Menu

cyber

20985

Limitations of AI and IIoT in Manufacturing

, , , , 0

The manufacturing landscape is undergoing a seismic shift, driven by the integration of Artificial Intelligence (AI) and the rise of Industrial Internet of Things (IIoT). These technologies promise improved efficiency, enhanced decision-making, and reduced operational costs. However, despite their potential, there are significant limitations that manufacturers must consider before fully embracing these technologies. Understanding these limitations is crucial for organizations looking to implement AI and IIoT effectively.

Integration Challenges and Cybersecurity Risks

The integration of AI and IIoT systems into existing manufacturing processes is fraught with difficulties. Many factories rely on legacy systems that may not easily interface with new technologies. The complexity of integrating these systems can lead to increased costs and extended timelines for implementation. Additionally, manufacturing environments often involve a multitude of different devices and platforms. Ensuring seamless communication between all components of the IIoT ecosystem requires significant investment in middleware and data standardization efforts. Without a cohesive integration strategy, manufacturers may find themselves grappling with data silos and interoperability issues.

As manufacturers increasingly adopt IIoT devices, they need to start taking cybersecurity risks seriously. The interconnected nature of IIoT systems means that a breach in one part of the network can compromise the entire system. Hackers can exploit vulnerabilities to access sensitive operational data or even disrupt production processes. Manufacturers must prioritize cybersecurity measures, but doing so can be resource-intensive and complex. The need for constant vigilance, updates, and monitoring can detract from other operational priorities, creating a challenging balance between innovation and security.

Talent Shortages, Model Complexity and High Costs

The successful deployment of smart technologies like AI and IIoT in manufacturing helps bridge skills shortage and relies on skilled personnel who can design, implement, and manage these technologies. Unfortunately, there is a significant talent gap in the industry. Many organizations struggle to find professionals with the necessary expertise in data analytics, machine learning, and IoT technologies. This shortage can slow down the adoption of AI and IIoT solutions and limit their effectiveness. Companies may find themselves investing in technologies without having the skilled workforce to fully leverage their potential, resulting in underutilized systems and missed opportunities for improvement.

While AI holds great promise, the complexity of AI models can be a significant barrier to their implementation. Many AI solutions operate as “black boxes,” making it difficult for manufacturers to understand how decisions are being made. This lack of transparency can be particularly concerning in industries where safety and compliance are paramount. Furthermore, training AI models requires time and resources. Manufacturers must invest in adequate computing power, data management, and ongoing model refinement to ensure that AI systems remain relevant and effective over time.

The upfront investment required for AI and IIoT technologies can be daunting for many manufacturers, particularly smaller firms. Costs can quickly accumulate when considering the purchase of new hardware, software licenses, and the necessary infrastructure upgrades. Additionally, ongoing maintenance and training costs can further strain budgets. While the long-term benefits of AI and IIoT can be substantial, steel fabrication Australia companies must carefully evaluate their financial readiness and consider phased implementation strategies to mitigate the risks associated with high initial expenditures.

Conclusion

While AI and IIoT offer transformative potential for the manufacturing sector, understanding their limitations is essential for successful adoption. Data quality and availability, integration challenges, cybersecurity risks, talent shortages, the complexity of AI models, and high initial costs all pose significant hurdles. Manufacturers looking to leverage these technologies must approach implementation with a strategic mindset, ensuring that they address these limitations proactively. By doing so, they can position themselves to reap the benefits of AI and IIoT, ultimately driving efficiency, innovation, and competitiveness in a rapidly evolving industry.

312959

The Digital Supply Chain

, , , , 0

The ability to streamline operations and improve efficiency are crucial aspects of operating in dynamic manufacturing markets. For manufacturers involved in and affected by global and local operations and logistics, the pressure is felt in future-proofing supply chains. Supply chain management (SCM) involves complex, multifaceted processes that demand precision, foresight, and adaptability. Enter the power of artificial intelligence (AI) and digital technologies, which are transforming how supply chains operate. The integration of AI in supply chain processes and the adoption of comprehensive supply chain management software are not only ongoing trends, but important strategies for companies seeking to be more efficient, stay competitive, and innovative. This blog deep dives into this exciting topic in greater detail.

