When Outset Medical, a U.S. medical device company, opened a greenfield factory in Tijuana, Mexico to manufacture dialysis machines it was determined to not only leverage advances in technology but reap the benefits of integrating autonomous systems with human intelligence.
Like most manufacturers Outset was aiming for lower than average labor turnover and transformative levels of increased productivity per worker. It faced the challenge of implementing technology while maintaining regulatory compliance. And, it worried workers would resist tech advances they feared would complicate or replace their jobs.
The dialysis machines, which weigh 200 pounds and are the size of a college dorm room refrigerator, are categorized as complex medical devices with a Class II designation by the U.S. Federal Drug Administration. They contain some 2000+ components and require 7,000 manufacturing steps.
Outset integrated multiple new technology systems to help manufacture them more efficiently: Oracle product lifecycle management, QAD enterprise resource planning software, a quality management system, and from Tulip, a frontline operations platform. Then, it empowered its workforce through a citizen developer program called “Tuliperos” which involved operators in the application design process. Each of the new tech applications underwent anywhere from 9-100 revisions based on worker feedback. This not only reduced the tension between automation and autonomy but resulted in significant improvements, says Marc Nash, Outset’s senior vice-president of operations and R&D.
By adopting new technology and involving the workforce in the process Outset was able to increase production capacity by 170% within nine months, says Nash.
Improvements included:
- Reducing the defect rate from 1.3 per machine to 0.1 per machine
- Decreasing quality review time from 6 hours to 11 minutes
- Digitizing 2,700 paper instructions into 90 digital applications
- Reducing its device history report from 200 pages of paper to a compact digital format
What’s more employee retention is 50% higher than the regional average, he says.
“I’ve been involved in running seven factories on four continents, says Nash. “This is the first one that truly embarked on a digital journey and empowered workers. The easy path would have been to just do what we have done before because you never know if the risk is worth the reward. In this case the payoff is huge.”
Outset is an example of the benefits of becoming a “learning organization,” says Natan Linder, co-founder and CEO of Tulip and co-chair of the World Economic Forum’s Advanced Manufacturing Industry Governors Community.
Digital transformation is an outmoded term, he says, since nearly all business transformation these days is digital. What is needed today is “continuous transformation,” he says.
The benefits of becoming a learning organization were highlighted in a recently published white paper that outlines the Forum’s efforts to create what it calls the Lighthouse Operating System, a next-generation industrial operating system that distills the lessons of the world’s leading manufacturing sites into an actionable framework for the entire sector.
The six key principles of the Lighthouse OS are becoming a learning organization, adaptable and robust processes, connected and transparent flows, end-to-end synchronization and embedded sustainability.
The effort began as a collaboration among the Forum, NEOM, a planned city being built by Saudi Arabia, and a group of industry partners, focused on developing what they called the Next Generation Industrial Operating System, a framework for integrating digitalization, sustainability and workforce transformation into core manufacturing operations.
“As the work progressed, it became clear that manufacturers needed more than just a blueprint: they needed a practical, tested system to bridge the digital maturity gap across industries and regions,” says the white paper. With the backing of 189 Lighthouse factories recognized by the Forum’s Global Lighthouse Network, the initiative evolved into what the Forum calls the Lighthouse OS – a structured, scalable way to embed best-in-class operational practices across industrial organizations.
“Few companies have yet mastered the full spectrum of what an advanced operating system can achieve,” says the white paper. “However, harnessing the collective learnings and aspirations of many industry leaders – each excelling in different areas – creates a unified pathway to accelerate progress that achieves what has been accomplished by the best in a fraction of the time. It also sets a roadmap for even greater advances.”
Each of the six principles is illustrated in the white paper with a case study of an industry leading company and partner within the Lighthouse OS initiative, including Foxconn, Johnson & Johnson, Schneider Electric and Bosch.
