AI Delivers Value Across the Entire Value Chain

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Oct 15

When the Global Lighthouse Network (GLN) was launched in 2018 by the World Economic Forum and McKinsey & Company, it started with a bold vision: to spotlight manufacturing leaders who were harnessing the power of Fourth Industrial Revolution technologies to drive transformative change. The inaugural cohort consisted of just 16 factories, all of them pioneers in their own right, testing the waters of digital innovation. These Lighthouses were early adopters, leveraging technologies like automation, data analytics, and robotics to optimize their operations. But in those early days, AI—arguably the defining technology of the Fourth Industrial Revolution—was only beginning to make its mark.

Fast forward to 2023, and the Global Lighthouse Network has grown nearly tenfold, now boasting 153 Lighthouses. But it’s not just the number of Lighthouses that has changed—it’s also how they are using AI. In the first cohort, fewer than 20% of the top use cases involved AI. Today, that number has skyrocketed: 58% of the newest Lighthouses use AI to power their most impactful transformations. This shift marks a profound evolution in the role AI plays in manufacturing, and it offers a glimpse into what the future holds for the industry as a whole.

The Evolution of AI in the Global Lighthouse Network

In the early days of the Global Lighthouse Network, AI was largely experimental. Companies used AI for isolated tasks—optimizing a production line here, improving a quality check process there. But as AI has matured, so too have its applications. Lighthouses today aren’t just experimenting with AI—they’re integrating it into every corner of their operations.

In the first cohort, AI was present in fewer than one in five Lighthouses. Early adopters faced challenges with scaling their AI solutions and proving tangible returns on investment. But the potential was clear, and as more manufacturers joined the network, AI use cases began to expand. AI went from being a tool for isolated problem-solving to a powerful engine driving change across entire factories and supply chains.

The most recent cohort of Lighthouses demonstrates just how far AI has come. Of the 21 Lighthouses announced in December 2023, nearly 60% have AI as a core part of their most transformative use cases. This represents a dramatic leap forward not only in the prevalence of AI but in its impact. These AI-enabled factories are leading the way, showing the rest of the world what’s possible when technology and human ingenuity come together.

Why AI is Thriving in the Global Lighthouse Network

So, why has AI adoption grown so rapidly within the Global Lighthouse Network? There are several key factors:

Maturity of AI Technology: AI itself has become more reliable and scalable. The early days of experimentation gave way to more mature applications as manufacturers learned how to harness AI’s predictive power, optimize processes, and achieve significant cost savings. AI is now less about potential and more about proven results.
Data Availability: The more data a factory can generate, the more powerful its AI systems become. Lighthouses are leveraging massive amounts of data—sometimes generating terabytes in a single week—to train their AI models and improve decision-making across the board.
Strategic Scaling: Many of the newest Lighthouses have moved beyond the pilot phase. More than 80% of Lighthouses design their AI use cases with scale in mind from day one. This focus on scalability means AI isn’t just being used in one or two areas of the business—it’s being integrated across entire production lines and supply chains.
Assetization: Lighthouses have developed a new approach called “assetization”, where they package AI use cases into modular solutions that can be deployed quickly and efficiently across multiple sites. This has enabled manufacturers like Unilever and Johnson & Johnson to scale AI applications faster than ever before.

The Impact of AI in Manufacturing

The numbers speak for themselves. Across the newest cohort of Lighthouses, AI has driven:

Two- to-three fold increases in productivity
50% improvements in service levels
99% reduction in defects
30% reduction in energy consumption

These results show that AI is not just a nice-to-have—it’s a game-changer. It’s transforming how products are made, how supply chains are managed, and how factories operate. At Mondelēz’s baking facility in Beijing, for example, AI-driven process optimizations have resulted in a 70% reduction in waste, while boosting productivity more than twofold. These are not small gains—they are step changes in performance.

The Broader Pulse of Manufacturing: Not as Far Behind as You Think

But what about the rest of the industry? Are non-Lighthouse manufacturers falling too far behind? Not necessarily. In fact, the Rootstock 2024 State of AI in Manufacturing report offers a different perspective: 31% of manufacturers are already using AI in production, making it the most common area for AI deployment. And the benefits they’re seeing—44% reporting improved efficiency and 42% reporting improved productivity—aren’t far off from what the Lighthouses are achieving.

This data shows that while Lighthouses might have started earlier and scaled faster, the broader manufacturing sector is not as far behind as some might think. The average pulse of manufacturers indicates that many companies are already on the path to AI adoption and seeing real, tangible benefits. The main difference is that Lighthouses embraced these technologies sooner, committed to scaling them, and are now reaping the rewards of being ahead of the curve.

What Does This Mean for the Future?

The rise of AI within the Global Lighthouse Network is a signal for the rest of the manufacturing world. AI is no longer an experiment—it’s becoming the standard. Every year, more factories join the network, and every year, the percentage of AI-enabled use cases grows. The Lighthouses are a glimpse into the future, showing us where the industry is headed.

Looking ahead, Generative AI (GenAI) is poised to take this transformation even further. GenAI could add between $2.6 trillion and $4.4 trillion to the global economy annually, with much of that value coming from manufacturing-related productivity improvements.