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CEO dialogue: Perspectives on productivity and sustainability

November 7, 2021
Borderless Future

Leading manufacturers are setting tomorrow’s standards for tech-enabled efficiency, growth, and environmental responsibility.

In late September, hundreds of thousands of viewers tuned in to hear 11 CEOs from around the world discuss how Fourth Industrial Revolution (4IR) technologies are accelerating environmental sustainability, igniting transformation across business ecosystems, and putting people at the center of innovation—all while boosting productivity. These CEOs represent new members of the Global Lighthouse Network (GLN), a community of world-leading manufacturing facilities and value chains using 4IR technologies to improve processes and develop workforce skills that can be scaled across the production chain. Launched in 2018, the GLN is a World Economic Forum (WEF) initiative in collaboration with McKinsey & Company.

“Increased global concern for environmental impact has made sustainability a must-have to maintain business viability,” said Francisco Betti, head of the WEF’s platform for Shaping the Future of Advanced Manufacturing and Value Chains. “The GLN has shown us how to use technology to power productivity across individual sites and value chains. And we are now learning how leaders are using technology to power environmental sustainability.” Betti noted that these imperatives were also discussed at the WEF’s Sustainability Development Impact Summit, in September.

The conversation has been edited for clarity and intelligibility.

Accelerating environmental sustainability
At the WEF’s annual meeting in 2020, leaders from industrial companies asked the GLN to investigate how technology could make sites and end-to-end value chains more sustainable. An independent expert panel has designated three existing lighthouse sites (out of 90) as the first sustainability lighthouses: factories and value chains that have achieved sustainability and productivity breakthroughs. These sites are: Ericsson (Lewisville, Texas, United States), Henkel (Düsseldorf, Germany), and Schneider Electric (Lexington, Kentucky, United States). Besides achieving the impressive level of 4IR maturity characteristic of other lighthouses, sustainability lighthouses have shown their commitment to environmental sustainability through the intent, impact, and scale of the advanced use cases they have deployed.

To capture more detail on energy consumption (such as precisely when and where it happens in the plant), Schneider Electric’s smart factory used Internet of Things (IoT) connectivity with power meters and predictive analytics. Energy use fell by 26 percent, CO₂ emissions by 30 percent, and water use by 20 percent.

Jean-Pascal Tricoire, Schneider Electric’s chairman and CEO, said that sustainability and profitability should not be in opposition. When both occur at the same time, competitiveness improves.

“It’s much more than energy consumption; it’s about reducing any consumption of resources by making everything much more efficient and, at the same time, organizing circularity all over the life cycle of our products,” Tricoire said. “This occurs within and beyond the factory and organizes the whole chain of services so that everything gets recycled. We apply digital technology all the time to everything we do, and every three years we gain 10 to 12 percent in energy efficiency. But we want to raise the bar as we go forward—and that’s coming from our operational teams on the shop floor.” READ MORE

By Enno de Boer, Yves Giraud, and Daniel Swan

Source: mckinsey.com

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