[Companies Overcoming COVID-19] LS Accelerates R&D to Respond to Digital Transformation

Commemorative photo celebrating LS Mtron Jeonju Plant's achievement of producing 20,000 tractors, the first in Korea.

[Asia Economy Reporter Changhwan Lee] Koo Ja-yeol, Chairman of LS Group, recently conveyed a message to employees stating, “As the uncertainty in achieving this year’s management plans has increased due to the COVID-19 pandemic, it will be difficult for the time being, but I ask you to face this situation with extraordinary determination beyond usual,” and emphasized, “Let us keep the flame of hope for overcoming this crisis alive with the belief that a new moment of opportunity will surely come after passing through this difficult tunnel.”

In response, LS Group employees are actively participating in the ‘social distancing’ campaign by refraining from business trips for the time being, avoiding group activities and gatherings, and utilizing smart work methods such as video conferencing.

LS is fully operating related systems and manpower to enable regular work-from-home arrangements, and is planning to migrate important group systems such as ERP (Enterprise Resource Planning) to the cloud in the mid to long term. To this end, the group plans to invest hundreds of billions of won over the next five years to establish a digital operating system that applies the same IT environment not only domestically but globally through cloud technology.

Additionally, the group plans to prepare for the future through ongoing activities such as cost reduction and curtailing unnecessary investments by quickly assessing the potential impact on business.

Alongside this, LS is accelerating its research and development and future preparation strategies, ‘R&D Speed-up’ and ‘Digital Transformation,’ aiming to transform into a digital company.

Koo Ja-eun, Chairman of LS Mtron, is also leading LS Group’s digital future strategy by heading the Future Innovation Division within the holding company, promoting digital transformation projects across affiliates, and spreading agile management techniques.

LS Cable & System is actively advancing the inventory management system business using the Internet of Things (IoT), the first in the cable industry. This system attaches communication sensors to products and materials to monitor their location and inventory quantity in real time via mobile phones. It can reduce the time and effort required for shipping hundreds to thousands of product types and prevent theft during transportation by enabling tracking of movement routes.

At the LS ELECTRIC Cheongju Smart Factory, Automated Guided Vehicles (AGVs) are transporting finished electronic contactor products.

LS ELECTRIC has established and is operating a so-called ‘smart factory,’ regarded as the core of manufacturing innovation, with an automated system covering the entire line from parts supply to assembly, testing, and packaging at Building G of its Cheongju Plant 1.

Since LS ELECTRIC’s Cheongju Plant transformed into a smart factory, the daily production volume of 38 low-voltage device line items produced at this plant has expanded from about 7,500 units to 20,000 units. Energy consumption has been reduced by more than 60%, and the defect rate has sharply dropped to 6 PPM (parts per million), a global smart factory level, resulting in a revolutionary improvement in production efficiency.

LS-Nikko Copper is promoting the ODS (Onsan Digital Smelter), a smart factory system at the Onsan Smelter that connects the entire production process via communication for automatic operation. The goal is to transform the Onsan Smelter, which boasts the world’s second-largest production volume, into the first global smelter that enhances production efficiency and stability while ensuring safety and environmental protection. ODS is expected to become a future growth engine not only for LS-Nikko Copper but also for LS Group.

LS Mtron is applying digital transformation (DT) technologies such as real-time production information monitoring systems and Computerized Maintenance Management Systems (CMMS). Through this, it has established a smart factory foundation, reduced waste, and maximized production efficiency, achieving the first-ever domestic milestone of producing 20,000 tractors annually and reaching this figure in just eight years, up from 10,000 units per year.

An LS Group official stated, “LS is dramatically enhancing its digital capabilities by applying automation, big data, and artificial intelligence (AI) technologies in traditional manufacturing sectors.”