2015 Trend Watch: Cyber Security Fears and the Supply Chain Cloud

While the advantages of cloud-computing are becoming well known and ever more compelling, the move to the cloud may be stifled somewhat in 2015 due to concerns over cyber security. While cloud computing isn't inherently more dangerous than on-site servers, the cloud does introduce unknowns, and with the severe stings received by Sony, Target, and JP Morgan last year, companies are skittish about unknowns.

Even so, ERP vendors are pushing the cloud. The shift will become irresistible for many manufacturers in 2015 in spite of cyber security concerns. The study, Manufacturing Trends to Watch, produced by Frost and Sullivan's Gil Manufacturing Leadership group, sees continued tension in 2015 between the need to move to the cloud and the fear of cyber attacks. This is the final article in a three-part series that examines developments in manufacturing that will play out in 2015.

Cyber security is in the spotlight

With the Sony Entertainment hacking scandal fresh in their minds, manufacturing executives will place a greater emphasis on protecting corporate networks and data from attack. The Frost & Sullivan report expects leaders to direct more resources and management focus to protecting critical customer, product, and supply chain data and systems. This means implementing technology. More importantly, it means creating an integrated set of policies, procedures, and training to insure that information-based resources are protected.

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This will be a trickier challenge for the plant floor. Up in the office, everyone can adjust their work to accommodate security policies and procedures. Plus, everyone goes home at night, leaving equipment available for patching and upgrading. Not so on the plant floor where uptime is the highest value. Adjusting to the moving target of cyber hackers is difficult when your equipment runs 24/7, work stoppages are costly, and everything is connected.

In 2015 companies will be determined to avoid Sony's embarrassing and costly hit. "What we've seen in the past 18 months is that interest in cyber security has become another business issue like productivity," David Brousell, global vice president of Frost & Sullivan's Manufacturing Leadership Council, told Design News. "This is a bigger threat than a lot of people think, and it needs greater attention. The Sony scandal and the JP Morgan attack should raise this issue to the board-of-directors level. Companies need to do more to protect that data. Even the largest companies do not have sufficient safeguards to protect their assets."

The rise of cloud-based supply chains

Frost &Sullivan notes that the manufacturing landscape has become far more interconnected and interdependent. The manufacturing supply chain requires close cooperative links with numerous partners in multiple locations. Networks need to be connected to manage materials, parts production, and new multi-channel services. In 2015, companies will increasingly adopt cloud and predictive web-based software to help manage and swiftly reconfigure their networks to gain real-time visibility, cut time-to-market, and respond faster to customer changes or potentially disruptive political and natural risks.

"There is a big push to the cloud coming from the enterprise software companies like Oracle and SAP. Some manufacturing companies have been using the cloud for years in applications such as HR and sales, especially with Salesforce.com," said Brousell. "Core financial applications such as MRP and ERP are another matter. All big companies -- not just manufacturing -- do a lot of due diligence around where to put more applications into the cloud. Some companies are all for it."

The advantages of cloud-based applications are compelling: limitless scale, continual upgrades without extensive shutdowns and training, and an expert in charge. "The vendor manages the applications, and all the company has to do is access it. But because of the high profile attacks on Sony, Target and JP Morgan, 2015 will see greater resistance to cloud-based computing. The C-suites are not going to be quick to approve applications in the cloud."

Design engineers and professionals, the West Coast's most important design, innovation, and manufacturing event, Pacific Design & Manufacturing, is taking place in Anaheim, Feb. 10-12, 2015. A Design News event, Pacific Design & Manufacturing is your chance to meet qualified suppliers, get hands-on access to the latest technologies, be informed from a world-class conference program, and expand your network. (You might even meet a Design News editor.) Learn more about Pacific Design & Manufacturing here.

Rob Spiegel has covered automation and control for 15 years, 12 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years he was owner and publisher of the food magazine, Chile Pepper.