Industry 5.0 promises a more humanistic approach to production.

It has been over a year since governments began lifting restrictions on citizens’ movements to resuscitate their economies, and some 18 months since the Ever Given blocked the Suez Canal in March 2021, sending global shipping activities into spasm.

But supply chains today are in critical condition. Assets and materials are in the wrong places around the world, factories are struggling to resume normal activities, and large numbers of people are simply not working, having either not returned to work after the pandemic or become part of what is now termed the Great Resignation, or the Big Quit. Some 20 million workers around the world, in the largest and most advanced economies, have left their posts, citing factors such as burnout, pressures at home and isolation, and feeling unvalued by their companies.

This is not the “new normal” we all expected. A major shift is taking place as peoples’ attitudes, desires and priorities have fundamentally changed.

Industry 4.0 and the previous automation-centric revolution have each sought to remove humans from production activities, to raise productivity by moving beyond our own limitations: our tendency to make errors, relatively short attention span, our vulnerability to illness.

In factories, humans certainly cannot compete with machines, and a strong case can be made for a similar transformation in the logistics sector. Here, digitalization including technologies like smart pallets and smart containers can deliver similar efficiency gains by improving visibility, which helps supply-chain partners understand each other’s needs and plan accordingly. As the consequences of Covid continue to play out in supply chains, it’s time for Logistics 4.0.

Despite the chaos and difficulties, however, markets such as IT and infrastructure have no shortage of inventory. Factories have been busy responding to short-term demand spikes during the Covid crisis as companies and employees have adapted to changing working patterns and the work-from-home phenomenon, in particular. We are now seeing stocks of these products have become so high it will take some time for the excess inventory to dissipate. It’s reminiscent of the communications industry crash of the early 2000s, when companies produced uncontrolled quantities of infrastructure equipment to fuel the internet revolution. They based their activities on wildly inaccurate forecasts, and when this was realized, the party suddenly stopped.

Well, now again, we are seeing excess inventory exposing manufacturers to unwanted costs in terms of materials, energy and manufacturing capacity they have expended. The waste is compounded because while our factories are building unwanted products through bad forecasting, they cannot build those that are needed to tackle the challenges of the future.

Could digitalization help with this problem?

Logistics 4.0 proposes to replace the current spreadsheet-based and siloed supply chain and logistics arrangements with a more informed and properly directed approach directed by AI and not subject to human errors and inattention.

Meanwhile, Industry 4.0 is moving over for Industry 5.0, which could be a complete paradigm shift: a rethinking of the entire purpose and priorities of our corporations. While the industrialists’ view of Industry 5.0 is about bringing AI and machine learning into manufacturing processes, the EU has stepped into the debate by defining Industry 5.0 in terms of human-centric, resilient and sustainable qualities as three guiding principles. It’s a vision that seeks to define success less in terms of corporate growth and customer satisfaction, and instead prioritizes worker fulfillment and protecting the world’s resources. It reflects a desire to move away from minimizing the negative impact of business on people and the planet – working toward net zero – and instead ensure businesses of the future have a positive impact.

Putting people back in the picture is good for all of us – and necessary, because machines cannot solve all our problems on their own. Certainly, in factories, their productivity provides the means for economic success.

On the other hand, when used to support planning, their help in directing our activities to make only the things we need, when we need them, provides the key to future sustainability. Perhaps most importantly, they bring the possibility to predict the unpredictable: black swan events that are, by definition, rare and beyond human anticipation. (It’s worth noting that Nassim Nicholas Taleb, who articulated the black swan theory in 2007, has said that the Covid crisis was no black swan; that such a pandemic had, indeed, already been predicted and governments advised to plan for its inevitability.)

While some may believe we can rely on human intelligence to protect ourselves against the apparently obvious, AI gives the ability to foresee unthinkable events as the data suggest them. Through not knowing any better, machines can hypothesize situations the human mind would discard immediately as unconscionable. In this way, they can force us to contemplate scenarios we could not, or would not, imagine. At this point, the role of the human becomes essential, bringing the critical thinking needed to distinguish the real black swans from the shadows and reflections that will inevitably be present.

As the coming industrial revolution seeks to leverage human qualities to ensure human fulfillment, support of our most advanced machines can enable the resilience that is an essential part of the mix. •

Alun Morgan is technology ambassador at Ventec International Group (ventec-group.com); This email address is being protected from spambots. You need JavaScript enabled to view it..

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