Chinese manufacturing wins again! LENOVO GROUP (00992) lights up the first "lighthouse factory" for Chinese companies in the Americas.

Today, the World Economic Forum (WEF) and McKinsey & Company officially announced the latest batch of "Lighthouse Factories". Lenovo Group's manufacturing base in Monterrey, Mexico successfully made the list, becoming the first Chinese company to be recognized as a "Lighthouse Factory" in the Americas. This milestone reflects Lenovo's continuous evolution in its internationalization process and showcases its smart manufacturing and global supply chain capabilities. It also demonstrates the strong power of China's manufacturing capabilities overseas, setting a model for Chinese companies in overseas digital transformation and intelligent upgrading. Lenovo Group's Monterrey manufacturing base overlooks the panorama. Located in Monterrey, Mexico, the manufacturing base was established in 2008 and consists of two main buildings covering approximately 40,000 square meters. It sources materials from over 2,000 suppliers globally and produces over 52,000 product categories including desktops, laptops, and servers, exporting its products to over 80 markets worldwide. The base has been rooted in the local area for nearly 20 years, during which Lenovo Group has continuously upgraded its smart manufacturing capabilities, leading to its recognition as a "Lighthouse Factory". The World Economic Forum and McKinsey & Company praised Lenovo Group's Monterrey manufacturing base, stating that in response to the increasing quality delivery demands of customers and the challenges of labor costs in Mexico, Lenovo Group's Chinese team, in collaboration with the local Mexican team, implemented over 60 digital solutions, more than half of which utilized artificial intelligence (especially generative artificial intelligence) technology. These initiatives significantly improved factory performance: reducing delivery times by 85%, lowering logistics costs by 42%, reducing quality losses by 56%, decreasing carbon emissions by 30%, and increasing production efficiency by 58%. Presently, the Monterrey manufacturing base has become Lenovo Group's global digital demonstration factory. With over 60 digital solutions Shining the "Lighthouse" with AI in Chinese manufacturing Artificial intelligence has had an unprecedented impact on the world, especially in smart manufacturing. In the context of large-scale complex manufacturing, the Mexico factory deeply applies cutting-edge technologies including artificial intelligence, especially generative artificial intelligence technology, in its manufacturing and supply chain processes, creating an efficient and agile "brain" for smart manufacturing and supply chain. Intelligent decision-making throughout the chain: The factory in Mexico sources raw materials from over 2,000 primary, 20,000 to 30,000 secondary suppliers, with 70% of small orders being less than 10 units, making the supply chain and manufacturing processes very complex. The factory has introduced AI-empowered supply chain planning modules, combining orders, deliveries, and supply-demand data for seamless collaboration with suppliers. With strategic allocation and dynamic multi-objective optimization algorithms, engineers' decision-making time was drastically reduced from 2-3 days to less than an hour, enabling a 43% inventory reduction and enhancing supply chain efficiency. Moreover, the Mexico factory has built an end-to-end digital twin supply chain control tower, utilizing generative artificial intelligence for real-time root cause analysis, effectively supporting predictive maintenance and providing immediate action recommendations. Intelligent engines for logistics: Addressing the pain points of manual and inefficient planning and underutilized data, the Mexico factory has deployed an AI transport engine based on meta-heuristic and machine learning algorithms, efficiently managing a large volume of shipping rules. An enhanced digital twin platform connects to 228 global data points, utilizes AI large language models for risk prediction, ultimately reducing delivery times by 85%. Additionally, with optimized route and container planning, and deployment of automated guided vehicles (AGVs) and other automation devices, logistics costs have been significantly reduced, further improving supply chain resilience. Production lines more responsive: To streamline the manufacturing process, the Mexico factory has implemented a Manufacturing Control Tower (MCT) empowered by generative artificial intelligence. This system features a KPI library empowered by generative artificial intelligence, which can track real-time hourly production losses (UPH) and enable frontline workers to interact directly with the system using natural language (including locally spoken Spanish), accessing expert-level solutions with the click of a button, significantly reducing problem resolution times. Furthermore, digital twin technology for process flows has achieved dynamic balancing of production lines, effectively