Five factors to consider for dedicated 5G in smart warehousing

Following the recent release of a white paper by analyst firm ABI Research and US network design and services company Betacom titled Private 5G in Warehouses, Enterprise IoT Insights has published some key findings on the topic. These lessons are primarily focused on the US market, where Citizens Broadband Radio Service (CBRS) has made it a reality for many people to deploy private wireless networks within buildings.

The white paper said that connectivity will be a major driver of Industry 4.0, as machines and production assets need to be connected to transmit data, and connectivity will also be one of the keys for warehouse operators to achieve gains and efficiency improvements through automation and digitalization of workflows and processes.

“Private 5G will be an important component of these enhancements as it provides important capabilities and addresses key pain points for warehouse managers.”

Read on for additional key points about dedicated 5G in smart warehousing.

2. The industry must be willing to pivot quickly

Warehouses and manufacturers can benefit from the industry’s digital transformation. Private 5G networks can help create greater efficiency, better quality, higher productivity, and less energy and labor consumption. This is a win for all parties, as less energy use is better for the planet and companies have the potential to achieve their environmental, social, and governance (ESG) goals.

According to Enterprise IoT Insights, while every industry can benefit from the advantages offered by dedicated 5G, the logistics industry and warehouses are under greater pressure to take advantage of this technology. Factors such as climate change, energy crises and economic recessions have fully demonstrated the fragility of traditional supply chain models and the importance of incorporating technology-driven solutions into them.

3. Connectivity

The white paper states that while many industries can benefit from network flexibility, warehousing and manufacturing are likely to be two of the industries that need it most due to the number of applications used. New cellular and 5G technologies can help warehouses make their environments more organized. Other solutions such as Wi-Fi and Ethernet have their uses, but may not offer the reliability or flexibility that a dedicated 5G network can. Dedicated wireless networks are specifically designed for rapid deployment, making it easier to manage small business locations.

“Private 5G guarantees a high level of integrity and data sovereignty, meaning that highly critical warehouse data, such as workstations, pallet locations or the condition of autonomous vehicles, can remain on the warehouse premises rather than having to leave the warehouse for external processing,” ABI Research said.

4. Dedicated 5G networks are good for business

According to Enterprise IoT Insights, ABI Research found that warehouse companies that connected existing applications, security camera systems, robotic automation projects, etc. to dedicated 5G networks achieved significant returns on investment. The company said that over a five-year period, the average investment for an average U.S. warehouse with a "dedicated network for smart warehousing applications" was $13.80. In addition, over the same period, the "average warehouse" could see a nearly 12% increase in gross margins and $284.17 million in operating cost savings.

On the other hand, warehouses that choose not to deploy 5G networks could forgo $231 million in unrealized profits and ship 6 million fewer packages, according to the report.

5. Dedicated 5G is also good for the environment

According to the white paper, with the use of Internet of Things (IoT) tools that can monitor and report energy reductions in warehouses, the industry has an opportunity to deliver on its ESG commitments. Data from ABI Research shows that each warehouse operator could reduce energy consumption by 2,000 megawatts per year.

“This will improve the sustainability of the industry as it will reduce CO2 emissions by nearly 700 tonnes per warehouse per year,” the research firm said.

6. Deploying a dedicated 5G network requires teamwork

Warehouse operators don’t need to go through the 5G deployment process alone. There are plenty of trusted technology vendors to turn to, so you don’t waste too much time figuring out which solutions to use and how to implement them. Vendors are more than willing to provide any necessary guidance throughout the process. ABI Research also assures that many vendors’ services are flexible enough to help ease the initial “bill shock” since they know how much the initial investment will cost.

“To simplify investment decisions, warehouse operators should consider offering service-based products from a business economics perspective, allowing each business to pay for dedicated 5G services over the long term rather than as an upfront investment,” ABI Research wrote.