Governing data shared with suppliers, customers, and machine OEMs

Each channel can leak more than intended. Vibration signatures can reveal tool wear strategy. Batch genealogy can expose recipe ratios. CAD files can contain tolerances that reveal design margins competitors would kill for. Unlike a bank sharing transaction data under a clean APIAPIApplication Programming Interface: a standardised interface that lets applications communicate and exchange data without knowing each other's internal workings.View full definition → contract, manufacturing data is often exhaust: generated by machines and processes never designed with data minimization in mind.

The regulatory backdrop (it's thinner than you think)

There is no manufacturing-specific data law equivalent to HIPAA (Health Insurance Portability and Accountability Act) in healthcare. Governance rests instead on general-purpose regimes plus contract law:

• GDPR (General Data Protection Regulation, EU, enforced since 2018) applies only if shared data includes personal data, for example operator IDs tied to machine logs. Machine telemetry alone (spindle speed, temperature) is typically not personal data, but linked operator shift logs can be.
• CCPA/CPRA (California Consumer Privacy Act / California Privacy Rights Act) is similarly scoped to personal data, rarely the core of OEM telemetry deals but relevant for workforce data shared with HR tech vendors.
• Trade secret law: in the US, the Defend Trade Secrets Act (2016); in the EU, the Trade Secrets Directive (2016/943). These protect proprietary process parameters, but only if you can show you took "reasonable measures" to keep them secret, meaning your contracts and access controls matter as evidence, not just your intentions.
• Sector-specific traceability rules create genuine obligations to share: the FDA's 21 CFR Part 11 for pharma manufacturing records, IATF 16949 (automotive quality management standard) requiring supplier traceability, and the EU's Machinery Regulation (2023/1230), phasing in through 2027, which touches data requirements for safety-related machine functions.

The upshot: regulation rarely forces you to share proprietary process data. It's your customer's contractual leverage or your OEM's warranty terms that do. So the contract is your primary governance instrument, not the law.

Designing the data-sharing agreement: four clauses that matter

1. Data scope, defined at the field level

Don't write "machine performance data." Enumerate fields: spindle RPM, coolant temperature, alarm codes. Anything not listed is not shared. This single practice stops more leakage than any legal boilerplate.

2. Purpose limitation with audit rights

State the OEM may use telemetry "solely for predictive maintenance and warranty validation," and reserve the right to audit their downstream use. Without this, telemetry aggregated across their whole customer base can become a benchmarking product sold back to your competitors.

3. Derived-data ownership

Who owns the predictive model trained on your machine's failure patterns? Best practice: you retain rights to raw data and any model outputs specific to your equipment; the OEM can use aggregated, anonymized patterns across their fleet but cannot resell insights identifiable to your plant. This is the single most contested clause in OEM telemetry deals today.

4. Genealogy disclosure boundaries for customers

When an automotive customer demands batch genealogy under IATF 16949, you must trace lot numbers, timestamps, and pass/fail quality data. You do not have to disclose the process recipe (feed rate, cure temperature ramp) that produced the result, only that it met spec. Structure your MES (manufacturing execution system) exports to separate "traceability data" (shareable) from "process parameters" (withheld) at the schemaschemaA schema is the formal blueprint that defines how data is structured, named, typed, and related within a database, file, or message.View full definition → level, not manually redacted after the fact.

A practical data check: the telemetry field audit

Before signing or renewing any OEM data agreement, run a simple audit. List every field in the data stream, classify it, and flag risk.

This is a five-minute exercise per machine class, but almost no plant does it before signing. Push your controls or automation engineer and your procurement lead to build this table jointly. It becomes the technical annex to the legal contract, the part that actually gets enforced at the PLC (programmable logic controller) or edge gateway level.

For a deeper primer on classifying industrial data flows, NIST's Manufacturing Profile of the Cybersecurity Framework is a solid free reference, built for exactly this kind of exercise.

Enforcement: contracts need technical teeth

A clause is worthless if the data pipepipeAll active sales opportunities across the stages of the sales process, together with their combined potential value and probability of closing.View full definition → doesn't respect it. Three enforcement mechanisms:

• Edge filtering: strip or aggregate high-risk fields (like feed_rate) at the machine's edge gateway before data ever leaves your network, rather than trusting the OEM's cloud to discard it post-receipt.
• Data clean rooms: for customer-facing genealogy requests, some manufacturers now use clean-room setups where the customer runs approved queries against your data without seeing the underlying process parameters. This is increasingly common in aerospace supply chains post-Boeing/Airbus supplier audits.
• Periodic third-party access review: quarterly, pull logs of what OEM and customer systems actually accessed, not what the contract says they're allowed to access. Discrepancies are your leading indicator of contract drift.

As of 2026, estimates from industrial cybersecurity vendors (for example, Dragos's annual OT/ICS threat reports, available free) suggest a large share of industrial data exposure incidents originate from third-party remote access, not external hacking. Your OEM and supplier connections are your actual attack surface.

🎬 [VIDEO: "How Manufacturers Are Securing OT/IT Convergence" - youtube.com/results?search_query=OT+IT+convergence+manufacturing+data+security - search for recent (2024-2026) conference talks from SANS ICS or Dragos covering operational technology data governancedata governanceData governance is the set of policies, roles, and processes that ensure data is accurate, secure, well-defined, and used responsibly across an organization.View full definition → basics]

Key Takeaways

• Manufacturing data sharing is governed more by contract and trade secret law than by sector-specific regulation; write field-level scope clauses, don't rely on vague terms like "performance data."
• Separate traceability data (often mandatory to share, e.g., under IATF 16949 or FDA 21 CFR Part 11) from process parameters (rarely mandatory, high proprietary value) at the schemaschemaA schema is the formal blueprint that defines how data is structured, named, typed, and related within a database, file, or message.View full definition → level.
• Derived-data and model-ownership clauses are the most contested and most often missing terms in OEM predictive maintenance deals: define who owns insights trained on your machine data.
• Enforce contracts technically, not just legally: edge filtering, clean rooms, and quarterly access audits catch the gap between what a contract permits and what a pipelinepipelineAll active sales opportunities across the stages of the sales process, together with their combined potential value and probability of closing.View full definition → actually sends.