From the Industrial Revolution to Industry 4.0, manufacturing organizations have been some of the earliest adopters of automation, robotics, IoT, industrial AI, and other cutting edge solutions. In fact, by the time most businesses in other industries adopt, manufacturing has already moved on to the next thing.
Disruption has made this continuous innovation an imperative. Macroeconomic, geopolitical, and supply chain conditions are ever evolving, keeping manufacturers on their toes and forcing them to find new solutions to keep up with demand. But labor shortages, changes in customer expectations, and shifts in the regulatory and sustainability landscapes in recent years have pushed manufacturing into yet another new chapter of disruption. If Industry 4.0 is here and now, what comes next?
A glimpse at Industry 5.0
Much like every great disruption before it, the next chapter of manufacturing innovation will be driven by a need to enhance operations, outpace competitors, and meet shifting consumer habits. Looking ahead, Industry 5.0 will likely be characterized by the following four areas of focus:
- Flexible and modular manufacturing: With rising demand for personalized products, expect to see manufacturing happen in smaller and more flexible batches. For that to be feasible, manufacturers will need to improve OEE and asset utilization to minimize downtime while boosting productivity and cost leadership. However, efficiency should not come at the expense of quality. Implementing a QbD strategy for improving ecosystems and design processes can help ensure that manufacturers produce the right products on their first try.
That was certainly the case during Green Tweede’s transformation. Because they manufacture critical parts for aerospace, defense, health sciences, energy, and semiconductors, getting them right the first time is essential. Digitizing and automating global data entry, analytical processes, and operator workflows, gave Green Tweede real-time insight into 22 unique processes at five global plants and 144 work centers, leading to boosted production yields and revenue, increased global efficiency via proactive insight and predictive modeling, facilitated quality control, and reduced product waste.
- Connected, intelligent, and smart products and services: Technology isn’t going anywhere in Industry 5.0; if anything, we’ll see even more of it. Expect manufacturers to harness new tools to improve track and trace, win customers’ loyalty, and add value to the business. AI will continue to play an important role, but it will likely be supported by a suite of complementary technologies such as edge analytics, digital twins, AR/VR, zero trust security, and green tech solutions. These tools will have an important role to play both on and off the assembly line, with more advanced solutions adopted to optimize other business units including sales, marketing, design, HR, CX, and beyond.
Hyster-Yale Group was recognized at this year’s Launch awards for integrating solutions to help customers operate their autonomous fleet of trucks. Comifar Distribuzione also future proofed its business with a mature sales and operations planning (S&OP) process that has reduced lost sales by 53%, increased forecast accuracy by 14%, reduced wasteful intra-warehouse orders by 37% and stock coverage levels by 18%, and increases margin growth as much as €1,3 million per year.
- Smarter supply chains: Supply chain disruption was the driving force behind much of the decision making and tech adoptions in Industry 4.0. Many of these moves were made to help manufacturers stay afloat, but in Industry 5.0, supply chain technology will be selected, developed, and adopted more strategically. Expect a major focus on resilience and performance via solutions capable of tracking products and services in both the upstream and downstream, and the adoption of solutions that eliminate bottlenecks to accelerate on-time delivery for faster time to market. New, smarter tools will be deployed across transportation, packaging optimization, supply chain design/operations, sourcing, procurement, demand and supply planning.
Trinity Industries is a great example of this in action. They adopted technology that touches nearly every facet of their business operations, including real-time visibility of railcar and cargo status, telemetry and machine learning enabled analytics, modernized cloud servers and edge computations to process and stream data with no business interruption. Together, it all enhances employee productivity tools and applications, and accelerates customer acquisition through enhanced CRM.
- Future-ready workforces: As businesses embrace new tools, they’ll need the right capabilities on their side to help leverage them properly. Industry 5.0 will be no exception; if anything, the upskilling imperative will only grow as technology engrains itself even deeper into our lives. But organizations will also be staffed by a workforce dominated by millennial and Gen Z talent that will have grown up with technology and have their own relationships with it, but also different needs, expectations, and perspectives than previous generations. In Industry 5.0, crafting cultures that accommodate all members of the team and center around innovation and change will be a major focus for organizations in manufacturing and beyond.
Achieving operational resilience
Of course, there’s no way to know for sure what lies ahead and what influences may crop up and reshape business priorities at any point. Therefore, the best thing manufacturing organizations can do is to aim for operational resilience. Having the right systems and foundations in place to sustain and catalyze innovation will always be more effective than acting reactively to shifts in the market as they come.
For more insights into what lies ahead for the industry, valuable trends and research, and real-world applications, check out NTT DATA’s Manufacturing hub.
