Factories of the future call for responsible scaling

Three select sites are receiving new designations as Sustainability Lighthouses for sustainability breakthrough.

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 (4IR) 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 amidst international unrest and economic headwinds. Furthermore, there are new pressures to maintain sustainability commitments and accelerate the transition towards renewable energy, while addressing more immediate energy market disruptions.

Leading companies have responded, stepping forward to set new standards and put innovation to work in the name of environmental sustainability. Defying the conventional wisdom that good stewardship of the planet and profitability are at odds with one another, they have shown how responsible changes can boost eco-efficiency and workforce engagement, yielding sustainability benefits while achieving business goals – and even realizing competitive advantages.

Members of the Global Lighthouse Network apply 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, while 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 4IR technologies in operations.

The new report, Global Lighthouse Network: The Playbook for Responsible Industry Transformation, outlines how manufacturers are effectively scaling 4IR 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. 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” said Francisco Betti, Head of Shaping the Future of Advanced Manufacturing and Value Chains, World Economic Forum.

Enno de Boer, Partner, McKinsey & Company and Global Lead of its digital manufacturing work, said: “In the face of geopolitical challenges, supply chain resilience and responsible manufacturing matters now more than ever. 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 on Apr. 6, which features CEOs and global manufacturing leaders focused on scaling digital solutions across their production networks to drive operations towards carbon neutrality and boost workforce engagement, advancing a responsible development.

The 3 new Sustainability Lighthouses are:

Johnson & Johnson Janssen (Cork): Janssen Sciences Ireland has been long supporting regional initiatives for sustainability improvement and now enabling the corporate 2030 Pledge of carbon neutrality. Through 4IR-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 site footprint was expanded by 34% to meet the growing business needs.

Schneider Electric (Le Vaudreuil): Schneider Electric Le Vaudreuil has implemented 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 global Schneider Electric pledge. The smart factory is equipped with a zero-reject water recycling station connected to cloud analytics and monitored by AI model to predict process drifts & leading globally to -64% 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. 4IR technologies, such as IoT sensors, digital twin modeling, analytics powered plant management system and lights-out automation with machine learning increased their sustainability impacts, while the site grew 43% (CAGR) in the last 4 years. This concerted effort enabled the Malaysia Green Building Index (GBI) certification for the site.

The 13 new Lighthouses are:

Europe

Johnson & Johnson Janssen (Latina): Janssen Latina has been deploying 4IR solutions that deliver faster, competitive and agile launches of new products and quality release, led non conformances reduction by 30% and product release lead time optimization by 84% while reducing energy costs by 10% and logistics labor costs by 72%.

Sanofi (Paris): With the ambition to accelerate saving generation, Sanofi embarked 2 years ago on a digital & analytics transformation of its procurement operations. To date it has built and deployed 6 products: data platform, should cost modeling & input cost monitoring, smart tender analytics, supplier performance tracker and cockpit that have delivered 10 % savings on addressed spent and transformed the way we work.

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 3x historical COGS savings by end of 2024. To achieve this Global Procurement implemented 4IR technologies within 1.5 years, increased labor efficiency by 30%, upskilled its workforce and optimized cross-functional processes to break down silos; and is leading the way for 4IR at Teva.

Asia

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

Bosch Automotive (Changsha): Facing 20% labor wage increase, year-over-year 10%+ price reduction request from customer and high fluctuation in customer orders, Bosch Changsha implemented 45 4IR 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 booming market of water heater and increasing requirement of high-end product and service, Haier Zhengzhou, as a new built plant, leverages big data, 5G edge computing and ultra-wide band solutions to build close connection with supplier, plant and customer, which speed up order response lead-time by 25%, increase production efficiency by 31% and improve quality performance by 26% since its start in 2020 to 2021.

Johnson & Johnson Consumer Health (Bangkok): Facing agility, profitability, and cost to serve challenges, J&J Bangkok site adopted 4IR technology such as collaborative supply chain control tower, computational fluid dynamics, AI energy optimization, 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, 20% carbon footprint optimization.

LG Electronics (Changwon): Facing growth of its product portfolio complexity by 70%, rising quality expectations from customers and labor shortages, LGE re-designed an old factory in Changwon into a digital plant leveraging flexible automation, digital performance management, and artificial intelligence to improve productivity by 17%, 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 artificial intelligence at scale to transform the manufacturing system, increased labor productivity by 52%, reduced production lead time by 25% eliminated 20% utility consumption per unit reduction.

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

Procter & Gamble (Guangzhou): In order to meet 45% increased eCommerce demands, P&G Guangzhou leveraged AI, flexible automation, and digital twins to integrate multi-systems across value chain to serve omni channels 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 3 years.

Schneider Electric (Hyderabad): Facing changing customer demands and a 54% business growth, Schneider Electric implemented 4IR 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%.