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Saudi Arabia has set a clear industrial ambition: expand the Kingdom’s manufacturing base toward 36,000 factories by 2035 under the National Industrial Strategy. New industrial licenses continue to be issued. Factories are opening across Riyadh, the Eastern Province, and Makkah.
Programs such as Future Factories aim to modernise thousands of existing plants. NEOM and OXAGON position advanced and clean manufacturing at the centre of long-term economic diversification.
This is not incremental expansion. It is industrial scaling at national level.
But behind the headline number sits a quieter question that rarely appears in official announcements:
If Saudi Arabia builds 36,000 factories, who will run them at rate?
Factory Count Is a Construction KPI. Output Is a Leadership KPI.
Capital builds assets. Leadership builds output.
In every large-scale industrial expansion I have seen across Europe, Central and Eastern Europe, Turkey, Korea, and the Middle East, the binding constraint was rarely funding. It was leadership density.
Leadership density means having enough capable plant directors, production managers, maintenance heads, planners, and supervisors to run stable systems under pressure.
It means middle management that can translate strategy into daily operating rhythm. It means commissioning that transitions into predictable throughput, not prolonged instability.
When factory growth outpaces leadership pipelines, volatility follows. Scrap rises. Overtime becomes normal. Delivery performance fluctuates. Governance dashboards show progress while the shop floor struggles with recurring problems.
Saudi Arabia’s industrial ambition is strong. The capital is available. The regulatory push is visible. The infrastructure is improving. But scaling at this speed inevitably introduces pressure points:
- Greenfield plants moving into unstable yield phases
- Smart factory investments outpacing workforce capability
- Saudisation requirements reshaping supervisory layers
- Foreign joint ventures adding governance complexity
- Supply chain localisation becoming a throughput variable
These are not theoretical risks. They are structural realities of rapid industrialisation.
The First 120 Days After SOP
The most decisive period in a new factory is not the ribbon cutting. It is the first 120 days after start of production.
This window determines whether:
- Yield stabilises or scrap becomes embedded
- OEE trends upward or fluctuates unpredictably
- Supervisors gain authority or lose credibility
- Maintenance shifts from reactive to disciplined
- Suppliers mature into reliable partners or remain bottlenecks
If operating rhythm is not installed early, firefighting becomes the default system. Once firefighting becomes cultural, recovery requires more than incremental improvement. It requires structured stabilisation.
A plant can be technically complete yet operationally immature. Equipment may be installed. Systems may be integrated. Digital dashboards may be live. But without clear decision rights, tiered meetings, maintenance discipline, and supervisor capability, the plant will not run at rate.
The difference between a “built factory” and a “stable factory” is management.
Why the Leadership Bottleneck Is Inevitable
The 36,000-factory ambition is not only about infrastructure. It is about people.
Rapid industrial growth creates predictable strain in three areas.
1. Middle Management Becomes the Constraint
Supervisors are promoted faster than they are prepared. Production managers inherit complexity before they master fundamentals. Maintenance leaders are expected to stabilise uptime without robust preventive systems.
Without strong middle layers, even capable plant directors struggle to create consistency.
2. Capability Transfer Takes Time
Saudisation and localisation policies are structural elements of the industrial strategy. Over time, this strengthens the system. In the short term, it requires deliberate coaching, structured handover, and disciplined skill development.
Capability transfer does not happen automatically. It must be designed.
3. Governance Complexity Increases
As foreign investment and joint ventures expand, decision rights often blur. Board governance and plant governance drift apart. Metrics look healthy at executive level while throughput instability persists on the shop floor.
Industrial scale without leadership clarity produces slow degradation rather than visible crisis.
And slow degradation is expensive.
Smart Factories Still Need Mature Operators
Saudi Arabia’s Future Factories program and Industry 4.0 investments are strategically important. Automation, digitalisation, and advanced manufacturing ecosystems are necessary for long-term competitiveness.
However, digital systems amplify management quality. They do not replace it.
Advanced environments require:
- Data-literate supervisors
- Clear escalation logic
- Consistent daily management cadence
- Maintenance planning discipline
- Cross-cultural alignment in multinational teams
Technology increases transparency. It does not compensate for unclear accountability.
In high-visibility environments such as industrial clusters and projects linked to NEOM or OXAGON, compliance and documentation standards are rising. Supplier onboarding requirements are stricter. Operational discipline is not optional. It is part of competitiveness.
What This Means for CEOs and Investors
For CEOs scaling industrial operations in Saudi Arabia, the core question is not whether factories will be built. They will be.
The question is whether there will be enough capable operators to stabilise and scale them.
For investors, the risk is not construction delay. It is post-opening underperformance. Capex can be deployed on time while yield, scrap, and throughput drift for 12 to 24 months.
For multinational manufacturers entering the Kingdom, the challenge is not strategy alignment. It is installing a functioning operating system fast enough to match ambition.
In all three cases, the leadership layer determines whether growth converts into stable output.
Stabilisation Is a Discipline, Not an Event
In practice, stabilising a new or underperforming plant follows a structured path:
- Install a daily performance rhythm
- Clarify decision rights and escalation logic
- Stabilise yield and scrap trajectories
- Reinforce preventive maintenance discipline
- Coach the supervisory layer to own performance
When this discipline is embedded early, plants move from volatility to predictability.
This is often the point where interim operational leadership is brought in. An experienced plant director or interim COO can install management cadence, stabilise output, and transfer capability to the permanent team. The objective is not dependency. It is system maturity.
The Leadership Question Behind the Numbers
Saudi Arabia’s industrial strategy is ambitious and credible. The expansion toward 36,000 factories signals confidence in manufacturing as a core economic pillar.
But factory count is not the final KPI. Stable output, predictable throughput, disciplined governance, and capable middle management are.
The Kingdom is building factories at scale.
The decisive question is whether it will build operating systems at the same pace.
