These 10 new 'Lighthouse' factories show the future of manufacturing is here

Just staying afloat has been a big enough challenge for many industry sectors this year. Let alone doing that while also improving customer satisfaction, being committed to workforce development and becoming more sustainable.

But in 2020, a fleet of 10 diverse factories – in industries from pharmaceuticals to electronics – have been able to do just that by adopting the technologies of the Fourth Industrial Revolution (4IR) at scale. They now join 44 others in the World Economic Forum’s Global Lighthouse Network.

Since 2018, the Forum has been recognizing those companies incorporating 4IR technologies – from artificial intelligence (AI) to the Internet of Things (IoT) – into daily manufacturing and supply chain operations, effectively creating the most advanced factories across the globe.

The idea is these Lighthouses can then show the way for the majority of the world’s manufacturing companies (70%) who are lagging behind, stuck in “pilot purgatory”.

Guiding the Great Reset

This year, COVID-19 has shone a spotlight on the fragility of supply systems and the urgency to embrace digital technologies to remain competitive. But it’s also highlighted the need for a Great Reset – a set of actions which will deliver value to companies and society as a whole.

“The agility and resilience of Lighthouse organizations have shown the same qualities that set them apart before the pandemic are, in fact, part of the strong foundation essential to withstanding the powerful waves of change it has brought forth,” says Francisco Betti, the Forum’s Head of Shaping the Future of Advanced Manufacturing and Production. “These qualities are what equip them to drive the Great Reset among industrials.”

Companies of any size wanting to transform their operations can look to the Lighthouses to see what’s possible and what’s needed for success in the face of adversity. A good place to start would be by catching up on the insights from the Global Lighthouse Network Annual Meeting.

From research based on learnings from the Network, the Forum and its partner McKinsey & Company found four shifts in manufacturing and supply chain have emerged:

Betti says: “Ultimately, lighthouses, as they lead the Great Reset among industrials, are key to helping shape and realize a stronger, more resilient and inclusive future in which creative entrepreneurism and technological innovation can benefit private enterprise and society at large, along with the natural environment.”

Here are the 10 newest Lighthouses and their stories…

1. Alibaba

Location: Hangzhou

Change story: Combining powerful digital technologies with consumer insights, Alibaba’s pilot Xunxi factory has brought a fully digitized new manufacturing model to life. It empowers end-to-end, on-demand production based on consumer needs, and enables small businesses to be competitive in the fast-paced fashion and apparel market by shortening delivery time by 75%, reducing the need to hold inventory by 30% and even cutting water consumption by 50%.

2. Micron Technology

Location: Taichung

Change story: To drive the next wave of productivity improvement, Micron’s high-volume advanced semiconductor memory manufacturing facility developed an integrated IoT and analytics platform. This ensures manufacturing anomalies can be identified in real time, while providing automated root-cause analysis to accelerate new product ramp-up by 20%, reduce unplanned downtime by 30% and improve labour productivity by 20%.

3. Midea Group

Location: Guangzhou

Change story: Faced with intense appliance industry competition and increasing complexity and speed in e-commerce, Midea leveraged 4IR technologies to transform from an automated factory to an end-to-end connected value chain, improving labour efficiency by 28%, reducing unit cost by 14% and shortening order lead time by 56%.

4. Unilever

Location: Hefei

Change story: With e-commerce booming in China, Unilever built a pull-production model by deploying 4IR solutions such as flexible automation and artificial intelligence at scale across production, warehousing and delivery. This reduced order-to-delivery lead time by 50% and e-commerce consumer complaints by 30% while reducing costs by 34%.

5. Groupe Renault

Location: Maubeuge

Change story: Groupe Renault deployed 4IR technologies at scale in its 50-year-old plant to protect its competitiveness, reducing warranty incidents by 50%, increasing its flexibility to deal with the many vehicle configurations and reducing manufacturing costs by 16%.

6. Janssen Large Molecule

Location: Cork

Change story: With a fast-changing and increasing demand for biological products, Janssen has digitally connected R&D, its internal and external manufacturing, and deployed advanced process control solutions to drive near real-time visibility of supply chain status, improve reliability by 50%, as well as accelerate technology transfers while reducing costs by 20%.

7. Novo Nordisk

Location: Hillerød

Change story: Facing volume growth and rising complexities, Novo Nordisk has invested in digitalization, automation and advanced analytics, building a robust Industrial IoT operating system to be scaled across their manufacturing footprint, increasing equipment efficiency and productivity by 30%.

8. Saudi Aramco

Location: Khurais

Change story: As part of Aramco’s dedication to increase the resiliency of its operations, the Khurais oil field was built as a fully connected and intelligent field, with more than 40,000 sensors covering over 500 oil wells spread over 150km x 40km. This enabled autonomous process control, remote operation and monitoring of equipment and pipelines, resulting in maximizing the oil well production with at least 15% attributed to smart well completion technology alone.

9. DCP Midstream

Location: Denver

Change story: Driven by the need to combat market volatility with operational transformation and innovative efficiencies, DCP Midstream leveraged internally developed digital solutions and tech-venture partnerships to integrate the remote control of operations with its planning, logistics and commercial systems, allowing real-time optimization of margins and creating over $50 million in value.

10. Schneider Electric

Location: Lexington

Change story: To maintain a business and technological edge, Schneider Electric’s more than 60-year-old facility has implemented 4IR technologies to achieve a complete end-to-end transformation of its operations from supplier to customer. This has improved customer satisfaction by 20%, demand forecast accuracy by 20%, and reduced energy costs by 26%.