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Supply Chain Risk

Cybersecurity risks of re-onshoring Australian manufacturing

Cybersecurity risks of re-onshoring Australian manufacturing

The global economic impact of COVID-19 has caused the re-onshoring of Australian manufacturing, leaving businesses vulnerable to cyber attacks according to Forescout.

Australian supply chains were disrupted as organisations became unable to source materials that were essential for domestic manufacturing and consumption.

This highlighted the importance of Australian supply chains, with local manufacturers forced to pivot to meet demands, the company said.

Australian manufacturing has gone from 30% of GDP to approximately 6% in 30 years.1 COVID-19 has forced a large percentage of manufacturing to come back onshore, and the rapid adaptability of these manufacturing companies prove that Australia is capable of ramping up the sector.

The Australian Government is investing $1.5 billion via the Modern Manufacturing Strategy, announced in the 2020–2021 Federal Budget.2 It is also providing a further tax incentive that will write off the value of assets for businesses, with more information yet to be released.

Steve Hunter, senior director, systems engineering at Forescout, said the Australian manufacturing industry will undergo rapid digital transformation.

“The funding will help bring manufacturing back onshore, modernise and improve operations, as well as increasing the opportunities with new technology, which could include investment in the Internet of Things (IoT), for example,” he said.

“The pandemic has increased the relevance of Industry 4.0, with technology being a higher priority at a board level. As manufacturing is re-onshored in Australia, boards must ensure that they prioritise cybersecurity from the start.”

As technology such as IoT, robotic process automation (RPA) and artificial intelligence (AI) reshape the manufacturing landscape, organisations can be simultaneously put at an increased risk of a cyber attack.

“The convergence of traditional IT with operational technology (OT) and IoT means previously air-gapped systems are now connected, giving cybercriminals more entry points to a company’s network. This creates more risk across the board,” Hunter said.

“Additionally, with cyber attackers aware of the increased funding going into Australian manufacturing, the potential risk of a cyber attack is multiplied. This increased connection and digitalisation, combined with increasingly sophisticated attack types, make the threat landscape even more dangerous.”

If OT systems are compromised, it can carry significant consequences such as stopping production or sabotaging the finished products.

Forescout said it is imperative that as manufacturers and supply chain partners re-onshore and modernise the industry by applying emerging technology and treating security as a top priority.

Hunter said addressing the manufacturing risk comes down to understanding and complying with industry standards and regulations, and security best practices.

“For a manufacturer with no specific industry standard, look to the recommendations made for other OT operators, like the energy sector, for guidance on suitable practices,” he said.

“The number one weapon against these manufacturing threats is visibility. It’s essential to identify, classify and control all connected devices, including IT and OT assets, both managed and unmanaged. With visibility in place, organisations can see the threats coming and act to mitigate them sooner.”

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