The “Manufacturing Lighthouse (lighthouse factory)” refers to a factory that leads the future of the global manufacturing industry by utilizing the core technologies of the 4th industrial revolution. It is a production plant that improves productivity, quality, and customer satisfaction by applying core technologies of the 4th industrial revolution such as AI (Artificial Intelligence), big data, and IoT (Internet of Things) to the production process.
Twice a year, The World Economic Forum, in collaboration with McKinsey and Company, selects lighthouse factories that are considered front runners in applying fourth industrial revolution technologies. South Korean company POSCO has been named manufacturing lighthouse for applying artificial intelligence technology to improve productivity and quality in the steel industry in 2019. The company established a cooperative ecosystem with universities, small and medium-sized enterprises, and startups to establish a smart factory platform unique to the steel industry through mutual cooperation. On POSCO’s selection, WEF cited, “POSCO leverages artificial intelligence to drive productivity and quality improvements in the steel industry. It is building its own smart-factory platform through a collaboration with a local ecosystem of academia, SMEs and start-ups.”
Since POSCO was designated as a lighthouse factory, the Korean government has also been making efforts to apply smart factory systems in manufacturing industries in accordance with the standards of the lighthouse factory. In June this year, the Ministry of SMEs and Startups selected 10 “K-Smart Lighthouse Factories” that support the construction of the highest level of smart factories that can be remotely controlled in real-time by applying artificial intelligence, big data, and digital twin.
The lighthouse factory represents productivity improvement and business model innovation by utilizing 4th industrial revolution technologies such as big data, AI, 5G (5th generation mobile communication), and IoT. In particular, it performs customized mass production at a much faster rate than before. It presents new ways to sustain growth through efficient resource utilization and eco-friendly approaches without huge capital investments such as large-scale location construction.
In the case of the Chengdu plant in China of Foxconn, Taiwan, factory automation using AI and IoT technologies was implemented as the business suffered difficulties due to a lack of skilled labor to respond to a surge in demand. As a result, labor efficiency improved by 200% and equipment efficiency by 17%. German energy company Siemens’ Amberg plant introduced robot technology, AI-based process management, and maintenance prediction technology to increase factory production by 140%.
The lighthouse factories succeeded in achieving practical business results through a differentiated implementation strategy while many other manufacturing companies were struggling with pilot (test) operation projects applying new digital technologyies. It is deemed to turn on a dark night light to tell the target point, telling the direction of the manufacturing industry in the era of the fourth industry.