Digital has the power to shape the future of industries.
And, more clearly, it is shaping procurement for the better.
We’re in a time of utilising data to make effective decisions and, with a growing market of digital solutions at our fingertips, it means more options for organisations seeking to implement them into their operations, as they work to become more efficient, productive and drive cost savings.
But, as this wave of Industry 4.0 – using technology to become more agile – takes flight, how is this defining the outlook for Industry 5.0?
What is Industry 4.0 and 5.0?
Atoss defines Industry 4.0 as the ‘fourth industrial revolution’, where technology is already making companies more agile, efficient and environmentally friendly. Organisations are using digital and data to optimise processes, and focus on value creation and cost savings.
Industry 5.0 goes further: it focuses on the collaboration between humans and machines. As a result, this provides opportunities to create even more advanced technology thus develop new skills among workers. Additionally, this could help combat the growing focus on improving sustainability efforts.
Industry 4.0’s value is expected to more than double by 2029, growing from $130bn in 2022 to over $377bn in just seven years.
How will digital help?
Digital solutions can create a more powerful organisation and supply chain, while also aiding decarbonisation efforts. Technology helps workers perform better in their job and free up time for strategic decision-making and tasks. It can be implemented throughout supply chains and manufacturing processes, to not only create new materials and products, but also contribute to efficiency and reduce waste in the production and sourcing processes.
Industry 5.0 emphasises the collaboration between humans and technology: they can each make the other perform better. For instance, improvements in technology can help companies determine how to provide better training for employees, thereby facilitating improved performance.
What impact will this development have on the future of procurement?
It’s no secret that digital is re-shaping procurement, supply chains and industries, for the better. Despite the fear of AI taking over our jobs after a series of major layoffs at tech giants, more processes are becoming automated to help workers. Whilst data can suggest an action, only humans are able to know the human-reaction to their decisions.
Industries 4.0 and 5.0 are creating more resilient supply chains, which are also unlocking cost savings along the way. With a growing choice of digital solutions available, these help to boost supplier diversity, going hand in hand with sustainability and increased local sourcing.
Technology is helping teams curate better quality – and cleaner – data, which allows them to provide better products and services for their customers.