Tech Trends

5G is accelerating factory automation that could add trillions to the global economy

Key Points
  • The new fifth generation of mobile networks (5G) is a catalyst for the next industrial revolution that is giving rise to smart factories worldwide.
  • The Ericsson USA 5G Smart Factory is part of a new wave of manufacturing plants that could add between $1.5 trillion to $2.2 trillion to the global economy annually by 2023, according to a Capgemini Research Institute.
  • 5G could replace wired Ethernet as well as Wi-Fi and 4G LTE networks that connect devices in factories and dramatically boost automation.
Stanley Black & Decker's "Manufactory" in Hartford, Connecticut, is the epicenter for its "smart factory" and workforce upskilling initiatives.
Stanley Black & Decker

Imagine a manufacturing plant in which all the production equipment is continually changing in response to market needs. Robots churning out widgets, for instance, would reconfigure themselves based on data coming in from all points of the widget supply chain, as well as sensors monitoring the factory itself. The result is a smart factory that's more agile and autonomous than previous generations of automation.

Also known as Industry 4.0, the smart factory runs on data and artificial intelligence, but connectivity forms the backbone of operations. The new fifth generation of mobile networks (5G) is a catalyst for this new industrial revolution because it offers much greater speed and bandwidth than previous networks, as well as low latency, or time required for data to travel between two points. 5G will work with and in some cases replace existing fixed, wired connections, making manufacturing more flexible and ready to implement innovations.  

The connected factory

5G could replace wired Ethernet as well as Wi-Fi and 4G LTE networks that connect devices in factories, but one 5G supplier is starting with the basics: powering mobile devices and robots. At a new factory in Lewisville, Texas, Swedish telecom Ericsson has been turning out 5G infrastructure equipment with the aid of a 5G network in the plant itself. Ericsson, which is supplying 5G equipment to telecoms in the U.S. such as AT&T, Verizon, Sprint and T-Mobile, has forecast 190 million 5G subscribers by the end of 2020 and 2.8 billion by the end of 2025.   

Earlier this year, the first millimeter-wave Street Macro base stations were assembled at the factory. Though the plant is still in partial production, staff are using 5G connectivity to boost production efficiency. For instance, workers are using the 5G network to get augmented reality support from remote experts by sharing video and annotated notes. The network will also be used to guide automated guided vehicles (AGVs) and drones around the facility.  

"Our fast and secure 5G connectivity enables the smart factory with agile operations and flexible production, utilizing industrial solutions such as automated warehouses, automated assembly, packing, product handling and autonomous carts," says Erik Simonsson, head of the Ericsson USA 5G Smart Factory. "The palette of what can be put in action to support business will be endless using 5G. A more efficient production through technology and automation with full throughput and zero downtime."

Ericsson's USA 5G Smart Factory in Texas is making base stations but it's also using 5G for autonomous carts and remote training via augmented reality.

Those kinds of benefits should propel the growth of smart factories. The Ericsson USA 5G Smart Factory is part of a new wave of manufacturing plants including Stanley Black & Decker's Manufactory in Hartford, Connecticut, that has the potential to add between $1.5 trillion to $2.2 trillion to the global economy annually by 2023, according to a Capgemini Research Institute report issued last year. Connectivity, intelligent automation and cloud-scale data management and analytics are key technologies, according to the report. It describes 5G as "a key enabler of smart factory initiatives as its features would provide manufacturers the opportunity to introduce or enhance a variety of real-time and highly reliable applications… 5G is also unique in that it offers 'network slicing,' allowing the physical spectrum to be split and to be allocated to specific applications."

When it comes to smart factory adoption, China, Germany and Japan lead the way with South Korea, the U.S. and France following on behind, according to Capgemini.

It's unclear how many factories in the U.S. are now smart, but based on an international survey of 912 manufacturers, Capgemini estimates 28% were made smart from 2017 to 2018, just below the global average of 30%.

Exploiting agility and AI

News about 5G has been dominated by Washington's battle with Huawei Technologies, one of the world's largest smartphone makers, over the influence of the Chinese military. The geopolitical pressure facing Huawei presents a chance for small players to get a bigger slice of the market and influence how 5G will be used.

Japanese IT company NEC, for instance, has a tiny share of the network equipment market, which is dominated by Chinese and European suppliers. With a fresh $598 million 5G alliance with Nippon Telegraph & Telephone (NTT), however, it has lofty visions of what the technology can do for manufacturing. In a promo video looking at the synergies between 5G and artificial intelligence, it imagines a factory in 2030 with a flexible production line that uses two-armed industrial robots and autonomous carts to turn out products. The conceptual plant would have humans remotely controlling international operations through 5G networks, taking advantage of their high speeds and low latency.

5G is going from hype to reality, telecoms expert says

"NEC believes that 5G technologies bring a wide range of benefits to the manufacturing industry, such as automated manufacturing, improved productivity, as well as efficient and cost-effective operations," an NEC spokesman says. "In terms of the handling of materials and logistics, for example, greater automation from 5G enables parts to be delivered in a more timely manner, thereby improving the efficiency of manufacturing, as well as enabling completed products to be collected and delivered more effectively."

Japan has excelled in factory automation, with suppliers like Yaskawa Electric and Fanuc garnering large shares of the industrial robot market, and communication equipment makers such as Mitsubishi Electric, which has been experimenting with 5G networks powering human-machine interfaces and programmable controllers in a factory setting.

"Because this is wireless, production lines can be rearranged as needed," says Mitsubishi spokesman Sebastien Parpaleix. "As a result, the areas that can be automated with AGVs and robots will increase, making it possible to improve work efficiency and reduce costs. Analyzing the data from all this can benefit users whether they're in manufacturing, logistics, or retail."

In combination with IoT, edge computing and AI, 5G could allow smart factories to produce customized products quickly and affordably, according to analysts at Gartner, which predicted last year that 5G wireless network infrastructure revenue worldwide will reach $4.2 billion in 2020.

"In the future, we might be able to create 'what we want' in smart factories and receive it in a short time as we do purchase mass-produced products at online malls like Amazon," senior research directors Kosei Takahashi and Alexander Hoeppe said in an email. "For the customer experience, products will become unique, customized and enriched with services."

Logistics boost

Logistics will also benefit from 5G networks. Improved digitization, coverage and tracking will accelerate distribution, according to DHL International, which sees 5G boosting warehouse applications like smartglass-guided picking. With 5G's greater capacity for smart devices, IoT trackers in the logistics chain will allow buyers to monitor their goods in real time, while 5G networks will communicate with autonomous trucks so they can react quickly to changing traffic conditions.

Other logistics companies have even more futuristic ideas. "With the advantage of 5G and holograms, consumers will be able to use 'virtual dressing rooms' to try on and purchase perfectly fitted clothes like a dress, a bathing suit, a pair of trousers or a suit jacket where the financial and environmental costs of associated return items throughout the supply chain will be eliminated," Koji Homma, president of Yamato Transport U.S.A., a unit of Japan's Yamato Holdings, said in a recent blog post.

5G has been rolling out in many cities across the U.S., with the Federal Communications Commission easing deployment rules and Verizon even moving ahead of schedule. The technology, however, has met headwinds from the coronavirus pandemic, including launch delays in some markets and conspiracy theories. Takahashi and Hoeppe also caution that 5G remains immature and lacks killer applications.

"Another aspect might be convincing manufacturers to invest in 5G now while there are currently not many use cases for which 5G is a must-have," they say. "Investing in 5G and in retrofitting obsolete equipment and infrastructure without any short-term business value is a real challenge. Communication service providers must work closely together with systems integrators and IT service providers in order to build a strong 5G value proposition."