LG invests in smart factory lines

Left: The current LG Electronics’ plant in Changwon, South Gyeongsang. Right: An image of the smart factory once it is completed. [LG ELECTRONICS]

LG Electronics is investing 600 billion won ($525.8 million) through 2022 to thoroughly upgrade its production lines in Changwon, South Gyeongsang, to incorporate fourth industrial revolution technologies including artificial intelligence, Internet of Things and big data analysis and to make it more environmentally friendly, too.

The electronics company said Wednesday that once the overhaul is completed, the plant will be fully automated from parts purchases to production and quality inspections.

Under an integrated management system, supplies of materials and production plans - including output volumes and the type of products to be made - will be automated and monitored in real-time.

“With consistent investment, our plant in Changwon will become a strategic outpost for premium electronic consumer goods while leading regional economic development,” said Song Dae-hyun, LG Electronics CEO for home appliance and air solution.

According to the company, the first factory in Changwon was built in 1976 and has been rolling out refrigerators, water purifiers and ovens. While it played a significant role in LG Electronics’ consumer electronic goods production, the factory lines have reached their limits. Adding additional lines or installing new machinery isn’t enough to improve production capability. So the company decided to made a bold investment in totally upgrading the facility.

The company said LG started planning the smart factory three years ago but the amount of investment was decided last February. The new plant will be built on a 25,632 square meter (6.3 acre) lot next to a 20-story research center that was built starting in 2015.

The company estimated that once the upgrade it complete, annual production capacity by 2023 will improve 50 percent. Currently the plant has an annual capacity of 2 million units of consumer electronics products.

LG Electronics said it plans to hire 250 new employees every year for the first and second plants in Changwon. The quality of the jobs will also be upgraded.

LG isn’t the first Korean company that has such ideas. The nation’s largest lumber company Dongwha Enterprise and Posco ICT, an IT affiliate of steel conglomerate Posco, announced Wednesday that they will work together to upgrade Dongwha’s plant in Incheon to a smart factory by next July and later upgrades other plants in Vietnam and Malaysia.

The factory is expected to use artificial intelligence to analyze big data collected from the production lines to cut costs and raise efficiency. According to the Korea Chamber of Commerce and Industry, between 2013 and 2016 1,129 SMEs have installed smart factory systems.

A recent study by Zebra Technologies forecasts smart factories with full connectivity will double around the world by 2022, which is expected to increase revenue growth for the companies by as much as 88 percent.

The report by the Illinois-based IT company said, “With automation comes instant access to data which is essential to ensure that the production process operates smoothly. ”

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]