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Every January, the World Economic Forum hosts its Annual meeting in Davos.

This year, the Fourth Industrial Revolution took center stage. Experts from industry and academia–representing top universities, SMEs, and the Fortune 20 alike–brought their perspectives, experiences, and solutions to the table.

Following Davos 2019, WEF released a whitepaper examining organizations in manufacturing that had successfully implemented a digital transformation at scale. The white paper is the result of a year of intensive research conducted by WEF and McKinsey and Co., and includes insights from the 2019 Davos conference, including perspective from Tulip’s CEO Natan Linder.

While the full report is worth reading, we know not everyone has time to digest a dense, 40-page document. Here’s what you need to know.

1.) “Lighthouse” Factories are Cutting Through the Fog

A majority of the report is dedicated to case studies of “Lighthouses,” or manufacturers that have used digital technologies to cut through the fog of stagnation in productivity and growth. They’re actively setting a course toward industry-wide impact through the inventive use of newly available digital solutions. These are organizations that have successfully transitioned out of “pilot purgatory” and implemented digital technologies at scale. In general terms, lighthouses are characterized by:

  • Resource productivity and efficiency
  • Agility and responsiveness
  • Speed to market
  • Innovation with business models as well as production
  • Global
  • Open and collaborative

2.) Two Routes to Scale

Manufacturers across the globe are at different stages of digital transformation. What separates lighthouses from others is their ability to achieve impact at scale. According to the researchers, there are two routes to scale.

-Innovate the production system: expand competitive advantage through operational excellence

-Innovate the end-to-end value chain: create new businesses by changing the economics of operations.


3.) It’s Essential to Act Early

Recent research conducted by McKinsey found stark differences in outcomes between companies that move early that those who wait. In a study of AI adoption, the consulting firm found that companies that adopt AI early gain an immense competitive advantage. Their analysis found that “frontrunners” can attain up to a 122% improvement in cash-flow, while those who wait might only improve as little as 10%. For those who adopt digital technology intelligently, the benefits far outweigh the initial investment.

4.) Digital Transformation Isn’t Just for the Giants

This is one of the more interesting findings in the report. The researchers found that SMEs stand to benefit just as much from digital transformations as large organizations. The researchers attribute this to the fact that SMEs can represent as much as 70% of jobs in OECD countries, and because they constitute such a vital part of global supply chains. Digitizing early is key to supporting national economies and streamlining supply chains.

5.) Lighthouses Let Concrete Business Cases Guide their Transformation

Lighthouse organizations all put business cases first. They adopt new technologies as a means of addressing particular operational problems. In all cases these organization aligned a problem with a use case, and adopted the technologies they determined would deliver measurable, predictable results.

That said, there’s still room for creativity in devising a digital transformation. The lighthouses’ use cases were many and varied. They ranged from in-process quality control to digital modeling and simulation to digital dashboards to rapid prototyping with digital twin and 3D printing.

6.) The Opportunity is Greater than Profit

The authors of the report are consistent on this point throughout: business problems are no longer limited to business. With climate change looming, borders disappearing, and technology evolving at a truly remarkable rate, how business strategize and deploy their digital transformations will have consequences for all aspects of life.

The WEF report stresses that businesses have an opportunity to solve some of the world’s most pressing problems. There are ethical stakes to digital transformation as well as financial stakes.

Further, innovation factories have the chance to make factories into “creative, entrepreneurial, and exciting places to work,” attracting the best and brightest talent to manufacturing.

7.) The WEF’s Digital Roadmap

It’s a long road to a full digital transformation of manufacturing, but the authors outlined some concrete steps organizations can take to help get there.

  1. Augment instead of replace the operator
  2. Invest in lifelong learning
  3. Diffuse technologies throughout geographic areas and include SMEs
  4. Protect organizations and society with better cybersecurity
  5. Collaborate to achieve maximum impact
  6. Address climate change using Fourth Industrial Revolution technologies

Tulip’s no-code platform helps manufacturers power their digital transformation. For more information, speak with a member of our team today!