Here are some of the ways 5G will influence the supply chains of the future.

Supply and demand

Part of the problem with modern supply chains is that, often, businesses and their suppliers have only a vague idea of where goods are at any one point in time, what condition they are in and whether they are even needed at their destination.

The technology already exists to measure these data points, but there are limits in current 4G networks to how many sensors, cameras and other internet-connected devices can be supported at any one time. The enhanced bandwidth and stability that 5G offers will enable far more devices to be live on a single connection, allowing much more gathering and sharing of data in granular detail.

Ricardo Ernst, a professor at Georgetown University’s McDonough School of Business, says that this new level of analytical capability will help solve one of the toughest challenges for supply-chain management: figuring out how much of something people want at any particular moment.

“I can estimate a market, but at the end of the day, I don’t really know,” he says about current efforts to measure and forecast demand. Cellphone manufacturers, for instance, expect to sell new models in a specific region, but deciding how many units to produce requires a substantial amount of guesswork, Prof. Ernst says. This often leads either to shortages or overordering. Granular data on product sales and movements, and customer behavior, will enable them to adequately prepare their supply chains to meet demand

“With 5G, you suddenly have the capability to transfer a lot of information faster, and in more efficient ways,” Prof. Ernst says. “That is the magic of what’s coming.”

Food waste

Inventory surplus is an economic issue for all sectors, but for food and agriculture, oversupply introduces environmental concerns as well. Experts say this is an area where 5G can have a marked effect.

Although 820 million people around the world are undernourished, up to 30% of all food is lost or wasted, according to an August report from the United Nations. There are many contributing factors, but oversupply in grocery stores and other retail environments is a major source of overall waste, according to the U.S. Department of Agriculture.

“It doesn’t take a lot to impact the food-supply chain,” says Chris Wong, a vice president for International Business Machines Corp. ’s consumer industry business. “There’s a lot of incentive to get that supply chain moving as efficiently, with minimal waste and maximum speed and agility, as possible.”

5G can help by enabling real-time data transmissions to monitor failures in refrigerated containers, for instance, which will mitigate food loss, says Ericsson’s Ms. Tamsons. John Coleman, chief information officer at West Chester, Pa.-based transport company A. Duie Pyle Inc., says that the enhanced data volumes and speed of 5G will also allow for greater route optimization, taking into account traffic and other information.

With far greater levels of information available, supply chains using artificial intelligence and blockchain also will help in such areas of environmental concern as “energy, scarce water supplies and climate-security threats,” says Mark Skilton, a professor of practice at Britain’s Warwick Business School. Businesses will incur fewer oversupplies of goods, reducing their impact on the environment by producing less waste and requiring fewer deliveries. Using the shared-online-ledger concept of blockchain, Prof. Skilton adds, there can be a chain of custody for sensitive materials such as medicine.

Infrastructure overhaul

Taking advantage of 5G will require new software and infrastructure investment. That’s why in the short term, at least, the real benefits of 5G will largely be realized by multinational corporations with the resources to invest in their own communications infrastructure or to create hyperlocal networks for specific uses, such as those for a factory or manufacturing plant.

“We’re still likely years away from small and midsize enterprises and consumers feeling the impact of the ‘trickle down’ effect,” says Krish Iyer, head of industry relations and strategic partnerships at Stamps.com Inc.’s ShipStation, which develops e-commerce software.

A more immediate benefit for supply-chain specialists will be the ability for wireless 5G to sidestep aging infrastructure that would otherwise be prohibitively expensive to replace, says Ranjit Gill, chief information officer at pharmaceutical distributor McKesson Corp. ’s U.K. business. For example, the ability for all of McKesson’s thousands of pharmacies across the U.K. to exchange data in real time, which he said isn’t currently possible using the country’s existing infrastructure, will have a tremendous effect on getting prescriptions to patients in a timely fashion and improving customer experiences.