Each year we listen intently to our State of Manufacturing® focus group participants to identify any news issues that might not have been anticipated by our survey questionnaire. We heard our first rumblings of the skills gap probably six or seven years before any popular media started talking about it.

Our biggest surprise this year was undoubtedly the number of manufacturers who told horror stories about cyber attackers that had stolen sensitive company information by hacking into their computer systems and demanded ransoms to get their information back. One focus group contained four such horror stories. We had a hunch cyber security might prompt some interesting responses, but we never dreamed we’d hear of so many that had been affected.

Cyber-attacks are becoming increasingly common. Microsoft published a report in September that discussed the rise of cyber-attacks — particularly ransomware —and how they’re coming from a variety of sources. In that report, Microsoft says they blocked over 13 billion malicious and suspicious emails among its clients in 2019. Ransomware, the company says, was the most common reason behind its incident response engagements between October 2019 and July 2020.

Some are targeting high-stakes entities such as hospitals, large retailers, or government agencies. Others are targeting smaller, more vulnerable businesses.

If you’re unfamiliar with ransomware, now would be a good time to educate yourself. The attacks are insidious. Hackers needle their way into your system, identify key files and effectively kidnap them. They’ll demand a monetary ransom — often in Bitcoin — in exchange for unlocking access to the files. Those files could contain sensitive financial records or even customer information. In most cases, once the ransom is paid, the hackers do indeed relinquish or unlock the “kidnapped” files.

Manufacturers are not immune.

One manufacturer told us that hackers broke in their system the week the company went into its COVID lockdown. The hackers demanded a large cash payment in exchange for releasing the files. Luckily, their insurance company provided consultants to negotiate with the “bad actors” and analyze the company network to see how far the security breach went. In the end, the hackers were paid $500,000.

“Thank goodness it didn’t cost us; we had insurance for a big chunk of it. But it was an absolute nightmare,” this manufacturer said.

Another manufacturer described paying a ransom and conducting a “proof of life” check: “Just like you would with a body,” he said. Luckily, his company had insurance. If it hadn’t, he said, the attack could have put him out of business.

In late 2019, one manufacturer got a Thanksgiving Day surprise when hackers hit his company with a ransomware attack. Although he negotiated the ransom demand in half, when they actually paid, this manufacturer said he could see millions of dollars pouring into a computer file from other victims.

“It’s real,” he said. “We were doing all the stuff you’re supposed to do but it just wasn’t good enough. Make sure you’re insured.”

Eventually, many manufacturers may find that a decision to beef up cyber security may not be optional. The U.S. Department of Defense recently decreed that any manufacturer in its supply chain must comply with certain requirements regarding cyber security. Additionally, the National Institute of Standards and Technology has an evolving set of standards pertaining to cyber security. Compliance with one or the other, just like compliance with quality management systems such as ISO, is becoming the norm.

For more about cyber security, see the upcoming Spring 2021 issue of Enterprise Minnesota® magazine.

Olsen Thielen CPA - Oct 2020

Events Calendar

January 13 – Driving Continuous Improvement in Uncertain Times
David Ahlquist will be demonstrating continuous improvement techniques that will keep employees engaged and focused on value-added activities, especially in times of uncertainty. Online via Zoom  Learn more and register

January 20 – How Your Employees Can help Improve Profitability in the Coming Recovery
Join talent expert Michele Neale as she shows ways to foster an engaged and productive workforce as part of your employee retention strategy. Online via Zoom  Learn more and register

January 28 – Thriving in a State of Change: Leveraging Purpose, Process and People
Competition is everywhere, especially in southeastern Minnesota! This Executive Forum is for SE manufacturing executives who want to grow and innovate as we work through the COVID-19 recovery. Three of our expert consultants will show you how to identify gaps that may exist within your purpose, processes, and people and help you create a step-by-step action plan that takes your company from managing to thriving. Online presentation  Learn more and register

February 4 – A Model for Manufacturing Excellence Using ISO 9001
ISO Certification expert Keith Gadacz will be discussing the value of the ISO and how it can take your operation from average to excellent. Online via Zoom  Learn more and register

See more upcoming events

Industry News

Blue Earth manufacturer adds 76,000 lb steel bending machine
Winnebago Manufacturing of Blue Earth, MN recently added a Faccin 3-drive roller plate bending machine capable of bending steel plate up to two and a half inches thick. Dec. 20, Faribault County Register  Read More

Minimizing stress while modernizing your warehouse
Here’s how small- and medium-sized supply chain organizations can revolutionize warehouse operations in 2021. Dec. 18, Manufacturing.net  Read More

Despite pandemic, window makers share millions in profits 
Two Minnesota window makers, Andersen and Marvin, are distributing nearly $50 million to their employees as part of a profit share. Dec. 18, Star Tribune  Read more

CEO of Tennant Co. retiring after 15 years
Chris Killingstad, the CEO of Tennant Co. for the past 15 years, will retire on March 1. He will be succeeded by Dave Huml, the company’s chief operating officer. Dec. 15, Star Tribune  Read more

Loll Designs sold; jobs to remain in Duluth
The Duluth-based outdoor furniture maker has been acquired by Landscape Forms Inc., headquartered in Kalamazoo, Michigan. All 85 jobs at Loll Design will stay in Duluth, say’s company’s co-founder. Dec. 14, Duluth News Tribune  Read more

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