Why 5G is a game changer for supply chain digitalization


MHD speaks with Venkatesh Ramakrishnan, Head of Maritime, Logistics and Retail, Nokia, about why 5G implementation is the cornerstone upon which Industry 4.0 successes are built.

Much has been made of the rigidity and frailties of supply chains in wake of the COVID-19 pandemic, climate change challenges and geo-political disruptions. One thing that is for certain is the shift that is taking place towards more agile and responsive operations, where companies leverage Industry 4.0 digitalisation to respond faster to disruptions and gain competitive advantages.

Digital supply chains which enable real-time end-to-end transparency are making logistics operations more efficient and cost-effective by helping businesses meet their planning, pricing and delivery commitments.

Venkatesh Ramakrishnan, Head of Maritime, Logistics and Retail, Nokia says the journey to mastering digital transformation can be hampered by overexcited use of buzzwords without proper consideration of the business impact of new technologies. 

“We try to identify the main problems on the business side that the customer wants to solve, in order to look at what kind of technology can help us solve that problem,” Venkatesh says. “Then we look at the communication networking piece, in terms of what kind of communication networking setup will enable that particular technology to solve that business problem.”

Consider a warehouse, where the main business problem is that the lead time to fulfil an order is very high. To counteract this, a business manager might make the decision to invest in robots from a vendor to reduce these lead times. 

Venkatesh explains that businesses get stuck when they realise that WiFi doesn’t provide the reliable low latency connectivity required for the operations of the robots. While Wi-Fi is a suitable technology to support IT operations and certain non-critical workflows in the warehouse, a 4G or 5G mobile network offers the bandwidth, speed and reliability most smart warehouse applications require. 

“Then the business owner or the IT owner realise they need to investigate either a 4G or 5G network solution to help the robots to always perform at their best,” he says. “This can be true for not just robots, but also for sensors, drones, video cameras, optical image recognition et cetera. Ideally, the Chief Information Officer (CIO) can identify all the business needs, then map them to all the technological innovations that can be made and then map that to all the network infrastructure that they need.”

WiFi requires a lot of access points because it has a relatively short coverage radius – and so therefore mobility on the warehouse floor becomes a challenge, just as it would were a user jumping from one WiFi connection to another with their mobile phone rather than being connected all the time to a 5G network.

Venkatesh notes that 5G is a game-changer for supply chain processes by virtue of its “low latency” – minimal delay processing and communicating data between points in a network system – and its “robustness” compared with competing alternatives. 

He elaborates on the differences between 4G and 5G within the supply chain context.

“There are two dimensions to consider – the first is the maturity of the supply chain company which is interested in deploying a mobile technology, the second is the regulatory compliance of what is available in a particular country,” he says.

“The supply chain industry is moving faster on the Industry 4.0 mandate, but it is still not completely there yet. 4G is able to fulfil a lot of requirements in the short term. Now, and certainly in the future, 5G will make a really big impact because of its ultra-low latency. 5G can offer you latency of five to 10 milliseconds compared to around 30 to 40 milliseconds on 4G LTE (Long-Term Evolution). Robots will require this ultra-low latency for faster communication.

“The second point is the regulatory requirements. Countries like Germany, Sweden, Denmark, France, Italy, South Korea, Japan and the UK – these countries have already started issuing enterprise license spectrum for 5G frequency – it is something that you need to activate a 5G or a 4G private wireless network. In these countries, you can simply very easily deploy a private wireless network and it will fulfil both the technical requirements of LTE but also go one step further and give the 5G power. The best that companies can do outside of these countries is to apply for a 4G license, where they can upgrade to 5G later on.”

E-commerce giant Alibaba works with Nokia to stay ahead of the curve and digitally transform the logistics industry. It’s just one example of Nokia providing networking solutions for the new industrial era, where smart warehousing takes predictive maintenance as well as picking, sorting and fulfillment to new levels. 

In Australia, 4G private wireless network deployments in industries like mining are already making a big impact – and this will only accelerate across other industries once the government issues a 5G spectrum at the end of this year or early next year.

“If you are operating a warehouse near an airport or if you are an air cargo company, for example, what you’ll be able to do is buy the solution from telecommunication companies like Nokia and apply for a 5G spectrum from the government,” Venkatesh says. “This will provide businesses with their own private 5G network, fulfilling all the Industry 4.0 use cases.

“From an industry point of view, Australia is really interesting. Because Australia is so big, a lot of our warehouses are very large and need to have automation sooner or later because of the labour shortage in this industry. The monotonous tasks around the warehouse are being replaced by robots; the pandemic has sped up the adoption of the 5G digitalisation as a concept.”

A 4G or 5G mobile network offers the bandwidth, speed and reliability most smart warehouse applications require.

To gain access to massive new computing power, 78 per cent of supply chain executives say they are planning to partner with other companies in the next three years, and 57 per cent plan to invest in technology or startups.  Nokia’s Bell Labs Consulting found that safety, productivity and efficiency improve elevenfold for manufacturing, ninefold for logistics, sixfold for agriculture and fivefold for mining when shifting to 5G technology.  In a recently conducted EY survey of 2000 global CEOs, ‘investing in digital transformation’ was named the second most important capital strategy (20 per cent), and investment in sustainability the third (13 per cent), for which digital technologies are a key driver. 

“Australia is a strategic location for us,” Venkatesh says. “One of our projects with one of the big ports in Australia dealt with many containers, vessels and metals moving around. Their WiFi network wasn’t reliable at times, so we helped to create a reliable infrastructure solution for all the ongoing digitalisation projects.

“The main requirement was wide coverage, reliable connectivity, low latency, and high bandwidth. Now, the customer is mounting multiple use cases: the planes are able to get all the job information on what they need to do, all the IoT devices are connected to the same network, the video traffic is connected as well. Once you place a private LTE or 5G network, it’s an infrastructure investment which has a huge capacity. You can keep adding more use cases which improves the business case for the investment even more.”

For more information on Nokia’s Industry 4.0 capabilities, click here.

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