Skip to Main Content

Strategic Business Insights (SBI) logo

Internet of Things November 2022 Viewpoints

Technology Analyst: Rob Edmonds

Private 5G Networks for Smart Factories

By Mark Smith
Smith is an independent consultant specializing in digital and connected technologies.

Overview

Demand for greater manufacturing automation is partly dependent on the rollout of effective 5G technology in factories. But technology and implementation issues, in combination with a fragmented market, have proved stumbling blocks. Now, a number of major investments in private 5G networks have signaled a renewal in focus on the technology's potential in manufacturing.

Description

The growth of effective 5G networks is a central pillar of smart manufacturing, with several recent developments signalling progress in the 5G technology's adoption. In one development, food giant Nestlé has deployed its first private 5G network in Latin America, harnessing Ericsson's Private 5G technology. Like other private 5G networks, the new deployment features a network architecture, located entirely onsite, that operates separately from the public mobile network. The technology enables fast data processing, with network data-transfer speeds up to 25 times as high as those of 4G, and is suitable for supporting business-critical applications that require ultrashort, millisecond-level, response times. Nestlé said the technology will enhance productivity, efficiency, and workplace safety in its factory, and the company promises more such rollouts to come.

Taiwanese semiconductor manufacturer ASE has also unveiled plans for a 5G smart factory, using 5G mmWave NR‑DC SA (New Radio-Dual Connectivity Standalone). ASE plans to cover several areas including AI‑enabled detection of abnormalities in standard operating procedures.

Agricultural manufacturer John Deere has also outlined plans to introduce 5G connectivity built on the Citizens Broadband Radio Service (CBRS) in its manufacturing plants. The firm previously spent $546,000 to acquire five CBRS spectrum licenses that it says may eventually lead to having private 5G networks in all of its factories.

Implications

5G networks have the potential to transform the manufacturing sector and enable highly efficient, flexible, and cost-effective factories. However, realizing that potential has proved difficult. Latency and coverage issues render public networks unsuitable for manufacturing, and private 5G technologies are still somewhat immature (for example, truly off‑the-shelf solutions are unavailable). Manufacturers have faced complexities in implementation and in working with mobile operators (many of which still struggle to adapt to the needs of factory-scale networks). Perhaps unsurprisingly, a report by UK5G, the government-backed innovation network dedicated to industrial 5G in the United Kingdom, also found the market for industrial 5G "highly fragmented" and not neatly scalable.

The commitment of companies such as Nestlé and John Deere to 5G smart factories represents a vote of confidence in 5G's future role in manufacturing. The creation of private networks is central to this role and Europe appears to be ahead of other regions in private 5G. GlobalData's connected enterprise tracker reports that 56% of private network deployments are in Europe, and market leader Nokia (Finland) reports that it has sold more than 450 private networks. Expect to see more companies invest in private 5G factory networks and continue advancing toward autonomous manufacturing in the short and medium terms.

Relevant Areas to Monitor

  • Industry 4.0

    Industry 4.0 leverages machines, parts, and services that exchange data and self-configure to support dynamic, agile, and efficient manufacturing processes. Stakeholders expect Industry 4.0 to revolutionize manufacturing and industrial practices to create self-sufficient systems, but challenges could limit progress.

  • Incremental versus Revolutionary 5G

    Deployment strategies for 5G can cause significant changes to business opportunities. Vendors may choose to deploy 5G services rapidly by using 4G core networks and enabling incremental improvements. Alternatively, developers may pursue stand-alone 5G implementations that enable a wide range of disruptive applications.

Impact Scale

On a scale of low, medium, or high, the anticipated level of impact for this topic is: High.

Impact Timing

On a scale of now, 5, 10, or 15 years, the anticipated impact timing for this topic is: Now to 5 years.

Opportunities in the Following Industry Areas

  • AI/Automation/Software
  • Sensors/Electronics
  • Manufacturing/Materials
  • Information/Telecommunications

Relevant to the Following Explorer Technology Areas