If ever there was a time for manufacturers to deploy digital transformation across their operations, the time is now.
Increasing energy price hikes, disrupted supply chains, worsening climate change and rising recession risks are proving a catalyst for an increasing number of manufacturers, as they realise the many benefits applying Fourth Industrial Revolution technologies (4IR) bring.
Industry 4.0 is the use of state-of-the-art technologies to facilitate and automate production, with employees working side by side with smart equipment, interconnected devices, and robots to produce future products.
Companies applying such technologies are already seeing benefits, which include driving impact in productivity, workforce engagement, supply chain resilience and sustainability – according to the World Economic Forum, whose Global Lighthouse Network lists more than 100 manufacturers showing leadership in applying such technologies.
These companies, including 11 newly listed ones, show how “manufacturers can meet business goals while having a positive impact on economies, people's livelihoods and the environment,” says Francisco Betti, WEF’s Head of Advanced Manufacturing and Value Chains.
While many companies are held back from digital transformation due to thinking the scale of such an operation isn’t possible, many more like Danone, Cipla and Sany Heavy Industry are proving that it is possible – as they deploy large digital transformation programs at scale across 20 to 40 factories in parallel, with thousands of people involved.
To be successful, however, companies must have a clear strategy, along with workforce capabilities, and strong governance, without which you “won’t capture impact to keep improving,” says Enna de Boer, McKinsey’s global lead of its digital manufacturing.
Digital transformation journey resulting in cost improvements
Cutting costs is the aim of all companies and especially as recession bites, and thanks 4IR technologies, at scale, many manufacturers are finding success in slashing labour and material costs and improving productivity.
Facing increased material and labour costs but wanting to preserve access to high-quality affordable drugs globally, India-headquartered pharma Cipla deployed digital, automation and analytics solutions to 22 of its Indian sites simultaneously leading to a significant reduction in costs. The global pharma’s Indore Oral Solid Dosage facility led this journey by implementing 30 4IR use cases leading to a reduction of total costs by 26%, while enhancing quality by three times.
Snacks giant Mondelez also managed to reduce its manufacturing costs at its Sri City manufacturing facility by 38% and increase labour productivity by 89% thanks to the deployment of end-to-end digitalisation, predictive analytics, AI and advanced automations.
While Danone’s factory in Opole, Poland, has improved costs by 19% and efficiency by 12%. Dubbed a transformation leader for the other 39 Danone plants in Europe, the factory successfully engaged its whole workforce across functions and level into a digital transformation journey to deploy connected shopfloor, AI, and automation at scale.
Adoption of 4IR technologies to reach sustainability targets
As well as improved productivity and reduction in costs and materials, deployment of 4IR use cases such as ML and digital twin can have a significant impact on environmental footprint reductions, helping organisations to achieve their sustainability pledges.
Turkish home appliance manufacturer Arcelik’s washing machine plant in Ulmi, Romania,
Is leading the way in efficient and sustainable manufacturing using cutting-edge technologies for enhanced energy and water efficiency.
With the aim to hit net-zero emissions in all operations by 2050 through green investments in renewable energy, as well as energy efficiency in products and production, Arcelik set out to “build not only a production-efficient Industry 4.0 unit, but also one that reflects our commitment to contribute to a better future,” says Arcelik CEO Hakan Bulgurlu.
Powered by 100% green electricity, the factory is the first and only production unit in Romania certified as LEED Platinum, the highest level of green certification obtained by a factory. And since it began operation, the plant has prevented 684 tons of CO2 emissions.
The factory deployed sustainability use cases such as digital twin for energy management and closed-loop water management system integrated to an advanced water treatment plant, resulting in a reduction of water (25%) and energy (17%) consumption. A digital twin model of the plant self-adjusts the lighting and optimises the cooling and heating systems, while the Building Management System uses an algorithm that employs roughly 15,000 real-time data points from more than 650 energy-measurement devices and sensors.
In a bid to achieve corporate sustainability goals of 70% reduction in Scope 1 & 2 emissions by 2025 over baseline of 2015 and reduce water consumption while tackling rapidly increasing volumes, Unilever in Dapada, India, deployed 14 use cases including ML-powered energy optimisation through integrated energy management system, and digital twin to accelerate eco-friendly formulations.
This resulted in reductions of scope 1 & 2 emissions by 54%, scope 3 emissions by 43%, and water consumption by 36%. This puts the manufacturing facility ahead of its targets.
And finally, semiconductor backend factory Western Digital in Shanghai successfully doubled the site’s petabyte (PB) output between 2017 and 2021 while reducing its environmental footprint per PB to achieve its corporate ambitions. Thanks to multiple 41R use cases such as ML to dynamically optimise the performance of the water recycling plant, the company reduced water consumption by 62% and energy consumption by 51% per PB.