In mid-2020, ARC Advisory Group and Wind River collaborated on a survey of manufacturing leaders to better understand the challenges industry faced during the COVID-19 pandemic to maintain production as a result of disruptions to their supply chains and operations. That report, “Industry 4.0 and 5G in the COVID Pandemic,” explores Industry 4.0 initiatives and manufacturer's increased focus on supply chain improvements, innovations, and remote operations support. Nermin Mohamed, the Head of Telco Solutions at Wind River, talked with the Plant Services editors Thomas Wilk and Anna Townshend about some of the findings in this report.
TW: In the research report question on next-generation process improvement initiatives, “supply chain” stood out as a leading response. When you look at the data, how do you explain that particular result?
NM: I think the interesting part of that question is really the fact that so many of our respondents are working on all projects in all five areas, so it's almost 70%. However, supply chain management or optimization came on the top of that, and the reason for that is the pandemic. The pandemic has disrupted so many supply chains in 2020 and exposed many vulnerabilities that still need to be evaluated and addressed. This is clearly an area of concern and focus for our company and for all companies.
COVID-19 has demonstrated the power of supply chain optimization to enable organizations to anticipate, sense, and respond to unexpected changes and minimize this impact. As we head into the post-pandemic world, end-to-end visibility and collaboration across the supply chain is critical to ensuring that the network will continue to function as intended. Otherwise, in the absence of this automation and optimization, manual intervention could be needed to adjust the disruption, and typically this is an inefficient and costly approach.
TW: Have you heard of cases where supply chain issues have either slowed necessary maintenance down by reducing the amount of spare parts people have on hand, or introduced other challenges into normal maintenance processes?
NM: Yeah, actually both of them. Supply chain optimization has been a focus, however, it came to the top of mind of all industrial manufacturers based on the challenges we faced with COVID-19. And it exposed our vulnerability for supply chain diversification as well as how to get our assets, how to automatically monitor the assets and optimize their use, and how to deduct whatever failure is going to happen and plan for this in advance. These use cases actually happened across many manufacturers and industries, and this is why I think the supply chain optimization came on the top of the use cases and process improvement industrial applications.
AT: You said COVID-19 was exposing cracks that were already there in the global supply chain, and exposing a problem that was already there more broadly. Do you think the pandemic has exacerbated those issues as well, and made things worse than they already were?
NM: The latter, actually. I think the supply chain problem has been over there, and looking into supply chain optimization was an initiative that's being pursued by all industrial manufacturers. However, COVID-19 has sped things up.
AT: The report also mentioned that these types of improvements are something that can't be realized overnight, and it was referring to the supply chain issues as well as innovations for products and services, that those are types of improvements that must be developed over time. Do you think manufacturers are thinking more long-term now or have more patience for something that won't be realized in a short period of time, given the pandemic? How much has it changed perspective and maybe attitudes overall?
NM: Actually that was another surprising result from this survey because, like you mentioned, manufacturers are taking their time in order to change and adapt to new technologies. However, when we interviewed them, the survey results showed an acceleration of the adoption of 5G and Industry 4.0 and going aggressively after this process improvement. I can share some data points from this survey that shows that 81% of these industries are expecting to adopt 5G within the next 5 years, and 50% next year.
This is actually a surprise for me, because it takes time to adapt to new technologies and see what ROI is expected. But these data show that things are changing and these companies are trying to pull forward to target this for their long-term initiatives in order to have it earlier than it was already planned, and it appears that they're accelerating the digital transformation.
TW: Do you think that your respondents are being realistic on their predicted adoption timeframes?
NM: I think so. People from the survey are very confident in the ability of 5G and the intelligent edge as well to not only solve basic supply chain problems, but also (drive) innovation and product production efficiency and security.
If you recall, 2020 had been planned to be the first year of 5G commercialization. However, the base of 5G deployments quickly surpassed the rollout numbers of all previous generations. Recent research data shows that 180 5G networks were deployed with more than 220 million subscribers by December 2020. To put this growth into perspective, if you look at 4G technology, we actually deployed 20 networks with 400,000 subscribers on rollout.
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In addition to that, Wind River did a different survey around the same timeframe and we found that one in three 5G projects in U.S. and China have been accelerated by COVID-19. I also think there are very high expectations around 5G to enable the industrial world. The survey has shown us that people are very eager to increase their use of analytics, artificial intelligence, autonomous collaborative robotics, machine equipment diagnostics, and cloud computing, to name a few that rose to the top. With all these benefits of 5G expected to deliver low latency, high bandwidth, high-reliability network connection, the combination of all these expectations actually fueling a sense of optimism and demand. So 5G is happening at a very rapid scale and it's happening right now.
TW: A few respondents selected “remote operations or control” as one of their top process improvements. I would have expected it to be higher. What are your thoughts on that particular data point?
