71% of manufacturers employ IoT despite cyber risks: PwC

Dive Brief:

A recent survey from PwC found 93% of executives believe the benefits of using internet of things (IoT) technology outweighs the cyber security risks.
Likewise, 68% of manufacturers surveyed plan to increase their investment in IoT integration over the next two years. According to the report, manufacturers' current or planned use cases broke down into three key areas: logistics (50%), supply chain (47%), and employee and customer operations (46%).
However, "As the number of connected devices increases exponentially so does the risk of cyber attacks." Rob Mesirow, a partner at PwC and leader of its Connected Solutions/IoT practice, told Supply Chain Dive via email. "All devices which can connect using WiFi or Bluetooth and who have IP addresses are vulnerable for attacks unless properly secured before being distributed commercially."

Dive Insight:

As the cost of IoT technologies decreases, adoption across industrial manufacturing and the supply chain is projected to increase rapidly. According to a Microsoft report, there could be as many 36.13 billion IoT devices in operation by 2021.

While IoT applications allow supply chains to achieve a variety of goals including better inventory tracking, reducing errors, preventing fraud or conducting predictive maintenance in a factory, any device that connects to the internet comes with inherent cyber security risk.

Morgan Forde / Supply Chain Dive, data from PwC

"As these devices can affect the physical world and potentially provoke physical harm, it is essential that they be secured and protected from attacks," Mesirow said. "Recent attacks of consumer webcams and smart thermostats have raised attention and lead most consumer manufactures to deploy software updates to secure these devices; however, the risks remain."

Fifty-three percent of the manufacturers surveyed said they are "extremely concerned" about these risks, particularly when it comes to maintaining data integrity and privacy. After all, the quality of supply chain visibility comes down to the trustworthiness of the data being collected, and having that information stolen can have serious consequences to operations.

To mitigate these risks, PwC's report recommends tying IoT devices to a secure internal network with multiple layers of encryption, or, Mesirow suggested, pairing them with devices that do not have their own internet connection or IP address can reduce their vulnerability to hacking as well.

As more firms move to put security measures in place around IoT projects, and companies building IoT software release security upgrades, PwC's survey found 81% of industrial manufacturers surveyed reported increased efficiency as a result of implementing IoT solutions.