Supply chain resilience and ESG define new cohort of ‘Lighthouses’

The World Economic Forum has announced the addition of 11 new factories and industrial sites to its Global Lighthouse Network.

This is community of over 100 manufacturers that are showing leadership in applying Fourth Industrial Revolution technologies to drive impact in productivity, workforce engagement, sustainability, and supply chain resilience.

Amid warnings of a global recession, energy price hikes and disrupted supply chains, the factories offer examples of how the manufacturing sector can stay competitive.
 
“Manufacturing is the backbone of both social and economic development. With the right corporate strategies and industrial policies, it provides high-wage jobs, commercial 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 latest cohort of lighthouses includes four sites designated as Sustainability Lighthouses in Asia Pacific. This includes: 

• Micron in Singapore: With the growing demand for memory and storage solutions, there is a need for Micron Singapore to expand and increase Gigabyte production while reducing environmental footprint. From 2018 to 2021, Micron Singapore increased output by ~270% and simultaneously reduced resources used per Gigabyte produced by ~45%. This is enabled by sustainable technology development with optimization of materials consumption through environmental footprint tracking.

• Unilever in Dapada, India: In a bid to achieve corporate sustainability goals of 70% reduction in Scope 1 & 2 emissions by 2025 over baseline of 2015 and reducing water consumption while tackling rapidly increasing volumes, Unilever Dapada deployed 14 use cases such as ML powered energy optimization through integrated energy management system, digital twin to accelerate eco-friendly formulations. Dapada reduced its scope 1+2 emissions by 54%, its scope 3 emissions by 43% and its water consumption by 36%, and as a result is ahead of its goal to achieve the emission reduction targets.

• Western Digital in Shanghai, China: In the context of growing demand, Western Digital doubled the site’s petabyte (PB) output between 2017 and 2021 while reducing its environmental footprint per PB to achieve corporate ambitions. This result was enabled by multiple 4IR use cases such as machine learning to dynamically optimise the performance of the water recycling plant and should consumption prediction to detect abnormal energy consumption based on real-time operating data. These measures reduced water consumption by 62% and energy consumption by 51% per PB.

Enno de Boer, senior partner, McKinsey & Company and Global Lead of its digital manufacturing work, explains: “It’s hard enough to digitise a single site. But then how do you scale from one site to many? Especially small sites, all different from each other, with old equipment and old ways of working. That’s what keeps so many companies from digitising successfully—they think it can’t be done at scale, so they don’t try. And they’re left vulnerable to the next big shock.”
 
However, 2022 shows the emergence of scaling champions: in the new cohort of lighthouses, many companies such as Cipla, Danone and Sany Heavy Industry, are deploying large digital transformation programs at scale across 20 to 40 factories in parallel, with thousands of people involved, dedicated governance in place and deploying tenths of innovative yet standardised technology use cases, over time spans of just 18 to 24 months.
 
“The newly designated Lighthouses show that scaling can be done, with three must haves. First, clear strategy. Without that, you get stuck in pilot purgatory, never seeing which technologies matter for your business. Second, workforce capabilities. Without enough of the right skills, your transformation runs out of steam. Third, strong governance. Without a real execution engine, you won’t capture impact or keep improving.”, added de Boer.

In an environment suffering from water stress, it resulted in a reduction of water consumption by 25% as well as a reduction of energy consumption by 17% and GHG emission by 22%, per unit manufactured.