Industry 5.0: what it is and how it will impact factories

You might have all received a gift once in your life.

The purpose of gifts is to make you feel uniquely valued. They get their emotional power from being tailored to your personal preferences and experiences.

Today I got to wonder: when factories will be fully automated, who will be in charge of crafting memorable gifts?

Modern manufacturing factories have focused on heavily streamlining their production lines. They have optimized their production cost and time by building the same things in the exact same way. That made them also lose the ability to build one-of-a-kind products.

Fortunately for our gifts, there’s a new industrial movement seeking to reverse this perspective. 5.0 factories want to meet personalized orders by leveraging human flexibility and craft.

Let’s see what this Industry 5.0 is all about, and what it means for the future of our industrial jobs and skills.

The Foundation of Industry 5.0: DIY and the Creative Economy

In the 1960s, stable job schedules and longer holidays gave previously unknown free time to families.

Dad and mom had more time to spend on household activities than ever. So they sought a productive hobby to undertake apart from child endeavors.

DIY — building, repairing, and modifying furniture, and clothes by yourself — was the perfect response to their thirst for new occupations. They could learn to fix their furniture and piping and make their home look more like themselves.

Soon, with the digital world, DIY was expanding and embracing new technologies. As the web was connecting people around the world, it became much easier to share your inventions, crafts, and designs.

When the Maker movement emerged, it was all about that: empowering people to build things instead of consuming them. Makers rely on open-source learning, contemporary design, and technology like 3-D printers to build beautiful and useful objects by themselves.

There is one place that gathered every self-made maker: Etsy, the marketplace for handmade and craft products. When he founded the platform, Robert Kalin wanted to make a place where passionate makers could connect with curious buyers. He was convinced that people were not only buying a well-made item, but also the craftsman’s story.

And you know what? While today streamlined factories are making consumer products cheaper than ever, handmade objects are more popular than ever. And Etsy has grown into the leading human-made product marketplace.

This impressive success all comes down to human psychology. Many academic studies have highlighted the human preference for handmade objects compared to manufactured and standardized products. One way psychology researchers have explained this tendency is by referring to the effort heuristic. People value objects more when they know it took more effort and time for creators.

Another way is demonstrated by Robert Kreuzbauer and colleagues’ study. During an experiment, they described to two groups either the symbolic property of a wine glass or its durability as a functional property. People reported valuing the wine glass more when they heard about their symbolic property and the unique human know-how that was behind it.

In other words, they put a higher value on the personal intention that was behind the craft, compared to the economic imperatives driving manufacturing production. They put human hands over robot hands.

And as simple as it seems, this fundamental preference might define the factory of the future.

Industry 3.0 vs 4.0 vs 5.0

ABB collaborative robots for industry 5.0

Factories like you see them today are the result of a long and ever-evolving history. They have got through three recent significant turning points.

Computers and Industry 3.0

During the 70s, the first computer era brought manufacturers digital ways to streamline their production line and depend on less workforce.

Integrated circuits and transistors helped brought partial automation of the machines involved in production processes. For example, programmable logic controllers (PLCs) enabled operators to automate applications with specific task requirements, be it on a CNC, milling, or plastic molding machine.

Industrial robots also started being implemented into manufacturing lines to handle repetitive, precise, and tiring tasks like lifting, picking, or welding. Operators only needed to code their specific working path and design a working cell to make them run continuously.

3.0 technologies soon widespread into every factory’s shop floor, and enhanced global industrial productivity. But they faced some recurring issues.

First, they have been designed to only fit specific applications and sectors (like the CNC machines). As there is no communication between devices, it’s impossible to leverage the data from one cell to another. They also heavily relied on human input to code the process, feed the machines, and manage changeovers.

Industry 4.0 and data intelligence

With the advent of data and IOT, the 2010s saw the emergence of smart factories that are relying on intelligent cyber-physical systems.

They use built-in sensors to check for product deviations, assess the part quality, and maintain the equipment preventively. They leverage digital twins to simulate production processes and make real-time corrective decisions.

Thanks to AI-based software, they use all that data to make a factory plant run continuously without the constant need for human input.

Industry 4.0 is still pretty much on its way, but the number of smart factories is growing. Amazon warehouses are notorious examples of autonomous production processes that minimize the need for human touch.

Meanwhile, some experts are already considering the limitations of 4.0 technologies. They point out the lack of flexibility in fully streamlined production lines. As each of the industrial processes is being automated, it makes it harder to adapt to changeovers and high mix production. Also, they are even more impacted by disruptions like power failure or cyberattacks.

Industry 5.0 and the return of the human touch

That’s why the concept of industry 5.0 has been outlined. The features of 5.0 factories would aim at putting humans back into the factories. While 4.0 factories were about cold and rationalized industrial processes, 5.0 industry would leverage human flexibility and creativity.

Technologies like collaborative robots, bionics, and augmented reality would empower workers to set up innovative industrial processes and react to real-time changes. Sustainability would also become a key concern for 5.0 factories that seek to minimize production waste and optimize energy consumption.

5.0 factories would align their goals with their worker well-being and social goods. That’s why the European Union has promoted Industry 5.0 as a top ideal for the years to come. And that vision ironically meets with the craft and handmade industry.

The impact of Industry 5.0 on Jobs and Skills

From previous industrial revolutions to industry 4.0, factories aimed at massively producing goods to achieve economies of scale. The more manufacturers standardized their production lines, the shorter the cycle time and the fewer mistakes. And for sure, that industrial framework worked well for the 20th consumer society.

Consumers enjoy access to cheaper and quality products like never before. No T-model buyer would have objected to Ford factories for not being able to pick a color, as long as they were affordable.

But as goods and services have become abundant, today consumer expectations are wired differently. People want to stand out and be unique. They want to signal their individuality through personalized products.

5.0 factories want to tap into this desire by enabling mass personalization of goods. They seek to achieve personalization at scale.

And for that, they need what art markers, craftsmen, and DIY hobbyists are especially good at: crafting unique products that people love. They need workers that can understand people’s needs, adapt the production to existing trends, and ensure products are of the highest quality.

Of course, 4.0 factories delivering essential and useful goods to consumers will remain. But as 5.0 factories might get a direct connection to consumers, their manufacturing process would be an integral part of the customer experience.

Factories 5.0 would make sure the Nike shoe, The North Face bag, or Rolex Watch’s fabric, constitution, and specs fit the exact expectations of the brand’s target audience. They would become real-time gift machines that would produce items such as craft beers, made-to-measure t-shirts, or personalized souvenirs.

So, the future of manufacturing jobs will be equally about technical skills (like data analysis, AI training, and system monitoring) as about design thinking and marketing personalization.

Even if this vision is still distant, you are better off refining your design thinking and product marketing skills!

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