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The Cybersecurity Drawbacks Of Supply Chains' IoT Adoption

Organizations are getting creative in the ways they implement the Internet of Things (IoT) into their back-office operations. In this month's Intelligence of Things Tracker, PYMNTS spotlighted an independent brewery, Sugar Creek Brewing Company in North Carolina, that has deployed IoT technology to track and mitigate beer spillage down the production line, as well as to manage and collect data on carbonation and pH levels, temperature and beer bottle fill times.

In Ireland, the Tracker noted, more than 375,000 IoT devices are now in use. This represents a surge in adoption, particularly in the nation's agricultural sector, as companies like Treemetrics enable efficiencies and a deeper level of operational insight in the space.

One of the largest areas eager to embrace the potential of the Internet of Things is the logistics and supply chain sector. Analysis by Forrester predicted that the discrete manufacturing, transportation and logistics, and utilities industries will spend $40 billion on IoT platforms and solutions by the end of the decade, according to Forbes last year.

IoT connectivity enables organizations to gain better visibility and control over the multitude of variables that can disrupt operations, from changes in weather that may impact the movement or quality of goods to the tracking of shipments across land, air and sea. Yet, as the space continues to embrace the IoT, cybersecurity is a growing threat — with potentially massive consequences.

The IoT Cybersecurity Challenge

This month's Intelligence of Things Tracker dove into the latest regulatory initiatives related to the Internet of Things, as watchdogs grow more concerned about data privacy and security. As the Tracker highlighted, a security flaw in the iLnkP2P software system — installed in millions of security cameras, doorbells and baby monitors — enables hackers to access that device. IoT-connected medical devices have also emerged as vulnerable targets for cyberattacks.

These concerns have triggered state- and federal-level policy action in the U.S., as well as legislative efforts in the U.K.

"Many consumer products that are connected to the internet are often found to be unsecure, putting consumers' privacy and security at risk," said Margot James, U.K. digital minister, the Tracker noted.

These cyber risks are threatening organizations' back offices and supply chains, too, as adoption increases.

A recent study by Inmarsat revealed that companies have not yet taken meaningful steps to safeguard their IoT-connected devices and platforms, particularly in the transport and logistics sector. Of the 125 companies surveyed in the transport industry, nearly two-thirds admitted that their cybersecurity processes could be stronger, but only 38 percent said they have invested in new security technologies.

"While industrial IoT presents immensely exciting possibilities for businesses across the transport and logistics sector, it also increases the risk that they will face cybersecurity issues, and our research suggests that they are unprepared for these risks," said Inmarsat Vice President for Industrial IoT Tara MacLachlan, according to the AJOT in April.

MacLachlan continued, "Truly secure industrial IoT deployments must have security built in from the ground up. This must include secure access management, secure execution environments, enhanced data encryption, and smart validation and authentication between sensors, gateways and the software orchestration platform."

The survey emerged against the backdrop of separate analysis by the U.S. National Counterintelligence and Security Center (NCSC), published last July, which warned that a major cyber event on U.S. firms' supply chains was imminent.

"Software supply chain infiltration is one of the key threats that corporations need to pay attention to, particularly how software vulnerabilities are exploited," said NCSC Director William Evanina in a statement when the research was announced.

As the surge of IoT adoption continues within the supply chain and logistics space, those cyberattack vulnerabilities are likely to grow larger.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.