Digital supply chain strategy: Building for industry 4.0
From sustainability to ethical practices to customer satisfaction, having a digital supply chain strategy is crucial to enterprises today.
When 5G networks started going live about four years ago, we were told they would lead to transformative payoffs in banking, healthcare, manufacturing, transportation, agriculture, and many other industries. The speed and efficiency of 5G networks were supposed to change business as we know it, accelerating Industry 4.0.
Yet the 5G revolution hyped by carriers and futurists hasn’t happened. While consumers purchased 5G devices, businesses have been slow to adopt the technology.
An EY study found that only 21% of businesses surveyed were investing in 5G technology at the end of 2022 compared to 38% who were spending on IoT technology and 65% who were budgeting for robotics and factory automation.While 76% said they view 5G investment as important, the fact they’re not committing money to the technology speaks volumes.
Hype vs. reality: 5G in business
Analysts say part of the responsibility for the glacial pace of 5G adoption in business lies with the carriers themselves, who initially positioned public 5G as a replacement for Wi-Fi and 4G/LTE. It turns out that was a non-starter.
“The reality is that, with existing use cases, LTE could suffice most of the time,” says Stefan Pongratz, a VP and analyst with consulting firm Dell’Oro Group.
Tom Snyder, executive director of RIoT, a nonprofit focused on driving IoT for businesses, says 5G technology itself also undermined its adoption. 5G is super-fast (about 100 times faster than 4G, the previous wireless standard) and efficient, but operates on higher frequency bands, where more data can travel at once. This means its range is shorter than its predecessors.
So, while carriers typically promote wireless technology to connect people and machines across vast distances, 5G wireless is more suited for nearby applications, Snyder says.
“It’s not really useful for things that move around a lot,” he says. “It’s more useful for things that stay relatively fixed and are located in one place, like on a factory floor.”
Snyder notes 5G’s efficiency does open up numerous automation possibilities for businesses where highly reliable and precise digital communication between systems are critical. But so does Wi-Fi, he adds, and that technology doesn’t carry high monthly subscription fees or require deploying spendy equipment.
The focus shifts to private 5G networks
All that said, analysts do not believe 5G wireless is dead for business. Rather, they say carriers are now casting it in a different light, and businesses are starting to use it in small but interesting ways.
After gaining little traction in selling public 5G networks, which are owned and operated by carriers, telecommunications companies put more energy into extolling the benefits of private 5G systems, which enterprises own and operate within their own offices and factories.
Considering 5G’s limited range, this shift makes sense and gives businesses greater control, security, and customization over their wireless infrastructure.
And while private 5G has also gotten off to a slow start, analysts say adoption is picking up. According to Analysys Mason, 5G accounted for more than half of all publicly disclosed private network announcements at the end of 2022. IDC predicts the LTE/5G infrastructure market will be worth $5.2 billion by 2027.
“Looking ahead, we remain optimistic about private 5G,” says Dell’Oro’s Pongratz. “We actually estimate the market opportunity to be rather large.”
Examples of 5G in industry
5G wireless also plays a pivotal role in providing high-speed, low-latency connectivity for edge computing, where you park network functionality closer to where data is being generated – like in point-of-sale (POS) registers, street cameras, or autonomous vehicles. 5G essentially facilitates data transmission between those devices and networks, including edge systems.
In that sense, 5G could end up playing a larger and more integral role in IoT than appears obvious right now, but in more isolated scenarios:
- Manufacturing: To enable factory floor workers to wear augmented reality headsets and receive live training on their machinery, 5G wireless and edge computing would provide the seamless connectivity to make that happen.
- Retail: To implement smart inventory management in a retail store, 5G would enable connected sensors to share real-time data while edge computing would process the data locally, allowing for rapid stock updates, automated re-ordering, and efficient supply chain management.
- Banking: To deploy advanced fraud detection, 5G and edge computing would work together to analyze transaction patterns and identify potential fraudulent activities in mere seconds. This capability would enhance the security of financial transactions, protecting the banks and their customers.
The benefits of 5G: Changing the game for customer experience
5G promises to boost customer experience in both the B2C and B2B worlds with faster speeds, more bandwidth, and lower latency.
All about business results
Looking ahead, experts like Snyder predict that as businesses become better educated about what 5G networks can do for them, they’ll implement the technology where it makes the most sense. And as automated technology like artificial intelligence and generative AI evolve, they too will become part of the mix.
In the end, Snyder says we’ll be less hung up on terms like 5G and IoT and more focused on results.
“I think IoT is a transient term,” he says. “It’s a quaint descriptor that will go away… I really believe it’s all going to morph into something else, and the term will ultimately end up being more about having a data economy.”
