“But, 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 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 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,” Alusha explained.

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. “Furthermore, equally important is the ability to measure risk when looking to adopt 5G and edge technology assets. 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,” said Alusha.

These findings are from ABI Research’s 5G and Edge Networks in Manufacturing application analysis report. This report is part of the company’s 5G Core & Edge Networks research service.

News report from ABI Research.