Here’s a look at how steel is produced in a steel mill or factory, and what the “smartization” of steel factories will look like.

So, how is steel made?

Iron Making

To make steel, manufacturers first need molten iron. Molten iron comes from two raw materials; iron ore and coal. Iron ore is converted into sinter ore in a sintering plant and coal is converted into raw coke using a coke oven. The processed materials are poured into a blast furnace where hot air reaching 1200℃ is blown in from the bottom through tuyeres, causing a chemical reaction. This process oxidizes the coke and reduces the sintered ore, creating molten iron.   

Steelmaking

In the steelmaking stage, the molten iron is transported to the steel making plant via a torpedo car, where the liquid is poured into a converter. Then, oxygen is blown into the converter to burn off all the impurities. All that is left is pure molten steel.

Continuous Casting

This is where steel finally becomes solidified into different shapes such as slab, bloom and billet. Liquid steel is poured into molds and cooled as it passes through a continuous casting machine until it solidifies into the desired shape.

Hot steel passes through rolling machines to be rolled into specific sizes and thicknesses. (Source: Global Sourcing Blog)

Rolling Process

During the rolling process, steel is heated once more to achieve various sizes and thicknesses. Steel slabs are heated to over 1100℃, then pass through rolling machines. This results in hot-rolled coils that can be shaped for different uses such as thick plates. They can also be processed into long, wire-shaped rods for billets. Often, the hot-rolled coils are rolled at room temperature for cold-rolled coils. Cold-rolled coils can be fabricated to produce galvanized and electrical steel products.

“Smartizating” these processes will involve converging IoT, Big Data, and AI to connect the different facilities, IT systems and workers in order to collect and analyze data for optimization.

POSCO is “smartizing” the steel-production process

POSCO is a steel company looking to lead the industry in adopting smart factories. CEO Kwon Ohjoon made “smartization” one of the 4 key priorities for POSCO starting back in 2014, and Kwon will continue to increase those investments.

POSCO smart factory incorporates artificial intelligence to enhance safety and efficiency.

SEE ALSO: How Smart Factories are Changing the Manufacturing Industry

In 2016, POSCO established its Smart Solution Council in order to research AI, big data and IoT applications. In the same year, POSCO ICT’s smart factory platform, PosFrame, was completed and installed in POSCO’s Gwangyang Steel Mill. PosFrame allows engineers to collect and monitor big data. So far, the company has saved over USD 14 million by incorporating the new technology in its production practices.

Here are some other features of POSCO’s Smart Factory.

POSCO’s Smart Blast Furnace

The Pohang Blast Furnace No.3 became a smart furnace in 2017, following a 102-day repair period. The furnace is now equipped with automated sensors that monitor and control its internal conditions using AI technology. Smart sensors monitor the blast furnace for factors like raw material quality and ventilator status, preventing breakdowns and ensuring a much longer lifecycle.

SEE ALSO: Will Artificial Intelligence Lead to Breakthroughs in the Steel Industry?

Worker Safety

Smart sensors can be used for more than just process monitoring. The company is working toward a full implementation of smart sensors for safety purposes, using IoT to create a better working environment.

Steel manufacturing involves high temperatures and high pressure levels, which is dangerous for workers who come in close contact with the equipment. With smart sensors monitoring all of the factory information, workers will instead be monitoring operation from a safe distance.

Workers in POSCO’s smart factory wear smart sensors for safety.

Wearable sensors, in conjunction with factory smart sensors, will be able to detect if and when workers are approaching potentially dangerous areas, and will alert them. These sensors will also detect and alert with regards to any impending accidents, or life-threatening situations like gas leaks, explosions, or fires.

Also, dust, sulfur, and nitrogen compounds will be removed via a high-plasma method, creating an eco-friendly steel plant and a healthier environment for workers.

