Amid recession fears, these factories are driving productivity, sustainability and resilient supply chains
The World Economic Forum announces the addition of 11 new factories and industrial sites to its Global Lighthouse Network, a community of more than 100 manufacturers demonstrating leadership in applying Fourth Industrial Revolution technologies to impact the productivity, workforce engagement, sustainability and supply chain resilience
Four member lighthouses with outstanding environmental footprint reductions earn the additional designation of Lighthouses of Sustainability. These global leaders are gaining momentum in delivering on their commitments to sustainability and greater operational competitiveness by realizing the potential of Fourth Industrial Revolution technologies in operations.
Amid warnings of a global recession, rising energy prices and disrupted supply chains, factories are offering business leaders and policymakers examples of how manufacturing can remain competitive and continue to create jobs.
“The manufacturing sector is the backbone of social and economic development. With the right corporate strategies and industrial policies, it delivers well-paying jobs, business innovation and drives environmental sustainability – even in times of crisis,” said Francisco Betti, head of advanced manufacturing and value chains at the World Economic Forum. “The Global Lighthouse Network’s new factories show how manufacturers can achieve their business goals while having a positive impact on economies, people’s livelihoods and the environment. The challenge for businesses and policy makers is to what extent they can scale these innovations across production networks and value chains.
Enno de Boer, Senior Partner, McKinsey & Company and global head of its digital manufacturing work, explains, “It’s hard enough to digitize a single site. But then, how do you go from one site to several? Especially small construction sites, all different from each other, with old equipment and old ways of working. This is what prevents so many companies from successfully digitizing. They think it can’t be done on a large scale, so they don’t try. And they remain vulnerable to the next big shock.
While most companies are held back, 2022 shows the emergence of scaling champions: in the new cohort of flagships, many companies such as Cipla, Danone and Sany Heavy Industry, are deploying large scale digital transformation programs in 20 to 40 factories in parallel. , with thousands of people involved, dedicated governance in place, and deployment of tenths of use cases of innovative yet standardized technologies, over periods of just 18 to 24 months.
“The newly designed flagships show that scaling can be done, with three must-haves. First, a clear strategy. Without it, you get stuck in pilot purgatory, never seeing what technologies are important to your business. Second, workforce capabilities. Without enough of the right skills, your transformation falters. Third, strong governance. Without a true execution engine, you won’t capture impact or won’t continue to improve,” added de Boer.
The latest cohort of lighthouses includes four sites designated as beacons of sustainability. These are:
Arçelik in Ulmi, Romania: Arçelik Ulmi’s Greenfield plant, powered by 100% green electricity, has deployed sustainable use cases such as a digital twin for energy management and a system closed-loop water management integrated with an advanced water treatment plant. In a water-stressed environment, it resulted in a 25% reduction in water consumption as well as a 17% reduction in energy consumption and 22% reduction in GHG emissions, per unit manufactured
Micron in Singapore: With growing demand for memory and storage solutions, Micron Singapore needs to expand and increase gigabyte production while reducing its environmental footprint. From 2018 to 2021, Micron Singapore increased production by approximately 270% and simultaneously reduced resources used per gigabyte produced by approximately 45%. This is made possible by the development of sustainable technologies with the optimization of material consumption through the monitoring of the environmental footprint.
Unilever in Dapada, India: with the aim of achieving the company’s sustainability goals of reducing Scope 1 and 2 emissions by 70% by 2025 compared to the 2015 baseline and To reduce water consumption while tackling rapidly increasing volumes, Unilever Dapada deployed 14 use cases such as Powered ML Energy optimization through an integrated energy management system, digital twin for accelerate environmentally friendly formulations. Dapada has reduced its scope 1+2 emissions by 54%, its scope 3 emissions by 43% and its water consumption by 36%, and is therefore ahead of its target to meet the emission reduction targets.
Western Digital in Shanghai, China: Amid growing demand, Western Digital doubled the site’s petabyte (PB) production between 2017 and 2021 while reducing its environmental footprint per PB to meet company ambitions. This result was made possible by several 4IR use cases such as machine learning to dynamically optimize the performance of the water recycling plant and consumption forecasting to detect abnormal energy consumption on the real-time operating database. These measures have reduced water consumption by 62% and energy consumption by 51% per PB.
