Factories of the future call for responsible scaling that prioritizes planet and people

Published
25 Mar 2022
2022
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Di Dai, Public Engagement, World Economic Forum, di.dai@weforum.org

  • The World Economic Forum announces 13 new members of the Global Lighthouse Network, a community of more than 100 advanced manufacturing sites and value chains that advance efficiency, sustainability and workforce engagement through innovation
  • Three select sites are receiving new designations as Sustainability Lighthouses for their sustainability breakthroughs
  • The Global Lighthouse Network releases a playbook for tech-infused industry transformation for a positive impact on people and the planet
  • Find out more from these leading innovators at the network’s Lighthouses Live event on 6 April here

Geneva, Switzerland, 30 March 2022 – The World Economic Forum announces today the addition of 13 new sites to its Global Lighthouse Network, a community of 103 world-leading manufacturing facilities and value chains using Fourth Industrial Revolution technologies to increase operational performance and environmental sustainability.

Local manufacturing and supply chain resilience are crucial in the current geopolitical context, as organizations strive to engage their workforces and sustain operations amid international unrest and economic headwinds. There are also new pressures to maintain sustainability commitments and accelerate the transition towards renewable energy, while addressing more immediate energy market disruptions.

Members of the Global Lighthouse Network are applying advanced technologies to increase supply chain resilience, augment green measures and boost workforce engagement while bolstering productivity. The result: 66% of lighthouses made sustainability improvements by reducing consumption, resource waste and carbon emissions, and 82% increased productivity.

Three lighthouses with outstanding environmental footprint reductions are gaining the additional designation of Sustainability Lighthouses. These global leaders are gaining momentum in achieving their sustainability pledges and greater operational competitiveness by realizing the potential of Fourth Industrial Revolution technologies in operations.

A new report, The Global Lighthouse Network Playbook for Responsible Industry Transformation, outlines how manufacturers are effectively scaling Fourth Industrial Revolution technologies and achieving all these results at once.

“As the world grapples with many challenges, it is remarkable to see how lighthouses are yielding sustainability benefits while achieving business goals, which we call eco-efficiency,” said Francisco Betti, Head of Shaping the Future of Advanced Manufacturing and Value Chains, at the World Economic Forum. “We need them to continue illuminating the way forward for the global manufacturing community by shaping a responsible future of manufacturing that works for people, society and the environment.”


Enno de Boer, Partner, McKinsey & Company and Global Lead of its digital manufacturing work, added: “The 103 lighthouses show how digital technologies drive value chain resilience, growth, and environmental and people sustainability. In the past, sustainability and resilience have often come at the cost of efficiency, but that is no longer true. Companies now have a digital playbook and tech tools at their disposal to make their operations more flexible, more agile and more sustainable. With these tools, they can amplify human capability, achieve sustainability breakthroughs and accelerate technological innovation – the recipe for smart manufacturing.”


The latest cohort of lighthouses will be officially presented at the Global Lighthouse Network Lighthouses Live event, which will feature chief executives and global manufacturing leaders focused on scaling digital solutions across their production networks to drive operations towards carbon neutrality and boost workforce engagement. The event will be livestreamed on 6 April 2022 (14.00-15.15 CET) here.

The 3 new Sustainability Lighthouses are:

The Janssen Pharmaceutical Companies of Johnson & Johnson (Cork): Janssen Sciences Ireland Unlimited Company has been long supporting regional initiatives for sustainability improvement and now enabling the corporate 2030 pledge of carbon neutrality. Through Fourth Industrial Revolution-enabled real-time release, adaptive process control and other sustainability efforts, the site has optimized its processes and reduced carbon emissions per kg of product by 56%, while the site footprint has expanded by 34% to meet growing business needs.

Schneider Electric (Le Vaudreuil): Schneider Electric Le Vaudreuil has implemented industrial internet of things (IIoT) sensors connected to digital platforms, unlocking data to optimize energy management by 25%, reduce material waste by 17% and minimize CO2 emissions by 25%, with the objective to be net-zero carbon by 2025, without offset and ahead of the global Schneider Electric pledge. The smart factory is equipped with a zero-reject water recycling station connected to cloud analytics and monitored by an artificial intelligence (AI) model to predict process drifts, leading globally to 64% in water reduction.

Western Digital (Penang): Western Digital achieved a reduction in energy by 41%, water consumption by 45% and material waste by 16% through a vertically integrated smart factory. Fourth Industrial Revolution technologies, such as internet of things (IoT) sensors, digital twin modelling, analytics powered plant management system and lights-out automation with machine learning, increased their sustainability impacts, while the site grew 43% (Compound Annual Growth Rate) in the last four years. This concerted effort enabled the Malaysia Green Building Index (GBI) certification for the site.

