Cybersecurity For Smart Factories MFG
Cybersecurity For Smart Factories MFG
Cybersecurity For Smart Factories MFG
Contents
Introduction 4
Growing cyber threats can be a menace in manufacturing environments 6
Behind the numbers: A proliferation of threats 7
The root cause: IT and OT are out of sync 8
Decoding cyber risk through smart factory use cases 10
Next steps: Where to start building cyber resilience in the smart factory 13
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Cybersecurity for smart factories
Supplier ManCoInc
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Cybersecurity for smart factories
Introduction
The newest chapter in industrial Deloitte and the Manufacturers Alliance for Productivity and
Innovation (MAPI) have been formally studying cybersecurity and
development, commonly known as the associated risks since 2016. Our joint studies have found that while
Fourth Industrial Revolution, heralds an awareness of the potential cyber threats related to smart factory
initiatives are growing, many manufacturers have had difficulties
era of tremendous potential for innovation advancing their cyber risk management capabilities. The 2016
and growth. It also brings with it new risks Cyber Risk in Advanced Manufacturing Study identified that one
in two manufacturers surveyed were only “somewhat confident”
and challenges. Nowhere might this be with their preparedness to address cyber threats.2 In the 2019
more apparent than in the manufacturing Deloitte and MAPI Smart Factory Study, we found that one in
four manufacturers surveyed have not performed a cyber risk
cyber landscape. The rise of digital assessment in the past year, which means these manufacturers
technologies and global interconnectivity likely do not have visibility to the impact a cyberattack could have on
their organization’s operations.3
marks a new level of complexity. Cyber
is no longer limited to certain aspects of The 2019 Deloitte and MAPI Smart Factory Study revealed a number
of risks relative to smart factory initiatives, spanning enterprise
operations or certain people; rather, it is categories from operational to financial and strategic to compliance
everywhere, likely in places manufacturing (figure 1) 4. Forty-eight percent of manufacturers surveyed identified
operational risks, which include cybersecurity, as the greatest danger
leaders haven’t considered. Every to smart factory initiatives. With the interconnectedness of smart
employee, every partner, every electronic factory technologies, cyber threats are among the most prevalent,
as smart factory environments expose people, technology, physical
device, piece of machinery, or finished processes, and intellectual property to these risks.
product brings with it the potential for
Complicating adoption of smart factory technologies is the reality
cyber risk. And many manufacturers could that management of information technology (IT) is often out
be underprepared for its potential impact. of sync with operational technology (OT) management, which
can further expose companies to cyberattacks resulting from
unknown or underappreciated vulnerabilities.5 The adversaries
often execute attacks through the use of malware, and the results
can be devastating: Several recent notable attacks have affected
manufacturing operations and cost companies $150 million or more.
In one case, the attack even affected safety systems, increasing the
risk of harm to humans.
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Cybersecurity for smart factories
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Cybersecurity for smart factories
The 2019 Deloitte and MAPI Smart Factory Study identified that However, industry-wide cyber-related incident data suggests this
more than 8 in 10 manufacturers surveyed have at least some may be overstated (figure 2).
capabilities to detect and respond to cyber threats.6
4 in 10
manufacturers
$330,000
surveyed indicated that their
operations were affected by a cyber
incident in the past 12 months average financial impact
Manufacturing from an IoT-focused
industry consistently cyber incident
featured among
the most frequently
targeted industries
Average financial
impact from a data
breach in 2018
Between 2017 and 2018, cyber
incidents increased by: $7.5M
3.5x Ransomware
2.5x Spoofing
0.7x Spear-phishing
Major cyber
risks
87%
Unauthorized
86%
Operational
85%
Intellectual
access disruption property theft
Strongly agree Agree somewhat Neither agree or disagree Disagree somewhat Strongly disagree
N=209
(Q19-Q32) What risk(s) are you concerned about in your OT environment? For the following potential risks, rate from a scale of 1 to 5,
with 1= “strongly disagree that we are concerned” to 5 = “strongly agree that we are concerned”
Today’s IT departments are often being tasked with managing Aspects of security can be overlooked when implementing advanced
security for these heterogeneous OT environments and coordinating technologies and smart factory initiatives. Ongoing OT system
the new generation of operational technologies alongside existing security is not typically covered in the service-level agreements
IT-managed systems, such as enterprise resource planning (ERP) and contracts with system integrators and equipment vendors.
