5G will have a profound effect on the logistics industry. We often underestimate how faster 5G is actually going to be compared to 4G. According to AT Kearney, 5G will help suppliers be more effective, speed up decision making and improve service delivery.
Reduced latency and signal sending time from one device to another will drastically increase the speed of data transfer.
So, what are going to be specific impacts of 5G technology in the world’s supply chains? How can we leverage this technology to stay ahead, even of those companies that also use this tech?
1. Quicker Decision Making
5G will reduce the need for all operations and tasks that don't require a high skill level. In other words, simple decisions will be enabled in real-time with the help of technology. This will reduce costs and decrease some of the burden from the logistics staff.
With fewer chances of human error and quicker decision-making, the entire chain performance will be optimized, from the warehouse to the final destination. Therefore, 5G technology will enable optimal performance across all stages of the delivery process.
There are also predictive analysis tools that detect errors, identify the shortest possible delivery routes and send notifications to staff when maintenance is necessary. Amazon uses its Anticipatory Shipping IoT system to achieve all of these benefits.
2. IoT Ready
5G networking is also a prerequisite for the Internet of Things. IoT technologies have the potential to completely disrupt supply chains. Many logistics companies are already utilizing IoT in their warehouses for the following benefits:
- tracking inventory
- predictive analytics
- tools for location management
- drone delivery systems
It's expected that major companies will continue to increase their stake in IoT implementation, both in their warehouses and beyond.
3. Precise Item Tracking
Due to practically no lagging, less room for error and greater precision, tracking of delivery items will be more accurate than ever. Not only will it be able to track the exact location of an item in supply chains at an unbelievable rate of accuracy, but it's also going to be possible to track micro-items.
This will also have an effect on customer satisfaction and the likelihood of customer retention (more on that below).
4. Better Vehicle-to-Vehicle Communication
V2V communication has experienced many issues since it was first introduced, but the improvement of technological resources has solved them as they cropped up. Now, the burning questions are V2V comm quality and security. With 5G networking, vehicle-to-vehicle communication will be easier to scale, more reliable, and have greater throughput and latency.
5. Increased Productivity with Automation
5G definitely has to capacity to push the limits of warehouse productivity and the efficiency of distribution centers in supply chains. A higher degree of automation and deployment of robots, pilots and IoT tech will be enabled by less dependency on wired networking.
Those companies in the supply chains that already use robots in their distribution centers will see very noticeable improvements in their performance. It's likely that all aspects of running a warehouse that can be automated will be, by the end of this year.
6. Increased Customer Satisfaction
There are increasing demands in last-mile shipping tracking and visibility from the side of customers. While many companies decide not to take this direction because it's extremely non-cost-effective, logistics companies that implement 5G networking will be able to implement this at a much lower cost. Tracking will finally become totally accurate and updated in real-time, which will significantly improve the customer experience.
From the customer support side, being able to instantly and accurately track the location of a pending delivery will ensure that most issues are solved quickly and successfully. For all other issues, customers who contact support due to a delivery issue will have a much higher chance of getting their problems solved with the expansion of information available to logistics agents.
7. The Rise of the Drones
Drone-based delivery systems have been one of the most exciting and disruptive innovations in logistics we have seen in previous years. Implemented and tested by supply chain giants like Amazon, drone-based delivery is an idea that has an appeal and potential benefits that just continue to rise.
However, speeding up and automating deliveries with drones often produces a counter-effect if the tech is not there yet. If implemented correctly, drones solve the last-mile issues, can provide customers with instant deliveries in the store or improve warehouse navigation.
This delivery system is still not commonplace, but chances are it will explode as 5G technology gets implemented all over the world.
8. More Control Over Inventory
More precise systems for inventory tracking will reduce the chances of human error and help managers plan distribution and restocking processes.
With the help of the sensors that will be connected thanks to 5G, supply chains will be able to store products safely, find a particular item instantly and save time and reduce the chances of human error and mishandling of inventory.
9. Route Optimization and Better Location Tracking
In 3G and 4G eras, there were so-called dead zones where logistics managers were not able to track the delivery of their cargo due to low coverage and poor connectivity. With 5G, geo-location tagging is improved and spread across all possible locations.
This is not only important for accurate and precise tracking of cargo deliveries but also enables smart systems to include these regions and locations in their route suggestions. In turn, this will decrease inefficient deliveries, save time and resources and speed up the delivery process.
Without a doubt, there will be far-reaching changes due to 5G networking in the logistics industries. Supply chains all over the world will benefit from better connectivity and improved performance. This opens up doors for more revenue, smoother supply processes and innovations in the industry.