As with all market evolutions, the meaning and the framework of the current manufacturing evolution—Industry 5.0—continue to change.
At its foundation, Industry 5.0 is considered the next major global industrial revolution, moving manufacturers beyond the Industry 4.0 era of digitalization into a space where organizations leverage data and information for good. Of course, much of the “good” equates to business performance, but Industry 5.0 also outlines tenets of environmental, social and governance issues that guide how a business is run, how we treat those who keep it running and how the business itself impacts the rest of the world.
Think of it this way: 4.0 was designed to create smarter factories, but 5.0 is designed to create more responsible factories while maintaining all the benefits of the 4.0 digital transformation years.
Industry 5.0 is focused on a few core pillars. It expands on the progress that manufacturers have made through digital transformation and shifts the primary focus to three distinct new efforts: building sustainability, creating resiliency and embracing a human-centered approach to manufacturing.
What does this mean for manufacturers today?
Sustainable business is good business.
Companies embracing digital transformation initiatives have uncovered immense value in their data as a result of information sharing and the application of tools like analytics and AI. This operational insight, in turn, has opened up opportunities for sustainability improvements.
Having greater visibility across the supply chain, for example, can streamline operations to reduce waste and cut energy consumption. Real-time data analysis allows manufacturers to adjust production levels quickly to meet actual demand, avoiding overproduction and reducing inventory and warehouse costs.
While many organizations initially adopt sustainability improvements for cost savings, the halo effect of being a better steward of resources and the environment reflects positively on a brand’s reputation, which can lead to improved sales, revenue, investor support and more.
To take advantage of sustainability opportunities, companies should audit and document areas of the business to be improved, such as energy and water usage, emissions, waste and recycling and bioplastics and chemicals. Leaders should set sustainability goals and work with data and operational teams to identify changes to processes or partners that support these goals.
Agility supports resiliency.
The importance of agility when the unexpected happens was proven during the pandemic. Unfortunately, many manufacturers across food, automotive, health supplies, household and hardgoods were caught unprepared and suffered great losses, not only to their customer base but to their reputations and their bottom line.
For instance, a staggering 90% or more of U.S. domestic automotive production sites temporarily closed down factories during the pandemic, first due to worker illnesses, but later due to supply chain issues. This has had a lingering effect on automotive component pricing, new vehicle sales and even delayed innovation in the sector.
Recently, a labor dispute in Canada between major railway companies and their employees raised fears of a breakdown in the food distribution chain, threatening to repeat the damaging shortages experienced during the pandemic. The immediate involvement of the Canadian federal government illustrated the concerning nature of the problem, as they worked to avoid rising food prices, food insecurity, lack of feed for livestock and other issues.
Unexpected market shifts like these may not be entirely avoidable, but manufacturers focused on building resilient businesses may be able to readjust and recover faster. For example, supply chain disruptions can be mitigated by switching suppliers or logistics plans, but only if a company has previously vetted and modeled the changeover to ensure success.
This pre-planning and risk management approach is critical. Manufacturers should revisit inventory management practices, moving away from just-in-time to a more secure and diversified approach. Consider more local supply partners and shorter chains to limit interruptions and also reduce the environmental impact.
Beyond inputs, resilience also depends on greater flexibility. Technologies such as modernized ERP systems, AI and automation all support more visibility into key operational data. This insight can lead to more predictable, simplified and adaptable production strategies that support the agility needed to adapt to unexpected changes, reduce business risk and safeguard reputations and revenue.
Human-centricity builds empathy and loyalty.
The final pillar of Industry 5.0 focuses on using technology to enable and empower people. In this human-centric approach, people are valued for their intelligence, empathy and decision-making, but can be supported by technology such as data, AI and automation.
Through digital transformation efforts, companies can now use vast volumes of data to predict trends, manage risk and prompt communications and other actions that support the advancement of the business. But people are still crucial to managing relationships and solving complex issues. As part of Industry 5.0, companies must increase investments in human capital, professional development and optimization of human time for high-value activities.
By properly training team members, valuing their contributions and ensuring their well-being, companies can send a strong signal that technology is a strategic tool to empower humans, not replace them. And, by offloading low-value tasks to digital tools and robotic processes, manufacturers can create efficiencies and cost-savings while developing and rewarding the skill sets of employees.
Conclusion
The evolution of Industry 5.0 represents a unique opportunity to leverage the digital transformation efforts of Industry 4.0 and combine disruptive technologies with human intelligence to further advance business. Not only does this create agile and resilient operations, it allows employees to use their most valued skills in support of the organization.
Beyond employees, Industry 5.0 sets the stage for more sustainable, responsible organizations that strive to have a positive impact on communities, the environment and the planet. The landscape of business will continue to evolve, but manufacturers can follow the tenets of Industry 5.0 at their own pace, reaping the benefits as they go.
Forbes
In the context of the Industrial Revolution, applying technology to operating mechanisms in each organization is extremely necessary, and is also an inevitable trend to minimize workload while still ensuring efficiency and enhance its competitive position in the market. Furthermore, applying management software into a business will also help build an organization with a clear system, promoting consistency, transparency and accuracy. Tasken eOffice, researched and built by Opus Solution – a business consultant in Vietnam – is an internal work management system as well as the management of automated, online, user-friendly approval processes, allowing businesses to operate more effectively on the path of digital transformation.
