Industry 5.0: Why Manufacturers Need to Adopt a People-centric Approach to Technology

The Fourth Industrial Revolution, or Industry 4.0, transformed the world by using automation and smart machines to exponentially speed up production. Just 12 years later, some argue we could be on the cusp of the next big revolution — Industry 5.0. 

But why the change? 

Unlike previous eras, the adoption of Industry 4.0 was far more rapid; from installing smart sensors on your shop floor machines to supply chain-related data relay to AI-led defect detection. All of these advances in technology pushed the boundaries of efficiency and productivity the world over. 

But it wasn’t resilient enough to withstand the effects of the global pandemic, specifically the supply chain crisis, and the skilled labor shortage (one right after the other). That’s because there was one key piece missing in this age of technological advancement — a focus on people. 

Even though many companies are still slowly adopting Industry 4.0 and digital transformation, some organizations, led by the European Commission, suggest we should already look to Industry 5.0. 

But just how different is “Industry 5.0” and could it be the solution to a more resilient supply chain? 

What is Industry 5.0?

As technology has grown more and more advanced, it has changed everything. It changed the way we designed things. It changed the way we manufactured things. It changed how we lived our everyday lives.

We’ve seen this over the course of every era of industrial change:

• The first industrial revolution was driven by the transition from hand-made to machine-produced goods, specifically in the textile industry, and allowed people to exponentially increase their output.

• The second industrial revolution was powered by production lines, most notably the Ford assembly line, that were able to mass produce goods at a rate that was never seen before. 

• The third industrial revolution, or the digital revolution, was the proliferation of computers. 

• The fourth industrial revolution, or Industry 4.0, encompasses three technological trends: connectivity, intelligence, and automation. Combined, they offer greater agility, flexibility, and operational performance through the Internet of Things technology, machine learning, big data, and artificial intelligence. 

Each time there was a big change, it was immediately followed by widespread unemployment and the rush to create new jobs that supported the emerging technology.

But Industry 5.0 is different. It is more than discovering new technology to drive faster and more efficient operations. It views productivity as the end result of empowering workers, favoring circular production models, and creating a more agile supply chain. 

According to the European Commission, Industry 5.0 is more of an extension of "Industry 4.0," not a complete shift away from IoT tech, automation, and AI. It is about building a more sustainable, human-centric, and resilient industry where people are key drivers of the next level of peak productivity. They are not an afterthought.

So far though, it doesn’t seem that the Industry 5.0 concept has made its way to North America — at least not officially. 

But at Software InsITe, it feels like we’ve been implementing it for years. We just call it a people-centric approach to Industry 4.0. And it works.

Why the Shift from Software-centric manufacturing to People-centric manufacturing?

This feels like a very easy question to answer, but the reality is that most organizations have a technology strategy focused on efficiency and productivity. Not resilience. 

That’s because, in a software-centric model, people are considered “resources” and not the “key drivers” of the business. 

But digital transformation begins and ends with people, not machines. Organizations exist to serve human customers and that’s why it’s so important to be mindful of the people you work with, your customers, and the people they serve before you can put an effective technology strategy in place.

According to McKinsey & Company, it’s this combination of both people and performance that helps organizations unlock the true potential of their technology, recruit and support the best talent, and adapt to volatility in the supply chain.

How to implement a people-centric approach to manufacturing

At Software InsITe, we’ve helped dozens of manufacturers implement the right technology for their business, and maximize productivity from the front office to the shop floor, and beyond. 

We help companies leverage their aging shop floor machines through modernization and technology integration. But we also help them optimize their operation so they see the most value from their technology — and that can only be done when you base your strategy around people.  

Here’s how we do it. We:

1. Understand the biggest problems your best customers face that you are positioned to solve. This will be the vision that unites your organization.

2. Connect all your technology together, from the top floor to the shop floor

3. Collect any data you can from across your organization

4. Analyze key trends, anomalies, and patterns 

5. Automate your time-consuming tasks

6. Focus on empowering your people and elevating them into the roles that best fit them

When you combine these six things together, you unite your entire organization behind a clear vision and get complete visibility into where your strengths lie and how you can become more flexible, efficient, and productive. 

It’s a system where people are no longer an afterthought. You aren’t struggling to fit people into an industry workforce dominated by machines; you are supporting and upskilling your employees effectively to work alongside the latest technology — and you are future-proofing your organization.

Is Industry 5.0 here? 

Almost every industry has embraced digital transformation in some form or another and software is now an essential part of their operations. 

Without software and Industry 4.0 technology, you are at a significant disadvantage.  

And while we wouldn’t frame the idea of a “people-centric approach” as the next big revolution or Industry 5.0, we do believe the idea that your technology strategy should be built around people (not machines) is the answer to succeeding in a time where manufacturing is constantly battling widespread volatility. 

By focusing on serving people and seeing them as the “end” and not the “means,” you not only avoid being left behind by the next great technological advancement, you end up with a more agile, resilient, and productive organization.