Canadian Manufacturing

5G in manufacturing will reach US$10.8B by 2030

Capturing that value will require ecosystem players to evaluate how to measure the impact of 5G and edge deployments on the factory floor

March 11, 2020  by CM Staff

The market for 5G cellular connections in manufacturing is expected to reach US$10.8 billion by 2030, at a compound annual growth rate (CAGR) of 187%, finds global tech market advisory firm ABI Research.

The current Industry 4.0 digitalization discourse centers around conventional financial metrics (e.g., return on investment, net profit and cash flow) as the yardstick to measure 5G and edge computing effectiveness. But ABI says these metrics are financial measurements to gauge profit and do not lend themselves to the factory floor.

“Therefore, 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. They are throughput, inventory and operational expense for the incoming flow of capital, for capital located inside, and for capital going out, respectively,” said Don Alusha, senior analyst at ABI Research, in a statement.

According to ABI, these three measurements enable Industry 4.0 partners (e.g., ABB, Bosch, Siemens) to institute a direct connection between the 5G’s utility and what takes place on the factory floor. In turn, they will be able to use that connection to find a logical relationship between daily plant operations and the overall company’s performance. Only then, will Industry 4.0 verticals have a basis for knowing the real benefit of 5G and edge computing.

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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, says ABI.

According to the research firm, with greater reliability and data speeds that will surpass those of 4G networks, a combination of 5G and local edge compute will pave the way for new business value. 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.

These findings are from ABI Research’s 5G and Edge Networks in Manufacturing application analysis report.