Refining The Framework Through Real World Applications
The white paper also covers two pilot projects which are designed to actively test, refine and validate the Lighthouse OS through real-world applications in different industries and geographical areas. In 2024, it was applied to the scope of shop-floor improvement and end-to-end supply-chain diagnosis in collaboration with Koç Holding and Tata Steel – both companies with several lighthouse sites in the Global Lighthouse Network. The case studies yielded what the Forum said were valuable insights that further shaped the development of the Lighthouse OS.
Beko Corporate, part of Turkey’s Koç Holding and a Fortune 500 company, piloted the current version of the Lighthouse OSframework on the shop floor to validate it, with the aim of improving the operational performance in its cooking-appliance production line at its facility in Bolu, Turkey.
In the first stage, the five-step maturity model was used to evaluate the Bolu production facility against the principles and elements of the Lighthouse OS framework. Through a mostly self-guided approach, in which the current version of the Lighthouse OS capabilities maturity model was shared with operations subject matter experts, Beko identified both its current state of practice and areas in which it could improve.
The assessment revealed that as a first step, the Bolu facility could achieve significant improvements in work and maintenance processes as well as in line operations.
The underlying practices were prioritized based on their expected impact on Beko’s operational goals. Next, Beko’s prioritized improvement opportunities were validated through in-depth analysis by internal subject matter experts, which included shop-floor observations, cycle-time analysis and inventory-data analysis.
As a result of this three-month pilot, the Beko team set ambitious targets, including a capacity/efficiency increase of more than 20% on its high-runner production line. It created a plan to achieve these goals without adding further headcount, accompanied by a significant rebalancing of the production flow to synchronize production schedules and material flows.
The Forum white paper says this is an example of how, through the Lighthouse OS approach, materials and tools, and using common governance processes for continuous improvement, an organization can review their progress against the framework and track and identify further areas of prioritized action on its journey to operations excellence.
In another pilot Tata Steel tested the end-to-end synchronization principle using its own operations as a benchmark. This real-world application led to the development of a structured methodology, equipped with tools and techniques to help businesses assess and elevate their end-to-end industrial performance, according to the white paper.
The Tata Steel team co-created a suite of tools designed to diagnose, design, plan and orchestrate large scale transformation. A structured, data-driven approach was developed to unlock efficiency and synchronization across the enterprise.
One key element was the detailing of the five-step maturity model, which assesses each capability by identifying the current state and defining a clear path to the target level, ensuring continuous progress. Alongside this, a visualization tool was created to provide a dynamic, system-wide view of the vertical synchronization needed to operate the end-to-end system as a single, seamless entity.
Additionally, a key performance indicator (KPI) improvement framework was introduced to uncover inefficiencies and loss points, enabling teams to quantify opportunities and activate the right improvement levers for maximum impact.
To ensure real-world applicability, the framework was put to the test with more than 20 senior executives at Tata Steel to ensure it was fit for purpose and fully aligned with business realities.
Through this hands-on validation, critical insights emerged, according to the white paper. Among them:
- A responsive and agile supply chain does not just optimize individual functions it seamlessly connects the customer at one end with agile supply at the other, creating a continuous feedback loop. This ensures that changes in demand, preferences or disruptions are reflected across the entire system in real time, allowing businesses to react faster and more effectively.
- Without high-quality data, businesses operate in the dark– unable to anticipate demand shifts, optimize supply or enhance customer experiences. A seamless data flow across the entire ecosystem enables predictive planning, intelligent orchestration and real-time decision-making.
In the long term, the initiative aims to create a kind of operating system for supply chains, transforming the Lighthouse OS into an independent, open-source digital platform to facilitate rapid scaling and widespread adoption by promoting collaboration among manufacturers, governments, solution providers, academia and other stakeholders.
A Call For Collaboration
The Forum is inviting manufacturers, technology providers, academia and the public sector to collaborate in testing,refining and co-creating the operating system. The aim is to establish together a global reference standard for advanced manufacturing and supply chains, driving unprecedented improvements and enabling responsible transformation across industries.
Those interested in learning more can access the Lighthouse Operating System web page.
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