Podcast: Data management in a digital manufacturing world

ECI Software Solutions’ Matt Heerey has more than 20 years of experience providing small- and medium-sized manufacturers with technology that allows them to control, measure, and optimize their businesses and improve their operations and outcomes.

He recently wrote an article for American Machinist, Smart Industry’s sister publication at Endeavor Business Media, about why manufacturers need to embrace cloud-based systems and adhere to best practices for data security.

Episode 2 of (R)Evolutionizing Manufacturing: Data is everything

In this episode of Great Question: A Manufacturing Podcast, Robert Brooks, editor-in-chief of American Machinist, shares Matt’s thoughts on why manufacturers must have robust data management and security strategies to safeguard their operations in an increasingly digital manufacturing landscape.

Below is a partial transcript of this Great Question podcast:

Manufacturers continue to face persistent labor shortages, with the Manufacturing Institute estimating that by 2030 the sector may be as many as 4 million employees short. Businesses increasingly turn to digital solutions (e.g., artificial intelligence) to augment human labor and streamline operations.

These tools introduce significant possibilities, but they also use and produce vast amounts of sensitive data, which exposes manufacturers to mounting cybersecurity risks. The global average cost of a data breach in 2024 was $4.88 million. So it's essential that manufacturers have robust data management and security strategies to safeguard their operations in an increasingly digital manufacturing landscape.

AI delivers significant value to manufacturers by optimizing production, enhancing quality control, and facilitating predictive maintenance. AI-powered technologies like machine learning algorithms and robotics permit manufacturers to analyze vast datasets in real-time, and make more informed decisions.

Predictive maintenance, for instance, uses AI to anticipate equipment failures, reduce downtime and cut repair costs. And AI-driven robotics automate repetitive tasks, freeing employees to focus on more complex and value—adding activities, enhancing both productivity and safety as a result. AI is reshaping manufacturing, making it possible to address labor shortages and revealing opportunities for efficiency and innovation.

The downside is that the vast amount of data generated by AI initiatives makes manufacturing organizations prime targets for cybercriminals. Since 2023, nearly a quarter of all cyber-attacks worldwide have targeted manufacturing companies, resulting in substantial financial losses.

Alarmingly, the global average cost of a data breach soared to $4.45 million in 2023, a 15% increase over three years. Projections suggest that cybercrime could incur annual costs of up to $10.5 trillion globally in 2025, underscoring the urgency for robust data management and security measures.

Some manufacturers may underestimate their susceptibility to cyber threats, but evidence shows data breaches are increasing, and cybercriminals are using increasingly sophisticated tactics to target companies of all sizes. 71% of attacks now target small and medium-sized businesses (SMBs).

Conventional cybersecurity protocols are no longer sufficient. The evolving threats require a proactive approach to safeguarding data assets. Failure to implement cybersecurity measures could leave businesses vulnerable to devastating attacks.

Against this background, numerous manufacturing enterprises are embracing digitalization. Integrating cloud-based Enterprise Resource Planning technologies is essential for streamlining operations, enhancing visibility into processes, and catalyzing automation initiatives.

Cloud-based ERP systems offer numerous cybersecurity tools, like centralized data management, role-based access control, data encryption, and monitoring tools. ERPs enable SMBs to achieve cost savings, elevate customer experiences, and fortify cybersecurity defenses amid an evolving technological landscape. Adopting cloud-ERP technologies presents unparalleled opportunities for innovation and growth in manufacturing.