Welcome to the next industrial revolution

Manufacturing is being transformed through the integration of cyber technology into factories.

Walking the line between harnessing the productivity benefits of cyber while managing the risks of cyberattacks will be crucial to Australian manufacturers seeking to stay competitive.

Whereas information from displays are now being recorded using pen or paper, or manually entered into databases, smart machines can talk to each other, and generate data for humans to monitor and analyse for value.

Processes that previously occurred in isolation or needed human intervention will now be managed by smart machines supervised by a human with an eye on the data.

While this may seem futuristic, the technology is available now: it is proven and cheap.

• Production lines can be partially or fully automated

• Machines can be monitored to predict maintenance needs

• RFID technology can track items in warehouses to optimise stock levels

• Sensors can monitor production live, helping manufacturers find efficiencies in their workflows

Connecting machines through networks means the massive power of the digital world can be applied to the physical world. AI can analyse vast data produced by the equipment in your factory and give you insights that previously relied on word-of-mouth from operators.

But the productivity gains come with risk too: connecting our industrial base to the internet means criminal groups can launch cyber attacks on businesses, or hostile countries can shut down our critical infrastructure: energy, water, banks and telcos.

The pandemic was a wake-up call for how dependent we are on global supply chains.

With the global security and trade environment deteriorating, Australia must have a robust manufacturing sector so we can make our essentials onshore at a cost that is sustainable.

America has clearly shifted to a self-interested transactional approach to its alliances. Over the next four years, there is a real risk of our supply chains being disrupted through major trade breakdowns or military conflict – China no doubt sees America’s abdication of global leadership as a great opportunity to seize Taiwan.

Now is the time to transform our manufacturing base into a manufacturing base that runs on cyber.

While the cyber risks are real, but the cost of inaction is greater.

What this means for businesses is that incumbents must re-engineer and modernise their machines and processes. And new players need to leapfrog the old technology in favour of cyber.