The 11 new headlights include:
Agilent Technologies in Singapore: With ambitions to simplify high-tech manufacturing in low-volume, high-complexity instruments to meet growing customer demand, Agilent Singapore has deployed digital twin, AI, and software solutions. robotic automation powered by the IIoT to achieve sustainable growth and overcome specialist workforce bottlenecks and transforming the workforce into scalable 4IR-ready generalists. This resulted in an 80% increase in production, a 60% improvement in productivity, a 30% improvement in cycle time and a 20% cost of quality.
CATL in Yibin, China: To catch up with significant business growth and meet higher quality and sustainability expectations, CATL is constructing a large piece of virgin land in the city of Yibin. The plant further deployed AI, IoT and flexible automation in depth in addition to flagship digital initiatives at CATL Ningde HQ, and achieved 17% increased line speed, loss of yield reduced by 14% and zero carbon emissions.
Cipla in Indore, India: To preserve access to affordable, high-quality medicines worldwide while dealing with rising material and labor costs, Cipla deployed digital solutions, d automation and analysis on 22 Indian sites in parallel. Indore’s Oral Solid Dosage facility led this journey by implementing 30 4IR use cases, improving total cost by 26% and improving quality by three, while reducing greenhouse gas emissions (GHG) by 28%.
Danone in Opole, Poland: To cope with an increasing complexity of the product portfolio, Danone Opole has engaged its entire staff across functions and levels in a digital transformation journey to deploy the connected workshop, the artificial intelligence and large-scale automation. As a result, it improved costs by 19%, efficiency by 12% while improving quality and reducing GHG emissions by almost 50%. He has become the processing leader for the 39 other Danone factories in Europe and the leading employer in the local market.
Dr. Reddy’s Laboratories in Hyderabad, India: Faced with business challenges of steep price erosion and rapidly changing quality expectations, the 25-year-old site embarked on large-scale digitalization to support and grow in the generic pharmaceutical market. The site has deployed over 40 4IR use cases by operating in “garage mode” and leveraging IIoT and the democratized platform for advanced analytics. As a result, he reduced manufacturing costs by 43% while proactively improving quality and reducing energy consumption by 41%.
Flex in Sorocaba, Brazil: To improve the competitiveness, sustainability and health of the site, Flex has implemented 4IR initiatives along the end-to-end value chain, such as e-waste recycling enabled by IoT and supply chain control tower. The digital transformation journey resulted in a 50% improvement in labor costs, an 81% reduction in material losses, while increasing customer satisfaction (+18%) and well-being employees.
Haier in Qingdao, China: Faced with growing demand for personalized design, fast delivery and high quality, Haier refrigerator factory has harnessed big data, digital twin and advanced visual inspection technology to accelerate R&D , upgrade the manufacturing process and logistics planning mode. Order response time was shortened by 35%, production efficiency was increased by 35%, and quality performance was improved by 36%.
Midea in Shunde, China: In order to meet the demand for high-quality products delivered in shorter lead times, the Midea Shunde factory has deployed AI, digital twin and other 4IR technologies in the value chain from start to finish, achieving 24% lower unit production cost, 41% shorter delivery times, 30% shorter R&D times and 51% lower defect rates.
Mondelēz in Sri City, India: Driven by the aspiration to outpace the market through higher volume delivery, cost containment and increased resilience and diversity in a volatile environment, Sri City of Mondelez rolled out digitalization end-to-end, predictive analytics, artificial intelligence and advanced automations increase labor productivity by 89%, reduce manufacturing costs by 38% and retain 50% female workforce. Thus, making it a benchmark manufacturing site for Mondelez globally.
Sany Heavy Industry in Changsha, China: To meet the challenges of market cycle fluctuations and the complexity of industry-specific products (263 SKUs), Sany Changsha leveraged flexible automation, AI and IIoT at scale to create a digital and flexible heavy equipment manufacturing system. As a result, the site increased capacity by 123%, improved labor productivity by 98% and reduced unit manufacturing cost by 29%.
Western Digital in Shanghai, China: To cope with a 250% annual growth rate, a short 18-month technology transition pace, and labor challenges, the semi-backbone plant -drivers of Western Digital in Shanghai implemented various 4IR use cases such as automated product design system, virtual system based on machine learning. wafer test and intelligent planning system. The site reduced time to market by 40%, product cost by 62% and improved productivity by 221%.