MCKINSEY & COMPANY: CAPITALIZING ON LIGHTHOUSE
FACTORIES CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
In business and management consulting, few names hold the same prestige and influence as McKinsey &
Company (hereafter McKinsey). Established in 1926, McKinsey has emerged as a global leader in
providing strategic solutions to some of the most complex challenges faced by organizations across various
industries. This case study delves into the method and approach McKinsey consultants employed to identify
n
a lighthouse factory. In 2018, the World Economic Forum and McKinsey joined forces to launch the
tio
lighthouse factory program on a global scale, which aimed to identify manufacturers who have
demonstrated exceptional leadership. Concurrently, the Fourth Industrial Revolution brought about a digital
transformation in manufacturing, impacting an increasing number of enterprises. By leveraging the
lu
advantages of becoming a lighthouse factory, many businesses have been able to gain a competitive edge.
So
The success of the lighthouse factory program has led to concrete data analysis and the identification of
common characteristics amongst the selected companies, which allowed for the development of a
lighthouse-type digital transformation path for manufacturing. By learning from lighthouse factories’
experiences, enterprises can avoid pitfalls in their digital transformation journey. As a consulting firm,
McKinsey could capitalize on the rise of lighthouse factories and related concepts to offer valuable insights
for traditional industries looking to embark on their digital transformation journey.
The Case Solution Starts From page 5
,OBJECTIVES
• Understand the evolution of manufacturing, the concept of lighthouse factory, and related strategies
and processes of digital transformation.
• Explore how the vision of a lighthouse factory can effectively address the challenges associated with
the globalization of traditional manufacturing and create new opportunities.
• Identify the opportunities associated with lighthouse factories for diverse stakeholders, including
consulting companies.
e
pl
m
Sa
n
tio
ASSIGNMENT QUESTIONS
lu
1. For a consultant, it is critical to understand the concept of lighthouse factory. What are the key factors
or characteristics commonly observed in successful lighthouse factory initiatives within the
So
manufacturing industry?
2. What specific strategies or approaches do lighthouse factory companies employ to effectively lead the
transformation of the manufacturing sector?
3. Can you provide a brief overview or examples of how the concept of the lighthouse path to digital
transformation of manufacturing patterns originated and developed over time?
4. As a consultant, what practical recommendations or frameworks would you suggest for using the
concept of the “beacon” to guide enterprises in their digital transformation efforts?
5. In a consultant’s assessment, which regions or industries show potential for becoming the next
lighthouse factory, and what factors contribute to their suitability for driving transformative change in
the manufacturing sector?
6. For a management consulting firm, such as McKinsey, in capitalizing on the rise of lighthouse factories,
what services can be offered to clients?
The Case Solution Starts From page 5
,2. What specific strategies or approaches do lighthouse factory companies employ to effectively
lead the transformation of the manufacturing sector?
From the enterprise’s own point of view, the advanced manufacturing enterprise represented by the
e
lighthouse factory has opened up its digital technology and intelligent production capacity to some
enterprises and manufacturing factories in the upper middle and lower reaches of the river. Here, "the river"
pl
metaphorically refers to various stages or tiers within the industry's supply chain or value chain. The upper
reaches denote upstream suppliers or raw material providers, the middle reaches represent manufacturers
m
or assemblers, and the lower reaches encompass distributors or end consumers. This initiative aims not only
to reduce the technological barriers for digital transformation among small and medium-sized enterprises
Sa
but also to drive advancements in industrial intelligence throughout the entire industry ecosystem.
The whole industrial chain will benefit from the chain of dots and beads. Relevant departments should also
take an active role in helping enterprises to grow and develop through active policy support. Expect these
lighthouse factories to better harness the radiation-driven effects. Expect more lighthouse factories to be
n
established, sparking greater innovation and creativity across the global manufacturing landscape. These
tio
lighthouse use cases are paving the way by effectively connecting the value chain end-to-end.:
Stage Use case
lu
Sourcing Utilization of predictive analytics for demand forecasting and supplier evaluation
Manufacturing Digital twin technology for process optimization and predictive maintenance
So
Real-time tracking of products using Internet of Things (IoT) and blockchain for
Distribution
transparency
Sales and marketing Artificial intelligence (AI)-powered customer segmentation and personalization
Customer service Use of AI and automation in handling customer queries and feedback
The investigation of specific strategies employed by lighthouse factory entities necessitates an intricate
The Case Solution Starts From page 5
, EXHIBIT -1: LIGHTHOUSE FACTORIES: A DIVERSE NETWORK IN ALL INDUSTRY SECTORS
Consumer Process Advanced industries Pharmaceuticals
packaged industries and medical
AGCO
goods Baoshan Iron & Agricultural equipment, Germany products
Argelik
Alibaba Steel Home appliances, Romania Bayer
Apparel, China Steel products, BMW Group Division pharmaceuticals,
China Automotive, Germany
Ericsson ltaly
Henkel Electronics, US
Consumer goods, DCP Midstream Fast Radius with UPS GE Healthcare
Germany Oi and gas, US Additive manufacturing, US
Medical devices, Japan
Ford Otosan
Automotive, Turkey
Henkel MODEC Foxconn Industrial Internet GSK
Oi and gas, Brazil Electronics, China Pharmaceuticals, UK
Groupe Renault
POSCO
e
Johnson & Johnson
Steel products,
South Korea
pl
ReNew Power
m
Sa
n
tio
lu
So
The Case Solution Starts From page 5
FACTORIES CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
In business and management consulting, few names hold the same prestige and influence as McKinsey &
Company (hereafter McKinsey). Established in 1926, McKinsey has emerged as a global leader in
providing strategic solutions to some of the most complex challenges faced by organizations across various
industries. This case study delves into the method and approach McKinsey consultants employed to identify
n
a lighthouse factory. In 2018, the World Economic Forum and McKinsey joined forces to launch the
tio
lighthouse factory program on a global scale, which aimed to identify manufacturers who have
demonstrated exceptional leadership. Concurrently, the Fourth Industrial Revolution brought about a digital
transformation in manufacturing, impacting an increasing number of enterprises. By leveraging the
lu
advantages of becoming a lighthouse factory, many businesses have been able to gain a competitive edge.
