Proportion of 'lighthouse factories' from China reaches new high in WEF’s new list

The proportion of lighthouse factories from China reached a record high in the new list released by the World Economic Forum (WEF) on Tuesday, highlighting the continuous efforts of Chinese companies to accelerate technology transformation and upgrading in the manufacturing sector.

The WEF announced that 22 innovative manufacturers have joined the Global Lighthouse Network, including the latest cohort of 19 Fourth Industrial Revolution (4IR) and three Sustainability Lighthouses across 10 countries, such as China, the Czech Republic and Germany.

Of the total, 13 factories are located in China, accounting for nearly 60 percent, a record high.

Among the 19 new lighthouse factories this year, Mengniu Dairy (Ningxia) Co, SANY Renewable Energy in Shaoshan, Sanmen Nuclear Power Co, Zhengzhou Coal Mining Machinery (Group) Co and Taiyuan Heavy Industry Railway Transit Equipment Co are the world's first lighthouse factories in their respective sectors - dairy, wind energy equipment, nuclear power, coal mining machinery, and rail transit equipment.

Additionally, a Chinese company established the first overseas lighthouse factory. Foxconn Industrial Internet Viet Nam Co overcame challenges like reliance on imported materials and focused on developing local talent. By implementing 40+ 4IR use cases, including advanced planning and AI-driven automation, the site increased labor productivity by 190 percent, achieved 99.5 percent on-time delivery and cut manufacturing costs by 45 percent.

Digital technologies such as generative artificial intelligence and machine learning are key features of this batch of the "lighthouse factories."

The listed Hefei Midea Washing Machine Co told the Global Times that it has continued to explore and reconstruct new end-to-end green and sustainable capabilities, and has extensively deployed digital technologies to apply artificial intelligence in the product designing, manufacturing, and broad logistics.

Zhang Xiaoyi, vice president and CDO of Midea Group, said that the in-depth application of AI in the entire factory process covers 457 sub-scenarios, mainly through self-developed small sample intelligent algorithms and AI development cloud platforms, as well as IT&OT compound organizational construction guarantees, to cut large-scale promotion and operation and maintenance costs, which has helped cut energy consumption by 37.6 percent, and optimize logistical efficiency by 29 percent.

The latest cohort of Lighthouses reported an average 50 percent boost in labor productivity, due to various digital solutions such as interactive training programs, smart devices and wearables, and automated systems combining robotics, AI, and machine vision.

Process modelling and root-cause analytics have also unlocked efficiency gains across Lighthouses' end-to-end supply chains, on average reducing energy consumption by 22 percent, inventory by 27 percent, and scrap or waste by 55 percent, WEF said.

Karel Eloot, a global senior partner at McKinsey, said that the "lighthouse factories" have truly surpassed the pilot stage, and currently nearly 60 percent of core application cases use advanced artificial intelligence technology, comparing to just 11 percent in 2019. This reflects that artificial intelligence is reshaping manufacturing and has reached an unprecedented level of maturity.

Lighthouse factories are known as "the most advanced factories in the world". McKinsey defines them as factories that have successfully transitioned Fourth Industrial Revolution technology from the pilot stage to large-scale integration, achieving significant financial and operational benefits.

Since the first selection in 2018, a total of 172 "lighthouse factories" around the world, with 74 factories located in China, representing 43 percent.

The Global Lighthouse Network is a global initiative created by the WEF and McKinsey in 2018. It has since released twelve lists of 'lighthouse factories'.