From Stuck in the Past to Industry 5.0: Why Your Factory Needs to Modernize

Summary

America’s manufacturing sector powers the globe; approximately 3,500 factories produce critical products daily. In fact, most items within your house were created in a factory—from your ketchup, soap, gas you put in your car, and the paint that covers your walls, for example. Factories are the backbone of modern life, producing everything from food and household essentials, to building materials and consumer electronics.

However, many U.S. factories are still operating with decades-old systems that can no longer keep up with the demands of modern industry. It’s time to ask: is your factory stuck in the past?
 

Why are companies pushing to automate?

Inflation, Supply chain chaos, Global competition. All these challenges are forcing manufacturers to rethink their operations. The solution? Automation.

Automation is no longer a “nice-to-have”—it’s a competitive necessity. It drives efficiency, improves product quality, and eliminates costly errors. Automation enables factories to operate 24/7, increasing output and reducing downtime. Beyond production, advanced systems can analyze real-time data, allowing for predictive maintenance, smarter resource management and faster decision-making.

Since 2021, that standard has been Industry 5.0, which emphasizes collaboration between humans and machines. “But wait a minute!” You might think, "Last year, I was presenting a proposal to bring our sites to Industry 4.0. Are we behind?" The simple answer is yes.
 

A look back: Industry 3.0 and Industry 4.0

• Industry 3.0: A term coined in the mid-20th century, it represented the rise of automation with the introduction of the programmable logic controller, pioneered by General Motors with the Modicon 084 PLC. These systems replaced bulky relay logic with software-driven controls, transforming production efficiency. Industries adopted PLCs, and with the personal computer boom in the 1980s, factory systems became more efficient. By the 1990s, these PLCs were connecting to the internet, bringing more data and control to the factory floor. As computing power increased throughout the 1990s, it became practical to model complex industrial processes. Initially used in chemical and manufacturing industries, process simulation allowed engineers to test and optimize systems virtually before physical implementation.
• Industry 4.0: Fast forward 20-30 years. The term Industry 4.0 was coined focusing on cyber-physical systems and advanced data analysis. Internet of Things (IoT) and Machine Learning became the corporate buzz words, driving leaders in industry to seek funding for digital automation projects. Process simulation is integral to the industry 4.0 cyber-physical systems, enabling predictive maintenance, operator training, and process optimization.  Yet, despite the buzz, the industry has struggled to keep up.

Why are we still behind?

Even with the clear advantages of Industry 4.0 and 5.0, many factories remain stuck in the past. Here’s why:

1. High foundational investment costs. Upgrading to Industry 4.0 or 5.0 requires a strong digital foundation, which many factories lack. This foundation is the initial investment in infrastructure that doesn’t always yield an immediate return on investment (ROI). Upgrading a 30-year-old PLC or implementing a Manufacturing Execution System (MES) can feel like a financial black hole with no immediate ROI. But without these foundational upgrades, progress stalls.

2. Complex integrations. Most factories operate with a chaotic mix of legacy systems—think PLC5s, SLC5s, manual relay controls and newer ControlLogix PLCs. Bringing this patchwork together is a massive challenge, especially when dealing with discontinued equipment or entirely manual processes.

3. Workforce upskill. Traditionally, automation was a niche skill taught as part of an electrical engineering program as one or two elective courses. Chemical Engineers typically receive process controls classes related to optimizing and automating chemical plants. After the rise of PLCs, many technician programs became available, offering training courses over several months or 2-year certificates/degrees to bridge the gap. While certificate programs and two-year degrees in PLC programming are now more widely available, the talent pool remains shallow.

4. Managing big data. Machine learning thrives on data, but many factories lack proper data management systems. Disorganized, siloed, or inaccessible data can cripple progress. Without adopting cloud-based platforms and FAIR (Findable, Accessible, Interpretable, Reusable) data principles, companies can’t unlock the full potential of Industry 4.0, let alone 5.0. Local storage is no longer adequate or reliable for these massive datasets, and cloud-based systems have become essential for integrating data from multiple sources across the factory. In addition, data from multiple sources needs to be easily integrated to view the entire process lifecycle throughout a given factory.
 

Overcoming challenges

So, how can your factory take the leap into Industry 5.0? Start small, prove value, and scale strategically.

1. Pilot projects. Instead of asking for millions to overhaul your plant, focus on incremental upgrades. For example, spend $20,000 to automate one process, demonstrate the savings, and use those results to justify future investments.

2. Develop a roadmap and implement middleware. Many factories are held back by a fragmented landscape of legacy systems, ranging from outdated PLCs to manual processes. This disjointed setup makes digital transformation feel like an impossible task. The solution? Develop a strategic integration roadmap that prioritizes key upgrades while addressing dependencies.

3. Upskill your workforce. Partner with local colleges to develop tailored training programs. Many institutions now offer short-term certifications or two-year degrees in PLC programming and automation. In-house apprenticeships can also bridge skill gaps by pairing junior workers with experienced technicians.

4. Adopt smart data practices. Move to cloud-based systems to handle massive datasets and ensure real-time insights. Invest in middleware solutions to connect disparate devices and standardize your data using FAIR principles. This creates a scalable, reliable infrastructure to support advanced analytics and machine learning.

The future is here: Industry 5.0

Industry 5.0 is about more than automation—it’s about synergy between humans and machines. It’s about sustainability, creativity, and resilience. To get there, manufacturers must address foundational issues: modernize infrastructure, train their workforce, and embrace smarter data strategies.

To transition to Industry 5.0, companies must address these foundational issues, investing in modern infrastructure, training programs, and data management systems. The journey may be challenging, but the benefits–increased efficiency, reduced waste, and a more agile workforce–are worth the effort.
 

Final thoughts

If your factory is still operating like it's 1985, it’s time to act. Industry 5.0 isn’t just the future; it’s the present. With the right approach, your factory can transform from lagging to leading the next industrial revolution.