Being in a global leadership position is not new to CEO Kwon. He served as the chairman of worldsteel’s Technical Subcommittee since 2012, when he was president of POSCO, and since 2014, he served as a member of the executive committee, the highest decision-making body of the organization, when he was inaugurated as the CEO of POSCO.

The new leadership will be looked upon to invigorate technical exchanges among steelmakers around the world, and boost the advancement of technology in the steel industry. In particular, while countries around the world are strengthening protectionism due to global oversupply, worldsteel’s leadership will be counted on to coordinate and arbitrate the interests of steelmakers through effective communication and networking.

The news of CEO Kwon’s new leadership role comes a day after POSCO received worldsteel’s Steelie Award for “Innovation of the Year.” The Innovation of the Year award is given to one member of worldsteel who made the most innovative accomplishments in technology or sustainability. POSCO was recognized for its use of artificial intelligence (AI) in coating weight control, the cold rolling process, automated operation and the furnace heat control process to improve quality and reduce costs at the same time.

This year’s award marks the last of 4 awards POSCO has received from worldsteel including the award for sustainability in 2010, and the awards for Innovation in 2012 and 2015.

Cover photo courtesy of World Steel Association.

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While consumers are able to see benefits added to their daily lives with IoT, it is the adoption in the industry and manufacturing sectors that are seeing the most significant economic gains, reductions in waste, and higher quality production. IoT is expected to see massive growth in the next ten to fifteen years, and most of that growth is expected to come from enterprise adoption, or what is now called IIoT, the industrial internet of things.

Below we take a look at how businesses are implementing IIoT and how it is revolutionizing industries all over the world.

Volkswagen Truck & Bus Launches RIO Platform

Beginning in 2017, Volkswagen Truck & Bus began offering its  RIO platform, an open and cloud-based “operating system.” RIO is unique in that it can connect multiple pieces of the global supply chain regardless of brand. Because the shipping and logistics industries utilize many different brands and types of equipment, it has been difficult to make the process more connected and more sustainable – but RIO does just that.

Shippers, dispatchers, carriers, drivers, and recipients can all be connected with a uniform logistics platform that includes forecasting features. RIO looks at information from traffic, weather, and navigation and combines it with information from tractors, trailers, bodies, drivers, and orders so that it can offer recommendations in real time.

Volkswagen Truck & Bus utilize IIoT technology to help compile information across multiple brands and types of logistics equipment. (Photo courtesy of Volkswagen AG)

In utilizing IIoT technology, Volkswagen can streamline the vast information sources across brands that will help improve the transportation and reloading process. As Volkswagen Truck & Bus CEO Andreas Renschler noted, this is not just good for efficiency and the company’s bottom line, it is also good for the environment. Being able to real-time decisions through multiple sensors and input, there will be fewer empty trucks on the road and far less waste.  

Caterpillar IIoT Saves Money, Increases Uptime

In the U.S., construction and mining equipment company Caterpillar is utilizing IIoT to help customers monitor their equipment to increase efficiency. Partnering with Uptake, a predictive analytics firm, Caterpillar sends data gathered from sensors on its products and sends it into the cloud for diagnostic analysis. Caterpillar then provides its customers with vital information related to their equipment so that they have the ability to plan maintenance schedules more efficiently. If customers can know that several parts are likely to need to be replaced, these can be fixed all at once while the equipment is offline instead of having each one break individually while in use. This ultimately helps prevent costly downtime providing customers with uninterrupted productivity.

Caterpillar also integrated advanced IIoT systems in their Marine Division to help monitor almost every aspect of their tugboats and shipping vessels. The generators, engines, GPS, air conditioning systems, and fuel meters are all connected and providing valuable data for the systems operators.

Caterpillar’s IIoT systems can now look at GPS and weather information to help guide the ship operators in how much power to use when operating their vessels. Also, when Caterpillar looked at performance data and hull cleaning correlations, they learned that dirty hulls were costing more than $5 million per year in decreased performance. By changing the cleaning schedule from once every two years to once every six months, they were able to save $400,000 per year per ship.

