Industry 5.0: Putting people first

Is the next industrial revolution around the corner? We are some ten years into the fourth industrial revolution, and 62% of industrial companies have implemented Industry 4.0 systems and applications already. Another 21% are still in the planning phase.* So it makes sense that these companies are keen to learn how they can develop further. That's where Industry 5.0 comes in.

Industry 1.0

Steam power and mechanization shaped the first industrial revolution. It started in England in the 18th century and continued into the 20th century. There is, however, some debate about that start date, as some scholars consider medieval technologies such as the water mill to be forerunners of the industrial revolution.

Industry 2.0

Many credit Henry Ford with the birth of the second industrial revolution. The founder of the Ford Motor Company simplified the production of automobiles by assigning only specific subtasks to individual workers. At the end of the production process or line, the workers brought all the different parts manufactured together. The resulting principle of assembly line work was transferred quickly to virtually all manufacturing industries. In addition, the second industrial revolution brought electricity and machines to manufacturing, and thus launched the era of mass production.

Industry 3.0

In the 1970s, the computer began to be used for the first time in industrial settings. This led to computerized control of machines and the automation of entire work steps. Electronics increasingly replaced humans, reduced costs, and boosted production. Adding machines were already in use to a degree in the 1940s, but it was the advent of the personal computer (PC) that propelled the widespread adoption in the industrial sector.

Industry 4.0

April 2011 is considered the start of the fourth industrial revolution. While computerized automation remains, the focus has shifted from computers to the internet. Internet of Things (IoT), machine-to-machine communication, and algorithms: Industry 4.0 stands for intelligent networks of information and communication technologies. Thanks to big data, the masses of data are finally being analyzed and used to optimize processes. Another topic that has gained importance: the sustainability of businesses. The ability to recycle and reuse products is a top consideration now.

Industry 5.0

Although there is often talk of Industry 5.0, this is not really the fifth industrial revolution. Rather the concept refers to ideas developed from Industry 4.0, in addition to the latest technologies such as artificial intelligence and virtual reality. However, the focus is on humans: Industry 5.0 is about how digitization can help workers and make their work easier, how tedious tasks can be performed by AI, and how the time freed up can be used for value-added activities.

The fourth industrial revolution is not over yet, and the potential of digital transformation has not been exhausted. Many companies lack the financial resources, which is why they are still in the planning phase. As a result, only a few industrial companies are working with Industry 5.0 already. So is it even worth it? Here are the key benefits of Industry 5.0:

Satisfied employees

So far, the focus has been on process optimization by people, not for people. That is starting to change. Companies are asking: How can we reduce employee workloads, i.e. what tasks can we eliminate through automation? By automating time-consuming tasks, employees gain time for more important work, which increases their satisfaction.

Better product portfolio

Automation also leaves more time to spend on customizing products and improving the breadth of services and products offered. Data analytics give rise to new product variations and combinations, and digital business models lead to new revenue streams.

Future-proofing the business

When businesses focus on the needs of knowledge workers and users, then these needs can be considered in the early phases of production and sourcing. Goals like less wasteful products, recyclability, and sustainability are more likely to be incorporated into the product development and optimization phases. Industrial companies are becoming more agile and more flexible, and less likely to miss out on this kind of improvement potential.

Resilience

The year 2020 rapidly accelerated digital transformation. The COVID-19 pandemic put industrial companies to the test and highlighted weaknesses in Industry 4.0. Businesses were forced to rapidly rethink and adapt these concepts, which paved the way for Industry 5.0. Through digital transformation, companies are preparing for external disruptors and becoming more adaptable.

Collaborative robots

Robots are no longer shielded by a safety fence but work directly with humans. For example, robots already support medical surgery or help to assemble heavy components.

Augmented Reality (AR)

AR can help to reduce the complexity of assembly instructions for industrial machines. The part you want to assemble is projected onto the machine, which speeds up and simplifies assembly.

Digital twins

Digital twins are digital images of physical products or machines. Efficiency tests, maintenance, or modifications can first be tested digitally, which allows for better planning.

Personalization

Personalized products are replacing mass products. 3D printers, for example, make it easy to modify designs and create customized products.

Industry 5.0 goes beyond automation and process optimization in production, and improves the way people and machines work together.

Research & development: By implementing AI systems and analyzing large amounts of data, R&D can be accelerated and optimized.

Sales & marketing: The increasing customization of products and services can help to improve sales and marketing strategies.

Customer service: AI systems and chatbots can help to improve customer service and shorten response times.

IT department: Industry 5.0 requires better collaboration between IT and production teams to make it easier to integrate data and systems.

Finance department: Through the use of AI, financial analyses and forecasts can be carried out faster and more accurately.

Logistics department: Automating storage, packaging, and shipping can improve efficiency and accuracy.

Quality control: AI and sensors can be deployed to ensure higher quality and better traceability.

Lower costs, increased productivity, and reduced workloads for employees: many industrial companies focus on production when it comes to these objectives. However, you should ideally leverage the solution on a company-wide basis, and introduce end-to-end digital transformation strategies. A state-of-the-art ECM system can revolutionize your information management systems and improve processes in all departments, such as procurement, vendor management, and invoice management. The software processes the information and delivers it at the right time, in the right place, and in the right context.

This also has a direct impact on production. For example, an optimized purchase-to-pay process prevents delivery problems and bottlenecks, or a 360-degree view of the supplier improves supplier management and benefits the entire supply chain.

*https://de.statista.com/statistik/daten/studie/830769/umfrage/bedeutung-von-industrie-40-in-deutschland/