POSCO will continue to add more smart features to its steel mills to increase efficiency, safety and sustainability. In efforts to learn and implement new technologies, POSCO CEO Kwon Ohjoon visited GE’s smart factories to learn about their technology earlier this year. POSCO also held the 2017 Smart POSCO Forum to share its insights with clients and affiliates, all as part of its expanding smartization efforts.

With the emergence of the 4th industrial revolution as a hot topic of the world economy, AI is expected to drive manufacturing innovation by providing breakthroughs in smart factories.

POSCO Smart factory in Gwangyang

In his recent POSCO Issue Report, Kim Ho-In, a senior researcher at POSRI, examined what innovations AI can bring to the upgrowth of smart factories, and identified key issues related to such technological introductions.

Smart Factory Takes Wing with AI

Kim looked at how AI will provide breakthroughs in areas of manufacturing, such as preventive system maintenance, process control, expert process control and robot automation, and how AI  will make smart factories more efficient, less wasteful and more productive.

Traditional stock, inventory and statistical analysis provided insufficient information for preventing factory defaults, and made certain failures inevitable. With AI, however, factories can predict quality deficiency, gather and analyze complex data and improve equipment reliability. Also, by integrating such intelligence with robots, there are now self-learning, versatile beings that can automatically overhaul and optimize system defaults.

Thus the ability to self-teach, analyze and create will lead to a more comprehensive statistical analysis and achieve positive results in preventive maintenance.

The Right Kind of Smart

The different innovative tools in smart factories, however, may have distinct values depending on its application for the industry in question, so while such technological advances may be a breakthrough for manufacturing, companies must apply the tools that are most effective for their field and industry.

AI that can self-teach, analyze and create in a smart factory

For instance, the technology required for “smartization” is entirely different for assembly process industries such as parts production, automotive and electronics, than from mechanisms industries such as metals, chemicals and energy.

In the assembly process industries, customizing production, cutting labor costs and responding to the fast life cycle of products are the major areas for innovation. AI applications like robot automation can guarantee positive results because many production processes can be replaced with robots, resulting in minimized labor costs.

In the process equipment industries, however, improving productivity through optimal control of core processes, controlling the linkage between processes and maintaining the facility are the major issues. The loss of data can be extremely critical in the case of a core facility failure, so preventive equipment maintenance would have a greater impact than robot automation.

The investment size and outcome value for implementation and innovation of smart factories will differ by industry. Thus it is necessary to build up strategies on technologies that are most suitable for each required field.

Smart Reconstruction

Recently, the world’s fifth largest blast furnace located in Pohang Works, went through major renovations to “go smart”. The Pohang Blast Furnace No.3 was first fired up in 1978 with an internal volume of 3795㎥, and was repaired in 1989, 2006 and finally in 2017, when it leaped toward POSCO’s vision of “smartization”.

After a 102-day repair period, the furnace volume expanded to 5600㎥, and the site is now fully equipped with AI to precisely monitor the condition of the blast furnace.

The Blast Furnace No.3 dismantled at the start of the repairing process

Engineers, including Gi Wan Son, Blast Furnace No.3 Repair Quality PJT team leader, worked on all three renovations and provided exceptional knowledge based on more than 40 years of experience with the Blast Furnace No.3. According to Son, the main focus was to build a smart technology infrastructure that utilizes AI and collects big data.

POSCO added smart sensors that automatically monitor the internal state of the blast furnace such as raw material quality and ventilator status. Both measures are expected to help forecast and extend the lifespan of the blast furnace to longer than the average period of 15 years.

[clickToTweet tweet=”POSCO Blast Furnace No.3 will lead the future of  blast furnaces for another 50 years if we incorporate POSCO’s advanced technologies” – Gi Wan Son, Blast Furnace No.3 Repair Quality PJT team leader” quote=”POSCO Blast Furnace No.3 will lead the future of  blast furnaces for another 50 years if we incorporate POSCO’s advanced technologies” – Gi Wan Son, Blast Furnace No.3 Repair Quality PJT team leader” theme=”style6″]

Though in its early stages, AI has already had a significant impact on smart factories and further innovations are expected. The manufacturing industry needs to pay close attention to the future scope of AI development and how it will allow them to overcome existing challenges and open doors to a limitless future.