POSCO Implements AI Into Its Smart Factories

POSCO’s Gwangyang Works is one of the top automotive coated steel plants in the world, providing 10% of global supply. During automotive steel production, one of the most critical steps is the coating weight process. When coating weight is controlled manually, quality deviates depending on the skill level of the worker, inevitably resulting in significant amounts of wasted zinc, so POSCO implemented IIoT technology to improve efficiency and product quality & consistency.  

POSCO workers monitor the optimal coating weight predicted through IIoT and AI. It is now possible to collect hundreds of different types of data and make adjustments in real time for complex coating weights

This highly-sophisticated technology helps keeps the thickness of the coating layer consistent – even when operating conditions change suddenly. They have installed a data integration infrastructure that uses an automated control technology that predicts the coating weight of zinc in automotive steel to precisely control the Continuous Galvanizing Line (CGL). In combination with the coating weight system, they have also created a data pre-analysis system that can preemptively detect abnormalities. The implementation of this technology has helped to increase the quality of POSCO’s automotive coated steel while also decreasing production costs.

Advancements in IoT technology are changing the way people live, but behind the scenes, at manufacturing facilities around the world, IIoT is having an even greater impact. Companies like Volkswagen, Caterpillar, and POSCO are leading the way to create more efficient and sustainable production methods using IIoT.

In-hwan Oh, President of POSCO, said, “We implemented a customer-oriented core research infrastructure to help us evaluate products in a production environment similar to that of customers. By doing this, we aim to develop leading technologies and provide preemptive and proactive solutions to customers.”

The Steel Forming Laboratory will be used exclusively to evaluate the products ordered by POSCO customers by looking at properties such as formability, weldability, coating weight, corrosion resistance, and fatigue life. These evaluations will also be used to provide basic customer support such as quality certification. The new Steel Forming Laboratory will primarily be used for more differentiated tasks such as providing application technology solutions involving steel products.

The Steel Forming Laboratory houses various equipment, including roll forming machines and presses, which are used to evaluate the formability of steel products such as POSCO GIGA STEEL and develop new forming technologies. POSCO is the first steelmaker in Korea to use the 2,000-ton hydraulic press in order to evaluate the formability of large components such as the side outers of automobiles. In addition, other equipment such as the high-speed crash test machine, full-scale fatigue test machine, and wheel durability test machine can evaluate the impact and durability of the molded parts of automobiles. They also provide customized analysis results using 3D scanners.

POSCO’s new Steel Forming Laboratory has various facilities for the evaluation and advancement of large components for customers. Above, a POSCO employee can be seen operating the 2000-ton hydraulic press, the first to be purchased by a domestic steelmaker.

POSCO will use these machines to implement its “POSCO One-Stop Development” system, making it possible to perform every step from developing application technologies for steel products to production verification testing without the involvement of customers, a move towards further reinforcing its Solution Marketing services.

Customers may find it difficult to adopt newly developed steel grades right away, but with POSCO evaluating formability (one of the mandatory criteria for selecting steel products) on behalf of its customers, the burden of selecting new steel grades will be reduced.

POSCO will continue to pursue shared growth by conducting joint research with not only large OEM companies, but also small and medium-sized parts companies that find it relatively more difficult to operate various testing machines.

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POSCO has been ranked as the world’s most competitive steelmaker for seven years in a row. It has remained competitive in part by focusing on its World Premium Products, which offer advanced steel solutions for their customers. POSCO has also put extensive effort into maximizing its non-steel technologies and products to find new growth in non-steel sectors. In addition, POSCO has been a leader in innovating its own manufacturing processes, incorporating advanced AI and IoT technologies into its smart factories. POSCO has also remained committed to not only growing its non-steel secondary businesses, but advancing upon existing technologies to create new and eco-friendly production methods.  Below we take a closer look at how POSCO has continued its work to innovate and stay competitive.

