Technology to Help Humans, Not Technology to Replace Humans: Logistics 5.0
In our previous blog post, we introduced the concept of Logistics 4.0 and how it shapes the execution and management of modern supply chain processes. The next phase in our industry’s evolution is Logistics 5.0. While some believe we haven’t reached this stage yet, others argue that Logistics 5.0 has already arrived. Regardless of who’s right, one thing is clear: the fifth era of logistics development is inevitable, and at its core will be humans and their knowledge.
Just as Logistics 4.0 took the fourth industrial revolution (Industry 4.0) as its starting point, Logistics 5.0 is an outcome of the ideas underpinning the fifth stage of industrial development (Industry 5.0).
It is worth noting that this fifth stage is not as revolutionary as the previous four phases. Instead, it can be viewed as an adaptation of the principles of Industry 4.0 to the current realities of the global economy, which in recent years has experienced significant shocks and faces even more challenging times ahead. Although we are not talking about revolutionary changes, this does not mean they are insignificant. Of course, with the concept of Industry 5.0, the approach of Logistics 5.0 has been developed, which translates these modified principles into the realm of organization and management of supply chains.
Both Industry 4.0 and Logistics 5.0 are based on three pillars: humans, resilience, and sustainability. Before delving into the details of this concept, let’s first briefly explain why the concepts of Industry 5.0 and, consequently, Logistics 5.0, came into being.
This approach was forged through (remotely conducted) workshops and expert debates, resulting in the report “Industry 5.0 – Towards a sustainable, human-centric, and resilient European industry,” published in 2020. The year and format of the discussions suggest what prompted a redefinition of Industry 4.0 –yes, it was the COVID-19 pandemic and how strong a shock it was to the global economy and supply chain. As we read in the online edition of Forbes: during the pandemic “the logistics demand rose to an all-time high due to people not being able to step out of homes, which led to several problems like scarcity of containers, new security measures and problems with renewing crews, delays, blockades and much more.” These challenges indicated the need for a new perspective on logistics processes.
Logistics 5.0: Human Factor
Industry 4.0, along with Logistics 4.0, may have given the impression that automation, cutting-edge technologies, and all optimization achievable through their implementation mean absolutely everything. In all this, the role of humans in logistics processes might seem increasingly marginalized. Without the involvement of human factors, without utilizing the knowledge and experience of logistics professionals who gain it through years of activity in the industry, logistics processes simply cannot run smoothly. Every, even the most advanced technology, can fail or make errors. Therefore, human control over machines is indispensable. Modern technologies are meant to support humans, facilitate their work, and improve its efficiency, not to eliminate people from these processes. On the contrary, humans should be at the center of the logistics process, with advanced technological solutions serving to accomplish tasks set by humans. Logistics 5.0 aims for full integration of people and technology in the organization and management of supply chains. Additionally, it also involves full respect for workers’rights, privacy, and general human dignity in the workplace. In one of the next entries, we will delve deeper into the place and role of humans and their experience in the world of logistics driven by modern technologies.
Logistics 5.0: Resilience
International crises can have a destructive impact on the globalized economy, which in the digital era becomes even more interconnected. The COVID-19 pandemic, which led to months-long lockdowns in many countries worldwide, was an unprecedented challenge for international supply chains. Goods deliveries were limited or delayed, production lines halted, and some essential products became much harder to obtain. In the eyes of the public (locked down at home), the importance of couriers increased, who began to be seen as key workers (alongside doctors, paramedics, firefighters, and police officers) during the pandemic.
The pandemic has ended, but challenges for global supply chains have not disappeared. The Russian aggression against independent Ukraine caused further disruptions (especially in the supply of food products, mainly grains). Moreover, testing the sensitivity of contemporary logistics connections to unexpected situations does not necessarily require epidemics or wars. Just mention the scale of delays that occurred when a ship blocked the Suez Canal.
Hence, the second pillar of Logistics 5.0 is building the resilience of supply chains in the event of crisis situations. This involves creating contingency plans, preparing alternative supply routes, protecting against cyber-attacks, in short, all preventive actions that minimize the scale of disruptions and interruptions in supplies if a global crisis or natural disasters occur.
Logistics 5.0: Sustainability
Speaking of natural disasters, we cannot forget about the climate disaster. Global warming will result in more frequent severe weather events, which can negatively impact logistics processes. Thus, the third pillar of Logistics 5.0 is sustainable development. This involves all activities aimed at reducing the negative impact of logistics processes on the environment.
This includes reducing the carbon footprint (e.g., by using zero-emission vehicles or optimizing routes), reducing the use of plastics and using natural materials for packaging production and their subsequent recycling, power logistics infrastructure with renewable energy sources, and engaging in various initiatives promoting pro-environmental attitudes.
As can be seen, Logistics 5.0 is rather a correction of the course of the Logistics 4.0 (so perhaps Logistics 4.5 would be a better term), which aims to better respond to the economic changes observed in the face of global crises. It is also a response to the rapid development of technology, aiming to prevent a situation where humans are sidelined in the logistics process. Humans should be at the center of logistics, with technology playing a supportive role. The climate catastrophe also forces the implementation of solutions directing the logistics industry towards a greener, climate-neutral future.
At Coyote Logistics, we are already aligning our business activities with the principles of Logistics 5.0. We prioritize a unique balance of 60% technology and 40% human knowledge and experience. Additionally, we are undertaking various initiatives to enhance the sustainability of our business and the entire industry.
* Naveen Joshi, “Logistics 5.0: The Final Piece In The Supply Chain Optimization Puzzle?”, https://www.forbes.com/sites/naveenjoshi/2022/03/26/logistics-50-the-final-piece-in-the-supply-chain-optimization-puzzle