In 2023, Australian manufacturers have much to contend with. Energy costs are surging and the prices of labour and raw materials have also risen, albeit not quite so dramatically, in most instances.
Small to medium sized players have been under particular pressure, according to accountancy firm Grant Thornton’s The State of Australian Manufacturing: 2023 Manufacturing Benchmarks
“…Cash flows have been heavily impacted by rising costs, inflationary pressures, and disruptions in supply chains. This has mainly affected manufacturers with turnovers under $40 million, who face increasing profitability challenges and struggle with pricing uncertainty and maintaining production volumes,” Grant Thornton’s report noted.
The latter issue is not helped by the fact that B2B buyers and consumers alike are tightening their belts. Many organisations and individuals are deferring major purchases, electing instead to spend money only on the absolute essentials.
Spotlight On Security
Altogether, it’s a challenging set of conditions and one which is forcing manufacturers to pursue efficiencies and cost saving measures of their own, in order to maintain margins and profitability.
But there’s one aspect of operations where manufacturers can’t afford to cut back their spend: cybersecurity.
Globally, there’s been an unsettling surge in incidents and attacks in recent months, as ahead-of-the-curve perpetrators have harnessed the power of next generation technologies to extort and destruct ill prepared corporate victims.
Ransomware groups have stepped up their game; exploiting vulnerabilities in commonly used corporate software and shifting their focus from data encryption to data theft, according to the Check Point 2023 Mid-Year Security Report. USB devices have resurfaced as significant threats and are being used as vectors for infecting organisations. At the same time, supply chain cloud attacks have increases, as hackers know the optimal way to enter a larger organisation is through their smaller supply chain vendor, which traditionally has weaker security restrictions. At the same time, as they move to ‘smart manufacturing’, organisations are also seeing many unsecured IoT devices continually added to their manufacturing process, which could be another potential vector for cyberattacks.
Here in Australia, malicious or criminal attacks were responsible for 70 per cent of notifiable data breaches from January to June 2023, according to the Office of the Australian Information Commissioner’s most recent report. These numbers are not stopping with Check Point Research revealing that Australian businesses on average suffered a staggering 843 ransomware attacks during the first half of 2023.
Artificial intelligence, meanwhile, is proving itself a powerful weapon, with generative AI tools being used to craft phishing emails, keystroke monitoring malware and basic malware code.
Top of the hackers’ hitlists? Unfortunately, it’s the hard-pressed retail and manufacturing sectors which have seen the most victims to date, globally. There’s no reason to assume Australian manufacturers aren’t squarely in their sights too, and a headline making incident is only a matter of time. When one occurs, the costs can be crippling, both financially and reputationally.
The average cost per cybercrime report was $39,000 for small businesses, $88,000 for mid-sized players and $62,000 for large businesses, according to the ACSC Annual Cyber Threat Report 2022.
But, for large manufacturers, the losses could be exponentially higher. When a major dairy and beverage global brand was hit with a series of ransomware attacks in mid-2020, production and distribution disruption resulted in significant stock shortages. The company was also hit with a ransom demand of $1 million, to prevent sensitive company data being posted online.
Ramping Up Protection Right Across the Enterprise
Maintaining rigorous security hygiene across on-premises, cloud and hybrid networks can help make local manufacturers tougher targets.
Keeping computers up to date and applying security patches limits vulnerability to ransomware attacks, while enforcing a strong password policy and multi-factor authentication makes it harder for bad actors to steal employees’ log in credentials.
Ransomware attacks frequently begin with a phishing email which tricks the recipient into clicking on a link or opening a malicious attachment, thereby kicking off the process of installing and executing the malicious code. Employees are the first line of defence and conducting cyber awareness training that teaches them the classic signs and language used in phishing emails can help foil attackers’ attempts to gain an ‘in’.
And should they succeed in doing so, anti-ransomware solutions which monitor programs for suspicious behaviour can take action to prevent further damage being done.
Implementing a robust data back-up process can prevent a ransomware attack from becoming a full-blown disaster. Given the object of the exercise is to force the victim to pay a ransom, in order to regain access to their encrypted data, having an up-to-date, secure back- up solution is a smart, cost-effective way to mitigate the impact.
Finally, prevention is better than cure. AI-powered threat detection technology that scans and monitors emails and file activity is fast becoming an indispensable ally, for manufacturers that want to strengthen their defences and maintain a robust cyber-shield against a vast array of attacks.
Making Manufacturing More Secure
In today’s tricky times, many manufacturers are running on tight margins and a significant cyber-attack may not be a survivable event. Against that backdrop, investing in systems and prevention-first cybersecurity solutions to mitigate the risk has never been more critical.