Key Components of Digital Supply Chain

There are certain key components that are essential within establishing a digital supply chain:

  • Comprehensive SCM Solutions: Supply chain management software is at the heart of the digital supply chain, offering a suite of tools that facilitate resource and supply planning, demand management, inventory management, order promising, and more aspects. These integrated solutions allow businesses to manage complex logistics networks efficiently, synchronise supply with demand, and optimise resource allocation and distribution. By automating and streamlining critical supply chain operations, SCM software plays a crucial role in enhancing the agility and resilience of business operations.
  • Cybersecurity: As supply chains digitalise, the cyber status of manufacturing become crucial to protect data integrity and prevent disruptions. Ensuring secure data flows and protecting against cyber threats are imperative to maintain the reliability and trustworthiness of the digital supply chain.
  • Connectivity and Integration: SCM software integrates with other manufacturing and operational software systems (e.g. MOM or ERP), as well as IoT devices. This connectivity ensures that supply chain managers and executives have full visibility and control over their supply chain. The integration facilitates real-time data collection and sharing across various platforms, enabling a unified view of operations, and helping decision-makers to respond swiftly and effectively to any operational challenges or opportunities.

Development of Digital Supply Chain

The 3 major trends that manufacturers need to watch and potentially integrate into their operations are as follows: –

  • Firstly, the future of supply chain management heavily relies on predictive and prescriptive analytics. These technologies go beyond traditional descriptive analytics by not only predicting future scenarios but also suggesting course actions that enhance manufacturing traceability. By utilising machine learning algorithms and big data, supply chain managers can anticipate issues before they arise and prescribe the best strategies to mitigate risks or take advantage of upcoming opportunities.
  • Secondly, sustainability is becoming a cornerstone in supply chain strategy, driven by consumer demand, regulatory requirements, and a corporate responsibility toward environmental stewardship. AI can play a significant role in enhancing sustainability efforts by optimising routes to reduce fuel consumption, improving inventory accuracy to decrease waste, and facilitating the recycling of materials. As manufacturers strive to meet their sustainability goals, AI provides the tools necessary to achieve these objectives in an efficient and cost-effective manner.
  • Finally, hyper automation, a trend that builds on the foundations of robotics and AI automation, involves the orchestrated use of multiple technologies to automate as many manufacturing processes as possible. In supply chains, hyper automation could mean automated systems for handling heavy products like pressure vessels, managing warehouses, and planning deliveries, all connected through a central AI that continuously learns and improves these operations.

Looking Ahead

The digital transformation of supply chains through AI and advanced SCM software solutions is not just a trend but a necessary evolution in today’s business environment. Manufacturers that are quick to adopt these technologies gain significant advantages, enabling them to outperform competitors and meet the increasing demands of consumers and markets more effectively. From predictive analytics that forecast future trends and optimise operations in areas such as mining plant and equipment Australia, to AI-driven automation that enhances efficiency and accuracy, the role of technology in supply chain management has never been more crucial. Now is the time for forward-thinking leaders to embrace these innovations and transform their supply chain operations into more responsive, efficient, and customer-oriented systems. Investing in digital supply chain solutions is not merely about keeping up with technological advancements but about setting the stage for continued success in an increasingly complex global marketplace!

cyber-data-and-information-security-idea-yellow-p-2023-11-27-04-54-16-utc (1)

Manufacturing SMEs Must Take Cybersecurity Seriously

, , , , 0

 

With manufacturing facing an unprecedented onslaught of cyberattacks, investment in the cyber status of manufacturing has never been more important. But now there is one more reason – and a very personal one for directors: the growing risk of serious penalties and even jail time in cases of gross negligence. The Australian federal government has been ramping up privacy and cybersecurity rules in recent years, most recently with the Notifiable Data Breaches scheme and the Security of Critical Infrastructure Act. Harsh penalties cannot be dismissed as a problem just for big businesses. Companies with turnovers of $3 million or more can be subject to fines of up to $50 million for the business, with directors liable for up to $2.5 million, removal from the board, or even imprisonment for gross negligence leading to significant financial loss or damage to shareholder value.