addressing challenges such as long planning cycles, high error rates, and long learning curves, enabling employees to easily manage production lines. Combining generative artificial intelligence with automated analysis has resulted in a 58% increase in labor productivity for the factory. Comprehensive upgrade of smart manufacturing talent: During the process of smart manufacturing transformation and upgrading, the Mexico factory has trained over 800 digital talents in three years to develop a team with more digital skills. Lenovo has also initiated the construction of a low-code development platform at the group level, providing powerful digital tools for factory operations, enabling non-professional IT personnel to easily create digital twin tools, helping more factory personnel transition to smart manufacturing talents and become core drivers of digital transformation. Significantly enhanced sustainability: By deploying a comprehensive ESG and park digital system based on big data and intelligent energy optimization, using IoT devices for end-to-end data collection of energy and water resources, combined with real-time analysis and optimization using artificial intelligence algorithms, the Mexico factory has established a closed-loop management mechanism for calculation-monitoring-alert-work orders. This year, the factory has reduced energy intensity, water intensity, and carbon emissions intensity by 30%. The successful implementation of smart practices at the Mexico factory has not only significantly improved manufacturing efficiency and supply chain resilience but has also extended Lenovo's hybrid artificial intelligence-enabled manufacturing solutions globally. The dual breakthroughs in technological capabilities and operational effectiveness fully validate Lenovo's innovative leadership in overseas markets. The successful upgrade of the Mexico factory was achieved through efficient collaboration between various departments at Lenovo, including global supply chain, research institutes, digital transformation, and IT. Employees from several of Lenovo's own factories, including the "Lighthouse Factory" in Hefei and the "Motherboard Factory" in Shenzhen, have traveled to Mexico to provide on-site support. The majority of the digitalization of the supply chain and manufacturing systems upgrades were developed in China, while being validated and implemented in Mexico. The close cooperation between the Chinese and Mexican teams, the successful propagation of the Chinese smart manufacturing methodology and solutions overseas, and the accreditation of the "Lighthouse Factory" in the Americas all contribute to Lenovo's success. At the same time, Lenovo is not only focused on technological advancements but also tightly integrates localized operations with global strategies to continuously explore new sustainable paths for international expansion. Deeply rooted in the local market for nearly 20 years Establishing a new paradigm for international expansion Since its establishment in 2008, Lenovo's manufacturing base in Monterrey, Mexico has been operating locally for nearly 20 years. This manufacturing base is not only an important part of Lenovo's global smart manufacturing map but has also become a "Lighthouse" for Chinese companies venturing overseas, thanks to its outstanding localization operations and corporate social responsibility practices, injecting vitality into the regional economy by creating over 2,000 job opportunities. When expanding abroad, companies often face challenges such as cultural differences, talent shortages, and high turnover rates. However, Lenovo, leveraging its mature international experience, has taken a unique path towards localization. The factory management and operations team at the Monterrey manufacturing base fully mobilize the advantages of local manufacturing and the subjective initiative and sense of belonging of employees, fully respecting local culture, trusting local employees, and adopting a "teach a man to fish" approach to talent management. The factory has established close collaborations with numerous universities in Nuevo Leon, the state where Monterrey is located, setting up joint laboratories and hosting open days to cultivate high-quality, highly skilled tech manufacturing talents in the local area. Lenovo has built a mature global talent circulation and localization integration system. Intelligent manufacturing talents from around the world, including China, Hungary, Brazil, regularly visit Mexico to support its digital transformation, and managers from the Mexico factory visit Lenovo's domestic manufacturing bases in Shenzhen, Hefei, Wuhan, Tianjin, and others to stay updated on global smart manufacturing trends. "Mxico is an important part of the global map for Chinese companies," says Lin Xueping, a supply chain expert who has long been observing Chinese companies going overseas. Lenovo, with its mature globalization experience, assesses risks upfront, extensively utilizes local managers, and collaborates closely with local governments, universities, and