Manufacturers continue to face persistent labor shortages, with the Manufacturing Institute estimating that by 2030 the sector may be as many as four million employees short. Businesses increasingly turn to digital solutions (e.g., Artificial Intelligence) to augment human labor and streamline operations. These tools introduce significant possibilities, but they also use and produce vast amounts of sensitive data, which exposes manufacturers to mounting cybersecurity risks. The global average cost of a data breach in 2024 was $4.88 million. So it is essential that manufacturers have robust data management and security strategies to safeguard their operations in an increasingly digital manufacturing landscape.
Turning to AI. AI delivers significant value to manufacturers by optimizing production, enhancing quality control, and facilitating predictive maintenance. AI-powered technologies like machine learning algorithms and robotics permit manufacturers to analyze vast datasets in real-time, and make more informed decisions.
Predictive maintenance, for instance, uses AI to anticipate equipment failures, reduce downtime and cut repair costs. And AI-driven robotics automate repetitive tasks, freeing employees to focus on more complex and value–adding activities, enhancing both productivity and safety as a result. AI is reshaping manufacturing, making it possible to address labor shortages and revealing opportunities for efficiency and innovation.
Cybersecurity challenges. The downside is that the vast amount of data generated by AI initiatives makes manufacturing organizations prime targets for cybercriminals. Since 2023, nearly a quarter of all cyber-attacks worldwide have targeted manufacturing companies, resulting in substantial financial losses. Alarmingly, the global average cost of a data breach soared to $4.45 million in 2023, a 15% increase over three years. Projections suggest that cybercrime could incur annual costs of up to $10.5 trillion globally in 2025, underscoring the urgency for robust data management and security measures.
Some manufacturers may underestimate their susceptibility to cyber threats, but evidence shows data breaches are increasing, and cybercriminals are using increasingly sophisticated tactics to target companies of all sizes. 71% of attacks now target small and medium-sized businesses (SMBs). Conventional cybersecurity protocols are no longer sufficient. The evolving threats require a proactive approach to safeguarding data assets. Failure to implement cybersecurity measures could leave businesses vulnerable to devastating attacks.
Cloud-centered security
Against this background, numerous manufacturing enterprises are embracing digitalization. Integrating cloud-based Enterprise Resource Planning technologies is essential for streamlining operations, enhancing visibility into processes, and catalyzing automation initiatives.
Cloud-based ERP systems offer numerous cybersecurity tools, like centralized data management, role-based access control, data encryption, and monitoring tools. ERPs enable SMBs to achieve cost savings, elevate customer experiences, and fortify cybersecurity defenses amid an evolving technological landscape. Adopting cloud-ERP technologies presents unparalleled opportunities for innovation and growth in manufacturing.
Unlike legacy systems, cloud ERPs offer advanced security benefits, including continuous monitoring, real-time threat detection, and automatic updates to address evolving cyber risks. These systems leverage robust encryption protocols and adhere to stringent compliance standards, and ensure that sensitive business data remains protected.
Additionally, the inherent scalability of cloud platforms allows organizations to adapt to new threats and regulatory changes seamlessly, without overhauling their infrastructure. Realizing these benefits hinges on effective implementation of comprehensive data management and security strategies, which provides manufacturers with a resilient, future-proof foundation to thrive in an increasingly digital economy.
Beyond embracing cloud technologies, there are additional best practices that can help SMBs secure data and systems.
Control digital access, educate employees. According to Fortra, a staggering 95% of data breaches stem from human error, emphasizing the critical role of employee awareness and training to mitigate cyber risks. Implementing comprehensive cybersecurity education programs empowers people to recognize and thwart common attack vectors, like phishing scams.
Furthermore, investing in next-generation endpoint protection solutions equipped with advanced threat detection capability is essential for bolstering defense mechanisms, particularly for small and medium-sized enterprises (SMEs) that lack dedicated cybersecurity expertise. Managed services offering round-the-clock monitoring can provide an additional layer of protection against emerging threats. And ERP systems can ensure that employees only have access to the data relevant to their roles, limiting exposure to sensitive information and insider threats.
Vendor security and data backups. Safeguarding against ransomware attacks and data loss necessitates implementation of robust backup strategies, including offline or cloud-based storage. Regular data backups, preferably automated or conducted on a weekly basis, minimize the impact of potential security breaches. Moreover, SMEs must ensure that third-party vendors and suppliers adhere to stringent cybersecurity protocols to mitigate external vulnerabilities that could compromise organizational security. Cloud-based ERP systems can store and back-up data, reducing the threat of on-premises attacks. Data can be recovered easily, reducing downtime and protecting against data loss.
Securing the future of manufacturing. As cyber threats escalate in sophistication and frequency, manufacturers must proactively implement robust data management and security measures to safeguard their digital assets. By embracing cloud-based systems – which are 50% less likely to be breached compared to on-premises solutions – and adhering to best practices in cybersecurity, manufacturers can protect their data integrity and preserve the resilience of their operations.