packages. Our recent Smart Factory Survey reveals that IT leaders Even when covered, these contracts rarely include statements
surveyed were more confident than their OT counterparts (detecting for maintaining security controls, which by default makes it the
threats 41 percent for IT vs. 33 percent for OT; responding 34 responsibility of the business process owners. As a result, some
percent for IT vs. 29 percent for OT)―indicating a gap between the large capital projects may omit any budget for ongoing security
two groups in having visibility to the risk profile of the organization. management of OT systems that could critically affect operations if
they were targeted by an attack.
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Cybersecurity for smart factories
Adding advanced technologies to OT networks requires equally These responses indicate that surveyed manufacturers seem
sophisticated cybersecurity standards. A significant share of more confident in their cyber preparedness than the maturity
manufacturers, however, have yet to build the cyber capabilities and capabilities they may have to respond to and recover from
to secure some of these business-critical systems. Given the rapid a cyberattack, especially when new technologies come online
pace at which new technologies are added to factories via smart in periods between risk assessments. It is likely that some
factory use cases, IT and OT leaders may be unprepared to respond manufacturers are not aware of the new threats they face when
to new threats that arise. While 90 percent of manufacturers leveraging IoT devices and other emerging technologies in a smart
surveyed in the study report capabilities to detect cyber events, factory environment. Even if they know that something bad could
very few companies today have extended monitoring into their OT happen, often they do not understand how.
environments, and fewer than half of manufacturers surveyed have
performed cybersecurity assessments within the past six months
(figure 5).16 Additionally, it could often prove difficult to identify an
attack if it originates within the OT environments unless there is a
negative effect on operations (because monitoring capabilities have
not been extended).
Capabilities to detect cyber events Most recent cyber risk maturity assessment
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Cybersecurity for smart factories
Source: Deloitte analysis of the 2019 Deloitte and MAPI Smart Factory Study data
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Cybersecurity for smart factories
1 Engineering collaboration/digital
twin–enabled product design 2 Risk-adjusted material requirement planning
(MRP)
Virtual models of a physical product (or assembly) MRP involves estimating the required volume
Capability to run simulations, predict product performance, of materials at the respective locations at the
and make iterative design modifications right time. Risk-adjusted MRP makes use of both
Capability
production and demand data–driven insights
Product configurations, materials, other
and stochastic algorithms to optimize the flow of
Data types intellectual property (IP), customer usage data,
materials in a manufacturing process.
repair and warranty data, quality data
Bills of material, customer order/demand
Engineering and design department, product
data, planning data (routing, labor, machine
Data owners management, after-market service, quality control, Data types
availability, quality standards, scrap percentages),
suppliers
supplier information
Hardware including AR glasses, laptops, VR caves;
Procurement department, production
Entry points software applications, databases, and analytics Data owners
department, supplier network
tools; network and cloud
Company intranet, software programs, data that
Network-enabled engineering software could be Entry points
resides at suppliers
accessed by others with access to that software.
Hardware (e.g., AR glasses) could be taken by Risks of phishing and cyberattacks can cause data
Threats/ someone and used to view sensitive product or Threats/ loss and system failures. Data compromise could
vulnerabilities vulnerabilities
customer data. The data uploaded to a cloud affect material replenishment or delay production.
platform for analysis and simulation could be
•• Control and manage access of users to systems
compromised.
and from one system to another system. This
•• Restrict device and system access to authorized includes identity and access management,
personnel only and follow a least-privilege remote access, and privileged access
approach. management.