NM: Yeah, good question. If you look at the question we posed, we asked for the respondents to rank (items) in order of importance to the company's overall plan. So clearly, when we asked this question, optimizing supply chain was top of mind as a result of COVID-19. Certainly, about innovation, it seems like a logical choice for them for innovation to come in second place, because you're talking about strategy. In addition to that, you'll see that enhanced time-critical control and remote operations or control were close enough to almost tie for third place. And then, of course, the last one was optimizing run-time critical control.
I suspect that this response was due to the nature of the question, followed by the sense of impact. In addition, if you look at industrial companies, I believe they are still trying to get a better handle on the mode of operation and how to deploy it. There is less confidence about the path forward on how to implement this approach, and maybe this is why it was reflected in the responses.
AT: I'm kind of curious to talk a little bit about rural areas. I was reading one of your blogs about building the future of rural networks, and that said that according to the 2020 deployment report from the U.S. Federal Communications Commission, 6% or about 21.3 million Americans do not have access to high-speed internet. "We can fix this," you said in your blog. So what's the reality of digital access for rural Americans, and what's the future of the intelligent rural network? And for our readers who work for small to mid-line manufacturers that are not in urban areas, what does that mean for them and their connectivity, whether it's remote operations or bringing 5G to those areas?
NM: During this pandemic connectivity is important for everybody, not only to get access to voice and data but for telehealth, telework, and all other applications that are needed in order to overcome the COVID-19 challenges, restore the community, and restore the economy. There are huge areas that are not covered now, and I've been focusing on this because I believe rural network coverage should be a focus of 5G networks.
For too long rural communities have been told it's too expensive to build high-speed network from urban areas, and most of the operators are not focusing on rural networks. But COVID-19 has exposed everything and changed the whole world into a new era where we need to fully engage with these communities, and rural networks must be deployed in a cost-effective way and it must be fast and secure. 5G is well-positioned to deliver the promise of the rural network, and on top of that, the rural network has to deliver the throughput that's needed. For that, we are expecting these rural networks to be dependent on 5G with a distributed cloud, intelligent edge, and all-round we see are going to play a major role and, of course, like you mentioned, applying automation in order for applications such as real-time sensors to be deployed in the network is a key in order to support the success of this network.
TW: One more area we wanted to cover on the report and was the issue of reliability and network outages. One sentence caught our attention: "In reality, industrial customers may accept less reliability if they have control over when network outages occur, the unplanned outages that caused them concern." Do you think that 5G providers and teams in plants are having the right conversations right now to deploy these solutions, and that they're addressing the issue of reliability?
NM: Yes, they should, and if they're not, they have to talk right now. If you look at current activities, telcos are starting to create focused business groups dedicated to addressing private 5G use cases, and they're looking into the need for this segment, which includes all verticals. So as industrial companies' interests in 5G grow, they know or they're coming to know and realize that they themselves are not 5G experts. If not now, then very soon, 5G providers and plant teams will be getting connected to work through the solution. This is not lost on telcos; there is enormous opportunity for telcos, and they know about it.
According to some studies, the manufacturing industry represents the estimated 5G addressable market for communication service providers (CSPs) to be US $132 billion in 2030. Based on that, expectations will need to be set and met from both the customer and the service provider. If you look at CSPs, CSPs are completely able to meet very stringent SLAs for their services whether it's an industrial customer or emergency services. However, they will need to work with the industrial firms they serve to understand the unique requirements that these firms have. This is one of the key takeaways from the paper, when it mentioned the need for planning SLAs and support with a view toward risk reduction and risk-sharing.
So I see that the collaboration between the stakeholders in manufacturing and mobile industry ecosystem is a key of achieving the enormous potential of Industry 4.0 and 5G. Wind River actually has a long history of providing solutions to the industrial telecommunication market, along with aerospace, defense, and transportation, so we see ourselves as being positioned to help facilitate some of those conversations. We know how to deliver highly reliable, low-latency, can-fit solution, and can help both sides to navigate.
AT: Respondents were also reporting that confidence with technology was a high perceived barrier to 5G adoption, and you mentioned that a little bit earlier. In plants that are running highly critical operation where downtime can mean huge lost revenues or even put safety at stake, can they be confident in 5G for their operations? And what conversations should they be having with network infrastructure suppliers about how to maintain critical infrastructure?
NM: This is a good question, we're talking about healthcare applications, industrial manufacturing, robots, autonomous vehicles, autonomous guided vehicles – all these use cases and all these applications that require real-time monitoring and planning. In addition to that, SLAs have to be met and risk should be minimized, so I see that this conversation has to start right now.
When we talk about all these initiatives from industrial and manufacturers, they're looking into all that, optimized supply chain came on top. However, they're looking at other multiple projects and more complex projects than we ever expected. They indicated the fact that they're engaged in at least three to five improvement initiatives that are quite complex in order to guarantee the SLA and reliability. And of course, key from their point of view is using 5G and intelligent edge in order to solve these problems, guarantee the SLA, guarantee real-time, improve customer satisfaction and internal confidence, and provide competitive advantage as well as profit margin for them.