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Upcycling ensures that resources are used to their fullest extent, minimizing the number of trips made to the landfill. Vivian Kim, a travel writer, takes us deeper into this topic and introduces two examples of upcycling architecture from her time in both Korea and the Netherlands.

Steel, an Ideal Material for Upcycling

Steel is 100% recyclable, which makes it one of the most ideal materials for upcycling. Other construction materials, such as wood and plastic, can only be recycled a limited number of times before they lose its original properties and functionality and need to be downcycled (recycled into a material that is of lower quality than the original material). Steel, on the other hand, never loses its original quality. In fact, it can even increase in value and be upgraded to a higher grade of steel with the same amount of energy it would take to recycle it.  

High-strength Low-Alloy (HSLA) steel being recycled. (Photo courtesy of Recycling International)

Steel is also reusable. Entire buildings made of steel can be reused or have their lives extended by years, just by making small improvements. Because steel can be easily reused for its original purpose, there is less of a need to use raw materials from scratch, allowing for more sustainable construction.

Let’s take a look at some of the most widely recognized pieces of upcycling architecture in the Netherlands and Korea.   

Amsterdam’s Abandoned Shipyard Reborn as Cultural Hub

Utilizing recycled materials in the design of a building is nothing new. In fact, upcycling in the Netherlands had its beginnings in the 1960’s when a small, social movement began in Jordaan, a well-known neighborhood in Amsterdam. The Dutch began to mobilize the community to protect their historical buildings and prevent constant demolition from taking place. Local governments also recognized the importance of reusing and remanufacturing materials from an economic standpoint and began to push for more upcycling initiatives.

A great example of this is the NDSM ship wharf, the site of the former Dutch Shipbuilding and Dry Dock Company. Just a 15-minute ferry ride from Amsterdam Central Station, the NDSM was once one of the largest shipbuilding companies in the world. However, a shortage of shipbuilding orders led to the company’s eventual closure in 1984. The abandoned shipyard soon became the breeding grounds for “city nomads” and local artists to take their place and breathe new life into the empty buildings. Through their efforts, the NDSM quarter was transformed into what is now a cultural hotspot in Amsterdam.

The NDSM ferry stop in Amsterdam Central.

As soon as visitors step off the ferry, they are greeted by what looks like a scene from an eerie, sci-fi movie. The NDSM ship wharf is full of gray, bleak buildings covered with graffiti and steel containers that are painted bright red and blue.

The former NDSM wharf is now Amsterdam’s newest creative hot spot.

Crane Hotel Faralda in the Sky of Amsterdam

At the center of the NDSM wharf stands a monumental, 50-meter-high crane called Crane 13. It is painted in red, blue and yellow, the signature colors of Dutch artist Mondrian. Built in 1951 by Hensen Ltd., it was one of the largest cranes in the world but slowly faded from the public’s memory with the closure of the shipbuilding company.

The Crane Hotel Faralda, transformed from a rusty, old crane into a luxurious high-end hotel.

In the spirit of upcycling, the 60-year-old rusty crane was transformed into the Crane Hotel Faralda in 2013 despite immense technical challenges. The hotel, named after a female Dutch spy who saved hundreds of people during World War II, is made entirely of steel.

As a crane’s main purpose is to lift heavy objects, only the strongest of steel is used to build it. For this reason, High-Strength Low-Alloy Steel (HSLA) is often employed. It contains 0.05% of carbon and other raw materials such as chromium, nickel, molybdenum, and vanadium – the secret behind its enhanced strength. HSLA steel is also more resistant to atmospheric corrosion, enabling Crane 13 to withstand the strong Netherland winds of the North Sea for over 60 years.

