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

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

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

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.