POSCO Expands Lithium Manufacturing Business

Amid the rising demand for rechargeable lithium-ion batteries used in smartphones, laptops, and electric vehicles, POSCO has been working on proprietary technology for lithium extraction. Earlier this year, POSCO opened Korea’s first lithium plant, PosLX, and commercialized the production of lithium carbonate from rechargeable batteries after 7 years of development.

From left to right: Jae-chun Song, chairman of Gwangyang City Council, Hyun-bok Jeong, mayor of Gwangyang, Gi-jong Woo, deputy governor of South Jeolla Province, POSCO CEO Ohjoon Kwon, Ung-beom Lee, president of LG Chem and Nam-seong Cho, president of Samsung SDI who can be seen pressing symbolic buzzers to show that the plant is now online.

The PosLX Plant is expected to produce 2,500 tons of lithium carbonate per year using a new eco-friendly technology, which is enough to manufacture about 70 million laptop batteries. This output will supply POSCO’s battery making partners LG Chem and Samsung SDI, as well as POSCO ESM, a subsidiary that produces cathodes for secondary batteries.

POSCO incorporates AI into Smart Factories

POSCO is also breaking through technical barriers by designing smart factories connected through IoT technology and artificial intelligence (AI) that produce higher quality products with less waste. POSCO has also begun incorporating advanced AI technology into its smart factories in order to more efficiently manufacture automotive steel.

Smart factories operate autonomously as the machines talk to each other through sensors – reducing faulty products and waste.

In particular, the ‘Smart Solution for Coating Weight Control Based on AI‘ technology uses an automated control technology that predicts the coating weight in real time and accurately meets the target coating weight. When coating weight is controlled manually, quality deviates depending on the skill level of the worker, which inevitably results in significant amounts of wasted zinc. However, when it is automatically controlled by AI, the quality of POSCO’s automotive coated steel can be enhanced while production costs are decreased. These new automated processes have also helped increase work efficiency and productivity with workers.

Also, CEO Ohjoon Kwon recently visited Siemens in Germany and GE in the U.S., both of which are known to have successfully operated advanced smart factories to observe how other companies have implemented highly sophisticated smart factory models. Through close cooperation with POSCO’s major affiliates such as POSCO E&C, POSCO Energy, and POSCO ICT, Kwon aims to embrace smart technology and reorganize POSCO’s entire business structure (Smart Factory, Smart Buildings & Cities, and Smart Energy).

POSCO’s Thailand CGL, Southeast Asia’s First Automotive Steel Sheet Plant

Faced with sluggish growth due to the oversupply from China and a decline in steel demand, POSCO has been looking to expand sales in new markets. In a bid to become the world’s largest steel provider for automobiles, POSCO completed its Thailand CGL (Continuous Galvanizing Line) in 2016. The plant has an annual production capacity of 450,000 tons and incorporates some of the most advanced AI technologies in its smart factory system.

In addition to being one of the strongest automotive production bases in Asia, Thailand is also the center of the consumer-electronics industry in Southeast Asia.

With the newly established automotive steel plate plant in Thailand, POSCO’s global volume will reach over 9 million tons in 2017 and more than 10 million tons per year starting in 2018. The automotive steel sheets manufactured by the facility will be supplied to global auto parts companies and carmakers operating in Thailand including Toyota, Nissan, and Ford. Despite the increase in competition from other steelmakers, POSCO aims to become a market leader through building strategic partnerships with global automakers operating in the country.

POSCO CEO Ohjoon Kwon and Deputy Prime Minister and Minister for Foreign Affairs Tanasak Patimaprakorn shake hands at hands at Thailand CGL.

As cities around the world get more crowded, urban dwellers are facing more and noisier neighbors. To help combat this problem, POSCO introduced PosCozy in 2016, a unique flooring system that combines manganese (Mn) Z-clips with continuous galvanized steel plates that greatly reduce impact noise, save space, and lower costs (product video).  

