Advanced Manufacturing

Lighthouses Live: Reimagining Operations for Growth

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Beatrice Di Caro
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Advanced Manufacturing

In collaboration with McKinsey & Company

The Lighthouses awards honour manufacturing leaders that show accelerated adoption of Fourth Industrial Revolution technologies. Across sectors and industries, the collaborative efforts of the Global Lighthouse Network illuminate the opportunities available to organizations that scale up digital operations across the value chain, delivering resilience, growth, and sustainability.

We are celebrating the newest members of the Global Lighthouse Network, a World Economic Forum project in collaboration with McKinsey & Company.

At our live event on 17 March, we heard from company leaders about how they are using 4IR technologies to power growth across multiple dimensions including productivity and environmental sustainability, and learn how to bring use cases of digital technologies to your own organization.

It featured:

Speakers:

  • Alex Gorsky, Chairman and CEO, Johnson & Johnson
  • Börje Ekholm, President and CEO, Ericsson
  • Carsten Knobel, CEO, Henkel
  • Enrique Lores, President and CEO, HP Inc.
  • Kexing Huang, Chairman and CEO, Tsingtao Brewery
  • Laura Rocchitelli, President and CEO, Rold
  • Paul Fang, Chairman and CEO, Midea
  • Revathi Advaithi, CEO, Flex
  • Roland Busch, CEO, Siemens
  • Satya Nadella, CEO, Microsoft
  • Simon Lin, Chairman & CEO, Wistron
  • Sumant Sinha, Chairman and Managing Director, ReNew Power
  • T. V. Narendran, CEO & Managing Director, Tata Steel
  • Volkmar Denner, Chairman of the Board of Management, Robert Bosch
  • Young Liu, Chairman and CEO, Foxconn Technology Group

Here are some of the best quotes from the event:

COVID-19 and digital technology

In a fireside chat, Satya Nadella, CEO, Microsoft, and Alex Gorsky, Chairman and CEO, Johnson & Johnson, discussed how the COVID-19 pandemic has accelerated digital adoption - and how companies are being transformed by the power of technology.

Gorsky agreed with Nadella's observation that "two years of digital transformation has happened in just two months". From drone delivery to e-commerce and telehealth, there has been unprecedented acceleration, but also greater expectations around transparency, and sustainability of value chains, driven by demand for personalization.

He said there was "no way" Johnson & Johnson would have been able to create a vaccine without collaboration, knowledge sharing - and the application of digitalization and new technologies.

"Vaccine design was enabled by data sciences and clinical trials were a large database exercise."

Resilience through digital capability

Nadella praised vaccine producers for the "miracle of ingenuity", as well as advanced manufacturing sectors that have "continued to keep our economy going".

He said in the pandemic, Microsoft had became "digital first responders to all the first responders out there, from healthcare to manufacturing and education".

"I shudder to think what the world would have looked like without technology like the cloud.

"Resiliency driven by digital technology has now become paramount. We will have resilience by digital capability because it’s a malleable resource."

In the second wave of digitalization, IoT capabilities are now in factory plants, and the ability to use computation at the edge will make manufacturing more efficient, Nadella added.

Just as ExCel changed knowledge work, now we have low-code tools to drive productivity - and an amazing amount of digital tech adoption will help to tackle future challenges.

Tech for good

Nadella and Gorsky agreed there is a need to focus on sustainability, innovation, skilling, wellbeing and culture in manufacturing and all sectors in the future - and tech can help.

Gorsky said: "We need to consider stakeholders, our communities, the environment, we’ve all got to think how to we incorporate these activities into our businesses. Sustainability is an essential part of healthcare."

Nadella said the way we approach learning and skilling is going to be structurally changed and that wellbeing is another big issue. We have to think about productivity more broadly, data can be helpful in terms of reallocating the most scarce resource, which is our time, to help prevent burnout.

"I don't subscribe to one dogma, the tools and technology and management capability will help us overcome these challenges."

'Sustainability at the centre'

Börje Ekholm, President and CEO of Ericsson, which built the first 5G Lighthouse Factory in Texas, said it makes good business sense to put sustainability at the centre.

"Our factory in Dallas improves the resilience of our supply chain. If we build factories in a sustainable way, it will cut energy consumption, serve customers better."

Digital strategies at the Henkel Lighthouse in Spain have driven down costs whilst helping to reducing the company's carbon footprint - CO2 have been reduced by 10%.

CEO Carsten Knobel said: "Industry 4.0 and technologies of the 4IR are the key lever to drive sustainable growth. Machine learning can optimize energy-intensive processes."

Enrique Lores, President and CEO, HP Inc., whose Lighthouse in Singapore is driven by automation, digitization and artificial intelligence, said "innovating with purpose" is about the impact they’re having on the environment and in the communities.

"We need to continue to aspire to drive changes in our overall ecosystem, I am very optimistic about where we can go in future."

Tsingtao Brewery in Qingdao, China, has successfully deployed digital solutions to reduce lead time to address consumer demands for customized orders.

Kexing Huang, Chairman and CEO of Tsingtao Brewery said: "Consumers expect a good product, but also a company that has values and produces in a green and simple manner.

"By using new technology, we can improve our efficiency and reduce energy consumption and incorporate green and sustainable development to the whole value chain."

Successful digital transformations

T. V. Narendran, CEO & Managing Director, Tata Steel, which has a Lighthouse in Jamshedpur in India, said: "To mobilize the entire workforce for digital transformation, we asked people down the line what can we do with technology to make your life easier? Once you have that kind of buy-in, you can make changes across the whole organization."

Volkmar Denner, Chairman of the Board of Management, Robert Bosch, said employees were proud to work in the Lighthouse Factory in Suzhou, China.

"We put people at the centre of all we are doing – you can use digital tools to replace jobs, but we try to make people even more valuable. We try to free them up from tedious, dangerous work."

Paul Fang, Chairman and CEO, Midea, whose Lighthouse is in Shunde, China, said:
"Digital transformation is not for one person, everyone has to participate – we need to have a digital mindset, we need to turn to technologies, the work methods of employees need to be digitalized, so we need to invest."

Knobel said: "Our employees make the difference, there is no 4IR without innovative people driving the change, we foster lifelong learning for all employees."

Ending the session, McKinsey Senior Partner Katy George, who leads the Operations Practice in North America, said: "Technology should not be about tech for tech’s sake, but a roadmap has to be coupled with business objectives, across the whole organization, not just pockets of innovation."

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