your cloud hosting providers also SOC 2 compliant?
- It's not enough for your software vendor to be SOC 2 compliant; any place your data is transmitted or stored must also be certified.
- How do you manage third-party and subprocessor access to my data?
- A data processing agreement ensures that any entity that touches your data meets defined data privacy requirements.
SOC 2 compliance for manufacturing is voluntary, but it's critical to protect your plant against downtime from cyberattacks. Redzone and its cloud hosting providers meet SOC-2 Type II compliance and are ISO-certified.
The Bottom Line
Achieving SOC 2 compliance can be resource-intensive — often involving policy creation, system monitoring, employee training, and regular audits. While voluntary, many of your vendors may require that your technology is SOC 2 compliant, making it a busines requirement. It also helps reduce risk and prevent unplanned downtime from cyber incidents.
Learn how Redzone Compliance software can simplify audits by replacing standalone solutions and paper-based processes with real-time, plant-wide compliance and quality assurance.
Frequently Asked Questions
What is a SOC 2 report?
A SOC 2 report details an independent audit of a company's systems, polices, and procedures to ensure they meet TSC requirements. There are two types of reports: Type I (control design) and Type II (design and effectiveness of controls), and both are produced by the CPA or audit firm that audits the company.
What is involved in a SOC 2 audit?
A SOC 2 audit involves three phases: preparation, observation, and reporting. Before an audit begins, companies must prepare with internal reviews, readiness assessments, gap analyses, and remediation. For a Type II report, the auditor will observe the company (including testing and interviews) for six to 12 months. Finally, the auditor will issue a report documenting their findings.
Who needs SOC 2 compliance?
SOC 2 compliance is both a security measure and a business differentiator. It demonstrates to customers, regulators, and partners that you take data protection seriously.
Is SOC 2 the same as ISO 27001?
No, although both SOC 2 and ISO 27001 are designed to improve information security. SOC 2 is an audit of a company's security controls, whereas ISO 27001 is an international certification that a company's information security management system (ISMS) meets global requirements.
How long does it take to complete a SOC 2 audit?
A SOC 2 Type II audit report usually takes between 6 and 12 months, depending on existing preparation and evidence and the observation period. A Type I report takes between two and four months. Either way, automation software can simplify and speed preparation.