Unlike conventional flooring that uses non-steel materials such as styrofoam insulators and rubber buffer materials, POSCO’s floor plates are developed by combining high Mn steel Z clips – a material that is 4 times more vibration-resistant than general steel – giving it the ability to reduce noise between floors. PosCozy is able to reduce the sound of typical walking from 50dB to just 40dB, while impact sounds are lowered from 58dB to 38dB.

PosCozy is the world’s first high manganese steel floor plate with first-class floor noise reduction.

PosCozy is the world’s first high manganese steel floor plate with top quality floor noise reduction. It is also the first flooring system to receive the highest rating in sound insulation from Korea’s industrial rating agency.  Due to its unique and superior qualities, PosCozy won the prestigious Jang Young Sil Award in 2016.

POSCO’s High Manganese Steel Used in the World’s Largest LNG-Fueled Bulk Carrier

Due to the rising number of shipbuilding orders for large-sized liquefied natural gas (LNG) carriers, there has been a shortage of nickel,  requiring new and innovative solutions to construct LNG-fueled ships. In order to address these issues, POSCO developed a new type of high-performance manganese steel and announced in 2016 that it would be applied to the LNG-fueled bulk carrier built by Hyundai Mipo Dockyard.

Developed independently by POSCO, this high manganese steel contains an Mn content of 20%. Compared to traditional materials, it boasts improved performance through unique properties that include high strength, low-temperature toughness, wear resistance, non-magnetic, and damping properties.

It is the first time a bulk carrier will have been constructed to include an LNG-fueled system and a fuel tank made of high manganese steel.  Its higher strength, ability to withstand an extremely low temperature (-162℃), and cost competitiveness make it superior to the nickel and aluminum alloys that are typically used in tanks. The ship, which will be the world’s largest LNG-fueled bulk carrier, is expected to have a capacity of 50,000 tons, seven times more than previous ships.

POSCO’s high-performance manganese steel will be applied to the world’s largest LNG-fueled bulk carrier built by Hyundai Mipo Dockyard.

POSCO has been able to overcome immense barriers, from the nickel scarcity in the LNG market to the oversupply of steel from China. POSCO strives to be a pioneer across all industries with its innovative products and will continue to do so in the years to come.

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We are entering a new era of manufacturing, one in which computers and machines are coming together to perform automated actions. Even more impressive, they are able to do this with less and less human involvement, learning from their mistakes and teaching themselves to constantly perform better.

Smart factories operate autonomously as the machines talk to each other through sensors – reducing faulty products and waste.

This new era, what is being called Industry 4.0, is one in which manufacturing moves beyond some of its former limitations by becoming more efficient, less wasteful, and much more productive. Corporations like Siemens, BASF, GE, and POSCO are leading the way by designing smart factories connected through IoT technology and artificial intelligence that produce higher quality products with less waste.

Industry 4.0 and the Smart Factory

The First Industrial Revolution marked the movement from pure human labor to using machines. Steam engines also appeared helping move things along further and more quickly. Next came electricity, and with it, mass production. The Third Industrial Revolution saw the rise of computers, more automation, and the replacement of some human labor. Now, we are entering the Fourth Industrial Revolution, or Industry 4.0, in which these machines interact and learn from each other with little to no human interference.

(Infographic courtesy of Christoph Roser)

With Industry 4.0 we are seeing the smart factory. A smart factory is a physical manufacturing system connected by AI, IoT, and tons of data in the cloud that teach the systems to work by themselves and make improvements without human involvement.

Bernard Marr says that for a factory to be considered Industry 4.0, it must include:

• Interoperability — machines, devices, sensors and people that connect and communicate with one another.
• Information transparency — the systems create a virtual copy of the physical world through sensor data in order to contextualize information.
• Technical assistance — both the ability of the systems to support humans in making decisions and solving problems and the ability to assist humans with tasks that are too difficult or unsafe for humans.
• Decentralized decision-making — the ability of cyber-physical systems to make simple decisions on their own and become as autonomous as possible.

