How Industry 4.0 and 5G will change supply chain visibility

As the pandemic highlights the serious inefficiencies within the supply chain, it is more important than ever for companies to implement technologies driven by real-time data as part of their supply chain strategy. However, the adoption of these technologies remains slower than the needs of current demand, and many supply chains still rely on a black box approach, where passive data loggers collect information about goods and require manual processes to capture the data. This approach can only provide insights after supply chain problems occur, such as temperature excursions due to cold chain failures.

To address this, supply chain organizations are moving toward Industry 4.0 initiatives, such as widespread adoption of 5G and sophisticated IoT sensors to enable real-time insights into the location and condition of each product at the unit level. In fact, 81% of supply chain manufacturers expect to adopt 5G within the next five years.

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Paving the way for supply chain visibility with Industry 4.0

Prior to the pandemic, personal protective equipment (PPE) for the healthcare industry was not effectively tracked through the supply chain. PPE manufacturers and their customers had no idea of ​​the custody, location, or condition of the product throughout its journey. During the pandemic, this lack of visibility was highlighted as demand for PPE in and outside hospitals quickly outstripped supply and posed a challenge for manufacturers to produce enough product to keep pace. This, in turn, accelerated manufacturers’ adoption of digital technologies. However, these advances often did not include real-time tracking capabilities, which became critical during the pandemic as conditions were constantly changing.

Historically, supply chain technologies have tended to operate on somewhat “stale data.” In other words, by the time a manufacturer or customer receives the information, the reported location and condition of the product is no longer accurate. The advent of Industry 4.0, and the use of low-cost sensors, provides the opportunity to digitally track products in true real-time, rather than near real-time. As a result, both manufacturers and customers can track location and condition. This is particularly valuable for medical products such as COVID-19 vaccine vials, which are heavily regulated and often have strict temperature requirements that must be maintained consistently from production to patient use.

Real-time supply chain visibility can be taken a step further by predicting the environmental excursions that goods may experience while in transit. This leads to operational efficiencies that can mitigate costs and drive overall smooth operation of the supply chain. For example, real-time supply chain visibility means that manufacturers and customers no longer have to wait until goods arrive at their destination to find out that a product or part of a product has spoiled in transit. Instead, companies can know that a product is at risk of spoiling in transit and address the issue or reroute the product to a closer destination to protect quality and efficacy.

The Role of 5G and IoT in Supply Chain Visibility

Due to the importance of transporting products, especially in the case of the COVID-19 vaccine, the adoption of real-time data and real-time visibility in global supply chains has accelerated rapidly. 5G is not yet widely promoted or adopted, so manufacturers have not yet experienced the full benefits of 5G. But as it becomes more popular, 5G is expected to play a key role in taking supply chain visibility to the next level and become an important tool to help companies see and share their supply chain insights in real time.

In terms of IoT, the supply chain industry is experiencing a major uptick in IoT sensor and device capabilities to solve key supply chain challenges. For example, over-the-air updates can be done remotely, and manufacturers can now decide in real time what type of data they want to capture, such as their real-time location and temperature.

Increased IoT applications also enable companies to track new types of leading indicators to gain valuable insights. These include shocks due to dropped containers, or ambient light to sense whether a product has been damaged or left out in the sun for too long. If this happens, manufacturers can cancel shipments and immediately notify customers of delayed orders, advancing transparency and communication, and ultimately improving customer service experience. In addition, manufacturers will be able to save costs by avoiding paying for the entire shipment and returns after it reaches the customer's destination. As a result, this enables manufacturers and customers to avoid product spoilage, product loss, and improve customer experience and retention.

5G in Action

5G capabilities will enable improved bandwidth for computer vision-enabled cameras to support quality control practices during manufacturing and shipping. Powered by 5G connectivity, cameras can perform three-dimensional visual assessments of products and, based on the product’s characteristics, assess them. Visual assessments of products, and based on algorithms associated with processing, can determine any defects. This information can be used to make supply chain processes more proactive and efficient. Additionally, next-generation smart appliances, such as refrigerators, washers, and dryers, will have built-in sensors from the point of manufacture to help locate individual products within warehouses and distribution centers. These sensors will connect to 5G networks in warehouses to improve the accuracy of detecting product locations and enable accurate inventory counts.

Leveraging the benefits of Industry 4.0, manufacturing organizations will be able to seamlessly monitor the health and condition of their manufacturing equipment to ensure they are being utilized as planned. Any deviations from the plan can be detected immediately, and in most cases, before the problem causes a machine failure. IoT sensors monitoring the equipment will alert of any defects and can initiate remediation procedures, checking the manufacturer's inventory for spare parts. Where feasible, suppliers can submit work orders, order and install new parts, and schedule downtime for the machine without affecting the production schedule of the production line. 5G speeds will provide communications between suppliers, manufacturers, and customers, allowing information to flow in real time across a secure, trusted network.

In addition, 5G will enhance the daily work experience of warehouse operators. For example, if the warehouse is enabled with a 5G network to support virtual recognition or augmented reality (AR) capabilities, operators can be guided by AR-driven instructions on which goods or products need to be picked to complete a certain order. In addition to speeding up the supply chain process, this also allows more data to be processed within normal production time, so more real-time insights can be generated.

The future of 5G-enabled global supply chains

As we continue to move towards a post-pandemic world, visibility remains critical to the supply chain industry’s Industry 4.0 digital transformation. With 5G capabilities, global supply chains will not only be able to provide this enhanced visibility for better cost savings, customer experience, and customer retention, but also operate at maximum efficiency speeds.