Impact of 5G on Supply Chains

Has 5G impacted your supply chain?

Per Lifewire, as of January 2021, PwC reports that US mobile operators had collectively covered 75% of the country with 5G with an expansion of 5% expected by July.  Certainly 5G as the new generation of mobile communication promises faster data speeds with less latency or delays than 4G or 4G LTE.

Our partner, The Association for Supply Chain Management, recently shared the overall applications of 5G outlined below. 

• The first applications will build on the 4G infrastructure and primarily focus on consumer services, such as faster mobile phone connectivity, gaming, downloading, streaming and virtual reality.

• As the 5G infrastructure expands, other applications in the business-to-business (B2B) arena will become possible. McKinsey & Company identifies the following applications as the most attractive 5G B2B opportunities:

  • Mobility systems: Connectivity will be the foundation for increasingly intelligent mobility systems. Although the automotive industry is at the heart of this, mobility is a broader concept that includes car-sharing services, public transit, infrastructure, hardware and software, and more.

  • Health care: Connected devices and advanced networks could transform health care. Low-latency networks and high densities of connected devices and sensors make it possible to monitor patients at home in real time, which could be a major benefit in the treatment of chronic diseases. Data can flow seamlessly throughout entire medical systems to facilitate smooth operations and coordinate care.

  • Retailers: Stores can use sensors, trackers and computer vision to manage inventory, improve warehouse operations and coordinate activities along the supply chain. Connectivity also can support frictionless in-store experiences by eliminating checkout or adding augmented reality services to share better product information. In addition, real-time, personalized recommendations and promotions can increase sales.

  • Manufacturing: Low-latency 5G networks can enable manufacturing and other advanced industries to run highly precise operations. Smart factories powered by analytics, artificial intelligence and advanced robotics can run at maximum efficiency and optimize and adjust processes in real-time. These benefits can be applied on select assembly lines or across multiple plants (Grijpink et al. 2020).

Clearly, we could see better and faster supply chains as 5G rolls out throughout the country and world. GSMA stated that by 2025, 5G networks are likely to cover one-third of the world’s population. The impact on the mobile industry and its customers will be profound.

Although 75% of the United States already has 5G systems, primarily in the densely populated areas, extensions to smaller cities and rural areas will follow, often taking years to complete. The use of private networks may help to provide services, such as the project described by Christopher Mims (2020) in The Wall Street Journal: “In the hills of southwestern Wisconsin, atop grain elevators and silos, a small team of technicians is assembling a next-generation wireless 5G network piece by piece. They work for a rural broadband company, not a telecom giant, and their mission is bringing connectivity to homes that otherwise wouldn't have it.”

For those of us who live in rural Wisconsin areas, 5G is not here yet, but it's coming! As supply chain leaders staying informed about the technology will help you to be more prepared to take full advantage of 5G when it arrives.

At ASCM Wisconsin we support supply chain professionals at all stages of their careers with the information and education they need to remain competitive in an ever-changing world. Learn more about our upcoming classes and events at: www.wisconsin.ascm.org or send us an email at: [email protected].