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Nearshoring and the Convergence of IT and OT Networks

By Jesus Gonzalez Suarez - Apollo X
General Director


By Jesus Gonzalez | General Director - Mon, 03/13/2023 - 10:00

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A term that has gained relevance lately is nearshoring, a combination of near and offshoring (moving the production of inputs from one country to another with more competitive production costs); that is, locate offshore manufacturing nearby. The US has become one of the main drivers of this strategy, seeking to reduce its dependence on Chinese manufacturing. This makes Mexico one of the potential beneficiaries, since it shares more than 3,000km of border with the US, has a high manufacturing capacity and has access to the USMCA free trade agreement.

The automotive, pharmaceutical and energy industries are on the frontlines of growth, thanks to the high demand for their products in Mexico’s northern neighbor. The production processes of these industries are highly automated and must be kept that way to ensure the competitiveness and success of the nearshoring initiative.

With the development of Industry 4.0 (also known as the Digital Factory), the exponential increase in the number of Industrial IoT (IIoT) elements installed, and the proven advantages of big data, IT (information technology) and OT (operational technology) networks cease to be support tools and become valuable sources for innovation and improvement of products for business leaders.

In the automotive sector, the data obtained from cars makes it possible to improve fuel efficiency and create algorithms for autonomous driving. 

In the pharmaceuticals industry, factories can produce at high speed and with a high level of precision, relying on automated processes, constant measurements, and strict quality controls (also often automated). Additionally, technology and information help maintain the high levels of hygiene and cleanliness that this industry requires.

In critical infrastructure industries, such as oil, energy or mining, data can be used to secure remote transmission capabilities that operate in remote locations, monitor processes, and streamline maintenance.

As we embrace this automation reality, we see how the interaction between the IT and OT worlds becomes a very relevant component to watch. Simply explained, we differentiate the IT environment, focused on information technologies (email, servers, databases), from the OT environment, focused on plant operations (field devices, PLCs, SCADA systems). Until a few years ago, each department was on its own land, without much interaction with the other department. Today, both worlds are coming together and need to work in coordination to accelerate and fulfill the digital transformation revolution; this process is known as IT and OT convergence.

The main advantages of a full adoption of IT and OT convergence in the industry are:

  • Optimization of production processes, avoiding superfluous, redundant, or inefficient processes.

  • Decreased maintenance times, using the data to schedule predictive and specific maintenance on damaged parts (without the need to guess the failure).

  • Protection of both networks against cybercrimes, and isolation of critical processes.

  • Fostered cooperation between IT and OT teams, exchanging best practices and areas of expertise.

  • Increased visibility in the processes, by evaluating the whole and not just isolated parts.

  • Increased overall cybersecurity, achieved by simply gaining visibility of the full manufacturing process, understanding critical and weak points, and enhancing collaboration and coordination between IT and OT cybersecurity professionals.

Throughout my career in the automation world, I have seen many cases where despite understanding the importance of convergence, implementation has been complicated. And as in all aspects of life, that is where challenges must be faced. In this context, the main challenges that we can highlight are:

  • IT prioritizes the confidentiality of information, while OT requires availability in real time to guarantee the continuity of operations.

  • The OT environment has a lot of interaction with the physical world, so protection and care of the processes must be treated with the highest regard.

  • IT works in a Windows or Linux environment. OT communicates with PLCs, HMIs and field instruments.

  • Criminals can access both networks indistinctly, breaching the OT network and entering the IT one to kidnap certain data, or going to the OT segment through IT and sabotaging the manufacturing process. 

The useful life of network elements is five years, with which the technology is constantly renewed. For its part, a SCADA system is designed to last 20 years, and there are several cases where they even work for 25 or 30 years, which complicates the situation when trying to introduce state-of-the-art technology.

Wrapping up, I would like to highlight the best practices that I have seen for a successful IT and OT convergence:

  • Clearly establish business objectives and create awareness that the common good is above specific processes in an area or isolated procedures.

  • Promote joint work, where each area contributes its greatest experience while listening to the point of view of the other to find a middle ground.

  • Implement cross-training programs, where IT knows plant processes and OT understands the importance of securely transmitting information and the associated complexities.

  • Define a cybersecurity strategy and follow through on its implementation. 

  • Have a strategic partner with knowledge of IT and OT, who contributes by introducing the best practices in the industry, facilitating the development of procedures, and guiding throughout the implementation.

In summary, Mexico has a great opportunity to benefit from nearshoring. We can grow our economy, create jobs and be environmentally sustainable, as long as we rely on automation and take actions based on the data we receive. The convergence of IT and OT presents great opportunities, but also great challenges that must be addressed with a highly professional human team, and by collaborating with industry partners, such as MSSPs, that enhance organic capabilities with their cross-industrial view and focused professional capacities.

Photo by:   Jesus Gonzalez Suarez

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