Warehouse space became one of the most sought after commercial real estate entities to lease as online shopping surged during the past year. In fact, warehouse space became so desired within the CRE industry, that it’s becoming much more scarce, leading to bidding wars and higher rents.
Strong demand is typically a great problem to have in any industry, but sometimes all it takes is one problem to disrupt an operation. In this case, the COVID-19 pandemic has thrown the supply chain, and in turn warehouses, off track, Bisnow reports. There’s a shortage of workers, making it more difficult to ship and deliver products to retailers who desperately trying to get things on their shelves and into their customers’ hands.
“Fixing this holiday, it’s literally like turning an aircraft carrier,” Adam Roth, the director of the commercial real estate brokerage firm NAI Hiffman’s global logistics platform, told Bisnow. I mean, what can you really do at this juncture?”
If warehouse operators are unable to bring in enough workers to handle the upcoming holiday rush and beyond, they’ll likely have to lean on technology like the Internet of Things and 5G wireless networks. Keep reading to see how wireless networks and IoT could solve the current supply chain woes.
How can 5G fix supply chain problems?
It’s not enough for businesses and warehouses to just put automated systems in place to fill the void that workers left. These systems have to move quickly to keep pace with customers’ demand for products. That is where 5G wireless networks come into play. Faster networks can help the following aspects of warehouse supply chain activity move more efficiently:
• Manufacturing—private 5G wireless networks can help machines communicate with each other faster as well as expedite information delivery. Any IoT devices on a 5G network can function without, a delay and machines can run even more precisely, leading to a more productive, reliable and safer warehouse floor.
• Inventory Management—with 5G inventory can be tracked in real-time, making the practice less labor-intensive and time consuming. Additionally, fulfilment centers are better fit to manage bigger quantities of products more accurately. Private 5G network also allows for software that can count and deliver data to a centralized system, providing warehouses with real-time data and exact inventory counts, product locations and reporting tools, according to Global Trade.
• Fulfillment—this is perhaps where 5G will be most critical to address the recent supply chain issues. Online shopping orders increased during the COVID-19 pandemic, but fulfillment centers’ capacity did not. A lot of suppliers are turning to warehouse robotics to help fill in the gaps. While robotics aren’t new to warehouses, access to 5G is and the network could enhance robots’ capacity and the speed in which they accomplish tasks.
What supply chain issues can 5G solve?
News of supply chain problems have come up recently, but 5G has been looked at as a way to “transform” the supply chain for some time, according to The Wall Street Journal. Measuring customer demand more accurately, reducing waste and reacting in real time as situations change are among the supply chain issues 5G networks are expected to solve.
“I believe it will bring as fundamental a transformation of our world as the introduction of the Internet,” Åsa Tamsons, head of business area technologies and new businesses at Ericsson AB, told The Wall Street Journal last year.
Many warehouses have technology that can help locate goods and determine their condition, but it exists on 4G networks limiting its capacity. There are only so many sensors, cameras and other IoT devices that can run effectively on 4G at a time. A 5G network however offers more bandwidth and stability and can house a lot more IoT devices on a single connection. The stronger network and enhanced reach will provide opportunities to gather and share more data in better detail.
Enhanced analytical capability will address one of the biggest challenges supply chain managers face—determining how much of a product that people want a given moment, according to Ricardo Ernst, a professor at Georgetown University’s McDonough School of Business.
Ernst pointed to cellphone manufacturers as an example. The expect to sell new models in a certain area but are basically guessing on how many to actually produce. A bad estimate could lead to creating too many units, or worse, not enough. That dilemma would be solved if manufacturers can see precise data on sales, movement and customer behavior.
“With 5G, you suddenly have the capability to transfer a lot of information faster, and in more efficient ways,” Ernst told The Wall Street Journal. “That is the magic of what’s coming.”
5G can help reduce food waste in the supply chain
Every manufacturing sector experiences inventory surplus at some point, but it might be worse for the food and agriculture industries. Approximately 30% of all food is lost or wasted according to an April 2020 United Nations report. Oversupply in grocery stores and other retail environments was the biggest reason for the waste, according to the U.S. Department of Agriculture.
“It doesn’t take a lot to impact the food-supply chain,” Chris Wong, a vice president for International Business Machines Corp.’s consumer industry business said. “There’s a lot of incentive to get that supply chain moving as efficiently, with minimal waste and maximum speed and agility, as possible.”
The fifth generation of wireless can assist in reducing food waste and getting the supply chain to move faster. The network can help real-time data transmissions monitor when refrigerated constrainers fail, which would cut down on food loss, according to Tamsons. Additionally, better data volumes and 5G’s speed will allow for products to reach their destination in a timelier manner.
