The transition from Industry 4.0 to Industry 5.0 marks a paradigm shift in global manufacturing, emphasizing human-centric innovation and intelligent automation. This study investigates the potential of human-machine synergy to enhance operational performance in the railway manufacturing sector in South Africa, which plays a critical role in national mobility and employment generation. However, inefficiencies in material handling systems, particularly in part dispensing at assembly workstations, continue to undermine productivity and sustainability. A key operational challenge identified was the inability of the current C-class storage system to accommodate the reintegration of unused fasteners such as bolts, nuts, and washers leading to significant annual material waste and ergonomic strain on operators. The research aimed to apply Industry 5.0 principles with industry system and ergonomics concept emphasizing human-machine synergy, lean manufacturing, human-robotic collaboration, and ergonomic optimization. A mixed-methods approach was adopted, combining time-motion studies, ergonomic risk assessments, and stakeholder interviews to inform system design. The proposed solution analyzed various issues at the storage management disbursement section to get the exact quantity of parts required per installation, thereby minimizing material surplus, reducing operator fatigue, and improving assembly cycle time. Key findings indicate the transformative potential of Industry 5.0 technologies in streamlining operations, fostering sustainable manufacturing, and improving workstation ergonomics. The study contributes to the growing body of knowledge on Industry 5.0 in emerging economies and offers a solution framework in material handling. These findings have significant implications for sustainable manufacturing, cost reduction, and workforce well-being in the railway sector.