Authorities are gearing up for enforcement, with ASIC Chairman Joe Longo telling The Australian Financial Review Cyber Summit in September 2023 that “cyber resilience has got to be a top priority.” “If things go wrong, ASIC will be looking for the right case where company directors and boards failed to take reasonable steps, or make reasonable investments proportionate to the risks that their business poses,” Mr. Longo said. “I can assure you that in the right case ASIC will commence proceedings if we have reason to believe those steps were not taken.” Manufacturers and steel fabrication Australia tend to focus on making things. But it is imperative they also protect their data because they are extremely susceptible to cybercrime.

According to IBM’s X-Force Threat Intelligence Report, manufacturing has the dubious honour of being the most-attacked industry by cybercriminals — for the third consecutive year. The report found that last year, manufacturers made up more than 25% of security incidents. Malware attacks, which include ransomware, were the most common. According to IBM’s report, security fundamentals such as patching, multi-factor authentication, or least-privilege principles can prevent 85% of incidents. But manufacturers are not always doing these things. This points to serious breaches in cybersecurity for the industry. The reason 34% of manufacturers and heavy steel fabrication companies pay a ransom? They cannot afford downtime. In a marker of the urgency around cybersecurity, “Cybersecurity Strategies for SME Manufacturers” featured as the closing keynote at the Central Innovations inaugural Manufacturing Innovation Thought Leadership Conference in May.

Strategic Adviser to Corporate IT and manufacturing Shane Williams talked about how SME manufacturers can navigate the complexities of digital transformation and the imperative for robust cybersecurity measures. Issues such as resolving data issues, ensuring secure communication, and developing effective cybersecurity strategies were discussed, along with practical steps for safeguarding digital assets without requiring deep technical knowledge. He gave the example of a cyberattack where a phishing email reached a pressure vessels manufacturer’s finance department, intercepting an invoice resulting in payment to a different bank account. Once the client found out, they shut down their account. Because of a long-standing relationship, the company recovered eventually. “It took them two years to get back their market share from one incident that lasted for one day, for one invoice,” Mr. Williams said. “It’s not the $15,000 invoice that’s the problem or the $20,000 in forensic IT to fix it; it’s two years’ worth of lost revenue from your biggest customer and the reputational damage.”

970

Data Woes Stifling Manufacturing

, , , , 0

 

Manufacturing depends a lot on data. Data is one of the top manufacturing technology trends and is the basis for day-to-day work as well as strategic initiatives. New research by Forrester Consulting for Hexagon Manufacturing Intelligence shows that almost all manufacturers are struggling with data issues, impacting their ability to roll out advanced technologies. This leaves them at risk of being left behind their rivals, the report reveals. So, what are these data issues and do they impact the cybersecurity of manufacturing firms? Let us find out in this blog.

Findings on Data Issues

Findings on Data Issues

Some data points around specific findings include the following:

  • 98% of manufacturers report at least one issue with data within their organization. Leaders are considering real-time collaboration, AI, and automation, but persistent data challenges stifle innovation and impede the roll-out of such advanced manufacturing technologies.
  • These data woes contributed to 97% of manufacturers facing challenges in collaboration and productivity, which can impact their ability to innovate and delay responding to customers’ needs.
  • The majority of business leaders realize that better collaboration can improve product quality (88%), time to market (86%) and sustainability, with 82% of respondents believing better communication between design and manufacturing teams can significantly reduce material waste and emissions.
  • Despite this, almost three-quarters (71%) are concerned about the lack of synergy between their design and manufacturing teams.
  • Only 2% of manufacturers claimed to be problem-free with their data practices.
  • 37% of manufacturers are falling behind their rivals and should be considered ‘laggards’, as they have failed to automate any phase of their manufacturing process partially or fully. This is compared to a quarter of manufacturers that should be considered the ‘leaders’ in the market, as they have highly or fully decentralized automation incorporated into at least two phases of their manufacturing processes.
  • Additionally, 58% of leaders report increased staff productivity and innovation, versus 35% of laggards.

What About Cybersecurity?

What About Cybersecurity?

