The Impact of 5G on Supply Chains

October 7, 2020 Opal Ruiz


5G has long been the talk of the town, and the promise of a hundred times faster network certainly gets all of us on the edge of our seats. But beyond the benefits for consumers, e.g. faster downloads and a lag-free gaming experience, 5G will also improve how certain industries operate.


Fittingly, the development of the 5G network comes at a time when the supply chain (an integrated network of industries tasked with supplying goods and services) has high expectations to fulfil, partially due to the worldwide e-commerce boom. This is especially true for local e-commerce; according to one outlook, Global e-commerce sales are expected to exceed 6.5 trillion USD in 2023.

The supply chain sector is already familiar with technological tools. The many benefits that come with 5G will undoubtedly improve its operations. In this blog entry, we’ll take a deep dive into that topic and see in detail what parts of the supply chain the technological capabilities of the new network will improve.




Manufacturing industries are vital components of the supply chain system. However, this system largely relies on how other players in the chain coordinate; production is only possible when others work in tandem. Whether it’s receiving a scheduled supply of raw materials or renting out warehouses to store goods, manufacturing can never find success if certain parts of the supply chain don’t exist.

As the manufacturing industry adapts to the fourth industrial revolution, it has ushered in smart factories as a response to the world’s growing demand for goods. Smart factories combine key production processes and operations with big data analysis and smart computing, delivering a more efficient overall performance, and innovative, high-quality products. This is possible thanks to IoT devices fitted with sensors to collect data and optimize productions.



In one of our previous blog posts, Pawel Zajaczkowski noted that 5G was created as a fast, efficient, flexible, and universal network for machine-to-machine communication. That’s incredibly promising for smart factories that rely on constant connectivity. IoT devices often warrant a fast, wireless connection to receive, send, and analyze data in real-time. Since 5G is two orders of magnitude faster than 4G, it looks like smart factories will be less likely to run into trouble once this new technology is fully deployed.

5G has also been used to accelerate manufacturing as seen in Ericsson’s use of an augmented reality (AR) tool for troubleshooting ⁠— reducing labour, material, and component costs, as well as production downtime. The AR tool was used to find operational bottlenecks, like failed diagnostics and maintenance planning issues. Ericsson also used AR to train repair specialists. 5G can further improve this technology since it’s able to provide a low-latency connection to sustain the data requirements of AR software and hardware. Without any disruptions, Ericsson reports that they were to reach time savings of up to 50% in repairs and maintenance.




Communication is a fundament of the supply chain system. Without efficient communication, the whole process will be in disarray. And this can create distrust and misunderstandings between customers, suppliers, and other key players in the chain. Furthermore, miscommunication can also delay operations and deliveries — resulting in contracted profits.

Thankfully, 5G’s groundbreaking speed and reliability can lower the risk of communication setbacks, as information can be sent in real-time.



A report on Verizon Connect highlights how the connectivity provided by 5G will allow different members of fleet operations to send and transfer large amounts of crucial data at the blink of an eye. This will empower fleets to make better decisions with real-time data, applying performance insights more accurately and systematically. The overall effect can be felt throughout the supply chain system, as mitigating fleet issues is one way to meet the demands of the market consistently. Supply chain industries also need to be synchronized to use resources efficiently and minimize waste.

As 5G improves fleet communications, managers can liaise assignments and updates to dispatch, which then sends these orders to drivers in an instant. There will always be changes in customer orders, required manpower, and traffic conditions ⁠— and with 5G’s impact on data transfer speeds, supply chain industries can ensure a seamless communication of crucial information between their workers, departments, and other industries.




Logistics makes it possible to reach factories and deliver products on time. With 5G, transportation and delivery industries that use compatible technology can upscale accordingly. This makes a difference in track-and-trace processes that allow supply chain managers to see the location and status of goods outside the warehouses in real-time. 5G-connected IoT devices attached to delivery trucks benefit from lower lag times, larger areas of coverage, and faster speeds, further meeting the demands of time-sensitive logistics processes.

Other smart devices that can be used in logistics are battery-operated tracking devices affixed to containers, boxes, or the goods themselves. More than just a glorified GPS tracker, these devices can also monitor the temperature, humidity, shock, light, and other metrics that affect the quality of the goods. This can ultimately enhance the visibility of vehicles and provide better tracking, as well as ensure that the goods are delivered in good condition.



5G can also be used in AI applications like autonomous fleet vehicles. Soon, we will likely see self-driving truck fleets on the roads; Tesla, Volvo, and Daimler projects are already in testing phases. Autonomous vehicle pioneer Kodiak Robotics points out that compared to manual trucks with drivers, self-driving trucks are significantly safer; statistics show that 90% of road accidents are caused by human error. 5G and Edge Computing can ensure that the reaction time of sensors is reduced to the milliseconds necessary to prevent accidents. Furthermore, deploying self-driving trucks is also a step toward sustainability, since they will drive more eco-friendly than professional drivers are able to.


Step by Step Into the Future


With 5G slowly deploying all over the globe, supply chain players should adapt accordingly. This means updating hardware, software, and networks to be ready to reap the benefits of this revolutionary technology. With it, industries participating in the supply chain can enhance key processes, drive higher profits, and easily meet the expectations of an increasingly demanding market.


Article specially written for By Opal Ruiz

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