Point of View

Follow an integrated technology approach for a 5G-enabled supply chain

May 15, 2020

5G offers many enhancements over 4G, such as improvements in speed, latency, and network slicing, delivering better business outcomes and customer experience. As per Intel, Nokia and Ericsson: “5G is 100 times faster and can support 100 times more devices than 4G.” Thus, 5G can enable the operation of a data engine that includes real-time data collection, storage, and analysis capability for better decision making. Enterprises across industries are increasingly emphasizing data-driven decision making,

 

The lack of visibility and transparency in supply chains has remained an area of improvement for enterprises, resulting in financial loss. 5G can be catalyst for supply chain improvement, but it can’t change everything alone, and it relies on a convergence of several other emerging technologies. In this POV, we will discuss the benefits of a 5G-enabled supply chain and offer some examples from this space. This POV answers supply chain questions for executives: What are the impacts of 5G technology on the supply chain? How can enterprises leverage different technologies along with 5G to support the supply chain? What are the business opportunity for the service provider when 5G comes in the supply chain?

 

5G technology is a game-changer for supply chains

 

5G is going to  bring significant benefits in the following areas, according to Intel and Nokia:

 

  • Reduced latency: New 5G networks will have even lower latency than 4G LTE, with the round-trip data transmission taking less than five milliseconds.
  • Better connectivity quality: 5G networks are architected differently from traditional 4G networks, allowing optimization of network traffic and smooth handling of usage spikes.
  • Increased speed and capacity: 5G will have up to 1,000 times more volume of mobile data than 4G, with predicted speeds of up to 10 Gbps, representing up to a 100x increase over 4G’s speed.
  • Network slicing: Network slicing is a specific form of virtualization that allows multiple logical networks to run on top of a shared physical network infrastructure. . It opens new types of service offerings and supports different enterprise business models, flexibly with high service deployment velocity.

 

5G can improve several aspects of the supply chain, as Exhibit 1 describes. Though 5G will work as a base for infrastructure communications technology, it will also provide several business benefits.

 

Exhibit 1: 5G will enable better decision making in supply chain management

 

Benefits

 

Description

 

Real-time shipment location tracking

The supply chain is already using IoT devices to track shipment location, but 5G will take that to the next level with its low-latency features, which help firms with tracking the exact location of goods and products, providing live status to customers, forecasting expected delays, and predicting arrival times.

Integrated supply chain

5G will allow seamless integration of upstream and downstream supply chains, making product movement faster and more accurate.

Better network management

5G, along with AI, can help optimize fleet routes in real-time, based on the latest data and with low latency, which will help in optimizing transport, minimizing delays, and achieving customer satisfaction.

Improved IoT device management

5G, due to less latency, lower power consumption, and increased speed, will help with climate control and managing product safety. 5G will help track real-time information on parameters like temperature, humidity, light levels, and gas levels, ensuring products’ quality and safety.

 

Source: HFS Research, 2020

 

 

Verizon, Huawei, Nokia, and Ericsson are among enterprises that have already begun working on 5G implementations for their supply chain.

 

Do not forget the other supporting technologies when formulating 5G-enabled supply chain solutions

 

AI, IoT, blockchain, the cloud, robots, drones, and other new technologies, along with connectivity features of 5G, are changing the supply chain landscape and how supply chains work. Data is the new oil, and companies can collect it with IoT sensors, store it in blockchains and the cloud, analyze it with AI, and process it using drones and robots, which help enterprise to maintain control, provide the ability to respond efficiently, and help in better decision making. Exhibit 2 shows how different emerging technology can be helpful in supply chain management. Of course, 5G will be the base for the emerging technology in a differentiated supply chain.

 

Exhibit 2: Different ways in which emerging technology will help supply chains

 

Benefits

 

Description

 

Blockchain

Blockchain can increase the efficiency of supply chains from warehousing to delivery to payment. Blockchain is an important component when end-to-end supply chain transparency is considered.

IoT

IoT technologies can increase supply chain efficiency using sensors to collect data, process it, and apply analytics, leading to better decision making.

AI

AI can increase efficiency by providing computing techniques to analyze the huge volumes of data for sophisticated analysis and performing complex functions.

Drones and robots

Drones and robots can increase supply chain efficiency by working in parallel with humans, reducing risk for humans in dangerous environments.

 

Source: HFS Research, 2020

 

 

The Bottom Line: Adopt a business-first approach to realize the 5G-enabled supply chain dream.

 

As 5G facilitates real-time data collection from different entities, enterprises should address regulations (like GDPR) and data privacy concerns (some data needs to aggregate, in some cases) for different business scenarios. Domain knowledge is essential, including understanding regulation guidelines for processes across geographies because supply chains differ significantly across industries and countries. 5G can be a game-changer for enterprises if supply chain executives can develop the focus of keeping both business and technology priorities in focus.

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