•• Ensure cloud access and storage follows access •• Define company-wide policy for secure remote
control protocols―confirm that secure network access, managing connectivity for both
architectures are applied to control system and employees and third parties.
data connections. •• Establish or join trusted exchange centers that
Cybersecurity
•• Apply defense-in-depth strategies: Detect, plot, are focused on sharing cyber intelligence.
considerations Cybersecurity
and translate the cyber threat landscape. •• Use simulations like wargames and tabletops to
considerations
•• Use threat intelligence specific to OT rehearse responses.
environments with a monitoring capability that •• Build muscle memory in employees around
can identify abnormal behavior. how to react/respond to phishing attempts
•• Develop a documented response plan for a (e.g., through establishing phishing campaigns).
cyberattack that could affect physical processes •• NOTE: Email and Internet access should not be
or one that results in a data breach. allowed within OT environments. If required,
such connectivity should be tightly controlled
and monitored. Instead, this type of access
should be restricted to business networks
where possible.
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Cybersecurity for smart factories
3 Advanced manufacturing
4 Robotics and cognitive process automation
A cyberattack could result in confidential product HMI (human-machine interface), robotic arms,
Entry points
Threats/ composition or design-related data loss, as well software programs
vulnerabilities as bring down a production line or facility through Unauthorized access, unwarranted bot programs,
access to the networked 3D printer(s). Threats/ and denial-of-service attacks that could lead to
vulnerabilities
•• Protect critical infrastructure and OT network disruption of a production line
to defend the processes, communications, and •• Employ application whitelisting, source code
assets. review, and file integrity monitoring to minimize
•• Confirm that 3D printers are appropriately the risk of malicious code being installed
segmented within the network. and executed.
•• Perform cyber compromise assessments, •• Correlate internal events with external
Cybersecurity Cybersecurity
security evaluations of new technologies, and threat intelligence to enhance organization’s
considerations considerations
threat modeling and simulation exercises. capabilities and tailor risk responses in
•• Develop a process to provide timely notification alignment with criticality and likelihood.
and response to cyber incident. A focus should •• Confirm there is an accurate inventory of all
be on confirming an organization’s ability to technology assets, along with a process for
restore operations to normal state quickly―this assessing potential business impact.
includes backing up systems and configurations.
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Cybersecurity for smart factories
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Cybersecurity for smart factories
Endnotes
1. ManCoInc is a hypothetical company for illustrative purposes.
2. Ibid.
4. Ibid.
5. Deloitte, “Cyber risk in advanced manufacturing: Getting ahead of cyber risk,” 2016, https://www2.deloitte.com/us/en/pages/manufacturing/articles/cyber-risk-
in-advanced-manufacturing.html.
7. IoT Business News, “New 2019 Global Survey: IoT-Focused Cyberattacks are the New Normal,” May 29, 2019, https://iotbusinessnews.com/2019/05/29/94747-
new-2019-global-survey-iot-focused-cyberattacks-are-the-new-normal.
9. Ethan Bresnahan, “Carbon Black Report Indicates Industries Most Targeted for Cyber Attack, Security Boulevard, April 2, 2019, https://securityboulevard.
com/2019/04/carbon-black-report-indicates-industries-most-targeted-for-cyber-attack.
11. Gregory Garrett, “Cyberattacks Skyrocketed in 2018. Are You Ready for 2019?”, IndustryWeek, https://www.industryweek.com/technology-and-iiot/
cyberattacks-skyrocketed-2018-are-you-ready-2019.
12. IoT Business News, “IoT-Focused Cyberattacks are the New Normal.”
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Cybersecurity for smart factories
Authors
Ramsey Hajj
Advisory Principal
Deloitte & Touche LLP
+1 561 962 7843
rhajj@deloitte.com
Sean Peasley
Advisory Partner
Deloitte & Touche LLP
+1 714 334 6600
speasley@deloitte.com
Jason Hunt
Advisory Senior Manager
Deloitte & Touche LLP
+1 901 322 6804
jashunt@deloitte.com
David Beckoff
VP, Product Development & Insights
MAPI
+1 703 647 5153
dbeckoff@mapi.net
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About MAPI
Founded in 1933, the Manufacturers Alliance for Productivity and Innovation is a
nonprofit organization that connects manufacturing leaders with the ideas they
need to make smarter decisions. As the manufacturing leadership network, its
mission is to build strong leadership within manufacturing to drive the growth,
profitability, and stature of global manufacturers. For more information, visit
mapi.net.
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