To ensure business continuity in the current and post-COVID-19 era, decision-makers should reconfigure their traditional supply chain (SC) networks, assisted by the successful development and implementation of cutting-edge technologies. Recently, Industry 5.0 (I5.0) has gained increasing attention as a paradigm that offers the salient features to create resilient and inclusive operations by ensuring long-standing SC sustainability. However, there has been insufficient analysis examining the challenges of implementing I5.0 in SCs. Therefore, this study aims to understand the challenges of implementing I5.0 towards managing the impacts of SC disruptions due to the COVID-19 pandemic in an emerging economy. Qualitative and quantitative methods were used for this research. First, the challenges to I5.0 implementation have been identified through a literature review and experts’ feedback. Those challenges were examined and prioritized using the Best-Worst method (BWM). Second, the contextual relationships amongst these challenges were analyzed using interpretive structural modeling (ISM) with cross-impact matrix multiplication applied to classification (MICMAC) analysis. Findings showed that active involvement of the senior managers in the execution process is required to adopt the I5.0 initiatives successfully to manage the post-COVID-19 impact on SC sustainability. Furthermore, findings showed that financial support and funding (e.g. tax reduction, short loans, etc.) from investors and the government play a pivotal role in enabling sustainability in SCs. Finally, MICMAC analysis has classified the challenges to provide valuable insights for managing future disruptions. This is a pioneer study to determine strategies to help managers and decision-makers successfully overcome the challenges disrupting the implementation of I5.0 in SCs. Implications for theory and practice are examined.