Artificial intelligence could transform industry, but its environmental footprint is a mounting problem. Could innovation in Saudi Arabia lead the way in proving that sustainable AI is possible?
Since the first electric-powered assembly lines rattled into life in the early years of the 20th century, manufacturers have continually sought ways to optimise their use of new technologies. During the 1960s, Toyota’s revolutionary “just in time” production system sought to eliminate waste and improve efficiencies, and was hugely influential. Other manufacturing philosophies, such as Six Sigma and Lean, would follow, seeking to further optimise factory processes and outputs.
In recent times, technology has raced ever more quickly forward, and manufacturers can now choose from an assortment of industry transformation technologies, including artificial intelligence, advanced robotics and digital twins. At the same time, regulatory and sustainability issues, as well as shifting market expectations, are creating yet more to think about.
“Digital evolution is not just another tool. It is reshaping the very DNA of manufacturing”
Howard Wu, Executive Director of Manufacturing and Investments at Oxagon
Howard Wu, Executive Director of Manufacturing and Investments at Oxagon, Saudi Arabia’s ongoing project to build an advanced and industrial city, explains the stakes of digital evolution. “We are living through the most profound shift in industry since the dawn of the industrial age,” he says. “Digital evolution is not just another tool; it is reshaping the very DNA of manufacturing.” Artificial intelligence, robotics and data are converging to rewrite the rules of how we design, produce and deliver, believes Wu. “The challenge before us is how quickly and how inclusively we can shape it. It is the foundation for competitiveness, resilience and sustainability in a connected world.”
For many companies, industrial transformation has, in effect, arrived without a handbook, so they lack a guiding framework to help them achieve optimal systemic transformation. “The problem is that digital manufacturing is largely conceptual to many people,” says Mark Hallum, Director of Advanced and Clean Manufacturing at Oxagon. “Smaller and medium-sized companies, in particular, often struggle to scale these new solutions.”
At its inception at the beginning of this decade, Oxagon, part of the Kingdom’s NEOM mega-project, set out to reimagine the future shape of manufacturing. This involved a return to first principles. Inspired by the Toyota Production System, it rethought what an industrial operating system should look like in the digital age. The goal was to create a solution that any manufacturer could use to achieve best-in-class performance, with industry transformation, sustainability and talent development built in from the start.
In 2024, NEOM partnered with the World Economic Forum (WEF) to begin translating this work into a structured, scalable framework for industrial organisations of all sizes. The WEF had already established a Global Lighthouse Network showcasing some of the most advanced production and supply chain sites in the world. The Lighthouse Operating System, as it was now named, would draw on not only Oxagon’s pilot projects, but also the work of leading pioneers of industrial transformation. “Essentially, the Lighthouse OS takes world-class manufacturing lessons from the best of the best, and turns them into a practical playbook that everybody can use,” says Kiva Allgood, Managing Director at the WEF and Head of the Centre for Advanced Manufacturing and Supply Chains.
FROM FRAMEWORK TO ACTION
The Lighthouse OS is currently a work in progress and is being developed and piloted among the community of partners, with the ultimate aim of being open-sourced for the benefit of all. Its holistic, end-to-end approach centres on the fundamental principles of day-to-day operations: processes, production lines, supply chains and sustainability, with a focus on people at its core. All this is enabled through accelerated digital and data capabilities.
Few companies have yet mastered the full spectrum of what the Lighthouse OS might achieve, but the WEF points to examples of individual companies that are excelling in specific areas. For example, Foxconn Industrial Internet’s site in Vietnam demonstrates how factory line operations might flow in the future. Its fully connected manufacturing ecosystem of seamless production steps uses digital technology to enable real-time transparency and decision-making.
Another example of the potential of the Lighthouse OS can be found at Oxagon in Saudi Arabia and, more specifically, at Port of NEOM, a facility that aims to develop an advanced, highly automated container terminal. “We see ourselves as an accelerator for the Lighthouse Operating System, using it as a roadmap for integrating the end-to-end supply chain,” says Melissa Blake, Port Director at NEOM.
That means digitalising cargo flows using AI technology and building an orchestration platform to bring end-to-end integration for the whole supply chain. Blake hopes the new technologies piloted at Port of NEOM will ultimately be used not just in other ports across Saudi Arabia, but also around the world.
Amid much talk of advanced automation, Blake is keen to stress the importance of humans, too. Upskilling is a vital aspect of the Lighthouse OS, and Blake talks enthusiastically of the group of Saudi technical graduates from the Oxagon Talent Academy who are the backbone of the port’s control room. “There are over 65 different systems that are fully integrated into our automated facility, and these women are tasked with testing all of the coding in those systems,” she says. “And then they’ll be accountable for making sure the operation works, once we go live. The role of humans will continue to be crucial.”
A solution for everyone
What about the small- and medium-sized companies in danger of falling behind in the industrial transformation journey? Can they afford the kind of advanced technology that the Lighthouse OS appears to demand? Allgood says that some modern technology solutions cost surprisingly little, and adds that governments can also play a helpful supporting role – for example, by encouraging public-private partnerships.
“We make industrial transformation the target, but we see our job as taking every manufacturer on a journey, no matter where they currently stand”
Kiva Allgood, Managing Director at the WEF and Head of the Centre for Advanced Manufacturing and Supply Chains
She also points out that the Lighthouse OS caters for different levels of company maturity, and that the aim is to take organisations from where they are to where they want to be, in a staged process. “We make industrial transformation the target, but we see our job as taking every manufacturer on a journey, no matter where they currently stand,” she says. “Each step builds to the next one.”
Manufacturing plays a far-reaching role in modern life, influencing everything from the availability of essential goods to the strength of supply chains and national competitiveness. Advocates of the Lighthouse OS believe that clearer frameworks could help companies navigate this increasingly complex landscape. If the system works as intended, it could help to foster more resilient, digitally enabled manufacturing across different sectors. “Manufacturing often plays a much bigger role in a country’s growth and transformation than people realise,” Allgood says. “It touches many aspects of daily life, even if it isn’t always visible.”
