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Connectivity: A Critical Differentiator for Digital Transformation

“In some cases, going 100% wireless just brings a small improvement. In other areas, it takes half the people to do the job that it once took.”

— Will Durfee , Senior Vice President of Global Operations at Hexagon

The accelerated pace of digital transformation in manufacturing that started in 2020 continues as companies steer toward the vision of the industrial metaverse. Investments in new factories, plant expansions, and facility retrofits have outpaced predictions. Much of this activity is driven by the desire to bring production and supply chains closer to the markets they serve. Manufacturers are intent on maintaining momentum, with 36% planning or starting to build greenfield plants and 21% retrofitting one or more existing facilities. Many are actively engaged in both.  

Manufacturers have more choices than ever about how to connect the machines and other equipment for the smart factory. Many still rely on a hardwired connection for core production machinery because of its perceived superiority in terms of reliability, performance, and security. But the latest generation of cellular technology – 5G – has come a long way from Wi-Fi, which has limited bandwidth, scalability, and signal propagation capabilities. In contrast to legacy Wi-Fi systems, 5G cellular technologies are better suited to operational technology (OT) networks in terms of speed, security, and capacity while offering greater mobility and innovative capabilities particularly relevant to smart factory requirements.    

As manufacturers digitize their operations, and the load of industrial internet of things (IIoT) devices begins to tax their networks, manufacturers will quickly find it’s not a matter of selecting wired for mission-critical use cases and wireless for everything else. Rather, the future of connectivity in manufacturing will be a carefully curated blend of hardwired, Wi-Fi, and 4G/5G. Finding that optimal mix will be the key to generating insights from data to make gains in productivity, performance, and competitiveness.  

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To gain a better understanding of where manufacturers stand with connectivity choices, Manufacturers Alliance partnered with Verizon to learn more about connectivity trends, best practices, and use cases. We conducted a survey of 172 U.S.-based mid-Cap to large-Cap manufacturing companies and interviewed executives representing a variety of company sizes and industries.  

Top-level findings reveal that manufacturers expect 5G to have the largest impact on manufacturing connectivity in the next three to five years, outpacing all other wireless technologies. While only a small share of those surveyed (2%) rely primarily on cellular connectivity today, 16% expect to within the next three years, an eight-fold increase. The vast majority will continue to deploy a mix of networks (wired, Wi-Fi, 5G) in their operations for the foreseeable future. Download the full report to learn how increasing 5G wireless connections will impact manufacturers.  

Relying Primarily on Wireless Other than Wi-Fi

Source: Manufacturers Alliance and Verizon study

As manufacturers continue to acquire knowledge and experience with 5G, new use cases that are unique to 5G technology will gain traction. With “network slicing” manufacturers can carve up spectrum on their private network and prioritize different applications and services that make sense for their business. For example, at the end of the day, when production ramps down and warehouse operations ramp up, the network can reallocate more bandwidth to warehousing and shipping on a dynamic basis. This is where 5G distinguishes itself from all other types of wireless technology which force all users to share the same bandwidth.  

Above all, manufacturers can look to 5G to break down barriers between the physical and digital worlds in a way that was not possible with less powerful connectivity options. Increases in speed, capacity, reliability, and security open up more use cases for mobile wireless connections. Entirely new functionalities offer manufacturers the ability to re-engineer and streamline existing processes and imagine new ones that were previously impossible.  

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Want More?

Highlights from the report and what it means for manufacturers will be discussed on May 21 at Smart Connectivity for a Smarter Factory. Register today to get even more insights.

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About Verizon

Verizon Communications was formed in 2000 and is one of the world’s leading providers of technology and communications services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $134.0 billion in 2023. The company offers voice, data and video services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, and security.

For more information, visit Verizon.