Manufacturing and Value Chains

How to harness technology and talent in manufacturing: Lessons from the Global Lighthouse Network

The Global Lighthouse Network is working to optimize productivity and the happiness of the global workforce Image: Photo by Testalize.me on Unsplash

Fernando Perez
Senior Partner, McKinsey & Company
Federico Torti
Initiatives Lead, Advanced Manufacturing and Supply Chains, World Economic Forum
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  • In the ever-evolving landscape of manufacturing and supply chains, the World Economic Forum's Global Lighthouse Network stands as a beacon of productivity innovation.
  • These Lighthouses are pioneers of technology and leaders in harnessing the power of their workforce to drive meaningful change.
  • Find out how you can become part of this transformative journey.

In the ever-evolving landscape of manufacturing and supply chains, the World Economic Forum's Global Lighthouse Network stands as a beacon of technology innovation. Over the past six years, the Global Lighthouse Network has celebrated 153 extraordinary stories of digital transformation, showcasing how the most forward-thinking organizations are redefining their industries.

A recent survey of Lighthouse designation recipients, conducted in 2023, of Lighthouse recipients revealed a compelling commonality: success is deeply rooted in focusing on the mutual interaction between technology and talent. While deploying technology innovation to improve performance, Lighthouses similarly deployed talent innovations to drive incremental value to their businesses and their talent. These Lighthouses are pioneers of technology and leaders in harnessing the potential of their workforce to drive meaningful change.

Here, we delve into the insights gleaned from the Global Lighthouse Network and propose its next frontier: a new phase of work highlighting how workforce enablement has emerged as a core element to achieving an improved value proposition for the enterprises and the people they employ.

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Beyond technology: The critical role of workforce empowerment

In our recent survey with GLN award recipients, we reviewed the 383 use case submissions for commonalities that helped drive performance beyond digital use case. See Exhibit 1.

Exhibit 1: Digital use cases deployed by Lighthouses in support of key workforce priorities

Upon review of the submissions, we found that ~75% of Lighthouses had an additional focus on talent, citing talent enablement as a pivotal factor in their digital transformation journeys. Of the advanced and developing use cases deployed, 56%% focused on upskilling and technology implementation to drive increased productivity and the remainder focused on improving stability through worker experience and improving the safety of operations at the site. The results of these efforts spoke for themselves — on average, Lighthouses were able to reduce non-value-added tasks by 15-20% and boost overall equipment effectiveness (OEE) by 5-10%.

In their journey, Lighthouses were no strangers to the talent challenges faced by other frontline talent leaders. See Exhibit 2.

Exhibit 2 Workforce challenges faced by Lighthouse companies

More than half of all respondents shared that they faced retention challenges and labour shortages and a large majority stated that matching the right skills with the factory needs had proven daunting.

The ability to create a strategic advantage by building talent capability is clearly exemplified by the Lighthouse community, but understanding how to develop an effective talent strategy remains elusive for many leaders.

Have you read?

Understanding the building blocks of talent

Over the last six months, the Advanced Manufacturing and Supply Chains Centre at the World Economic Forum has collaborated with McKinsey & Company to engage Lighthouse organizations and other workforce leaders to understand what types of innovations employers are deploying to overcome their most pressing challenges. Insights were gathered across geographies, industries, and enterprise sizes, identifying digital and non-digital innovations across five primary innovation domains.

1. Work design

Innovations that change the fundamental job task for talent (e.g., AGVs, automated warehousing, dark facilities).

2. Talent Planning

Innovations that support the organizational capability to identify the talent supply required to meet targets (e.g., Talent S&OP, skill matrices).

3. Talent attraction

Innovations that support the creation, curation and application of potential talent into the organizational pipeline (e.g., early intervention programmes, formal apprenticeships).

4. Skilling and upskilling

Innovations that support the training or retraining of individuals from onboarding to offboarding (e.g., university partnerships, no-skill pathways, training COEs).

5. Talent Management and retention

Innovations that change the way talent interacts with their work or which drive retention of talent across the frontline (e.g., AR, variable shift structures, performance reward systems).

To date, the initiative has identified more than 40 talent innovations across the domains that have improved performance and enabled a safer, more engaged and higher-performing workforce. These innovations have shown the ability for leaders to create impact across a variety of outcomes, including:

Productivity gains: How specific talent innovations lead to higher output and efficiency.

Retention rates: The impact of talent innovations on employee satisfaction and retention.

Skill development: Effective methods for bridging skill gaps and fostering continuous learning.

Operational performance: Improvements in overall equipment effectiveness, customer service levels, product quality, labour efficiency and other critical performance indicators

Shaping the next generation of talent innovations

To unlock the workforce's potential and identify innovations that deliver substantial value, the Frontline Talent of the Future has been launched. This aims to discover and share impactful, proven and scalable talent innovations that drive significant improvements in operational performance. Over the course of the year, the initiative will continue to identify and share the most impactful workforce transformation strategies and innovations within the community.

We invite you to be part of this transformative journey. By engaging with our initiative, you will gain new ideas on how to continue the development of your own talent journey and help your peers learn through your experience in building highly effective talent innovations.

Interested in learning more? Visit our Frontline Talent of the Future initiative webpage to discover how you can participate and contribute to driving deeper insights on how to unlock the workforce and drive higher impact transformations in manufacturing.

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