Logistics 5.0 builds a bridge between business, technology, and society

The background

Remember when there was a goods shortage, and prices increased during the pandemic? It affected global supply chains. Nobody could foresee the scale, of course. But it showed how the current world of industry works. 

Focused on technological innovation, efficiency, and profits, industry was disrupted as it was put to a global resilience test. The European Union (EU) addressed this explicitly when it said: 

“The new industrial system will have to reflect the growing post-COVID shift in human consciousness that survival in the face of crisis and access to essential goods and services is more important than the ownership of most material goods.”

It's not new that we are quickly approaching the planet's limits. In this context, making workplaces better, more reliable, and greener has to become an industry priority. This is especially true in logistics, which is completely vital for global supply chains.

What’s wrong with Industry 4.0 and the logistics of today?

Chances are that most things in your home traveled worldwide before they arrived at your doorstep. And as supply chains grow even more global, sustainability has to be considered every step of the way.  

The old Industry 4.0 framework recognized that to some extent. Eliminating, let's say, paper printouts in a warehouse is a step forward in sustainability. Yet, the simple digitalization of manual processes is not enough. It also needs guidance from principles that consider workers, operations, and the environment.

Here, we can already see the limitations of the traditional Industry 4.0 approach. According to the German Federal Ministry for Economic Affairs:

“Digitalising production is gaining a new level of quality with global networking across corporate and national borders: the Internet of Things, machine-to-machine communication and manufacturing facilities that are becoming ever more intelligent are heralding a new era: the fourth industrial revolution, Industry 4.0.”  

In other words, technology, technology, technology. Industry 4.0 is the brainchild of the Industrial Revolution of the early nineteenth century. It is focused on technology.

That said, warehouse workers who had their clipboard replaced with an RF scanner are not necessarily better off. Even if the scanner is connected to the internet, the workers will still have their hands occupied by a piece of "tech." What they need are tools that blend in perfectly with their tasks, workflows, and needs. So, the focus shouldn't be on the technology itself but on the people using it.

The debate: Industry 4.0 vs. Industry 5.0

Industry 4.0, at its core, also included environmental aspects, theoretically. Yet, since its coining in 2011, the real push has been almost entirely on automation and efficiency. The EU, which has instead promoted Industry 5.0 as a vital next step, highlights:

“Over its ten years of life, Industry 4.0 has focused less on the original principles of social fairness and sustainability, and more on digitalisation and AI-driven technologies for increasing the efficiency and flexibility of production.”

Germany's National Academy of Science and Engineering (acatech), has a different view. For them, Industry 5.0 is just an extension of Industry 4.0. Automation, data-driven processes, and digital technologies are still important, they say, because they help industry to innovate.

For acatech, the Industry 5.0 concept is unnecessary. They claim that industry can achieve sustainability, human-centricity, and resilience goals within the parameters of Industry 4.0. But is this enough, especially when we look at the logistics sector?

The logistics space is already at a point where traditional Industry 4.0 approaches might not be enough. Many workflows are already built with Industry 5.0 principles in mind. So even if acatech says those ideas are already covered within Industry 4.0, a new name can help raise awareness and promote them.

“A lot of the potential of digitalization has already become a reality for the logistics sector,” says Lisa Gruber, a Senior Product Marketing Manager for industrial AR solutions at TeamViewer. “Let's look at DHL Supply Chain as an example. They've got over 1,500 operators using smart glasses and other wearables to make their operations more efficient and improve ergonomics for their employees. It's a win-win.”

We can call this win-win approach Logistics 5.0. It’s the best of both worlds. It doesn't abandon Industry 4.0's goals but also follows the EU's call for a wider and more humane approach.

How TeamViewer Frontline Pick brings Logistics 5.0 to life

Frontline Pick is a vision picking software for connected warehouse operators. It runs on smart glasses worn by operators and uses AR to create a user-friendly work experience. And as the industry talks about moving from Industry 4.0 to 5.0, TeamViewer, with Frontline Pick, is already considering how to make the most of the new ideas.  

Making things more user-friendly, resilient, and sustainable is at the solution's heart. With it, picking becomes a guided, hands-free, and paperless process. Workers love it because it fits in with their tasks and reduces physical strain. Instructions appear in the worker's line of sight or come via headset.

All this makes it easier to pick the right items, which means fewer complaints and returns. Fewer goods shipped back and forth means lower costs and better sustainability. People are happier at work, and there's less staff turnover.

Frontline Pick also works with warehouse management systems (WMS) such as SAP. This helps avoid siloed operations that can harm supply chains.

In the below case studies, you can learn how every principle of Industry 5.0 is applied in reality:

• Human centricity
• Resilience
• Sustainability

Human centricity: Nadro achieves more with less, thanks to vision picking

Nadro S.A. de C.V. is Mexico's top pharmaceutical wholesaler. The company distributes 51 million medical and personal care products to pharmacies nationwide each month. Yet, it needed to up its warehouse game to meet demand.

They went for TeamViewer's vision picking solution, Frontline Pick. The workers use it with smart glasses. SAP warehouse management is also part of the solution

With vision picking, operators only get the information they need to do their jobs, which helps them focus better. TeamViewer Frontline Pick shows order info on smart glasses. It also responds to voice commands. This means workers enjoy better working conditions, while integrated confirmations cut down on errors and boost productivity. Nadro is an excellent example of this in action. It reduced time for onboarding and training by 93%, and employees can now work more autonomously.

“At first, we were skeptical that older, more experienced employees would be receptive to this technology. So, we conducted a baseline study with a veteran, 51-year-old warehouse employee who had worked at Nadro for years. The results were very impressive. He was the first employee to achieve at least a 150% increase in productivity,” said Carlos Flores, Chief Innovation Officer at Nadro.

Read more: Nadro success story

Resilience: Coca-Cola HBC uses Frontline to ensure it can go on and on

Coca-Cola Hellenic Bottling Company (HBC) is one of the world's largest Coca-Cola bottlers. It has 54 plants worldwide and makes all Coca-Cola products. Coca-Cola HBC uses TeamViewer Frontline to improve picking and other processes.

With the high volumes they ship, even a 0.1% error rate can lead to 1,000 wrong deliveries. Rejected orders must be returned to the warehouse, and a new order must be shipped. This results in a spike in orders, slowing the entire operation and degrading business continuity.

Coca-Cola HBC's decision to switch to TeamViewer Frontline Pick changed this. After only two months, the picking accuracy reached 99.99%. This means increased resilience in operations at peak times and reduced costs. 

Coca-Cola HBC also uses TeamViewer for remote support. Employees can get in touch with experts via video call and get help getting things back up and running. With TeamViewer Frontline Assist, they've been able to cut production downtime by up to 50 percent.

When it comes to maintenance, Coca-Cola HBC creates AR workflows with TeamViewer Frontline Inspect. The instructions are sent to the workers' smart glasses, so they know exactly what to do. This saves about 20% of the time during production changeovers. It’s proof of how digital solutions can make businesses more resilient.

Read more: Coca-Cola HBC success story

Sustainability: GlobalFoundries eliminates 100,000 printouts annually