In the age of Industry 4.0 and the Industrial Internet of Things (IIoT), there are plenty of honest security concerns. But there are also plenty of sensationalized concerns, too. While a Russian hacker might not be interested in stealing your files, an ex-disgruntled employee might be.
Security issues surrounding technology advancements, however, don’t solely fall in the data-breach bucket. Concerns could include property damage, employee injuries, and even challenges finding and retaining quality employees.
Fortunately, fabricators and manufacturers don’t have to navigate the new and sometimes complicated world of Industry 4.0 alone. In fact, many already have a trusted partner they can rely on. Although they may not realize it, a company’s insurance provider should be well-equipped to offer advice and guidance to ensure that the adoption of advanced technologies is done in a way that keeps data, employees and property safe.
Employees first
As Industry 4.0 adoption increases, fabricators and manufacturers often increase the amount of automation and new technologically advanced equipment on their production floors. With the introduction of new equipment, however, several safety considerations are introduced, as well.
Think about any new equipment installation and the typical hurdles involved with bringing it online. Investments in automation are a good example of this. As more humans and robots begin to work side by side, the potential for a workplace accident increases. Simply operating the new equipment involves a learning curve, but in addition, the process also requires the implementation of new safety protocols and proper safeguards.
Hiring new younger employees can also produce similar safety concerns, especially in the first few months of employment. With older equipment, a more established employee might have known all of its quirks, but when that older operator retires, they don’t always have the opportunity to pass on each and every operational detail to new employees. Not fully understanding how a machine might react in certain situations can introduce safety concerns. Furthermore, there have been instances where new employees have attempted to override a machine’s built-in safety mechanisms, not fully respecting the consequences in doing so.
For Erika Melander, the manufacturing industry product director at The Travelers Indemnity Co., there is a direct correlation between employee safety and employee recruitment and retention. While it’s fully understood that an insurance company would be able to offer advice on safety issues, it’s sometimes less apparent how that same insurance company could help their insureds find new staff.
“Once you’ve attracted and found a new employee, you want to keep your workplace safe and engaged so that they’ll stay and you can continue to attract and pipeline for the right people,” she says. “If people feel good about where they work, word spreads. But, it could be a huge hit to a facility if your neighboring machinist becomes injured and is gone from work for a while. These places often are like families, meaning just one injury could be detrimental to overall morale.”
To help an insured establish a safe working environment, Melander says that in the case of Travelers, a representative from the company’s risk control group will schedule a time to visit a facility to then offer recommendations to improve operations and avoid loss scenarios. Travelers also produces a wealth of tools for insureds to refer to on an as-needed basis. Those tools include infographics and white papers on safety considerations as well as checklists and inventory forms to better understand where a business stands in terms of safety.
Beyond the baseline
An insurance provider, such as Travelers, has their customers’ best interests in mind – going far beyond traditional safety issues. In addition to establishing a safe manufacturing floor, Travelers wants its customers’ businesses to be robust from the ground up. Examples of where Travelers can help in that regard include supply chain security and data safeguarding.
Sophisticated Industry 4.0 software systems can remove some of the questions marks associated with a company’s supply chain in various ways, including tracking shipments and analyzing historical trends with suppliers. Just as UPS or FedEx is able to show customers exactly where their package is and when it will arrive, fabricators can, as just one example, insert radio frequency identification tags into their parts or shipping containers to view their location in real time on system dashboards.
To further help customers establish a robust supply chain, Travelers has a questionnaire for customers to fill out to highlight areas where there may be vulnerabilities. Items on the list include how dependent a company is on any given supplier and the percentage of product that is shipped overseas or sourced from overseas. It also asks whether those foreign countries are located in disaster-prone areas.
“In a traditional supply chain scenario, upstream risk is often the focus, but we continue to ascribe to the theory that your supply chain is more of a circle,” Melander explains. “There are risks that could impact the ability to get a product to your customers, but there are also risks involved with receiving material.”
While an Industry 4.0 software system can help streamline operations, including supply chain partner activities, Travelers can advise its customers how to best leverage those systems while keeping their data safe. Although a Russian hacker isn’t a typical perpetrator in that regard, there are plenty of other realistic threats to safeguard against.
“Customer data is definitely something to be concerned about,” Melander says. “That could include manufacturing and part information that if compromised could introduce defects into the goods you’re producing. Tolerances or specifications could be overridden as well as any equipment that is tied into the Industry 4.0 system.”
The realistic threats to that data could be something as innocent as an employee opening an email from an unknown or suspicious sender. And that is why Travelers stresses the importance of establishing data-security protocols and properly training employees on them. But threats could also come from a competitor or elsewhere, so security protocols will need to include firewalls and other IT-driven devices.
“When we think about what-if scenarios, exposure could come from a variety of sources, so safety measures need to be comprehensive,” Melander says. “We work with our customers to identify how one access point within a company could lead to another access point where sensitive data is contained and how to safeguard those points of access.”
Trade show insight
Travelers was founded more than 150 years ago and is the second largest writer of commercial property casualty insurance in the United States. Despite a nearly unmatched level of experience, the agents at Travelers will be the first to punctuate how important it is to interface with their insureds to formulate programs, services and resources that will further support those insureds. Trade shows, such as Fabtech, serve as a valuable venue to gain that insight.
“Where we decide to focus our attention comes from our customers,” Melander explains. “For example, two or three years ago, everyone was talking about Industry 4.0 and cyber security, but our individual conversations with exhibitors and customers at trade shows like Fabtech led us down the road of how to support our insureds who are struggling looking for skilled labor.”
Because of those conversations, Travelers is able to expand the ways in which the company can help its insureds and the manufacturing industry as a whole. In fact, those conversations revealed just how closely tied security issues and hiring issues can be.
“That’s why trade shows are so important in developing that knowledge,” she concludes. “When we’re able to have casual conversations with our customers, we’re able to really find out what the day-to-day reality is for those in the manufacturing community.”
