Lead-in Overview: Organizations that wish to improve efficiency and profitability by transitioning to smart warehouse systems face unique challenges. However, potential IoT cybersecurity vulnerabilities can be resolved following a risk assessment.

Ecommerce giants such as Amazon and Alibaba have demonstrated the enormous efficiency and financial benefits of transitioning to smart warehouse technologies. Paving the way for other organizations to upgrade or build anew, automated warehouse investment soared from $17.32 billion in 2022 to $19.78 billion in 2023. By 2027, experts anticipate warehouses relying heavily on technology to top $33.5 billion.

While integrating the latest software, hardware, and Internet of Things (IoT) innovations continue to provide profit-driving benefits, getting from paper slips and clipboards to the 21st Century is not without its challenges. Smart warehouse makeovers involve growing pains and may open the door to cybersecurity vulnerabilities. Industry leaders who want to reap the benefits of smart warehouses and take advantage of IoT connectivity would be well-served to understand the potential risks and know how to cure them.

What Makes a Smart Warehouse Different?

It’s important for decision-makers to understand that a smart warehouse leveraging IoT and other technologies is not significantly different from old-school operations. Tasks such as loading, unloading, inventory tracking, and order fulfillment remain basically the same. The critical differences involve the way these and other processes are managed.

A warehouse 50 years ago relied on people to check in truckloads and print out order forms for manual-labor employees to put on pallets and shrink wrap. Conveyor systems later improved efficiency but still needed human muscle to load, off-load, and stack orders. While employees are still essential to a smart warehouse, their physical labor and tedious tasks are significantly reduced.

Using software, IoT devices, and automation improves inventory management while minimizing labor costs, workplace injuries, and inefficiencies. If there’s an image that best highlights the difference between a smart warehouse and one stuck in the 20th Century, it’s an employee with a clipboard and pen walking through aisles manually checking inventory. In a newly minted smart warehouse, these and other tasks occur automatically.

This is not to say that change does not come without some level of adversity. Retrofitting a facility calls for robotics and the latest warehouse management software to be seamlessly connected to laptops, desktops, and handheld IoT devices. Unless company leaders onboard an IT firm with expertise in both smart warehouse systems management and cybersecurity, hackers could easily exploit emerging vulnerabilities.

Smart Warehouse Cybersecurity Vulnerabilities

There are two distinct ways to understand the cybersecurity vulnerabilities of smart warehouses. The first involves gaps that are persistent across most industries. The second comes as a direct result of utilizing IoT devices without considering how they can be exploited and improve defenses.

Standard Warehouse Vulnerabilities

It’s a given that all modern warehouses use at least basic computer systems connected to the Internet. This means specialized warehouse management software was purchased at some point and most communications are performed electronically. Like any operation, an outdated warehouse without determined cybersecurity in place remains vulnerable to the following.

• Phishing Attacks: Untrained employees are often taken advantage of by hackers who use electronic messaging to gain access to a business network. Should an otherwise good employee fall for a scam, company data can be compromised, and the entire operation shut down by ransomware.
• Brute Force Attacks: Skilled hackers have a variety of tools to attack a warehouse network, such as Distributed Denial of Service (DDoS) attacks. This example involves flooding a system with requests until it becomes overwhelmed.

There’s a veritable laundry list of ways cybercriminals can penetrate any vulnerable system and steal valuable and sensitive data. Integrating new technology and adding dozens of IoT devices expands your attack surface.

IoT Warehouse Vulnerabilities

The notion that IoT devices such as smart watches and Fitbits are separate and distinct from commercial-grade sensors and tracking technologies is something of a misnomer. Because these products typically enjoy internet connectivity, it’s possible for hackers to use them as a kind of backdoor.

For example, a Fitbit used by a warehouse inventory specialist will likely be synced to the person’s email account on phones, laptops, and iPads also used for work. That scenario cracks the door for a cyber-thief halfway around the world to exploit the organization using the following.

• Botnets: When IoT devices lack security mechanisms, malware can spread across multiple items and build an army of tech soldiers to carry out cyber-attacks. Protections against botnets include secure passwords, maintaining up-to-date firmware, and restricting access to IoT devices.
• Convergence: This concept is based on the idea that IT and IoT are not entirely in sync. An in-house IT team usually focuses on securing data housed in the network. Although mandates call for employees to follow security protocols for IoT items, gaps persist. By onboarding a third-party IT firm with cybersecurity expertise, the outside experts can help bring everything together under one secure umbrella.
• Invisibility: The personal and commercial IoT devices that are directly or loosely connected to a smart warehouse sometimes go unseen. With no one adequately monitoring them for potential threats, hackers see IoT as the path of least resistance. By integrating network discovery tools, 24/7 cybersecurity monitoring, and approving threat-hunting initiatives, cybercriminals are inclined to seek low-hanging fruit elsewhere.
• Legacy Devices: Older IoT products are something of a cybersecurity flashpoint. Many of these products were designed to be cheap, prompting manufacturers to cut back on their security bandwidth. Companies with antiquated sensors and cameras only encourage digital thieves to pull virtual burglaries. Because these products are not equipped to be part of a robust cybersecurity plan, they must be swapped out for newer models that possess the capacity for upgrades.

Companies that wish to enjoy the profitable benefits associated with asset tracking, inventory management, automation, and predictive maintenance can overcome the potential smart warehouse vulnerabilities associated with IoT devices. Doing so typically calls for a process that brings key stakeholders together to develop and implement a comprehensive cybersecurity plan. It may also require organizations to orchestrate a thorough risk assessment as well as a scalable investment in smart warehouse security.

Author Bio

John Funk is a Creative Consultant at SevenAtoms. A lifelong storyteller, he has a passion for tech and cybersecurity. When not enjoying craft beer or playing D&D, he likes spending time with his cats.