In the following time-lapse video, watch how the rusty crane transforms into an iconic symbol of the NDSM quarter and one of Europe’s most unique and sensational hotels.

An old rice mill transforms into one of Seoul’s hotspots

Another example of upcycling that shifts the culture can be found in the quaint neighborhood of Seongsu-Dong, South Korea. Known as the “Brooklyn of Seoul”, Seongsu-Dong is known for its trendy and hip cafes embedded in between old warehouses and factories. Its roots can be traced back to the 1970s where steel, leather and printing factories once dominated the streets. But, beginning in 2010, a wave of cafés, galleries, and studios began to break into the bleak space, transforming the once gray industrial district to a colorful vibrant scene brimming with new sights and sounds.

Daelim Warehouse in Seongsu-dong, Seoul. (Photo courtesy of Daelim Warehouse)

Hidden within the streets of Seongsu-Dong is the Daelim Warehouse, an old rice mill that has in recent years, been upcycled into a multi-cultural hub that doubles as a café and performance/exhibition venue for the artist community. From the bare concrete walls to the metal rod ceiling structure, it retains the distinct flair of a warehouse, cultivating a special atmosphere that has people flocking to it on a regular basis. Because of its unique interior, it has even been acknowledged as one of the most Instagram-worthy spots in Seoul.  

[clickToTweet tweet=”Upcycling is more than just a passing fad – it will continue to be an integral part of a sustainable lifestyle.” quote=”Upcycling is more than just a passing fad – it will continue to be an integral part of a sustainable lifestyle.” theme=”style6″]

From the NDSM quarter in Amsterdam to the Seongsu-Dong neighborhood in Seoul, upcycling has become a worldwide trend improving our surroundings as we live, create and build. Just as steel has been with mankind for thousands of years, it will continue to play a crucial role in recycling, reusing and upcycling.

Cover image courtesy of Crane Hotel Faralda

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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CEO Kwon of POSCO greets Chairman & CEO Jeffrey Immelt of GE to discuss ways to integrate GE’s smart factory solutions into POSCO’s steel and non-steel factories

In late February, Kwon made trips to Germany and the US to visit Siemens and GE factories. He met with executives to discuss best practices and share thoughts on potential collaborations. At that time, Kwon and Immelt were not able to meet so they took advantage of Immelt’s time in Korea for a face-to-face meeting.

Kwon and Immelt discussed different ways that smart technologies could be incorporated into POSCO’s steel and non-steel factories. By combining GE’s strength in equipment manufacturing and POSCO’s expertise in the steel industry they hope to create more advanced smart industrial solutions. POSCO, in particular, was looking to introduce smart features to their material, energy, and construction businesses through this partnership.

Executives from POSCO, including CEO Ohjoon Kwon, discuss smart factory solutions with GE Chairman & CEO Jeffrey Immelt

After meeting with Immelt, Kwon left for Indonesia to attend the Korea-Indonesia Economic Development Forum in Jakarta. Kwon also visited PT Krakatau POSCO, located in Cilegon, and encouraged field employees to continue their hard work to strengthen their competitiveness in the region.

PT Krakatau POSCO is POSCO’s first overseas integrated steel mill and is capable of producing a total capacity of 3 million tons. Since 2013, it has cut down on operating losses and increased its competitiveness through innovative cost-reduction activities and new technology integration.

Last year, the overseas steel business division’s operating profit reached KRW 218.2 billion, up by KRW 648.1 billion from 2015. This is a result of increased sales of high-margin products and intentional efforts to cut costs.

POSCO plans to focus on strengthening its financial structure by increasing the sales of its World Premium Products. Through this effort, they hope to continuously expand their presence in overseas steelmaking while optimizing the process of locally sourcing product materials.

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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.