While the report did not go into detail about the cyber status of manufacturing, it is not difficult to connect the dots. Manufacturing organizations that struggle with implementing new technologies, along with accessing and sharing the data being generated by current software and automated processes, would seem to also have issues with protecting any OT assets. While some might point to a lack of technology and data management platforms as limiting the attack surface and potentially making their enterprise less palatable to hackers, this mindset has been proven wrong numerous times throughout the steel fabrication sector. The reality is that to improve operational efficiency and stay competitive, investments in the areas addressed by Hexagon’s research are essential. But just as essential is working hand-in-hand with IT and OT teams to ensure all these platforms are being integrated with cybersecurity in mind. Accompanying these priorities should be well-defined and thorough plans and strategies for managing, monitoring, and updating these OT assets with the proper cybersecurity protocols. Essentially, this report not only identifies the numerous missed opportunities from a technological investment perspective (such as incorporating sampling processes in manufacturing), but as a reminder of the role cybersecurity needs to play when developing plans for introducing these new tools into the manufacturing organization.

Closing Remarks

Closing Remarks

It can thus be observed that there are a multitude of data challenges facing the industrial sector today, and it may impact cybersecurity as well. As the importance of data grows, manufacturing firms have an increased responsibility to ensure clean, consistent, and up-to-date data in legacy systems and this will help to improve the performance of manufacturing firms overall. There is a saying that “Data is King” – and it is totally relevant in this scenario!

Cyber Attacks Flat Illustration

Cyber Status of Manufacturing

, , , 0

 

Cyber-crime is an almost invisible pandemic that has been infecting the world, and Australian manufacturers need to be on high alert. Cyberattacks worldwide are estimated to have stripped companies of US$8.4 trillion in 2022 and industries such as oil and gas have improved their cyber-readiness. Industry estimates put the cost of IT (Information Technology) attacks between $10-$20 trillion by 2025. According to IBM’s 2022 X-Force Intelligence Report, manufacturing became the most attacked industry globally in 2021 – replacing financial services and several of Australia’s biggest, high-tech firms were shocked by last year’s breaches and data theft. So, what has led to manufacturers being increasingly targeted by cyber criminals? This blog will look to provide a deep-dive analysis in this regard.

Perception of Soft Target

The speed at which manufacturers are integrating systems to catch up with the rest of the business world means little or no focus on security which makes them easy pickings. Digitization and systems integration is a new phase for most manufacturers so rookie mistakes are likely and hackers know this. As manufacturing has digitized, it has experienced more cyber-related incidents, often through interfaces and OT (Operational Technology) control systems managing industrial operations. Application Programming Interfaces (APIs) allow different systems to talk and share data. Every time a once-discrete system needs to talk to another, it uses an API and, without the right precautions, increases the attack surface. And, without adequate security, the convergence of OT and IT enables vulnerabilities in one area to be used by hackers to traverse to the other. Deloitte and the US’ Manufacturers Alliance for Productivity and Innovation (MAPI) studied cyber security and risks for manufacturing and structural steel fabrication. Almost half the manufacturers (48%) of 600 IT execs with global firms surveyed by the 2019 Deloitte and MAPI Smart Factory Study said operational risks, such as cyber security, were the greatest danger to smart factory initiatives.

Low Priority

Industry experts say manufacturers’ attention to security suffers from many factors, not least workplace culture, including security awareness and different teams’ priorities:

  • Inadequate training: the World Economic Forum’s (WEF) Global Risks Report 2022 declared 95% of cyber security issues can be traced to human error and that insider threats, accidental or intentional, create 43% of breaches across all sectors.
  • OT teams naturally focus on physical machinery (e.g., mining plant and equipment), tangible products and maximizing production. Often wary of ‘interference,’ there is a reluctance to give IT oversight and a tendency for OT to integrate systems ad hoc.
  • Business leaders have not been sufficiently aware of IT risks. IT advisors struggle to get points on cyber security through to leaders. The C-suite has been criticized for preferring to pay cyber insurance than think about the issues. The prices for cyber insurance in the US have been skyrocketing: up by 96% in Q3, 2021 alone, and a 204% jump on the previous year, says the WEF.
  • Factory floors’ fear of downtime means systems have not been patched to latest versions so they are vulnerable. Old factory equipment that is near impossible to update to work with more secure OT.
  • Reports of complacency include one security provider’s survey of manufacturers’ knowledge of their systems and their APIs: it showed manufacturers’ confidence in their system security to be badly misplaced.

