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And They're Off! |
NEWS |
Following an announcement in June 2019, Mercedes-Benz will be one of the first European manufacturers to move off of the industrial 5G starting line. The German automaker’s Factory 56 is a greenfield manufacturing site in Sindelfingen in southern Germany, where a private industrial 5G network will be built using Ericsson’s network infrastructure and Telefonica’s leased 5G spectrum and network services.
While 5G has already gone live in the consumer market, this announcement is early in the context of the industrial sphere, where the consensus suggests full commercialization of enterprise 5G deployments will occur from 2021 onward. Furthermore, Ericsson’s private cellular network technology for industry, marketed under the name Ericsson Industry Connect, was only announced in late March of this year. When Ericsson outlined this packaged solution of network equipment and services, it suggested its private networks would initially be deployed using LTE cellular connectivity before eventually transitioning to 5G. The announcement from Sindelfingen is therefore major news in the context of industrial 5G.
Staying Grounded |
IMPACT |
Mercedes-Benz says it plans to connect all production systems and machines within its factory using a private 5G network, which will allow it to link product tracking data to the assembly line in a secure way that allows it to retain control of sensitive production data.
However, given how soon this news comes during the genesis phase of industrial 5G and its lack of detail relating to specific use cases or time frames, it should be viewed through a somewhat cynical lens. As has been seen in the consumer market, technology and network providers assign enormous value to those that are the first to announce 5G deployments due to the brand power it brings. To say that this announcement is purely a marketing ploy would perhaps be a stretch, but this planned deployment is unlikely to become a fully-formed industrial 5G deployment combining massive Machine-Type Communications (mMTC) and Ultra-Reliable Low-Latency Communications (URLLC) anytime soon. Connecting every single industrial machine, end point, sensor, and mission-critical controller is a major task and will be reliant on 5G standards that have yet to be deployed.
Industrial 5G will emerge in phases as the various releases (16, 17 and beyond) evolve, enabling the kinds of massive Internet of Things (IoT) and low latency mission-critical use cases that many imagine when they think of 5G-enabled Industry 4.0 environments. Any deployment of industrial 5G at the current time will be largely limited to existing wireless use cases that are available using industrial Wi-fi and LTE cellular connectivity. This essentially means any short-term industrial 5G deployments will be “4G on steroids,” rather than offering the truly transformational capabilities that are expected to occur from 2021 onwards.
The joint announcement from Mercedes, Telefonica, and Ericsson is certainly an early example of companies aggressively trying to be first to market with a potentially game-changing technology deployment. But we must not get carried away by the 5G hype and expect this early deployment, which has yet to be built, to be a game-changing technology deployment straight away. Afterall, any 5G deployment is reliant on the user equipment (operational devices) being retrofitted or built with 5G-enabed chipsets. At present, the number of industrial devices with this capability is simply too small to enable any large scale 5G deployment on the factory floor.
The building of a 5G network in Mercedes-Benz’s Factory 56 should therefore be viewed as an early example that is testing the many limitations of current 5G technology and the technological standards being developed and rolled out over the coming years. For the three partners involved this is where the value lies, in addition of course to the marketing buzz it generates. This planned deployment offers these companies a test bed for future deployments while highlighting the limitations and opportunities for 5G in industry. So far, conversations around 5G in manufacturing have been largely hypothetical. Very soon Mercedes, Telefonica, and Ericsson will be able to go beyond theorizing and ascertain valuable intelligence about exactly which use cases will offer the most value for a real live factory. Gaining a head start with 5G in the manufacturing sector and learning core lessons is more valuable than the early improvements to production efficiency, but don’t expect Mercedes-Benz to be too vocal about the lessons it is learning, which are ultimately trade secrets it can leverage in the early years of industrial 5G.
Looking down the Road |
RECOMMENDATIONS |
So, what can we take from this announcement and what does it tell us about the outlook for 5G on the factory floor? Firstly, it confirms what many have been saying about 5G in manufacturing from a vertical perspective: the automotive industry will be the first to move. BMW and Volkswagen have also gone public with plans for early 5G networks in manufacturing sites. Secondly, Germany’s dominance of smart manufacturing in Europe will continue, driven not only by the strength of German manufacturers, who clearly have the hungriest appetite for it, but also the ecosystem of technology vendors and service providers that are targeting this market as a high priority. In the near future we should expect more announcements of this kind, with testing likely to begin in 2020, especially in Germany and the automotive sector.
The next interesting aspect to look out for is how other players respond. Nokia is competing head-to-head with Ericsson by offering a similar private cellular network solution, Nokia’s 5G Future X program, and Communications Service Providers (CSPs) such as Deutsche Telekom are hot on the heels of Telefonica in the German market. Nokia has already launched industrial 5G test cases with manufacturing ecosystem partners such as Bosch, and formal announcements of fully operational deployments will surely follow soon.
Above all, any conversation about the deployment of 5G networks in live factories needs to be grounded in realism. The fully automated factory that uses 5G to connect thousands of mission-critical sensors, machine tools, control devices, and various kinds of operational equipment is reliant on market developments and device deployments that are yet to occur. What is promising to see is that, by the time the technological stars align and its big day finally comes, companies that have abundant expertise with private cellular networks and industrial 5G will be ready to capitalize on 5G in manufacturing. These are promising signs for the those excited by the concept of Industry 4.0.