The 13 new lighthouses are:

Europe

The Janssen Pharmaceutical Companies of Johnson & Johnson (Latina): Janssen Latina has been deploying Fourth Industrial Revolution solutions that deliver faster, competitive and agile launches of new products and quality release, led non-conformance reduction by 30% and product release lead time optimization by 84%, while reducing energy costs by 10% and logistics labour costs by 72%.

Sanofi (Paris): With the ambition to accelerate saving generation, Sanofi embarked two years ago on a digital and analytics transformation of its procurement operations. To date, it has built and deployed six products – data platform, should-cost modelling and input-cost monitoring, smart tender analytics, supplier performance tracker and cockpit – that have delivered 10% savings on addressed spent and transformed the way of working.

Teva Pharmaceuticals (Amsterdam): Global Procurement is the main contributor to Teva's ambitious Gross Margin Improvement Program and contributes to the Free Cash Flow target, delivering three times historical Cost of Goods Sold (COGS) savings by the end of 2024. To achieve this, Global Procurement implemented Fourth Industrial Revolution technologies within 1.5 years, increased labour efficiency by 30%, upskilled its workforce and optimized cross-functional processes to break down silos. It is leading the way in Fourth Industrial Revolution technologies at Teva.

Asia

BOE Technology Group (Fuzhou): To pursue premium product market share with high-quality expectation, BOE Fuzhou has widely adopted AI and advanced analytics in a fully automated production system to achieve best-in class quality excellence, equipment efficiency and energy sustainability with a new product yield ramp-up period shortened by 43%, cost per unit reduced by 34% and output increased by 30% without major capex investment.

Bosch Automotive (Changsha): Facing a 20% labour wage increase, year-over-year 10%+ price reduction request from customer and high fluctuation in customer orders, Bosch Changsha implemented 45 Fourth Industrial Revolution use cases with automation and AI to increase competitiveness, maintained the market position with 100% NEV (new energy vehicle) customer portfolio penetration and reached carbon neutrality.

Haier (Zhengzhou): Facing a booming market for water heaters and increasing requirements of high-end products and services, Haier Zhengzhou, leverages big data, 5G edge computing and ultra-wide band solutions to build a close connection with suppliers, plants and customers. This has sped up order response lead times by 25%, increased production efficiency by 31% and improved quality performance by 26% from 2020 to 2021.

Johnson & Johnson Consumer (Thailand) Ltd. (Bangkok): Facing agility, profitability and cost to serve challenges, Johnson & Johnson Consumer Health site in Bangkok adopted Fourth Industrial Revolution technologies, such as collaborative supply chain control tower, computational fluid dynamics, AI energy optimization and advanced data analytics on logistics. The value chain delivers 47% revenue growth with 25% inventory reduction, and it reduced 43% end-to-end supply chain lead time, 42% productivity improvement and 20% carbon footprint optimization.

LG Electronics (Changwon): Facing growth of its product portfolio complexity by 70%, rising quality expectations from customers and labour shortages, LGE redesigned an old factory in Changwon, South Korea, into a digital plant leveraging flexible automation, digital performance management and AI to improve productivity by 17% and field quality by 70%, while reducing inventory by 30% and energy consumption by 30%.

Midea (Jingzhou): Due to consumer expectations with higher product complexity, Midea Jingzhou, as a 30-year-old factory, adopted flexible automation, IoT and AI at scale to transform the manufacturing system, increase labour productivity by 52%, reduce production lead time by 25% and eliminate 20% utility consumption per unit.

Midea (Hefei): Targeting domestic high-end product segments and oversea market expansion, Midea Hefei Laundry Appliances widely deployed AI and IoT technologies across end-to-end value chains to form a faster response and higher efficiency supply chain, which resulted in a lead time reduction by 56%, customer report defect rate reduction by 36% and labour productivity improvement by 45%.

Procter & Gamble (Guangzhou): To meet 45% increased e-commerce demands, P&G Guangzhou leveraged AI, flexible automation and digital twins to integrate multi-systems across its value chain to serve omni-channel consumers. This increased the responsiveness of their supply chain with 30% reduction of inventory, 15% reduction of logistics cost and 99.9% on time delivery within three years.

Schneider Electric (Hyderabad): Facing changing customer demands and a 54% business growth, Schneider Electric implemented Fourth Industrial Revolution technologies such as IIoT infrastructure, predictive/prescriptive analytics and AI deep learning. This has resulted in reduction of field failure by 48% and lead time by 67%, while manufacturing efficiency improved by 9%.

Unilever (Dapada): Driven by the need to accelerate the pace of innovation and speed of response to consumer demand while augmenting cost competitiveness in an increasingly challenging market, and acting on sustainability goals, Unilever Dapada deployed digital, automation and AI-ML across its end-to-end value chain to shorten product development lead time by 50%, reduce manufacturing cost by 39% and energy by 31%.

Notes to editors

Read Global Lighthouse Network:The Playbook for Responsible Industry Transformation here

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