In the examples below, we can see how three corporations are bringing these pieces together to advance smart factory production. Siemens, GE, and BASF have all utilized this technology to build a more efficient production system, and POSCO is doing the same in its steel production line.

Siemens, GE, and BASF – Case Studies in Smart Manufacturing

Siemens

The Siemens AG plant in Amberg, Germany, is unique in that it not only produces automated machines to be used in other industrial factories, but that it does so using fully automated machines in its fully connected smart factory. With over 1,000 manufacturing units connected via the web across 100,000 square feet, each step of the manufacturing process is automated and programmed to make customized products immediately.

The plant, established in 1989, is currently operated with around 1,200 employees and about 75% of operations are automated. The plant manufactures more than 12 million programmable logic controls (PLCs) that are used to automate cruise ships, automobile production lines, and ski lifts to name a few. With production quality at an impressive 99.99885%, an inspector would be hard pressed to find any defective products.

While Siemens has largely automated the production process, workers are still needed in the beginning to place the circuit board on the production line and supervise it through its production cycle. Producing more than 1,000 product variants for over 60,000 customers worldwide, Siemens has developed a model smart factory with automated systems creating nearly perfect products with less waste.

BASF

At BASF, the chemical giant incorporated a smart factory system so that it could manufacture fully customizable soaps and shampoos. When an order is placed, the automated factory line adjusts its protocols to make the unique product and packaging that was ordered by the customer. The set up is automatic and the quality is near perfect.

At its smart pilot plant in Kaiserslautern, Germany, once an order is placed for a personally customized soap or shampoo, radio-frequency ID tags that are attached to the soap containers send out wireless signals. These wireless signals tell the machines on the production line about the customized order.

The setup and manufacturing process is automated, exact, and with near perfect quality control.

GE

At GE’s Advanced Manufacturing Works in Greenville, South Carolina, engineers are working on new ways to streamline smart factories using AI and IoT technology. This $75 million plant sits next to where GE makes the world’s largest gas turbines – products manufactured on a huge scale with incredibly intricate pieces. They have introduced smart factory systems into this factory and are working to provide more to its other plants around the globe.

Staffed with 80 engineers, PhDs, and machinists with decades of experience – they will use the Advanced Manufacturing Works to try new manufacturing and design ideas in order to streamline the production processes of other factories.

POSCO Implements AI Into Its Smart Factories

POSCO CEO Ohjoon Kwon recently visited Siemens and GE to compare their work in smart factory systems with POSCO’s. All three of them are working on vastly different products; however, the ideas behind the technology are similar.

At POSCO’s Gwangyang Works, they have installed a data integration infrastructure that encompasses all of its operations and facilities. This technology uses an automated control technology that predicts the coating weight of zinc in automotive steel in real time to precisely control the Continuous Galvanizing Line (CGL), the primary technology used in automotive steel sheet production. In combination with the coating weight system, they have also created a data pre-analysis system that can preemptively detect abnormalities.

POSCO’s smart factory systems have improved quality and reduced waste

Coating weight control is a highly-sophisticated technology that keeps the thickness of the coating layer consistent – even when operating conditions change suddenly. When coating weight is controlled manually, quality deviates depending on the skill level of the worker, inevitably resulting in significant amounts of wasted zinc. However, the plating process is now automatically controlled by artificial intelligence, increasing the quality of POSCO’s automotive coated steel while decreasing production costs.

Also, in order to apply smart technologies more quickly, POSCO Group University is partnering with POSTECH (Pohang University of Science and Technology) to build an AI ecosystem that nurtures AI specialists and fosters advanced research. POSCO Group University will be in charge of launching related training programs POSCO and its subsidiaries, while POSTECH Information Research Laboratories (PIRL) will be in charge of developing content for basic and advanced courses to increase people’s understanding of AI, big data, programming, pattern recognition, machine learning, natural language processing, and computer vision. This partnership will serve as a significant milestone in expanding cooperation between companies and academic institutions, a fitting move in the era of the Fourth Industrial Revolution.