Final Thoughts

As smart factories are busy enhancing production and supply chain performance, greater interconnectedness brings greater risk with each interconnection enlarges the attack surface. Yet the trend to more connectivity and more smart devices in the Industrial Internet of Things (IoT) space is not slowing, and 5G networks’ next-level connectivity will accelerate it. The risks are huge and, whether on the cloud or on premises, businesses must be confident of the security of any externals with which they connect. Potential business partners can offer their bona fides but a manufacturer needs to diligently discover their true security posture, all their precautions and if they are vulnerable. In this matter, the old adage holds true: a chain is only as strong as its weakest link!

cyber-security-2837427_1280

Cyber Security for Oil and Gas Companies

, , , 0

 

With the advance of technology, the oil and gas utilities industry has moved to incorporate information technology (IT) into its upstream and downstream operations so as to achieve better oversight on productivity, real-time monitoring and control and a more productive working relationship with heavy steel fabrication companies. This has led to increased streamlining in the process of managing supply and demand; however, it has also made the industry more vulnerable to cyber-attacks. Cyber-attacks have the potential to inflict substantial damage on critical infrastructure, and this can lead to far-reaching consequences in an increasingly decentralized digitally connected energy ecosystem. This blog will discuss more about cyber-attacks and potential protective measures from such events.

Cyber-readiness of oil and gas companies

In May 2021, the possibility of a cyber incident with regard to the oil and gas industry was brought to the public’s awareness when U.S. pipeline operator Colonial Pipeline suffered a ransomware attack. The company was forced to stop running the systems that operate its 5,500-mile pipeline and the economic damage, including adverse impacts to the pipe fabrication industry, was tremendous. Europe’s oil products sector was hit in February 2022 when a cyberattack targeted loading facilities in Germany and spread to key terminals in the Amsterdam-Rotterdam-Antwerp (ARA) network. A total of 17 terminals (11 in Germany and six in ARA) were affected. This instance shows that attacks are becoming increasingly frequent – and more sophisticated. As early as 2017, the U.S. research institute Ponemon was commissioned by Siemens to conduct a survey of the oil and gas industry. According to its findings, 68% of U.S. oil and gas cyber managers said that their organization had experienced at least one loss of confidential information or disruption to operations in their Operational Technology (OT) environment over the past 12 months. At the same time, the study asserted that many organizations lacked awareness of OT cyber risk.

What can companies do?

The energy sector’s leaders and top executives need to take greater responsibility in mitigating the risk of cyber-attacks. CEOs and board members must draw from their decades of expertise in integrating energy assets with OT and leveraging IT networks to reduce cyber risk across their hyperconnected operating environments. For decades, oil and gas companies have pursued productivity gains by researching advanced excavation techniques and by linking physical energy assets with OT control systems and IT networks. That trend continues today with energy organizations seeking big data, artificial intelligence (AI), and automation solutions to reduce costs, improve efficiency and help reduce emissions. Throughout this process, industry executives have also pioneered key management principles and risk-based approaches to securing the technologies and processes that serve as the foundation for their hyperconnected industrial Internet of Things (IoT) business model. To prepare for the new normal of more frequent and sophisticated cyber-attacks on energy and critical infrastructure, energy sector CEOs and corporate board members must take the best practices and key lessons learned from a decade of both successfully addressing and learning from the failures of addressing cyber risk.

Conclusion

Resilience of the oil and gas industry to cyber attacks has a lot of potential to improve going forward. Assessment of IT/OT security should include current risk covering, systems, threats and impacts. Digital workforce in oil refineries can improve field force effectiveness using wearable devices and digital tools, including augmented-reality systems. Regulatory developments in this space can assist in making oil and gas companies more aware of cyber attack risks, however the industry has a long way to go in its quest to become technologically resilient!

© K999 Engineering & Construction Co. Ltd. 2023