The The Illinois Manufacturers’ Association is the oldest and largest state manufacturers association in the U.S. Representing more than 4,000 manufacturers, the IMA is the Voice of Manufacturing in Illinois.
Published Quarterly, ‘The Illinois Manufacturer’ provides information, comments, and perspectives on the issues and legislation affecting manufacturers.
First Quarter 2025: https://ima-net.org/publications/the-illinois-manufacturer/
Bridging the Gap from Industry 4.0 to Industry 5.0: Investing in a Culture of Innovation
By Steve Anton
For many manufacturers, Industry 4.0 has represented the “next big thing.” It is the Fourth Industrial Revolution that unfolded with rapid advancements in IT, artificial intelligence (AI), big data analytics, robotics, and the Internet of Things (IoT). Much like its predecessors, this revolution fosters innovation that does not just slightly improve productivity and efficiency but fundamentally transforms the way goods are produced and how work is performed. What is different, however, is the successive waves of industrial revolutions that are unfolding more rapidly as technology evolves and mass adoption takes place at an accelerated pace.
While earlier revolutions spanned decades, today’s manufacturers — particularly small and mid-sized suppliers — are grappling with the complexities of rapid digital transformation and the evolving role of human workers in manufacturing. This has already laid the foundation for Industry 5.0, where human ingenuity and technological power converge. The focus remains on enhancing productivity and enabling intelligent decision-making, but the emphasis has shifted from connecting devices to connecting minds. For many, it’s a chance to catch up.
At its core, Industry 5.0 represents a paradigm shift from welfare to well-being. It prioritizes human-centric manufacturing by harmonizing innovation with human expertise and creativity. This evolution — from automation-driven processes to human-technology collaboration — is reshaping how manufacturers pursue efficiency and innovation while addressing pressing environmental and ethical concerns.
Foster a Culture of Innovation
While the sunsetting of one industrial revolution and the emergence of another is fascinating, history is written in hindsight. All too often, organizations feel pressure to set the tone, adopting and investing in the latest technologies and initiatives prematurely. Change agents are critical, and big swings can result in home runs, but they can also cause costly inefficiencies, such as required training or even adding complexities and steps to processes. It is important to remember that innovating for the sake of innovating is meaningless if the outcomes are not driving tangible results — improving the bottom line, meeting performance benchmarks, and advancing core values.
At Rahco Rubber, Inc. we have stayed focused on these pillars and remained ahead of emerging trends for over five decades by embracing a seemingly straightforward yet powerful philosophy: fostering a culture of innovation. Trends take shape naturally, and innovation should not come from the top down — it should be embedded in the DNA of your entire organization.
This means encouraging employees to think creatively, experimenting with new ideas, and challenging the status quo. Establishing an environment where innovation is part of the everyday workflow can lead to new solutions for problems that may have been overlooked. Hold regular brainstorming sessions, reward creative ideas, and create cross-functional teams to tackle problems with diverse perspectives. When teams and the organization as a whole are ready for change, new technology, or refined processes, the shift can take place naturally and be embraced harmoniously.
It’s Working Perfectly… Why Invest in Automation?
At Rahco Rubber, we’ve been producing high-precision molded rubber parts for leading OEMs for decades. For years, our production systems ran smoothly — costs were controlled, quality was high, and customers were satisfied. So, when the idea of automating a successful legacy process came up, it raised a big question: why change a perfectly working system? But after a closer look, we realized that even our most efficient processes still had room for improvement. Through a collaborative evaluation of our entire production cell — from tooling and molding operations to in-process quality control and shipping — we found significant opportunities for improvement. Automation wasn’t just about adding new technology, but about identifying areas where we could optimize efficiency, reduce waste, and improve sustainability. Other manufacturers can take a similar approach. Here’s how:
- Audit Your Current Systems: Before committing to automation, evaluate your current processes, equipment, and systems. At Rahco, we started with an audit of every step in our production process. This helped us spot inefficiencies that weren’t immediately obvious but could be significantly improved with automation. Whether you’re automating an existing system or integrating new technology, start with a thorough assessment of what’s working and where there’s room for improvement.
- Look for Incremental Improvements: Innovation doesn’t always require a complete overhaul. At Rahco, we focused on smaller changes that had a big impact, like automating precision slitting or using robotics to reduce manual labor. Manufacturers should identify high-impact areas where automation can improve efficiency without disrupting the entire workflow. Sometimes, small, targeted improvements can yield significant results.
- Evaluate the ROI: Automation comes with a cost, but the benefits often outweigh the initial investment. For Rahco, automating certain processes required a significant upfront investment. However, the long-term savings from reduced waste, improved cycle times, and better labor utilization made the decision worthwhile. Manufacturers should evaluate the potential ROI of automation, considering not just upfront costs but also long-term benefits such as sustainability and cost reduction.
- Engage Your Workforce: Automation is most effective when employees are engaged in the process. At Rahco, we involved our team in every step of the automation process, from brainstorming to execution. Their insights were key to ensuring the solutions we implemented were the best fit for our production needs. Manufacturers should foster a culture of collaboration and innovation, ensuring that employees at all levels are involved and invested in the automation journey.
- Think Long-Term: Automation isn’t just about solving immediate challenges. It’s about positioning your company for long-term success. At Rahco, we didn’t just automate for the present; we invested in systems that would support future growth. Similarly, manufacturers should think about the scalability of their automation solutions. Look for technology that can grow with your company and adapt to future innovations
Make the Case for Change
To determine where to invest in innovation and assess potential changes, manufacturers should conduct an audit and analysis of all production and business processes, assets, and operational systems. This involves evaluating various KPIs and benchmarks to gain a clear understanding of the current state, establish priorities for technology and automation needs, and identify potential quick wins. Another example from Rahco Rubber, Inc. was an automatic bagger that our logistics teams added years ago. The innovation leveraged technology, and at the simplest level. Minimal data was required to justify the investment and the machinery continues to deliver longterm value. Depending on what is being produced, smart systems that provide predictive analytics or dashboards driven by business intelligence are necessary. Industry 4.0 solutions and tools can collect, analyze, and interpret vast amounts of data in real-time. Investigate new technologies that can be retrofitted to older machinery to help transmit performance data. The age and function of the machinery will determine a solution – and an audit and analysis can help determine the long-term value of retrofitting versus replacing legacy assets.
Overall, the goal is to obtain actionable insights that can help make strategic decisions, but the real impact is likely to come from the human touch. At Rahco, innovation isn’t just about adopting the latest technology; it’s about using that technology to make a real difference for our customers and their industries.
Embrace the Journey
The rise of Industry 5.0 signals a new shift, but it is important to note that Manufacturing 5.0 is an upgrade of 4.0 and not entirely new. In manufacturing, innovation is a continuous journey, not a destination. By embracing digital transformation, investing in the latest technologies, fostering a culture of creativity, and staying adaptable, companies can ensure they’re not only keeping up but also leading the charge in the next era of manufacturing. The emphasis on harmonizing technological advancements with human creativity will define the future. Innovation is not about a one-time investment but rather about creating a mindset of constant improvement and agility. The manufacturers that succeed are those who are proactive in seeking out new opportunities in a calculated fashion, experimenting with new ideas, and always looking for better, faster, and more sustainable ways to meet customer needs.