Demystifying Buzzwords: Industry 5.0 Part 1

In part one of this series on demystifying Industry 5.0, we cover what Industry 4.0 aimed to accomplish, and how a shift to a more human centric approach to technology fills many gaps.



I like to demystify buzzwords, so it makes sense for you and me. Buzzwords like Industry 4.0, and Digitalization, for example, often get tossed around willy-nilly, and I want to ensure we have a realistic picture of how these ideas will change how we operate. In this piece, I will demystify Industry 4.0 and Industry 5.0 and clearly describe, in my opinion, where the industry is going.

We’ll address some common questions about these ideas, such as:

• What were the goals of Industry 4.0?

• Has the industry achieved these goals, and are they ready to move on to Industry 5.0?

• What makes Industry 5.0 a practical revolution?

• What fundamental challenges does Industry 5.0 solve for Industrial Enterprises?

• Understand an essential value that was all but forgotten: People.

What were the goals of Industry 4.0?

Industry X.0 gets its name as an iteration of the first industrial revolution and the birth of the manufacturing industry. The invention of the steam engine in the late 18th century helped shift economies from being run by artisans creating small volumes of custom goods to organized factories using machines to produce higher volumes of products. Over the next several centuries, technology has improved our ability to efficiently manufacture greater volumes of increasingly complex goods.

Industry 4.0, emerged from several powerful technologies simultaneously becoming accessible such as Manufcaturing Execution Systems (MES). Sensors were becoming exceedingly cheap, Cloud solutions with ready-made environments for server power, storage, artificial intelligence (AI), and machine learning (ML) were becoming widely available, and wireless technologies had matured into valuable backbones ready to enable connectivity worldwide.

The essential vision of Industry 4.0 was presented to the world at the Hannover Messe fair in 2011 by Professor Wolfgang Wahlster. The main goal was to introduce the idea that German manufacturers could compete in the globally competitive world if they implemented a new paradigm of connected and automated manufacturing.

Modern sensors made connecting a monitoring device to the cloud and immediately extracting value from the data realistic using a centralized MES as a control point. Previously, such data was challenging to obtain through control systems like Programmable Logic Controllers (PLCs) or SCADA. With these connected devices, engineers could easily measure the performance of machines, predict when maintenance would be needed, and make data-driven decisions.

However, this level of near real-time information was not immediately actionable for top management. By 2011, the iPhone was up to its 5th version with the iPhone 4S, and the mainstream public was used to handheld devices connected to a fast wireless network with an excellent user interfaces. Such a massive change in value in your hand was never imagined before. By 2011,Cloud services such as Microsoft Azure, Amazon Web Services, and IBM Cloud Services were all released onto the market, all promising significant change in providing computational power at a price and speed never known before.

These technologies signaled the opportunity for all this collected data to soon be widely accessible and applicable across the organization. Industry leaders decided to use MES to improve their processes and become more globalized, agile, and automated. They moved from on-premise IT environments to Cloud solutions and significantly dropped their time to create innovative internal solutions. Industries started adding more connected solutions like automated machines, self-driving robots, and decentralized manufacturing to speed up production, increase volume, and reduce costs by connecting MES solutions to their ERP and Product Lifecycle Management (PLM) solutions.

Each machine would be connected as quickly as possible to the Cloud, sucking up enormous amounts of data that you could then throw into a Data Lake and find some new value, creating the so-called “Data is the new oil” paradigm shift.

Some efficiencies were found, amongst others, a quick move of IT environments to the Cloud for those who dared. Robotics and automation devices had already made a massive dent in the industrial world, and this technology expansion simply expanded.

The big goal of mainstream industry 4.0 adoption was to create a “Cyber-Physical” System: a Digital system connected to the physical world, sometimes called Digital Twins, depending on the marketing name you want to choose! This buzzword came with the promise that adopting these technology solutions would help drive efficiency, scalability, and near-real-time visibility into globally distributed manufacturing operations.

The main problem of this paradigm is that People were perceived as a considerable part of the costs and considered inefficient, and a goal of Industry 4.0 became replacing the people behind many manufacturing processes.

So, has the industry achieved Industry 4.0 goals, and are they ready for Industry 5.0?

The automotive industry presents the strongest example. They’ve come a long way due to increased competition, green tech evolution, reduced margins, and other parameters. Most other sectors will be more hesitant to answer the question. Even in this industry, it’s become abundantly clear that adopting Industry 4.0 in its fullest vision could be prohibitively costly and not a worthwhile investment for many manufacturers.

One of the visible markers of Industry 4.0 is the wide usage of autonomous robots, autonomous warehousing, and the like. Some of the highest profile and most technology-enabled manufacturers have struggled with removing humans from the equation. Elon Musk, the CEO of Tesla Motors described their attempts at building one of the most advanced factories in the world as a “manufacturing hell” due to an initial over-reliance on machines replacing humans. Sometimes nothing can beat a person for flexibility and hands on intelligence.

This struggle should not mean a failing to take advantage of the Cloud, Data Collection, and, most of all, getting the right data to the right person at the right time. Some of the greatest opportunities presented by Industry 4.0 lie in these areas, but raise the question: even if you are collecting all of this data, how can you even make sense of it, work around it, and make it actionable? How can you fully replace skilled people, their creative problem-solving abilities, and their capacity to quickly respond to a changing environment?

It turns out these 4.0 technologies work excellently for improving efficiency and scalability for producing high volumes of simple and identical goods, however, the nature of factories is changing. The industry no longer competes on cost for high-volume and low-mix, ideally suited to Robotics and Automation. New players were entering the market with greenfield technology, and new market needs required a different delivery mechanism: a connected and enabled person.

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