LG Electronics, Partner Companies' Smart Factory and Digital Transformation Achieve Significant Results

LG Electronics is supporting the establishment of smart factories and digital transformation to strengthen the manufacturing competitiveness of its partners. Shinshin employees are inspecting parts produced by automated equipment.

LG Electronics is supporting the establishment of smart factories and digital transformation to strengthen the manufacturing competitiveness of its partners. Employees of Shinseong Autotech are inspecting the equipment control system.

[Asia Economy Reporter Ki-min Lee] LG Electronics' support for smart factory construction and digital transformation to strengthen the manufacturing competitiveness of its partners is beginning to show tangible results.

LG Electronics announced on the 20th that the automation rate of 64 partner companies supported this year will increase to the 40% range by the end of this year, and hourly production volume will increase by more than 20%. In addition, compared to last year, production costs will be reduced by approximately 46 billion KRW, and the defect rate occurring in the production process will decrease by 1.3 percentage points from 4.3% to 3.0%.

Since 2018, LG Electronics has selected about 60 partner companies annually and established three-year plans to support the automation of production lines and the application of digital technologies in production processes to improve productivity and manufacturing competitiveness.

In particular, this year, digital transformation is being promoted in connection with partners' smart factories. For example, LG Electronics supported Shinshin, a first-tier partner company related to home appliance parts, to establish an equipment control system equipped with digital technology. First, LG Electronics analyzed Shinshin's manufacturing process and selected about 20 factors affecting production or quality. Then, sensors detecting temperature, pressure, and levelness were applied to enable real-time monitoring. As a result, the total time from production stoppage to restart decreased by about 20% compared to last year.

Moreover, various data detected through sensors are stored on servers. LG Electronics expects that by utilizing data analysis technology in the future, it will contribute to improving productivity and quality by predicting production stoppages or quality defects in advance.

Additionally, LG Electronics supported Shinseong Autotech, a first-tier partner located in Suwon, Gyeonggi-do, in building a system that allows quality management based on data from raw materials to production equipment and finished products.

Since establishing the system, Shinseong Autotech has been digitizing and managing and improving factors such as the temperature and humidity of the warehouse storing raw materials, elements affecting the operation of injection molding machines, mold temperature, and the size and weight of finished products.

LG Electronics is also actively supporting second-tier partners struggling due to COVID-19 in building smart factories to enhance manufacturing competitiveness and productivity. This year, including first- and second-tier partners, about 100 partner companies are being supported to build smart factory solutions and automation systems utilizing artificial intelligence (AI), big data, and other technologies.

Lee Si-yong, Executive Vice President and Head of LG Electronics' Purchasing Management Center, said, “We are actively supporting smart factory construction and digital transformation to enhance the manufacturing competitiveness of our partners in line with changes in the manufacturing industry. We will work together so that LG Electronics and its partners become mutually prosperous partners.”