communities, establishing an effective localized implementation system that can swiftly resolve various challenges such as infrastructure, electricity, and talent. Lenovo's successful practices in deepening its presence in Mexico for nearly 20 years serve as a replicable and scalable model for Chinese companies venturing overseas. Shenzhen Bromake New Material, a company from Shenzhen with over 20 years of partnership history with Lenovo, followed Lenovo to Monterrey in 2016 and established a manufacturing base in the region, leveraging its strong collaboration foundation. The partnership between Lenovo and Shenzhen Bromake New Material goes beyond business to encompass close collaboration in response to challenges. When Shenzhen Bromake New Material faced issues such as incomplete local supply chain support and difficulty in meeting product quality standards, Lenovo's expert teams conducted in-depth visits to the factory, holding multiple collaborative meetings with Shenzhen Bromake New Material's technical personnel. Over a period of six months, they completed the upgrading of protective material product quality, setting a new benchmark in manufacturing. This mutually beneficial cooperation also extends to cultural integration and other areas. Shenzhen Bromake New Material has adopted Lenovo's "visual management system" and employee care activities such as "the most beautiful smile", greatly enhancing local employee's sense of belonging and enthusiasm for work. Today, in addition to Lenovo, Shenzhen Bromake New Material has expanded its customer base in Mexico. Lenovo's and Shenzhen Bromake New Material's stories in Mexico and globally demonstrate how Chinese companies are showing immense potential to build open ecosystems, drive industrial win-win situations, and provide high-quality products and services to global customers. Nurturing China and global mutual benefits "Double Lighthouses" leading the "China+ Global" strategic layout Before the Mexico factory was included in the "Lighthouse Factory" list, Lenovo's Hefei industrial base became a "Lighthouse Factory" in 2023. As a crucial part of Lenovo's global manufacturing network, the two "Lighthouse Factories" will continue to empower each other, continuously enhancing Lenovo's smart manufacturing capabilities, and strengthening the resilience and operational efficiency of Lenovo's global supply chain. Lenovo has spent many years creating an end-to-end integrated global operating system, forming a unique "self-manufacturing + outsourced production (ODM+)" model and a "China+N" strategic layout to build a "global resources, local delivery" operational model. This layout is centered around multiple manufacturing bases in Hefei, Shenzhen, Wuhan, Tianjin, and other locations in China, as well as overseas manufacturing bases in Mexico, Hungary, Brazil, and other countries to closely reach local markets and achieve efficient delivery. This global manufacturing network provides Lenovo with great flexibility and resilience, enabling it to quickly adapt to uncertainties arising from global political and economic changes and seize market opportunities in fast-growing regions like Latin America and the Middle East. In addition, through its deep presence in overseas markets, Lenovo can effectively integrate global resources and contribute back to the domestic market. Currently, around 80% of Lenovo's manufacturing and production staff, 70% of its research personnel, and 60% of its employees are in China, with 75% of its revenue coming from overseas, showcasing a true commitment to nurturing China while benefiting globally. Leveraging its outstanding global operations, Lenovo has been listed eleven times on the Gartner Top 25 global supply chain rankings, ranking eighth globally in the latest list, consecutively retaining its status as the APAC supply chain leader and remaining the only APAC high-tech manufacturing company in the top ten for the fourth consecutive year. The inclusion of the Mexico manufacturing base in the "Lighthouse Factory" list further strengthens Lenovo's collaborative capabilities in its global manufacturing network. By interconnecting and collaborating through data between multiple manufacturing networks, including another "Lighthouse Factory" in Hefei, Lenovo has built a cross-regional, cross-platform global intelligent manufacturing network that will empower Lenovo to more flexibly respond to market demands, disseminate global advanced smart manufacturing practices throughout the manufacturing network, share knowledge and experiences, and serve customers worldwide with higher-quality products and services. In the future, Lenovo will continue to drive the global industry's digital transformation with each "Lighthouse Factory" as an engine, using its global manufacturing layout to consolidate its supply chain advantage and propel people's artificial intelligence into an era of mixed intelligence, benefiting every individual and every business, and providing higher-quality products and services to global customers.