[Report] The Smart Factory of 'Nongseulla'... Visiting Daedong Daegu Plant

Daedong Implements In-House ERP·MES... Advanced Smart Factory
120 Billion Investment Next Year... Final Inspection Station Built with Line Method
Remote Diagnostic Function for Agricultural Machinery... Expansion of 'Connect' App Devices
Joining the 10 Trillion Club for Two Consecutive Years through 'Smart Agricultural Machinery'

A view of the Daedong factory located in the Nongong Industrial Complex in Daegu. Tractors, combines, and transplanters, which are agricultural machinery, are manufactured here.
[Photo by Daedong]

[Asia Economy Reporter Kwak Minjae] On the 22nd, I visited Daedong Factory in the Nongong Industrial Complex, Daegu. At the factory on a site of 231,405㎡ (about 70,000 pyeong), tractor production was ongoing nonstop. Upon entering, a blue screen monitor installed at the top caught my eye. Through the monitor, it was possible to check the real-time performance and target figures by line of the factory where MES (Manufacturing Execution System) had been introduced.

Daedong, a specialized agricultural machinery company, has begun full-scale promotion of smart factory initiatives to advance production and quality management. With continuous domestic and overseas growth and efforts to promote overseas sales of large tractors over 100 horsepower, Daedong redesigned its own ERP (Enterprise Resource Planning) and MES systems in the first half of this year and introduced them at the Daegu factory. By the end of this year, the company plans to convert the OEM forklift production line to tractors, increasing the annual maximum tractor production capacity from 40,000 units to 50,000 units.

In smart factories where MES (Manufacturing Execution System) is implemented, the production process is monitored in real time, and production capacity and quality are enhanced through big data.
Photo by Kwak Minjae

The products produced here are Daedong's main export items, tractors. In particular, the company is accelerating its overseas market penetration centered on its own export brand KIOTI, especially in North America. In fact, tractor production volume and overseas sales have increased significantly. Compared to 2017, Daedong's tractor production volume last year was about 42,000 units, a 280% increase, and overseas sales reached 774.6 billion KRW, a 264% increase.

Workers are assembling tractor engines at Daedong Factory.
[Photo by Kwak Minjae]

Upon entering the engine assembly factory, the first thing that caught my eye was the black 'cylinder block' used in 3-cylinder tractor engines. Engine parts are supplied through affiliates Daedong Gear, Daedong Metal, and partner companies. Each worker's station was equipped with a monitor. The monitor screen displayed work details and measured data. This system was introduced by Daedong in the first half of this year to promote the smart factory. Basic assembly values are automatically set in real-time for each product, and assembly manuals are automatically provided to workers. According to the company, this improved the production product quality index (DPHU) and finished product inspection pass rate by 45% and 10%, respectively, compared to the beginning of the year.

Park Inho, Deputy Manager of the Service Business Team, said, "Daedong collects and analyzes production data to predict and control abnormalities in production equipment and assembly quality, and proactively responds to recurring assembly defects by changing assembly methods or sequences to minimize production loss."

The 'overhead conveyor line' located at the top of the factory. This line carries out the painting process for the 'powertrain'.
[Photo by Kwak Minjae]

When the completed engine is moved to the main factory, it goes through the body assembly process. At the top of the factory, the 'powertrain,' which serves as the engine's frame, was hanging on an overhead conveyor line, going through the painting process. After painting, the powertrain goes through an automated system and is lowered to the ground, where it is manually assembled with transmissions and other components by workers. Completing assembly does not mean the product is finished. Deputy Manager Park said, "Just because assembly is completed on the line does not mean it goes straight to the shipping yard. It must undergo hydraulic tests that inspect the left and right brakes and various braking devices to become a final completed tractor."

The assembled tractor undergoes a hydraulic test that inspects the left and right brakes as well as various other braking devices one by one before shipment.
[Photo by Kwak Minjae]

Daedong has been promoting the 'smartization of the agricultural machinery business' and became the first in the industry to exceed 1 trillion KRW in consolidated sales last year, joining the 1 trillion club for two consecutive years. In the third quarter of this year, cumulative sales and operating profit increased by 27.3% and 40.6%, respectively, compared to the same period last year, recording 1.1367 trillion KRW and 80.7 billion KRW. Especially, the premium 'HX Tractor' with 100 to 142 horsepower, launched last year, was released in the U.S., Europe, and Australia in the second half of this year. Since cumulative sales of 100 to 140 horsepower tractors from January to October this year increased by 50% compared to the same period last year, it is expected to contribute to Daedong's overseas sales growth. The HX Tractor features agricultural machinery remote control 'Connect,' straight-line autonomous driving, and a 10-year free warranty service.

With the increase in domestic and overseas tractor distribution, Daedong plans to expand the number of customers subscribing to the Connect service app to strengthen the agricultural platform business foundation and maximize parts sales. Although the Connect app was available only for some tractor models produced since 2021, the company plans to supply after-market attachment terminals for previous production models in the domestic market by the second half of next year. Na Youngjoong, Head of AI Platform Promotion Team at Daedong Agtech, said, "We plan to link the parts store to the Connect app and add remote diagnostic functions for agricultural machinery to improve customer convenience and parts sales simultaneously."

Daedong plans to invest up to 12 billion KRW next year for mid- to long-term production quality advancement. Next year, the company will newly establish a line-type final inspection station to improve manufacturing quality. The inspection system will shift from the existing cell method, where one worker inspects one product, to a line method where multiple workers share the inspection of products, similar to finished automobiles. Daedong expects that expanding maintenance and inspection spaces on the production line will increase in-house detection capabilities and improve manufacturing quality.

The finished product of Daedong's own export brand KIOTI tractor.
Photo by Kwak Minjae

No Jaeok, Factory Manager of Daedong, said, "Since 2020, we have been intensifying the smart agricultural machinery business equipped with AI, ICT, and big data-based autonomous driving and remote diagnostic functions, increasing domestic and overseas agricultural machinery sales, and continuously discovering new business opportunities such as parts and service, and OEM production supply." He added, "We will not hesitate to invest in strengthening manufacturing capabilities to enhance the competitiveness of Daedong's core business, the smart agricultural machinery sector, by exploring various businesses such as platform businesses aligned with the vision of becoming a leading company in future agriculture."

Daegu = Reporter Kwak Minjae