SIEMENS is a digital company where “all production processes are optimally integrated and controlled by IT.” Its plant in Amberg is a model smart factory thanks to its 1,000 sensors used to connect its IOT technology that makes it possible to check for abnormalities at each stage of the production process. These sensors can also stop the production line if any defective products are found and replace them with new ones. Also, with the ability to analyze 50 million pieces of process information per day, SIEMENS is continuously optimizing its production processes to ensure the lowest possible rate of defects.

GE is slowly shifting to a software company by combining new IT with its traditional manufacturing processes for aviation engines and power turbines. Recently, the company built digital ecosystems into its factories by bringing in software specialists, creating a digitalization department, and developing diagnostic programs. Similar to POSCO, GE’s power generation turbine plant in Greenville is on its way to being converted into a smart factory. GE also recently opened the Advanced Manufacturing Works (AMW) facility, a space that freely allows engineers to test out new manufacturing ideas.

At POSCO, ever since forming the Smart Solution Council in 2016, they have been integrating ICT into their core businesses – steel, construction, and energy – which has had a significant impact in transforming Korea’s manufacturing industry in the process. In its smart factories, POSCO takes 50 years of manufacturing expertise and combines it with IoT, big data, and artificial intelligence technology to produce and supply high-quality products in an economical fashion.

POSCO’s steel plate factory at Gwangyang Works has transformed its integrated production process by building a data integration infrastructure that encompasses all of its operations and facilities. It has also created a data pre-analysis system that can preemptively detect abnormalities. In addition, they have installed laser sensors with AI functionality on the second hot rolling mill at Pohang Works.

Kwon plans to continue developing new businesses under the “Smart Industry” label. Through close cooperation with POSCO’s major affiliates such as POSCO E&C, POSCO Energy, and POSCO ICT, Kwon ultimately aims to reorganize POSCO’s entire business structure by cultivating several sectors that all embrace smart technology (Smart Factory, Smart Buildings & Cities, and Smart Energy).

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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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What is QSS+?

QSS is a tailored and upgraded version of Six Sigma, a popular technique used in many businesses to reduce defects and variabilities in manufacturing and business processes. Moving beyond creating a clean workplace and restoring facility performance, POSCO further upgraded QSS to QSS+ in August 2014 to include My M&S (Machine & Safety) activities, designed specifically to build a more efficient and safer working environment.

Through QSS+, POSCO has been able to drastically improve its facilities by establishing standard manufacturing processes. They worked to make raw material and inventory management more efficient and reallocated working spaces for increased productivity. Since 2006, POSCO’s unique innovation program has helped its employees to complete over 8,000 assignments designed to improve the production line. Such efforts resulted in reducing the concentration of fine dust, equipment failures, and improving the operation rate up to 95%.

Executives and department heads inspect facilities as part of the My M&S initiative.

QSS+ Success Story

POSCO applied QSS not only to its steel mills but also to its family companies and overseas subsidiaries. In China, the first QSS leadership training and master workshop were launched in 2011, and after one year, Qingdao Pohang Stainless Steel became the first overseas subsidiaries to be QSS-certified. In 2015, POSCO China chose four representative branches to lead My M&S activities.

In 2013, POSCO Vietnam successfully completed facility restoration activities named ‘My Machine’ at 11 different facilities as well as 19 other QSS assignments. In 2016, It became the first facility in Southeast Asia to begin using QSS+, tailoring it for their multiple branches.

In Pohang, Korea, four plants drastically lowered the concentration of fine dust in the steelworks from 80mg/m2 in 2007 to 50.3mg/m2 in 2013. Also, in 2016, they launched ‘Smart M&S’ – a program that works to integrate ‘My M&S’ safety improvements with its smart factory, helping it to become safer and more efficient at the same time.

Facilities before (left) and after (right) carrying out a systematic inspection through My M&S Activities.

