Small Manufacturers, Big Target: The Growing Cyber Threat and How to Defend Against It

Digital transformation in manufacturing has opened doors to promising possibilities, but not without new risk exposure. With expansive transformation comes additional threats. As manufacturers embrace automation, IoT integration, and cloud-based operations, they also become prime targets for cybercriminals seeking to exploit vulnerabilities in increasingly interconnected systems.

Deloitte’s Cybersecurity Threat Trends Report 2024 revealed a staggering 400% surge in cross-industry IoT malware attacks, with the global manufacturing sector being the most targeted. This sharp increase underscores the urgent need for manufacturers to fortify their cybersecurity posture, as reliance on digital infrastructure continues to grow.

Legacy systems, looming threats

As small to mid-sized (SMB) manufacturers continue using legacy systems, cyber-attack risks increase. Aging and non-updated operating systems as well as industrial control systems without modern security controls leave known cyber exploits vulnerable, creating a significant operational and financial risk. Threat actors, primarily ROI-driven cybercriminals, exploit these dated systems’ vulnerabilities with the specific goal of financial gain through ransom payment as manufacturers scramble to get impacted systems back online. Deloitte reports that 34 of the 39 most popular IoT exploits took advantage of vulnerabilities that had been present for over three years.

A recent World Economic Forum survey highlights an 125% annual increase in the global cost of cyberattacks in the manufacturing industry, with ransomware playing a role in 71% of incidents. As attacks grow in frequency and sophistication, the financial and operational stakes continue to rise. Beyond immediate ransom payments, manufacturers face costly downtime, supply chain disruptions, regulatory fines, and reputational damage that can have long-term consequences.

For SMB manufacturers operating on tight margins, these attacks can be devastating, halting production and eroding customer trust. The reliance on IoT-connected devices has increased the risk, as outdated security protocols leave critical infrastructure exposed. Without proactive security measures, manufacturers risk attack by cybercriminals that have been successful in extorting ransoms in the manufacturing sector.

Smaller size, not lower risk

While many small and medium-sized businesses think that they are too small for cyberattacks, reality and data say otherwise. Taking advantage of a false sense of security, smaller companies often put off implementing cybersecurity controls due to limitation of resources missing crucial steps like encryption and data file backup. As a result, the manufacturing industry lags behind other sectors in cyber maturity. Implementing best practices for safeguarding is crucial for manufacturers.

The importance of maintaining good cybersecurity hygiene

For manufacturers, regular cybersecurity training is crucial and should be an ongoing initiative and a top organizational priority. Despite this, a Deloitte report found that only 29% of manufacturing companies surveyed have implemented appropriate control measures to mitigate cyber risk. Common threats, including malware, phishing emails, credential theft, and ransomware attacks, continue to burden the manufacturing industry, emphasizing the need for established training programs.

Incorporating interactive exercises, real-world scenarios, and periodic simulated attacks to assess employee responses ensures that training remains effective and engaging. To build a cyber-resilient culture, manufacturers must address employees’ reluctance to report suspicious activity for fear of repercussions. As such, businesses should maintain cybersecurity hygiene, establishing clear guidelines for protecting sensitive customer data. Cybersecurity awareness is not an optional activity to tick off – it’s a necessary practice to ensure an appropriate level of protection for a company.

Double defense: password management and MFA for stronger cybersecurity

For small manufacturers, multi-factor authentication (MFA), paired with a strong password management system, offers an efficient and inexpensive security solution. Password managers provide simplified solutions for the creation and storage of strong, original passwords for each account, reducing the likelihood of breaches spurred by weak or reused credentials, the primary cause of data breaches. In addition, there are helpful tools to provide features such as centralized admin controls, secure password sharing, and integration with MFA tools.

MFA enhances security by requiring multiple forms of verification, such as a one-time code from an authenticator app or text message, adding an extra layer of protection. For small businesses, implementing a strong MFA strategy is one of the most valuable technical safeguards. When combined with password managers, these tools create a simple yet highly effective security framework, even for teams without dedicated IT support.

Cloud coverage: backup to weather cyberattacks

Regular data backups are essential safeguards against cyberattacks, hardware failures, human error, and natural disasters. It’s crucial to back up critical data, such as HR records, financial files, and databases, offline and in secure cloud environments. Organizations should prioritize solutions that allow the creation of immutable offline copies, as many ransomware attacks specifically target backup data to hinder recovery efforts. In fact, McKinsey found that most modern ransomware attacks begin by encrypting backup data to prevent restoration.

For manufacturers without dedicated cybersecurity teams, a cloud Enterprise Resource Planning (ERP) provider serves as a built-in security partner—offering enterprise-grade backup strategies without the in-house burden. Cloud ERP vendors ensure that software, security patches, and compliance updates are automatically maintained, reducing risk from outdated systems. Migrating business-critical systems like ERP and HRM to the cloud means that security best practices, including regular encrypted backups and rapid disaster recovery, are managed by experts, offering enhanced protection and peace of mind.

Preparing for tomorrow’s cyber threats

Cyber threats are constantly evolving, and even the most secure systems remain vulnerable to advanced attacks and human error. Prioritizing a cloud-first approach, paired with strong password management, multi-factor authentication, endpoint detection, automated data backups, regular vulnerability assessments, and ongoing employee training, lays the groundwork for a resilient defense.

Cybersecurity isn’t about eliminating all risks; it’s about strengthening adaptability. By leveraging cloud-based systems, detecting threats early, and establishing clear recovery protocols, small manufacturers can reduce downtime, limit damage, and ensure business continuity even in the face of an attack.

About the Author

As Chief Technology Officer, Brian Winters leads the delivery of ECI Software Solutions’ cloud-based SaaS solutions, the constant evolution of their cybersecurity stance, and the management of corporate information technology operations. Brian is a seasoned technology executive with a passion for customer delivery. Along with his customer-first mentality, he brings more than 15 years of leadership experience. Brian specializes in building and managing the infrastructure and operations necessary to deliver business-critical services securely via the cloud, and in positioning PE companies to maximize value.