The market for 5G cellular connections in manufacturing is expected to reach $10.8 billion by 2030, at a Compound Annual Growth Rate (CAGR) of 187%, finds global tech market advisory firm ABI Research.
"To capture the value at stake, ecosystem stakeholders will first need to evaluate how to measure the impact of 5G and edge deployments," said Don Alusha, senior analyst at ABI. According to ABI, The current Industry 4.0 digitalization discourse centers around conventional financial metrics to measure 5G and edge computing effectiveness but the organization argues that these metrics are financial measurements to gauge profit and do not lend themselves to the factory floor. "Industry 4.0 ecosystem entities must consider an alternative set of measurements that look at how 5G and edge deployments aid manufacturing establish operational rules to run a plant," Alusha said. "They are throughput, inventory and operational expense for the incoming flow of capital, for capital located inside, and for capital going out, respectively."
These three measurements enable Industry 4.0 partners to institute a direct connection between the 5G’s utility and what takes place on the factory floor. They will be able to use that connection to find a logical relationship between daily plant operations and the overall company’s performance.
“Equally important is the ability to measure risk when looking to adopt 5G and edge technology assets," Alusha said. "Discussions on new technology adoption have always been based on an assessment of risk and reward. If the reward is truly compelling, adopters will take the risk. 5G and edge offer unprecedented commercial opportunities, but they inherently constitute new technologies and therefore there is a risk attached."
ABI says that continued attempts to keep up productivity growth, increase process automation to meet changing client demands, and the need to establish a reliable supply-chaining that spans multiple geographies are forcing manufacturers to be more flexible. The capacity, reliability, high-quality service, and speed provided by 5G and a hyperconverged edge compute can optimize operations for an efficient supply chain.
The research finds that commercial benefits will accrue along three broad aspects: agility and process optimization; better and more efficient quality assurance and productivity improvement. “The implications for solution providers such as Ericsson, Huawei, Nokia and ZTE are that they must enhance their 'value add' by complementing their deep technical expertise with business expertise including vertical industry knowledge, new functional expertise (sales, marketing, and accounting) and solution design and consulting expertise tailored at niche use cases,” Alusha said.
