Enabling IoT and Blockchain with 5G: A Glance at Tomorrow’s Supply Chain
With 5G and other next-generation wireless solutions on the rise, we will witness vast improvements in our connectivity. Across virtually all industries, this will spur technological advancements. The Internet of Things (IoT) and blockchain are already gaining traction in the logistics and supply chain sector. This is, however, just the tip of the iceberg. With 5G on its way, these technologies – benefiting from improved data transmission and the increased scope of wireless connections – can be deployed at greater speed and scale.
The COVID-19 pandemic stresses the importance of having lean and responsive supply chain and logistics operations, allowing us to mitigate supply chain shocks immediately. This is where 5G-enabled IoT and blockchain can make the difference.
So, how will these tech innovations take shape in our industry in the years to come? Here’s where I see the greatest potential.
5G and IoT in Logistics and Supply Chains: What’s in Store for Us?
5G’s global footprint is expected to grow in the coming years. This will enable millions of devices to connect to one another, opening up new avenues for real-time data transmission. In the logistics and supply chain industry, this will trigger a wave of technological applications, the most promising of which are:
1. Edge Computing
To date, IoT relies on a lot of computing in the cloud, far away from the actual devices it connects. Edge computing can change this, making it possible to analyze data in real time near the source of data generation.
Currently, high-bandwidth technologies like 5G may be unavailable at remote sites, limiting the possibility to use edge computing. In the future, this can be overcome with private 5G networks. Improved real-time information sharing between upstream and downstream supply chains will empower supply chain participants to immediately respond to changes.
This will result in a shift towards highly responsive supply chains.
Supply chains have always worked on the basis of a linear process. When IoT is coupled with distributed ledger technologies, such as (private B2B) blockchains, information can be shared securely. In this way, we no longer need to rely on a linear flow of information. As a result, the real-time data gathered through 5G-enabled IoT will be available to all stakeholders across the value chain. This will help to overcome the fragmented nature of the logistics landscape and thereby improve collaboration and transparency amongst all parties.
3. Smart Contracts
Also in the case of smart contracts, blockchain technology and 5G-enabled IoT work hand in hand. While smart contracts can be facilitated by blockchain, 5G-enabled IoT will help to implement and automatically execute such contracts. This is because blind spots in the supply chain will be eliminated. Vendors and third-party logistics providers will be incentivized to adhere to service clauses, such as delivery times, temperature-control during shipment, or damage-free shipment. This ability to measure performance in a transparent manner will transform the way contracts are structured and governed. Consequently, friction between supply chain partners and the related costs can be reduced, leading to a leaner supply chain organization.
4. AI and Big Data Analytics
Through 5G-powered IoT, connected devices will generate huge amounts of data. With big data analytics, we can make sense of this data, convert it to meaningful information, and input this into decision making. Best-in-class organizations will additionally leverage Artificial Intelligence (AI) to learn patterns from big data and predict future outcomes. The coming together of these technologies will mean that in the future end-to-end supply chain processes can be further streamlined and become truly predictive.
5G-Enabled IoT and Blockchain: My Outlook
It is clear that the widespread roll-out of 5G will be a game-changer for the combined and accelerated adoption of tech innovations. Moreover, the real-time insights we can gain through 5G-enabled IoT applications will empower even more robust data-driven progress.
As affordability increases and connectivity and devices improve, IoT will fuel new business models. One example are service-based business models in high-value asset sectors, such as engineering and energy. Here, organizations may provide equipment as a turnkey service, while leveraging IoT for predictive maintenance.
It is clear that the value proposition of the combined adoption of these technologies holds great promise, ultimately creating smarter, more agile and predictive supply chain and logistics processes. And these are urgently needed, which the lockdown and related supply chain challenges clearly demonstrate. Only in this way, we will be equipped to handle future crises.
For this to materialize, I see early adoption as a must. Current obstacles to scalable deployment should not discourage us to innovate and push forward.
How do you see 5G impacting future tech adoption in your industry? I am looking forward to an interesting discussion in the comment section below or on my LinkedIn channel.
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Welcome to Sabinext. I’m Sabine Mueller, CEO of DHL Consulting. DHL Consulting is an independent strategic supply chain and management consultancy of Deutsche Post DHL Group. I have been dedicated to the logistics sector for close to two decades. This personal blog is a discussion platform for supply chain trends, diversity and future of work.