Digital Transformation: Impact of 5G Technology in Supply Chain Industry

Digital Transformation: Impact of 5G Technology in Supply Chain Industry

Likhit Verma (Ericsson, USA) and Mohit Lalwani (Oracle, USA)
DOI: 10.4018/978-1-5225-7700-3.ch013

Abstract

Supply chain industry is undergoing massive digital transformation. However, the pace of transformation has been rather slow. One of the challenges in the transformation is that there is so much dependency among various digital technologies that if one is implemented without the other, it might lead to no value creation at all. Furthermore, some of these technologies are dependent on other technologies that are still in its early phase of adoption. The existing technologies (namely artificial intelligence, machine learning, augmented reality, internet of things, virtual reality, big data) are critical enablers for the digital supply chain network; however, to unleash the full potential of these technologies, an extensive data sharing and analysis is required. This will only be possible if there is a robust telecom network. 5G with its features of low latency, high bandwidth, higher speeds, and low power requirements is expected to fill the void and hence expedite the digital supply chain transformation.
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Introduction

Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets in the right place at the right time. In other words, you must win through superior logistics. ~ Tom Peters

In today’s globalized world, organizational success is not just dependent on its own internal efforts, but it also largely depends on how effectively the organization can orchestrate a vast, global network of supply chain to deliver goods and services to its consumers. With the growing complexity of supply chains, and the number of stakeholders involved, it is even more important to be able to track products in real time by accessing data and making a quick decision within the supply chain. This requires a massive transformation of the supply chain network.

Supply Chain Visibility Platforms, Big Data Analytics, IoT and Cloud technologies are some of the technologies that are leading the change in this Digital Supply chain transformation. However, the change has been rather slow. According to a survey by Capgemini Consulting and GT Nexus, 70% of executives mentioned that they have started a digital supply chain transformation, but only 5% are very satisfied with progress so far (Nextus, 2016).

One of the challenges in the transformation is that there is so much dependency among these various technologies that if one is implemented without the other, it might lead to no value creation at all. Furthermore, some of these technologies are dependent on other technologies that are still in its early phase of adoption.

In this chapter, we not only discuss the role of these existing technologies (namely Artificial Intelligence, Machine Learning, Augmented reality, Internet of Things, Virtual reality, Big Data) in digital supply chain transformation but also describe an upcoming technology that is expected to impact these technologies and hence in the transformation of next-generation Digital Supply Chain – 5G.

The flow of the chapter is as follows:

  • Digital supply chain transformation

  • Key technologies that are enabling digital supply chain transformation (along with its use cases).

  • Next generation wireless technology: 5G and how it impacts the digital supply chain transformation and its applications in supply chain industry

  • 5G as an enabler to other Digital Supply chain technologies

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Digital Supply Chain Transformation

Beginning from the first industrial revolution until now, various industries including the supply chain have gone through various transformations. Refer to Figure 1 for various stages of the industrial revolution.

  • Industry 1.0: It was all about manual labor. Water-and steam-powered machines were used to help workers perform their job.

  • Industry 2.0: Electricity became the prime source of power for industries. Mass production of goods using assembly lines became a commonplace

  • Industry 3.0: Inventions of computers and software lead to the automation of tasks that were previously performed by humans.

  • Industry 4.0: Connects the internet of things (IOT) with manufacturing techniques to enable systems to share information, analyze it and use it to guide intelligent actions. It incorporates technologies including Big Data, artificial intelligence and other cognitive technologies, advanced materials, and augmented reality.

Figure 1.

Stages of industrial revolution

978-1-5225-7700-3.ch013.f01
Source: Wikipedia Christoph Roser at AllAboutLean.com

Key Terms in this Chapter

eMBB (Enhanced Mobile Broadband): New application areas and requirements in addition to existing Mobile Broadband applications for improved performance and an increasingly seamless user experience.

ISP: Internet service provider, provider of internet services.

Big Data: Is an evolving term that describes any voluminous amount of structured, semi-structured, and unstructured data that has the potential to be mined for information.

Virtual Reality: Is fully immersive computer simulated environment that gives a user, feeling of being in that environment instead of when they are actually in.

Last Mile Delivery: This term is used to describe delivery of the product to the final end user in home.

First Industrial Revolution: The transition into new manufacturing processes during mid 18 th century to mid-19 th century.

Industry 3.0: (end 1900s) Inventions of computers and software lead to automation of tasks that were previously performed by humans.

Digital Supply Chain Transformation: Application of digital capabilities to supply chain process, products to improve efficiency, enhance customer value, manage risk, and uncover new sources of monetization.

FTTH: Fiber to the home, also called fiber to the premises.

mMTC (Massive Machine Type Communications): Machine talking to another machine over a wired or wireless network in order to exchange information and possibly take actions without the need for any human intervention.

FWA (Fixed Wireless Access): It is the process of accessing a communicating network or internet on a fixed wireless network.

Big Data Analytics: Big data analytics is the often-complex process of analyzing voluminous amount of structured, semi structured and unstructured data that has the potential to be mined for information.

Industry 4.0: (early 2000s) New industrial revolution that makes it possible to gather and analyze data across machines, enabling faster, more flexible, and more efficient processes to produce higher-quality goods at reduced costs. It includes internet of things, cloud computing, and cognitive computing.

Industry 1.0: (mid-1800s) It was all about manual labor. Water-and steam-powered machines were used to help workers perform their job.

International Telecommunications Union (ITU): Specialized agency of the United Nations that is responsible for issues that concern information and communication technologies.

5G: It is the fifth generation of cellular mobile communications. It succeeds the 4G, 3G, and 2G systems. 5G performance targets include high data rate, reduced latency, energy saving, cost reduction, higher system capacity and massive device connectivity.

Asset Tracking: Refers to the method of tracking physical assets, either by scanning barcode labels or RFID sticker attached to the assets.

Augmented Reality: Is the expansion of physical reality by adding layers of computer-generated information to the actual environment. AR is reality modified by technology.

Inventory Management: Inventory management is the management of flow of units into and out of an existing inventory.

Artificial Intelligence: AI is intelligence demonstrated by machines, in contrast to the natural intelligence displayed by humans.

Machine Learning: Is a subset of AI that include abstruse statistical techniques that enable machines to improve at task with experience.

Industry 2.0: (early 1900s) Electricity became the prime source of power for industries. Mass production of goods using assembly lines became a commonplace.

Pick and Pack: Pick and pack is a part of a complete supply chain management process, managing individual components of an order from master cartons (picked) and then placed into a box.

Route Optimization: It is the process of determining the most cost-efficient route. It sounds simple, but it could be complex process.

URLLC (Ultra-Reliable Low Latency Communications): URLLC, also referred to as “mission-critical” communications, will enable critical applications where high reliability and low latency are essential

RFID: Radio-frequency identification uses electromagnetic fields to automatically identify and track tags attached to objects.

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