New Mobile Communications Standard: How 5G Is Changing Supply Chain Management

Telecommunications companies around the world are currently investing billions of euros in modernizing their network infrastructure to offer new 5G services for consumers and companies.

With low latency times and a bandwidth of up to 10 Gbit / s, 5G creates the conditions to connect around one million devices per square kilometer.

In India, the 5G network is expected to cover all motorways, federal highways, and rail routes in 2025 – the basic requirement for autonomous driving and new concepts for traffic control.

However, in terms of logistics and supply chain, expectations of the new mobile communications standard should not be raised too high.

A Gartner study assumes that telecommunications companies will only switch their infrastructure completely to 5G between 2025 and 2030.

In addition, most of the systems used in logistics do not fully exploit the advantages of the LTE standard introduced ten years ago. Therefore, it is likely that this trend will continue and that changes will continue to be gradual rather than sudden.

Prepared for the future

The leisurely pace does not have to lead to missed opportunities. On the contrary, for those responsible for logistics in companies, this opens up the opportunity to prepare for technological change and steer it in the right direction. 

Supply chain professionals should first take stock of their existing work processes and the technologies used. This includes, among other things, promoting digitization in your own company and putting an end to paper-based processes and isolated data silos such as Excel tables.

The processes within the supply chain and whether the software used ensures the smooth exchange of data also need to be examined: Is the bidirectional flow of information guaranteed at all levels, without which the extensive networking via 5G would run nowhere?

Only when the necessary preparations have been made at all levels does the integration of the new mobile communications standard provide real added value in the company.

There are many ways in which 5G can positively influence the logistics industry – here is just a small selection:

• Faster customs clearance: containers’ information and contents can be transmitted faster and more reliably via 5G. Even just a few days of savings can have a significant impact because companies need to keep less stock and reduce spoilage in food deliveries.
• Better yard management: Truck drivers still often wait hours for their vehicle to be loaded or unloaded. RFID has long been considered the solution of choice, but it is still expensive to implement. 5G can help complement and replace RFID in the long term, thus getting available freight capacity back on the road more quickly.
• Real autonomous driving: Only 5G makes the dream of an autonomous truck possible. There will be gradual changes from increasingly sophisticated assistance systems to fully automated driving in the years to come. In the future, drivers will be less and less needed directly at the wheel and instead monitor the vehicles remotely like today’s drone pilots. This also means that statutory rest periods are no longer applicable; trucks can stay on the road longer, and productivity in road transport increases – a study by the consulting firm Strategy & assumes a cost reduction of up to 47 percent by 2030.

Until then, the right preparation on the company side is the be-all and end-all, explains David Landau, Chief Product Officer at BluJay Solutions:

“The new 5G technology in itself will not bring about any major changes in the supply chain. However, 5G creates the potential to enable massive change in the industry.

One can take the position that neither the previous infrastructure nor the existing systems fully exploit the advantages of LTE. Without major investments, the change could be very limited.

But with a comprehensive introduction, the possibilities are extremely exciting. “

This is how the supply chain benefits from 5G

Various scenarios are conceivable: In a smart factory, autonomous transport systems bring parts from the warehouse to the production facilities.

They communicate from machine to machine and process the data without delays. Irregularities in production are fully and quickly recorded so that they can be remedied quickly and easily.

Sensor-controlled products with 5G modules can be tracked and controlled in real time across the entire supply chain. The trend towards delivery robots and delivery drones also benefits from 5G, as it makes these machines easier to navigate.

5G will change supply chain management permanently. This enables companies to make the entire supply chain more flexible and effective. Transports will be easier to plan and carry out.