In the fourth quarter of 2024, the World Economic Forum (WEF) officially recognized Mengniu’s Ningxia facility in China as a Lighthouse Factory. It became the first liquid dairy factory in the world to receive the designation.

The Lighthouse Factory title is awarded by the WEF to manufacturing facilities that pioneer the use of advanced digital technologies to create customer value, accelerate time-to-market and optimize operational efficiency.

Setting a new benchmark for global dairy manufacturing

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Control room at Mengniu’s Ningxia factory in China. Photo: Tetra Pak

According to the WEF, the factory has reduced operating costs by 32%, shortened delivery cycles by 55% and cut quality defects by 60% through the deployment of more than 30 Industry 4.0 solutions.

The facility operates with full automation under the supervision of engineering and maintenance teams.

Operators receive real-time instructions and alerts whenever intervention is required, allowing production issues to be addressed immediately.

Notably, the factory aims to achieve one of the highest labor-efficiency ratios in the world, requiring only 100 employees to produce one million tonnes of dairy products annually.

The results achieved by the Lighthouse Factory model have established a new benchmark for the global dairy industry. Yet for manufacturers in Vietnam, the path toward similar transformation is considerably more complex.

Speaking to VietNamNet on the sidelines of the International Dairy and Dairy Products Exhibition 2026, Nguyen Van, Technical Director of Tetra Pak Vietnam, said the greatest challenge facing Vietnam’s dairy sector is the lack of infrastructure uniformity.

Because dairy companies typically expand production capacity in phases, equipment is often purchased and installed at different points in time.

As a result, many factories now operate with a mixture of legacy machinery and modern Internet of Things (IoT) devices. The technological incompatibility between these systems creates significant obstacles to data management and integration.

 

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Nguyen Van, Technical Director of Tetra Pak Vietnam, discusses infrastructure challenges facing Vietnam’s dairy industry. Photo: Du Lam

Capital investment is another major hurdle.

Most manufacturers cannot afford the enormous cost of discarding existing production lines and replacing their entire technology infrastructure in a single upgrade cycle.

Connecting old and new systems through open architecture

To address these challenges, software solutions based on open architecture, such as the Factory OS platform, are increasingly being adopted.

According to Tetra Pak, the core principle behind this approach is the creation of an integrated data platform that functions as an intelligent connection layer capable of communicating with equipment regardless of its technological age.

“The system standardizes fragmented data from everything ranging from legacy SCADA platforms to the latest generation of devices into a single source of truth that supports automation,” Nguyen Van said.

Rather than replacing equipment, Factory OS focuses on connecting and enhancing the value of existing assets, allowing manufacturers to improve operational efficiency without requiring massive upfront investment.

Its modular design also enables dairy companies to spread costs according to their actual needs.

Manufacturers can begin their digitalization journey on a smaller scale, such as establishing a centralized control room. After evaluating performance gains, they can then invest further in Manufacturing Execution Systems (MES) or integrate operations with Enterprise Resource Planning (ERP) platforms.

AI helps reduce operational risks

Beyond equipment compatibility issues, dairy manufacturers face significant operational risks linked to human error.

Dairy processing requires strict hygiene standards, and even minor mistakes can have serious consequences for product quality.

To mitigate these risks, artificial intelligence is increasingly being embedded into factory operations.

AI systems can digitize standard operating procedures and function as virtual assistants, providing step-by-step guidance and reminders to ensure employees follow sanitation and production protocols accurately.

This allows workers to perform tasks with greater confidence and consistency while supporting quality assurance, productivity and automation goals.

The growing adoption of comprehensive digital transformation solutions has already demonstrated tangible benefits globally, with average operating cost reductions of around 32%.

In Vietnam, major dairy producers are beginning to incorporate these technologies into their smart factory roadmaps, gradually narrowing the gap between local manufacturing operations and the world’s leading Lighthouse Factories.

Du Lam