World Economic Forum recognises Dr. Reddy’s Hyderabad factory as part of its Global Lighthouse Network

• Dr. Reddy’s largest manufacturing facility in Bachupally, Hyderabad, joins Global Lighthouse Network of the World Economic Forum

• Journey started four years ago with digitisation of infrastructure and processes. Two years ago, Project ‘OpsNext’ saw deployment of six Industry 4.0 technologies, 40+ business impact linked use cases and heavy investment in people capabilities

• Significant business results seen – 43% manufacturing cost improvement, 30% reduction in production lead time, 41% energy consumption reduction, and significant dip in quality deviations

• Dr. Reddy’s aspiration is to be the most efficient pharma operations in the world

• Efforts key to staying competitive, meeting business imperatives and ESG goals for environmental stewardship (100% renewable energy by 2030, carbon neutrality in direct operations by 2030) and for patients (reaching over 1.5 billion patients by 2030, 25% of launches to be first-to-market by 2027)

Hyderabad, India; October 11, 2022 – Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY; hereafter referred to as “Dr. Reddy’s”), a global pharmaceutical company, today announced the recognition of its largest manufacturing facility in Bachupally, Hyderabad, as part of the Global Lighthouse Network (GLN) by the World Economic Forum (WEF). With this recognition, the facility joins the GLN, a community of over 100 manufacturers that are showing leadership in applying Fourth Industrial Revolution (Industry 4.0 or 4IR) technologies to drive impact in productivity, workforce engagement, sustainability, and supply chain resilience. GLN is a WEF initiative in collaboration with McKinsey & Company. Factories and value chains that join GLN are designated by an independent panel of experts. The journey began four years ago when Dr. Reddy’s embarked on an ambitious programme to ‘digitise its core’. This involved upgrade of infrastructure and digitisation of processes for robust and comprehensive data capture. Real-time data and insights laid the foundation for Project ‘OpsNext’ which was initiated two years ago to transform the plant into an Industry 4.0-driven ‘Lighthouse’ factory as defined by the WEF. The site saw the deployment of six of the eight technologies of 4IR – Advanced Analytics, Digital Twins, Robotic Process Automation, Augmented/Virtual/Mixed Reality, Digital Performance Management and Industrial Internet of Things (IIoT). The OpsNext team identified 40+ business results linked use cases impacting various aspects of productivity such as customer service, quality, energy consumption, sustainability, equipment efficiency and people productivity. The company also invested heavily in building people capabilities such as digital and analytics translators, data scientists and data engineers.

In response to business scenarios of price erosion, sustainable manufacturing practices, need for constant vigilance and maintenance of uncompromising standards of quality, the journey has already yielded significant results at the site – 43% manufacturing cost improvement, 30% reduction in production lead time, 41% energy consumption reduction, and significant dip in quality deviations.

Sanjay Sharma, Global Head of Manufacturing, Dr. Reddy’s said: “The successful inclusion of our 25-year-old site in Hyderabad as a ‘Digital Lighthouse’ factory is a big milestone in our productivity improvement journey. We have seen significant financial and operational impact from the journey. We are in the process of scaling and replicating this to the rest of our manufacturing network. Dr. Reddy’s aspires to be the most efficient pharma operations in the world. Our productivity improvement and digitalisation efforts are key to staying competitive, meeting business imperatives, and meeting our ambitious ESG goals. Building such ‘factories of the future’ is integral to innovation and to build healthcare of the future. One of the most important outcomes is that our top talent and young leaders want to be a part of this aspirational journey. This collaborative and cross-functional effort truly helps us fulfil our purpose of ‘Good Health Can’t Wait’.”

Francisco Betti, Head of Shaping the Future of Advanced Manufacturing and Value Chains, WEF, said: “Global disruptions have highlighted the fragility of current supply chains – as rising inflation and material shortages are increasing pressure on manufacturing organizations, Lighthouses show that scaling the deployment and adoption of Fourth Industrial Revolution technologies across multiple factories and business functions is key to accelerate the achievement of their strategic imperatives, such as business growth, resilience and greener operations." Enno de Boer, Senior Partner and Global Lead of digital manufacturing at McKinsey & Company, said: “The newly designated Lighthouses show that scaling can be done, with three must haves. First, clear strategy. Without that, you get stuck in pilot purgatory, never seeing which technologies matter for your business. Second, workforce capabilities. Without enough of the right skills, your transformation runs out of steam. Third, strong governance. Without a real execution engine, you won’t capture impact or keep improving.”

Enno de Boer, Senior Partner and Global Lead of digital manufacturing at McKinsey & Company, said: “The newly designated Lighthouses show that scaling can be done, with three must haves. First, clear strategy. Without that, you get stuck in pilot purgatory, never seeing which technologies matter for your business. Second, workforce capabilities. Without enough of the right skills, your transformation runs out of steam. Third, strong governance. Without a real execution engine, you won’t capture impact or keep improving.”

Watch our Chief Executive Officer, Erez Israeli, at the Global Lighthouse Network Live event, which will be webcast live on 13th October, 2022 (17:30-18:30 IST | 14:00-15:00 CET | 08:00-09:00 EST). The event will be telecast simultaneously on the social media platforms and website of the WEF. For details, please visit: https://www.weforum.org/agenda/2022/10/global-lighthouse-network-lighthouses-live-2022.