There’s a lot of buzz surrounding 5G and what it promises to deliver beyond today’s 4G networks. Billions of dollars are being spent globally by telecommunications carriers to upgrade their network infrastructures to support new 5G services for consumers and businesses alike.
As telcos like Telstra and Vodaphone continue to spruik their 5G networks, the supply chain industry is getting caught up in the hype. Reflecting on the shift from 3G to 4G, the new technology failed to improve the logistics industry as a whole. Further, Gartner research reveals 5G technology will not take off until 2025 – 2030. This begs the question: What does the introduction of 5G mean for supply chains?
What is 5G?
By 2023, there could be more than 50 billion connected devices worldwide —telecommunications carriers are struggling to service the amount of information that will be required. Think about it, the average Australian household has an average of 17 connected devices, with the number of inter-connected devices set to double by 2023.
5G is being pegged as the way to connect all these extra devices. 5G is designed for mass connectivity—it can support around one million devices on a network per square kilometre. 5G will also make more use of previously unused frequencies and higher frequencies.
This equates to 5G being fast. It is likely to reach speeds that are 20 times faster than 4G LTE—around 20GB per second.
Rise of mobile
Logistics companies heavily rely on the use of mobile strategies and technology solutions to help them meet demands. where 5G can add the most value is the last mile.
Increasing consumer expectations for on-demand goods raises the needed for a robust solution to deliver. Mobile solutions enables transportation providers to have better knowledge of its carriers and assets at all times, addressing any last mile delivery challenges. Organisations using cloud-based transportation management systems depend on mobile apps to access the system. With less latency and fewer blackspots, 5G will enable businesses to make informed decisions quicker, based on real-time data.
Another area that will benefit from the introduction of 5G is the Internet of Things (IoT). Many supply chains already use IoT devices and sensors to their advantage – from tracking and authenticating products to monitoring products’ storage and environmental conditions. Potential benefits include streamlined operations and automatic data sharing among third party providers, resulting in improved efficiency and overall cost reduction for supply chains. The new tech allows delivery drivers to reschedule and track parcels with greater accuracy, but is the information correct?
Organisations can easily get caught up in the hype and forget that the adoption of new technology requires careful consideration. Before jumping on the 5G bandwagon, consider if the technology will help your organisation meet your business objectives. As a business, if the goal is to improve customer experience, the speed of your data doesn’t necessarily translate to delivering an enhanced customer service.
Simplify – bring it back to processes
While 5G adds value to the network and enables technology advancement, we haven’t seen notable increase in operational efficiency or compliance with the upgrade. This echoes a similar pattern when 3G and then 4G was introduced in areas such as scanning rate compliance (DIFOT). Many organisations, particularly those at the lower tiers, still work off outdated systems or spreadsheets. This hampers their ability to take advantage of the faster network.
It sounds simple, but supply chain executives need first to understand how disruptive new technology can be to existing systems before adoption. Supply chain professionals should first look to build a firm foundation with the right technologies and get their processes sorted. Businesses should focus on digitisation by removing outdated processes like paper-based systems and then working to integrate existing computer systems within the supply chain. Additionally, managing flows in the network is crucial – this can be a challenge due to network complexity. Before implementation – ask the question – does the supply chain support the bi-directional information flow that is required for a new technology like 5G?
If not properly managed, technology adoption can create more problems than it’s solving. Technology is not a silver bullet – it won’t solve all your problems – but use it to improve your processes and deliver on better logistics.