18 of the smartest factories in the world – featuring Hitachi, Infineon, Renault, Unilever
The World Economic Forum has named 18 new factories, mostly from Asia (and mostly in China), as part of its ‘global lighthouse network’ of advanced manufacturers. They join the existing roster of 26 factories.
All of the sites have been assessed by consultancy McKinsey & Company; the lighthouse factories have built up from an original cohort of nine, in September 2018, with seven added in January last year, and a further 10 last summer.
Of the 18 new entrants, listed below, 10 are in Asia, three are in Europe, two are in Latin America and the Middle East each, and one is in North America. Brazil, Japan and Singapore are represnted for the first time in the list. New manufacturing industries include semiconductors and agricultural equipment.
The World Economic Forum says around half of the new lighthouses are “end-to-end factories”, driving value outside the four walls of the factory to effect change throughout their value chains. A report on the new factories is available here.
Of the 44 in total, 16 are in Europe, 15 are in Asia, three are in North America, two are in the Middle East, and one is in Latin America. It may be noted, the regional pictures looks different when factory ownership is considered.
Francisco Betti, head of shaping the future of advanced manufacturing and production at the World Economic Forum, commented: “Not only does the network celebrate leaders and best practices in effective technological deployment, but more important, it also creates a shared learning journey for the industry to accelerate the transition to the future of manufacturing. This transition must focus on sustainability and efforts dedicated to reskilling and empowering people.”
Enno de Boer, partner and head of McKinsey & Company’s global manufacturing practice, said: “The 44 lighthouses are trailblazers in the Fourth Industrial Revolution. Manufacturing is often the starting point for innovating a new, company-wide operating system powered by the latest technology to achieve new levels of sustainability, agility, speed-to-market, and productivity.
“The value doesn’t stop at the factory door: instead, lighthouses find impact across the entire end-to-end value chain, from suppliers through to customers. This year, we believe the Global Lighthouse Network has found the secret sauce to overcome pilot purgatory and generate impact at scale.
“By now the frontrunners have two to three years’ head start compared to their peers. That should set off alarm bells for all manufacturers that are still busy trying to prove technology’s value instead of using technology to change the way they work.”
The World Economic Forum Annual Meeting 2020 takes place on January 21-24 in Davos-Klosters, in Switzerland.
The new lighthouses are listed below; all text is from the World Economic Forum.
Baoshan Iron & Steel (Shanghai, China): This 40-year-old factory adopted digitization early. Its extensive implementation of artificial intelligence and advanced analytics has allowed it to maintain its industrial competitiveness in the digital era, creating value of $50 million.
Foton Cummins (Beijing, China): Foton Cummins has self-deployed internet of things and artificial intelligence throughout its end-to-end product life cycle in its design, production and after service. By doing so, it has improved product quality and customer satisfaction by 40%.
GE Healthcare (Hino, Japan): This GE factory, with more than 30 years’ experience of lean manufacturing, used Fourth Industrial Revolution technologies to transform into digital lean manufacturing. This has resulted in achieving the next level of performance, for example, cutting costs by 30% and reducing cycle times by 46%.
Haier (Shenyang, China): The Haier Shenyang refrigerator factory is an example of a user-centric mass customization model. Achieved by deploying a scalable digital platform that connects end-to-end with suppliers and users, it has improved direct labour productivity by 28%.
Hitachi (Hitachi, Japan): By leveraging a range of industrial internet of things technologies and data analytics in engineering, production and maintenance operations, Hitachi Omika Works has reduced the lead time of core products by 50% without undermining quality.
Infineon (Singapore): Enabled by a digital backbone and people development, Infineon has used data, advanced analytics and automation in its manufacturing plant and supply chain network to reduce direct labour costs by 30% and improve capital efficiency by 15%.
Johnson & Johnson DePuy Synthes (Suzhou, China): This site has scaled up standardized digital solutions developed in other Johnson & Johnson sites to drive performance improvements, including increasing productivity by 15%.
Micron (Singapore): This semiconductor fabrication facility has integrated big data infrastructure and industrial internet of things to implement artificial intelligence and data science solutions, raising product quality standards and doubling the speed at which new products are ramped.
Procter & Gamble (Taicang, China): This young site leveraged Fourth Industrial Revolution technologies to build the first lights-off operation in P&G Asia and connect its E2E supply chain. It increased productivity by 2.5x, boosted its production agility enabling e-commerce growth and improved employee satisfaction.
Weichai (Weifang, China): Weichai digitally transformed its entire end-to-end value chain to accurately understand customer needs and reduce costs. Powered by artificial intelligence and internet of vehicles, it shortened its R&D cycle by 20% and improved operating costs by 35%.
AGCO (Marktoberdorf, Germany): By combining digital solutions with intelligent line design, AGCO/Fendt can manufacture nine series of tractors – ranging from 72 to 500 horsepower – on a single assembly line with a batch size of one. This has increased productivity by 24% and reduced cycle time by 60%.
GSK (Ware, UK): This pharmaceutical site has applied Fourth Industrial Revolution technologies throughout its manufacturing operation, exploiting advanced analytics and neural networks to use existing datasets. It has improved line speed by 21%, reduced downtime and increased yield, delivering an overall equipment effectiveness improvement of 10%.
Henkel (Düsseldorf, Germany): Henkel has developed a cloud-based data platform that connects more than 30 sites and more than 10 distribution centres in real time. This helps meet growing customer and consumer expectations on service and sustainability, while achieving double-digit cost and inventory reductions.
Groupe Renault (Curitiba, Brazil): Renault Curitiba approached Fourth Industrial Revolution technologies with a focus on improving employee accountability and E2E connectivity, engaging its workforce and developing a connected ecosystem throughout value-chain players including dealers, customers and workers. Results include improving its productivity by 18%, without major capital deployment.
MODEC (Rio de Janeiro, Brazil): Leveraging advanced analytics for predictive maintenance, a digital twin of its process plant, and a proprietary data platform to accelerate development and enable the exponential scale-up of new algorithms across oil production vessels, this offshore facility has reduced downtime by 65%.
Petkim (Izmir, Turkey): This 35-year-old petrochemical facility embarked on a digital journey to drive value creation. Self-developed artificial intelligence algorithms optimize process and product pricing by analysing billions of production scenarios, resulting in an earnings before interest and taxes improvement of more than 20%.
Unilever (Dubai, UAE): In a drive to improve cost competitiveness, a local entrepreneurial team established a factory data lake and developed and deployed at scale Fourth Industrial Revolution use cases. With limited investment and in a short period of time it achieved a cost reduction of more than 25%.
Johnson & Johnson Vision Care (Jacksonville, USA): Vision Care has digitally connected its value chain end-to-end from suppliers to consumers, as well as implementing reconfigurable manufacturing, to achieve double-digit cost reduction and sales growth.