Last week, Connected looked at 5G’s environmental impact. That consideration factors into supply chain, too. With more access to information, supply chains using AI and blockchain should help in the environmental areas of concern like, “energy, scarce water supplies and climate-security threats,” Britain’s Warwick Business School professor Mark Skilton told The Wall Street Journal. With 5G, businesses won’t have as much excess goods, which will reduce waste and the number of deliveries.
With new networks comes new infrastructure
As much as every business will want their warehouse operating on a 5G network, it might not be possible. The shift will require investments in upgraded software and infrastructure. At first, bigger businesses that can afford to enhance their communications infrastructure will be ones to reap the benefits of that 5G can bring to their supply chain. CRE owners of warehouses that don’t have older infrastructure that requires replacement will also have an easier time investing in 5G.
How will 5G impact warehouse operations?
Worker shortages have negatively impacted the supply chain, but 5G is geared to make the warehouse environment a more efficient and safer one for the employees who are there. For example, when 5G is paired with AI and edge computing, operators at the Port of Barcelona can analyze live footage from cameras around the port along with sensor data to manage the boats’ flow, according to telecommunications company Vodafone. Additionally, accurate real-time boat location lets port pilots navigate remotely and they can safely manage ship entry and dock operations.
5G on the warehouse floor
5G will put wireless connectivity “at the heart of innovation” as businesses and workers can explore wearable tech, sensors and robotics in a fast, reliable and scalable fashion, according to Vodafone. The 5G, IoT and edge computing combo will let workers detect issues and deal with them in real time. A 5G mobile private network and IoT sensor for example could let a forklift driver in the warehouse know if a hazard is ahead, helping them avoid an accident and keeping the rest of the workplace and employees safe.
Meanwhile, connected wireless factories have already implemented big changes, like using virtual reality to help staff get a feel for specific equipment before it’s put on the shop floor. With 5G and sensors connected through IoT, warehouses and factories can have more efficient production by monitoring machines and avoiding downtime, given that autonomous operations can support them.
Dedicated 5G connectivity through an MPN built to cover a certain area offers the best of both worlds—the speed and reliability of a wired connection and the flexibility of mobile. This allows companies to collaborate remotely while being confident that the information is being shared securely. This all can be done faster than it was in past and businesses can adjust their production lines on the fly if needed.
How 5G can effect shipping
It’s great that 5G can improve warehouse operations, but customers’ concern is their part of the supply chain—shipping and delivery. Fortunately, 5G can also improve shipment tracking and visibility. With edge computing, 5G offers real-time responsiveness, reduce network congestion and accelerate application performance. All of these actions enable connected devices to reach new automation levels.
For example, end-to-end solutions can allow automated, robotic offloading of supplies at docks, which would improve productivity. Additionally, 5G networks can improve product tracking throughout the supply chain and share data constantly so processes can continuously be improved to meet customers’ needs. There’s also the possibility of delivery route optimization, so items can be tracked to avoid losses and provide continuous updates on shipment status.
“We all want instant gratification – whether that is immediate information about the closest parking space or next day delivery when buying online,” Vodafone said. “5G’s super-fast speeds and low latency will help businesses up and down the supply chain meet every customer expectation.”
What will an 5G-enhanced supply chain look like?
The major wireless carriers in the United States are not shy about disclosing how fast their respective 5G networks are or will be. For warehouse operators and manufacturers however, the important thing will be that the fifth generation or wireless is faster than its predecessor. If that’s the case, manufacturing facilities with low-latency (the amount it takes for data to travel across a network) 5G networks will be able to run highly precise operations, according to the Association for Supply Chain Management. Additionally, “smart” factories that run on analytics, AI and advanced robotics will be able to operate at top efficiency and optimize and adjust their processes in real time. Such benefits can be applied to certain assembly lines or in multiple plants.
Meanwhile, retailers can equip their stores with sensors, tracker and computer vision to manage their inventory, improve warehouse operations and coordinate supply chain activities.
“Connectivity also can support frictionless in-store experiences by eliminating checkout or adding augmented reality services to share better product information,” Richard Crandall wrote for ASCM. “In addition, real-time, personalized recommendations and promotions can increase sales.”
“The three pillars of 5G — ultra-low latency, ubiquitous connectivity and massive data capacity — will enable connected, flexible and responsive manufacturing systems that are more resource efficient, more demand responsive and safer for workers,” Peter Fretty wrote in a 2020 IndustryWeek article. “Manufacturing lines, for example, will see more equipment on the move — whether it is robots and cobots or production stations moving to reconfigure the factory floor. For this environment, wireless systems provide necessary flexibility.”