So
The success of the lighthouse factory program has led to concrete data analysis and the identification of
common characteristics amongst the selected companies, which allowed for the development of a
lighthouse-type digital transformation path for manufacturing. By learning from lighthouse factories’
experiences, enterprises can avoid pitfalls in their digital transformation journey. As a consulting firm,
McKinsey could capitalize on the rise of lighthouse factories and related concepts to offer valuable insights
for traditional industries looking to embark on their digital transformation journey.
The Case Solution Starts From page 5
,OBJECTIVES
• Understand the evolution of manufacturing, the concept of lighthouse factory, and related strategies
and processes of digital transformation.
• Explore how the vision of a lighthouse factory can effectively address the challenges associated with
the globalization of traditional manufacturing and create new opportunities.
• Identify the opportunities associated with lighthouse factories for diverse stakeholders, including
consulting companies.
e
pl
m
Sa
n
tio
ASSIGNMENT QUESTIONS
lu
1. For a consultant, it is critical to understand the concept of lighthouse factory. What are the key factors
or characteristics commonly observed in successful lighthouse factory initiatives within the
So
manufacturing industry?
2. What specific strategies or approaches do lighthouse factory companies employ to effectively lead the
transformation of the manufacturing sector?
3. Can you provide a brief overview or examples of how the concept of the lighthouse path to digital
transformation of manufacturing patterns originated and developed over time?
4. As a consultant, what practical recommendations or frameworks would you suggest for using the
concept of the “beacon” to guide enterprises in their digital transformation efforts?
5. In a consultant’s assessment, which regions or industries show potential for becoming the next
lighthouse factory, and what factors contribute to their suitability for driving transformative change in
the manufacturing sector?
6. For a management consulting firm, such as McKinsey, in capitalizing on the rise of lighthouse factories,
what services can be offered to clients?
The Case Solution Starts From page 5
,2. What specific strategies or approaches do lighthouse factory companies employ to effectively
lead the transformation of the manufacturing sector?
From the enterprise’s own point of view, the advanced manufacturing enterprise represented by the
e
lighthouse factory has opened up its digital technology and intelligent production capacity to some
enterprises and manufacturing factories in the upper middle and lower reaches of the river. Here, "the river"
pl
metaphorically refers to various stages or tiers within the industry's supply chain or value chain. The upper
reaches denote upstream suppliers or raw material providers, the middle reaches represent manufacturers
m
or assemblers, and the lower reaches encompass distributors or end consumers. This initiative aims not only
to reduce the technological barriers for digital transformation among small and medium-sized enterprises
Sa
but also to drive advancements in industrial intelligence throughout the entire industry ecosystem.
The whole industrial chain will benefit from the chain of dots and beads. Relevant departments should also
take an active role in helping enterprises to grow and develop through active policy support. Expect these
lighthouse factories to better harness the radiation-driven effects. Expect more lighthouse factories to be
n
established, sparking greater innovation and creativity across the global manufacturing landscape. These
tio
lighthouse use cases are paving the way by effectively connecting the value chain end-to-end.:
Stage Use case
lu
Sourcing Utilization of predictive analytics for demand forecasting and supplier evaluation
Manufacturing Digital twin technology for process optimization and predictive maintenance
So
Real-time tracking of products using Internet of Things (IoT) and blockchain for
Distribution
transparency
Sales and marketing Artificial intelligence (AI)-powered customer segmentation and personalization
Customer service Use of AI and automation in handling customer queries and feedback
The investigation of specific strategies employed by lighthouse factory entities necessitates an intricate
The Case Solution Starts From page 5
, EXHIBIT -1: LIGHTHOUSE FACTORIES: A DIVERSE NETWORK IN ALL INDUSTRY SECTORS
Consumer Process Advanced industries Pharmaceuticals
packaged industries and medical
AGCO
goods Baoshan Iron & Agricultural equipment, Germany products
Argelik
Alibaba Steel Home appliances, Romania Bayer
Apparel, China Steel products, BMW Group Division pharmaceuticals,
China Automotive, Germany
Ericsson ltaly
Henkel Electronics, US
Consumer goods, DCP Midstream Fast Radius with UPS GE Healthcare
Germany Oi and gas, US Additive manufacturing, US
Medical devices, Japan
Ford Otosan
Automotive, Turkey
Henkel MODEC Foxconn Industrial Internet GSK
Oi and gas, Brazil Electronics, China Pharmaceuticals, UK
Groupe Renault
POSCO
e
Johnson & Johnson
Steel products,
South Korea
pl
ReNew Power
m
Sa
n
tio
lu
So
The Case Solution Starts From page 5
