BY MICHAEL POWER
BEYOND INDUSTRY 5.0 HOW CLOSE ARE WE TO THE NEXT INDUSTRIAL REVOLUTION? There’s little doubt that traditional manufacturing and their supply chains are changing rapidly through digital transformation. Technologies such as robotics, 3D printing, autonomous vehicles, artificial intelligence (AI) and others are putting pressure on organizations to adapt or be left behind. The change appears so rapid and exhaustive that many now refer to this point as Industry 4.0, or the fourth Industrial Revolution. The first Industrial Revolution, beginning in the 1780s, focused on mechanization and using machines powered by water and steam. About 100 years later, the second such revolution arrived through the adoption of mass production and assembly lines. Automation, or so-called Industry 3.0, arrived around 1970 and used electronics and computers. Today, Industry 4.0’s focus is on technologies such as connected devices, data analytics and AI to automate industrial processes even further. Looking to the future, the 14 APRIL 2020
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next stage has already been dubbed Industry 5.0, which will focus on personalization and cooperation between humans and machines. But how relevant is the distinction between these recent revolutions? Is the concept of Industry 5.0 much different from that of 4.0? And when can we expect the shift to happen? Industry 4.0 has focused on using technology in manufacturing, along with how to connect devices, using that connection to gather and analyze data, says Peter Bolstorff, executive vice-president for the Association for Supply Chain Management (ASCM). In other words, Industry 4.0 is all about the digitization of the supply chain. In the future, Industry 5.0 will focus not only on the ways in which humans interact with technology but how companies can use that interaction to boost personalization down to the individual consumer, Bolstorff says. “That’s really how we framed our view of Industry 5.0 in the future – personalization,” he says. “But the question that remains is, ‘personalization of what and how?’” There’s been no wholesale shift from 4.0 to 5.0 yet, Bolstorff notes. There are instances of 5.0 among some organizations, while others are still catching up from globalization (which kicked off in about 1980 and is referred to as Industry 3.5). Industry 5.0 won’t arrive in a flash, he says. Rather, innovative organizations will push for change while many others will follow their lead. “I think we’re solid in 4.0 and you’ve got 10 to 15 per cent of the companies really wanting to continue to innovate,” Bolstorff says. Companies are now trying to establish frameworks that allow them to focus their digital capabilities and investments on what they think will help them financially as well as benefit customers, says Bolstorff. The most important discussion surrounding that technology adoption is deciding what business problem needs to be solved, rather
“Define the problem or opportunity, focus on a particular digital capability and pilot so that you can learn quickly and adapt if necessary. The absolute thing not to do is to go big bang.” than which specific technology must be adopted. Whether it’s improvements to productivity, service or increased growth, start by framing the problem or opportunity that you want to address, Bolstorff advises. Next, decide where the focus of the improvement will be in terms of process. “Where’s the biggest win? Once you focus on that – let’s just say you’re going to focus on synchronized planning – just realize that to become a synchronized planning organization, there are connections to other things,” he notes. “Define the problem or opportunity, focus on a particular digital capability and pilot so that you can learn quickly and adapt if necessary. The absolute thing not to do is to go ‘big bang.’” DRIVEN BY DATA As connectivity ramps up, data is often cited as an enabler to Industry 4.0 and the eventual transition to the 5.0 model. That data is also critical to the development of the Internet of Things (IoT), which will lead to a more technology driven environment for supply chain and manufacturing alike. Data governance is critical to identifying, capturing, sharing and using information about products within these environments, says Peter Zalinski, supply chain
architect and product manager of identification solutions at Barcoding. IoT acts as a data source that can, for example, add event notifications to a system and report those events, he says. Automated data collection and IoT provide real-time updates and location information for assets. This creates a trail of events that not only help in making better decisions but also in automating other activities. “IoT and automatic data collection free up scarce human resources that are better spent adding value to the supply chain through transformative work rather than gathering data points,” Zalinski says. As well, GS1 Standards, which provide a common language to identify, capture and share supply chain data, are therefore fundamental because they support interoperability for identification, electronic data exchanges and event-based notification and tracking, he says. “Join the GS1 Standards organization and begin the journey towards good data stewardship and digital transformation,” Zalinski advises. As the changes brought about by Industry 4.0 and into Industry 5.0 unfold, Zalinski recommends staying aware of cybersecurity issues and preparing to manage the data flow that comes with increased IoT infrastructure. As we move towards Industry 5.0, organizations can expect to see more data in motion, closer standards compliance and greater interoperability among IoT providers, he says. WHAT ABOUT PEOPLE? Often, debate surrounding Industry 4.0 and its progression to 5.0 can leave out what the human interaction with technology will be, says Professor David A. Johnston, director, Master of Supply Chain Management Program, Schulich School of Business in Toronto. The discussion can confuse technology with the actual information that people need to process in order to get business done, SUPPLY PROFESSIONAL
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