POSCO, Siemens, GE, and BASF are all utilizing the connected technologies of Industry 4.0 to move their industries forward. GE recently estimated there will be over “50 billion connected devices by 2020 and that the Industrial Internet could add $15 trillion to global GDP in productivity gains over the next 20 years.” Despite the industry barriers facing steel companies, POSCO is leading the industry in implementing connected technologies that will help them build the smart factories of the future and remain competitive for years to come.

Automotive coated steel, one of POSCO’s World Premium Products (WPP), is a high-grade product that requires a high level of sophisticated technology. Only 20 out of 800 steel companies in the world can produce it at this time. Last year, POSCO sold approximately 9 million tons of automotive steel sheets, accounting for 10% of the global automotive steel sheet market.

The ‘Smart Solution for Coating Weight Control Based on AI‘ is a technology that drastically reduces the deviation of coating weight by using artificial intelligence to precisely control the Continuous Galvanizing Line (CGL), the primary technology used in automotive steel sheet production.

In particular, this technology uses an automated control technology that predicts the coating weight in real time and accurately meets the target coating weight by combining the coating weight production model of the artificial intelligence technique with the control model of the optimization technique.

A developer and worker are seen in the operating room monitoring the optimal coating weight predicted through artificial intelligence. POSCO succeeded in developing the ‘Smart Solution for Coating Weight Control Based on AI‘ through a joint industry-university effort, and applied it to POSCO 3CGL last January. With artificial intelligence, it is now possible to collect hundreds of different types of data in real time, as well as accurately predict and control target coating weights.

Coating weight control is a highly-sophisticated technology that keeps the thickness of the coating layer consistent even when operating conditions change at the request of automakers. When coating weight is controlled manually, quality deviates depending on the skill level of the worker, inevitably resulting in significant amounts of wasted zinc. However, the plating process is now automatically controlled by artificial intelligence, increasing the quality of POSCO’s automotive coated steel while decreasing production costs. These new automated processes have also helped to increase work efficiency and productivity with workers.

Since the inauguration of CEO Ohjoon Kwon in 2014, POSCO has been preparing to take the lead in smart solutions by integrating AI into its smart factories. Last June, POSCO Technical Research Laboratories identified the need for an automated coating weight control system and collected the relevant data after discussing with several departments. POSCO worked with Prof. Jon-seok Lee of the Department of Systems Management Engineering at Sungkyunkwan University in Seoul, Korea, to develop the artificial intelligence coating weight prediction model algorithm. Prof. Lee is an expert in statistics, data mining, machine learning and optimization methodologies. He collaborated with POSCO researchers to develop the coating weight prediction program after analysis of the plating process.

Starting in July 2016, a beta program was introduced for two months. After successful completion of the beta test, POSCO Technical Research Laboratories added an additional program to ensure quality control even under changing operating conditions.

The core AI technology that was applied to the coating weight control automation is a self-learning software that utilizes big data deep learning techniques. This method operates in real time allowing the AI program to stay up-to-date by analyzing hundreds of different types of data generated during the plating process. It can accurately predict and control coating weight through real-time, even if equipment has been replaced or operating conditions have changed.

The completed coating weight control automation solution was applied to POSCO’s 3CGL line in Gwangyang on a trial basis for approximately 2 months, enhancing accuracy and stability. Normally, when operating manually, deviations in the coating weight can extend up to 7g per m², but with POSCO’s AI-based technology, this number is reduced to 0.5g per m². After a technical verification process, the technology was incorporated into the 3CGL line on January 5.

To maintain its position as a global leader in automotive coated steel technology, POSCO is planning to apply this coating weight control automation solution to other CGLs at home and abroad, like the recently opened Thailand CGL. POSCO is also taking steps to introduce artificial intelligence technology to the manufacturing processes of other steel products while also continuing to build smart factories that can help POSCO continue to be a leader in the steel industry.

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