Factories of the future in China are among those leading the way to production innovation

As the world of production faces a perfect storm wrought by the Fourth Industrial Revolution, the accelerating climate emergency, rising trade tensions and growing economic uncertainty, manufacturers must develop new capabilities and adapt. The companies best prepared to successfully navigate this storm are those which embrace advanced manufacturing technologies and solutions across their factories and supply chains, creating value and improving operations while also increasing sustainability. 

The need for vision and leadership in the manufacturing sector is clear: More than 70 percent of companies are struggling to adopt technology effectively, with their efforts to respond to the Fourth Industrial Revolution stuck in what we call “pilot purgatory”, the attempt to implement new technological solutions without realizing the expected returns on investment or improvements in efficiency.

To address this, the World Economic Forum’s Global Lighthouse Network, in collaboration with McKinsey & Company, has identified and brought together 44 of the most advanced factories in the world that are showing leadership in applying advanced manufacturing technologies, including artificial intelligence, the internet of things and big data analytics, to drive financial and operational impact at scale and transform value chains end-to-end. Twelve of the factories are located in China.

A new report outlines several key lessons from this community that can help the industry thrive in the Fourth Industrial Revolution:

First, ensure technology solutions can scale and evolve. To succeed in the rapidly changing landscape of the Fourth Industrial Revolution, factories must operate in a new way. That requires a strong focus on identifying problems and then creating solutions that go beyond adding incremental tools to existing processes. 

For example, SAIC Maxus in Jiangsu province, East China, has developed an app that enables customers to customize and place orders and then track the production status. This shortens the time to market and increases accuracy.

Second, optimize efficiency to drive sustainability. Manufacturing represents 54 percent of the world’s energy consumption and is responsible for 20 percent of global carbon emissions. Increases in efficiency driven by technology can help reduce materials consumption and CO2 emissions.

Weichai Power Company in Shandong province, East China, is using digital rapid modeling design, virtual development simulation and intelligent IoT-based testing to create an end-to-end product development system that has shortened new product development from 24 months to 18 months, and the product design reuse rate has increased by 30 percent.

Third, focus on reskilling and enabling workers. Any technological solution must consider the effects on workers and put people first. Manufacturing leaders in the Fourth Industrial Revolution leverage internal and external expertise to reskill their workforce.

This involves empowering workers to innovate with technology, managing talent development and implementing new ways of working. Some examples of effective learning methods are offering gamification of new skills, applying virtual or augmented reality and delivering real-time work instructions via digital platforms. 

For example, Foxconn Industrial Internet in Shenzhen, South China’s Guangdong province, has increased levels of problem-solving and collaboration on the front line.

Fourth, create a shared learning journey. The manufacturing sector can only realize the full benefits of the Fourth Industrial Revolution if there is a complete transformation across value chains and production systems. Leaders in this space should support the diffusion of technology through their entire production networks, lifting up small and medium-sized enterprises to improve overall results. This shared learning journey can lead to not only a return on investment but also a more inclusive distribution of knowledge, which can accelerate innovation across the industry.

The author is head of Shaping the Future of Advanced Manufacturing and Production at the World Economic Forum. The author contributed this article to China Watch, a think tank powered by China Daily. 

The views do not necessarily reflect those of China Daily.