5G: A revolution or an evolution for logistics?
5G rollouts have finally arrived, but what does this mean in practice for supply chains?
In an age where reactivity and visibility are critical, the underlying systems that allow data gathering and sharing are taking on a new level of criticality. Within this context, 5G heralds a potential leap in capability, offering far wider coverage of high-speed internet that could at last allow disparate parts of the supply chain to communicate in near real time.
However, how realistic is this vision? How quickly can we expect 5G to be available? What are the real-world use cases? Is it a cost-effective solution to some of the biggest challenges in supply chains?
To discuss these questions and more, experts from across the supply chain space gathered for a behind-closed-doors conversation to thrash out the fundamentals and the potential of 5G. The following summarises the thoughts expressed during that conversation while keeping participants’ anonymity safe to protect the open and frank conversations that are part of our roundtables.
Is 5G a bright new reality or yet to dawn?
It is easy to get carried away by the hype of a new technology making big promises, but how should we really view 5G as it currently stands and in the near future?
The broad consensus during the discussion was cautious optimism tempered by a heavy dose of realism regarding current claims as to coverage and carrying capacity.
Throughout, ran a vein of understanding that the technology remains nascent and that the true potential of 5G is only just being sketched out.
Even though concerns exist regarding the current state of 5G, there are plenty of use cases were outlined that would make a major difference to the bottom-lines of businesses, which we will cover below.
Broadly the sentiment stood that we are still around two years away from 5G coverage becoming meaningful in countries like the US, with healthy scepticism around the level of coverage being claimed by some of the major telecommunications (telco) providers.
It was noted that the deployments were constrained to larger urban areas and that this would continue to be the case until the end of this year at least, and likely well into 2022.
This view is backed up by studies on the ground, which show that 5G is still being installed and that its full potential for most developed countries will most likely be realised by the middle of this decade.
A market survey by mobile performance tester Ookla found that there was partial 5G presence in 14,643 cities globally at the close of Q3 2020, although this did include all formats, extending to pre-release test coverage. Nonetheless, this represented a 1,671% increase year-on-year from Q3 2019.
We are early on in the deployment and adoption curve, but this demonstrates that rate of uptake is increasingly exponentially.
Another study estimated that 25% of the world population will have some degree of access to 5G by the end of 2021 and that this will rise to above half by 2025, although it did note that this will be concentrated in a “select few regions in Asia, the US and Europe”.
Proving the ROI
Naturally, the gaps in coverage currently limit the overall potential for 5G and consequently can undermine the case for investment, which created discussion around how to explain the Return On Investment (ROI) when deploying 5G capabilities.
They noted that this can be difficult in the case of 5G, as its broad range of potential applications are only just being tested. It is likely to make many roles more efficient incrementally, or to improve operations via the faster uploading and subsequent analysis of data, which reduces the ability to develop and show a very simple ROI calculation.
Nonetheless, the cases do exist. An example was given of a single, large facility, where a decade-old WiFi network needs replacing. In this case, the cost of installing dozens of WiFi routers in a working facility is likely to easily exceed that of a single 5G connection, which would cover the area in a single unified network that is both faster and more secure. This kind of small-scale deployment allows users to test out use cases and to connect new devices to prove the ROI in a low-risk environment.
Upping the ante in the warehouse
The above case is part of what makes deployments in warehouses and yards one of, if not the, most compelling use of 5G for logistics operators currently.
There was strong sentiment that it is possible to enhance efficiencies both now and in the long-term through deploying 5G tech to cover a limited area, especially as connectivity enhances and the Internet of Things (IoT) places more strain on available bandwidth.
This could be in the case of cold storage, enhancing the monitoring capacity within the warehouse and allowing the state of cargoes to be shared both further and in a more responsive manner across the value chain. Data could be updated more frequently to reduce wastage and then passed up to the source of the product so that they could re-ship affected cargoes, or to avoid the slight temperature deviations that can reduce the efficacy of pharma products.
This is but one example. As the internet of things progresses, the case for 5G becomes more compelling.
In warehouses that rely on manual pickers, this could mean more sophisticated visual or audio aids for pickers and other warehouse workers, as well as reducing physical paperwork and pairing down the administrative burden through process automation.
For facilities with more automation, the need for connectivity to make the most out of robots or cobots is clear, especially as they become cheaper to implement.
As more devices become connected and more data is put on tap, 5G opens up possibilities for predictive maintenance that has the dual benefits of reducing the cost of wear and tear, but also downtime for key elements in a supply chain.
Making the most of moving data
5G also opens up a key possibility that is not yet available but will be the key to truly unlocking the potential in some of the applications above and beyond: Edge computing.
The concept moves computing power from a single device, or from purely centralised cloud storage, to a more distributed basis, placing it closer to the data sources in an additional layer between servers in the cloud and the end usage.
This means faster networks that can communicate more readily with those on the front line. This will allow access to real-time databases to assess ongoing situations, such as weather or new delivery requirements, and then communicating those to drivers in the field, for example, without having to go back through centralised systems.
5G users will be able to use edge computing to leverage emerging technologies that require more computing power through connected local networks, such as autonomous vehicles and to handle the exponential increase in loads networks will have to handle as thousands of devices become connected. It can also facilitate the reduction in data siloes and add value in terms of real-time data analysis.
Another advantage of a cloud computing system is that it can provide more security for data. In 2017 Maersk nearly lost access to all of its data as a powerful cyber attack infected the company’s servers, and only a small number of offline servers saved the day. By distributing resources and data, this risk of a loss at the centre is reduced.
However, there is another safety angle to 5G: The personal connection. We have seen in the last 12 months the importance of worker safety and how the working environment has changed to put more workers in remote situations.
With powerful mobile devices now the norm, 5G enhances our ability to conduct remote connection and improve in areas that have become key since the outbreak of COVID-19. Video communication with those in the field or within large facilities will be more stable using 5G, and can help to truly connect the remote working structures likely to arise in the post-pandemic environment.
Reducing the physical documents required in supply chains has also increased in importance, especially when allied to process automation on the administrative side, aspects that will be facilitated by 5G.
Seeing further, communicating more
Overall, the there was agreement that the effect of 5G is going to be evolutionary rather than revolutionary. That is not to say it won’t be profound, but more that it will emerge over the course of this decade, gradually replacing and enhancing the systems we rely on and empowering new ones. As the use cases proliferate and become more well understood, the effects of 5G will accelerate.
By the middle of the decade, it is likely to become a core technology, with its only limitation in how effectively it can be rolled out a country-by-country basis.
At the very least, there are already compelling arguments for deploying it in the right kind of facilities and exploring the upgrades it can make to capacity.
In time, it will become like many of the technologies that surround us, such as our smartphones. Just 15 years ago, such computing power and connectivity would be utterly astounding. Jump forward and now it is almost mundane to most of us, but the changes it has made are utterly profound, changing society and economies.