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Private Wireless and 5G will define Supply Chain 4.0 in Asia

Private Wireless and 5G will define Supply Chain 4.0 in Asia


By Stuart Hendry, Head of Enterprise for the Asia Pacific and Japan, Nokia

Over the past decade, supply chains have been defined by megatrends. Cost pressure and increased customer expectation for reduced delivery times and improved service quality have led to major consolidation. Geopolitical tension and trade wars are driving supply chain players to move manufacturing and distribution facilities closer to their customers, while concern over environmental sustainability is seeing these operators becoming open to leveraging more decentralized networks and solutions where possible.

COVID-19 is the latest of these megatrends and it has really pushed the envelope when it comes to catalyzing change. The economic fallout of the pandemic caused abrupt, unprecedented breakages in supply chains all around the world. Businesses in this sector have been forced to rethink their strategies and bolster their resilience to market dynamics that are in more flux than ever before – as well as to plan ahead for what remains an uncertain future.

Supply chains in the Asia-Pacific have not been spared these winds of change. Among other factors, the rise of e-commerce in the region has resulted in goods now being distributed at unprecedented rates and becoming a global logistics hub. With e-commerce projected to see revenue growth of over 23 percent to US$4.7 trillion by 2022, other players in the supply chain sector will naturally also see growth, not least of which is the freight and logistics market. It is a critical component of the supply chain and it is expected to increase by over 6 percent in 2020-2025.

But true growth can only be achieved through transformation. With this increased volume of goods and reliance on distribution networks, supply chains in Asia – and globally – must now digitalize and automate to keep pace with the times. They need to move to what the industry is dubbing as Supply Chain 4.0, where players can leverage Industry 4.0 technology such as the Internet of Things (IoT) to connect goods, remotely and autonomously control machines, and build self-optimizing networks powered by artificial intelligence. These advanced private wireless technologies will be powered by new telecommunication networks with the capacity to support their requirements, laying the foundation for more connected supply chains of the future.

Digitalizing and automating the entire supply chain

Typically, supply chains move materials or goods from a supplier to the manufacturer, where they are then made into goods that will then be sent to a distribution centre. However, the pandemic has pushed supply chain actors to adapt to the immediate contraction in economic activities and consumer demands, heightening the calls for greater digitalization – and consolidation – of networks to reduce costs, delivery time and waste. Simultaneously, they are seeking to provide customers (and their customers) transparency in the supply chain while adapting to different levels of demand and supply, as well as being able to deliver customized solutions and higher quality service.

Private wireless networks – starting with 4.9G (super-charged 4G) and migrating to 5G as business needs emerge – bring several enablers such as ultra-low latency, high bandwidth, wide-coverage, and mobility. Combining such networks with simple deployment of IoT devices provides the perfect platform on which logistics businesses can drive the digital transformation of factories, warehousing, and transportation environments. Processes that were done manually such as packing, moving, and controlling inventory can now be completely automated, while Augmented Reality (AR) and Virtual Reality (VR) can reduce the need to have an operator in the immediate vicinity.

Incorporating 5G and IoT can enhance last-mile delivery to customers – be they retailers, other factories or even the end consumers. They also help more companies leverage drones as goods carriers to add to the range of options that now include sea, plane, railways and roads. Meanwhile, asset management services can use these more advanced technologies for indoor ultra-precise positioning, global tracking and condition monitoring – providing supply chain operators with better asset localization capacities and supply chain control.

The transformative role of private wireless networks

Supply chain actors share similar challenges – be they factories, warehouses, ports or logistics hubs. Using fixed cables is now becoming more impractical for connectivity, but any shift to a wireless setup requires dynamic transformation to conventional physical layouts. Shelves, production line equipment and containers in conventional heavily metallic environment interfere with Wi-Fi signal penetration, leading to Wi-Fi blind spots. Even without these blind spots, supply chain environments depend heavily on automation – ones that need low network latency and reliability – which legacy Wi-Fi networks cannot reliably provide.

In comparison, private wireless technologies such as 4.9G and 5G offer greater capacity for long-term supply chain operability and efficiency. This is due to their more robust signals, lower latencies, enhanced security, and their ability to sync with connected devices. By transitioning to a private 4.9G/5G wireless network, supply chain operators can simplify their work immeasurably. For instance, private wireless can replace all other existing networks such as Wi-Fi and IoT networks like LoRa (low-power wide-area network protocol) for data applications, using voice solutions over the public network, and separating ultra-wideband networks for indoor positioning.

The added benefit private wireless provides is enabling network slicing. This means that a dedicated slice of the network can be assigned to certain services. Take, for example, the case of a logistics park operator who can provide private wireless connectivity throughout the entire complex, offering businesses their own dedicated slice of the network – which ensures better speeds and more stable connectivity.

The 5G difference

Today, 4.9G private wireless networks can support various use cases for supply chain operators. They can also be easily upgraded to support 5G once their digital requirements evolve.

For instance, with more automation in factories and warehouses, operators can lower costs by moving to edge computing. However, they require the ultra-low latency and ultra-high reliability that only 5G can provide. Therefore, much of the processing power of robots is migrated to the network core, making the robots lighter and more agile, as well as more energy- and cost-efficient. 5G can enable VR and AR deployment. It can also enable high resolution 4K camera-based utilizations in ultra-precise monitoring, in addition to built-in indoor geo-positioning capacities that help with asset-tracking.

Amid the growing proliferation of these applications is the heightened priority on security. The increasing number of connected devices is leading to a growing rate of attempted attacks, which makes the need for simplification even more crucial.

According to the Nokia Threat Intelligence Report, there has been a 100 percent increase in IoT malware infections since 2018, and IoT devices now make up roughly 33 percent of infected devices, up from about 16 percent in 2019. By adopting network slicing over 5G, operators can create virtual private networks for insecure devices thereby securing them by default.

5G also provides another crucial advantage for supply chain actors in the long-term: energy sustainability. This is as 5G is more energy-efficient and can potentially provide 100 times more traffic with the same energy.

A new world order for the supply chain sector

Governments across Asia are recognizing the opportunity that private wireless and 5G bring to the business. Several countries – from advanced markets such as Japan and Singapore to emerging economies like the Philippines and Vietnam– have allocated (or will soon allocate) 5G spectrums.

Additionally, we can expect more spectrums to be released for private wireless industrial site use. This is especially since actors operating at various points within the supply chain are exploring the use of private wireless, from automotive factories in Japan and smart warehouses in Singapore to AI-enhanced ports in Malaysia.

Moving forward, more governments and businesses are expected to shift towards a digital-first mindset in their decision making – especially as the regional supply chain must now digitally transform to be faster, safer, and more reliable. Doing so requires networks to be more responsive by having exponentially faster data transfer speeds and reduced latency that only advanced private wireless technologies can provide.