Initiating programs like QSS are not easy. Because factories are running 24 hours a day, it can be difficult for workers and management to see how individual steps can improve an entire system. According to Kim Dukbae, POSCO’s first QSS Master, “QSS+ was able to become a strong pillar of POSCO’s operations because the leadership team and employees took the initiative to constantly improve and transform our operations…”

QSS+ is now established as a goal-oriented and innovative program that focuses on the three elements of quality, stability, and safety. Thanks to QSS+ and its advancement over the past decade from Six Sigma and QSS, POSCO has been able to establish safe and healthy manufacturing sites. POSCO will continue to apply QSS+ in every level of its organization in order to ensure its position as an industry leading steelmaker.

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Jeremy Rifkin, the author of “The Third Industrial Revolution”, published in 2011, composed the overarching idea of an industrial revolution. Rifkin analyzed the first Industrial Revolution, which took place in the 19th century, as a phenomenon which resulted in an economic revival led the collaboration of coal and steam engines and communication methods, such as print. He also took apart the second major industrial revolution in the 20th century, accounting it for being responsible for the rapid economic growth that occurred from the combination of oil resources and electric power with other kinds of communication methods, telephones and televisions.

However, in the 21st century, with the reindustrialization of China and a spike in oil prices, Rifkin wrote about the end of the era of oil energy, mentioning the limitations of fossil fuels in leading another dramatic economic growth.

Rifkin diagnosed a change in the economic paradigm to new energy systems, such as solar and wind power energy. He also asserted that the 21st century economy will spark the third industrial revolution, dominated by a new system, which involves communicating through the internet based on bio-energy.

When the industry evolves to become an IoT-based smart factory and combines operation stages, such as product development, production, and distribution – ICT can innovate productivity, quality, production cost and even customer satisfaction, which possibly could lead to another economic revival. According to Jeremy Rifkin’s standard of classifying an industrial revolution, the fourth industrial revolution can be included to become a part of the third industrial revolution.

The World’s Industrial Revolution

The Ministry of Education and Science in Germany strived to seek for an innovative industrial output system that could solve the country’s current issues: overcome small businesses gradually losing competitiveness, cope with the revival of the United States’ cutting-edge manufacturing and chase China’s emerging capabilities of manufacturing. As a result, it came up with a new concept called “Industrie 4.0”. Germany adopted the idea as a national industrial strategy.

“Industrie 4.0” uses a cyber-physics linked system that enables an industrial facility’s digital factories and automatic factories to share every piece of operating data and predict the optimal operating condition.

This new concept of a smart factory system has gained the attention of many experts, and also became the model of the predicted fourth industrial revolution in this year’s Davos Forum. Klaus Schewab, the executive chairman of The World Economic Forum, asserted that when Germany’s “Industrie 4.0” model’s artificial intelligence is combined with genetic engineering, the basis of industry will change into an entirely different form, which will trigger the fourth industrial revolution.

Aside from this, the United States’ General Electric (GE) has started providing facility management services to their clients by installing sensors on the industrial facilities they produce, and have developed industrial internet technology to monitor and manage its facilities’ status in real time. This system allowed manufacturing businesses to become more than just a facility producer and provide a service that analyzes the existing conditions of facilities.

As the concept of smart factory system that adopted GE’s industrial internet technology and Germany’s cyber-physical system received a remark as an innovative case in manufacturing business, every government is starting to emulate such concept as their strategy to future industry.

Although the technology to automatically adjust facilities according to a product’s demand variation is commonly shown in cutting edge manufacturing factories, most of them are focused on mass production. When the quantity of the order is small, the production facilities’ conditions change and replacement of the components occurs frequently. Even the condition of the ingredient changes. This will lead to an increase in cost and a decrease in productivity.

Changing the quantity of production does not solve the problem, however. From receiving orders, raw material supply and demand, adjusting the facilities at each step, distribution within the factory to the supply chain – every step has to change according to the kinds and quantity of the products. Each stage has to share data to find the best production settings and minimize the possibility of error.

As the market evolved into the direction to provide personalized products for each customer, the industrial world faced a difficult task of selecting smart factories with flexible production systems.

POSCO’s Smart Factory

It is easy to imagine that the steel industry, which is classified as a sub-industry, will follow the traditional manufacturing method. However, the steel manufacturing process has been filled with equipment that continuously produces products in high-temperature and high-pressure environments, and has applied automatic operation methods from early on. The workers who were once in danger of working too closely to the equipment are now in charge of monitoring the operation of these facilities.

POSCO is already planning to turn the whole steel production process into a 21st century smart factory, and plans to complete a project that will convert all fields of equipment, quality, energy and safety management into the new system by 2017.

Smart Factory, a futuristic steelmaking process pursued by POSCO, is a factory that collects data in real time through an Internet of Things (IoT) sensor installed at factory facilities that operates autonomously. The collected data can be used for real time diagnoses and forecasts of the facility’s conditions, thereby maintaining a stable operating environment and also extending equipment life.

When the POSCO Smart Factory is realized, the facility management department will be able to analyze the facility’s information, such as sensor information, inspections, repairs and faults in the integrated center. Through a smart sensor that can check the operation status of the facility in real time, thus extending the service life by predicting and taking measures in advance. The worker wears wearable equipment to receive drawing information, and carries out the disassembly and assembly procedures of the equipment, so that perfect maintenance is possible.

In the production management sector, production is automatically determined by an unmanned intelligence system that analyzes field conditions such as quality, energy, and environment, separate from the production methods that depend on expert experience. Thus, by integrating an analysis of equipment-material-quality data and deriving the optimum operation pattern, it is possible to improve production efficiency and quality in sub-unit work.

In the quality management department, real time quality control is possible by monitoring all production processes. Because it is a continuous process that cannot be interrupted, it collects and analyzes factors such as equipment noise, vibration and temperature affecting the current quality to predict the possibility of failure. It also foresees the working conditions of the downstream process to prevent quality defects.

In the logistics management department, it will be possible to automate the entire process of transporting and storing materials and products within the production plant. From the unloading of materials to be imported, and thereby improving the efficiency of logistics management, the process will improve productivity and play a role in reducing costs. In addition, POSCO has built an automatic product recognition system to monitor the entry and exit management of products, until they are shipped from the factory and finally reach the distribution bases and customer warehouses.

In the environment and energy sector, harmful substances such as dust, sulfur and nitrogen compounds that are generated in factories are completely removed by a high-plasma method, and an eco-friendly plant is implemented. By analyzing energy consumption by plants and specific processes, POSCO aims to apply the optimal energy usage pattern.

The smart factory system also enhances safety standards. The safety management system automatically identifies workers approaching dangerous areas and prevents accidents by warning them in advance, recognizing life-threatening situations such as fires, explosions and gas leaks through sensors or CCTV images attached to the facilities.

In the facility engineering department, we can create a digital virtual factory for each plant and simulate the equipment and operation changes like the actual factory. This optimizes product design and saves costs and time by analyzing and customizing a new facility’s performance beforehand. Various kinds of test operations can be attempted at a virtual factory, so finding the optimal production condition for the actual factories will be one of its crucial advantages.

The smart factory that POSCO pursues is a state-of-the-art 21st century factory model incorporating all forms of innovations, including: IoT, Big Data, computer simulation, advanced robots, augmented reality, cyber security, integration of production and management systems and artificial intelligence. It can serve as a model for upcoming smart factories that will eventually appear in the steel industry, as well as in other industries all over the world. Because of its transformation into a smart factory, POSCO is expected to play an active role as an industry leader in pioneering future civilizations as it constantly keeps producing new steel products that provide new value.

Written by science technology columnist Dr. Junjeong Lee

The opinions expressed in this POSCO Report piece are the author’s own and do not necessarily reflect the views of POSCO.