Since last February, CEO Kwon has visited Siemens, GE and other businesses in Silicon Valley to explore new technologies and expand POSCO Group’s smartization plan. At CES 2018, CEO Kwon saw first-hand the latest smart technologies and plans to implement them to all of POSCO’s core businesses including steel, construction, IT and energy. He also met officials from leading smart companies such as GE and DPR Construction, and examined possibilities for cooperation over commercializing POSCO’s smart solutions.

POSCO Kwon met Heilmann Matthias, President and CEO of Digital Solutions at Baker Hughes General Electric (BHGE). Matthias oversees the digital solution business of GE Group, and the two discussed the development of PosFrame, POSCO’s proprietary smart platform, its compatibility with Predix, GE’s smart platform, as well as the possibility for joint commercialization.

In particular, POSCO ICT is planning to sign an MOU with DPR Construction, the world leader in Smart Construction, to collaborate on smart projects and find opportunities to apply new ICT technologies to construction. Through this MOU, the two companies will cooperate on projects such as constructing and operating highly-efficient, low-cost data centers and smart factories controlled by PosFrame.

CEO Kwon also visited the automobiles, home appliances, smart city and smart home exhibition booths. He examined the latest tech trends of IT utilization in steel-consuming industries to develop compatible materials and steel solutions.

He also made sure to explore electric vehicle (EV) batteries and new IT technologies surrounding EVs, as lithium materials are the new growth engine of the company. CEO Kwon also evaluated the possibility of securing new markets for the group’s construction business at home and abroad.

POSCO Group plans to continue searching for new, innovative solutions to apply to its smartization efforts and actively develop domestic and overseas data centers and smart factory markets.

Cover photo courtesy of BGR.

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.

Traditionally, metal cutting methods have been used to manufacture machine components. The process would begin by shaping the metal through casting or welding, getting it to look as close as possible to the final product. To finalize the procedure, any unnecessary parts would be removed by a CNC (Computer Numerical Control) router. Using these types of cutting methods would accelerate the speed of production, but was considered wasteful since the majority of the starting material would be cut out and discarded. It is especially not appropriate for high-priced materials or materials that are difficult to cut.

Then there is additive manufacturing, which is a 3D printing technology that builds a final product through stacking layers of material, and then polished for a seamless appearance. The advantage of this method is that there is almost no waste of the material, which allows for the opportunity to create various prototypes without a separate mold or tool. A downside, however, is that it takes too long to manufacture, which makes it a tough choice for productivity.

Recently, General Electrics (GE), an American manufacturing corporation, officially joined the 3D printer business by assigning a merger of Arcam, a Swedish 3D printing specialized company, and the Germany-based SLM Solutions, to GE Aviation. Until now, 3D printing technology was primarily centered around plastic materials, but GE’s ambitious expansion into the 3D printing business indicates the rapid growth of new technology in producing major metal parts.

SLM solutions specializes in the Direct Metal Laser Sintering (DMLS) method – a printing technique that requires laser-firing a bed of powdered metal such as titanium, special steel, aluminum, cobalt chrome or nickel, melting together the powder to form a structure. Sweden’s Arcam has been manufacturing aircraft engine turbine blades by using the Electronic Beam Melting (EBM) method, which enables high-speed 3D printing by injecting 100 or so electron beams simultaneously into the metal. By combining the technologies of these two merging companies, a new high-speed 3D metal printer is surely to be developed in the near future.

Manufacturing Metal Parts with 3D Printing

Image credit: WH Williams

The multinational special steel company, Voestalpine Group, recently established a new research and development center for the 3D printing of metal components. At this center, 3D printing manufacturing technology for automotive and aviation sectors, medical devices and complex metal parts will be researched.

Creating metal parts with 3D printing requires powdered metal of excellent quality. Raw metals initially undergo vacuum melting to become an alloy, which then becomes atomized by spraying high-pressure inert gas through a nozzle, turning into powder. The powder must appear very round and uniform, so the core of this technology is to meticulously control the nozzle’s injection amount, temperature, pressure, gas quantity and speed — all depending on the type of the alloy. The atomized powder is then classified by size, ranging from 20μm to 100μm, after several filtering processes.

Designing the metal components to be suitable for 3D printing is also important. Since the printer builds the part layer-by-layer, surfaces must fulfill the requirements for a laser or electron beam to scan through. As a fine diameter of light from the laser passes through the designed lines and surfaces, the powdered metal melts topically and creates a new layer on top of the previously laminated surface. At this point, the part may have an overall directional angle, so the order of drawing lines and angle within each layer is also very crucial.

During the 3D printing process, if the metal powder particles fail to melt completely or if there is a delay in clotting, minuscule bubbles could appear. The ability to withstand fatigue and fractures is important, as these metal components are supposed to support the weight of an object. Minor bubbles or gas pockets could be critical flaws. To achieve a perfect density by preventing bubble formation, the beam’s speed must be balanced and adjusted to suit different types of alloys.

This process demands additional attention when using metals of alloy elements. Unlike pure metals, alloys can experience a large gap in temperature and be able to exist in both solid and liquid states if their composing elements carry a great difference in melting points. In these cases, bubbles are easily made. Although alloy properties are very important, a composition of alloys with distinct melting points is required and the difference of these melting points must be maintained at a minimum.

That is, the development of suitable alloy metals for 3D printing, including technology for assigning a product’s cross section and designing a laser beam’s pass-through, is the bottom line of component manufacturing technology. In addition, the thickness of a component is closely related to the diameter of metal particles. Therefore, it is recommended to design the final product to be as thick as the particles it is made of, and vice versa.

The Future and Mission of 3D Printing

The 3D printing process creates an extremely complex structure that cannot be produced through conventional precision casting or processing methods. In that sense, even components of the same purpose can be designed with completely different structures using 3D printing. Thus, it is possible to reinforce the component’s functionality by reducing the component’s weight or enhancing its cooling performance.

It is now possible to manufacture components to produce their final shapes with special alloy metals, which had been impossible with conventional processing methods. As of recently, only a few types of metals were available for 3D printing. However, the low prices and excellent quality of metals now available will enable new developments of special steel 3D printing materials that meet the purpose of each component, expanding the spectrum of 3D printing.

As powdered metals accumulate together almost instantaneously, alloy elements do not diffuse or segregate. It is possible to obtain a supersaturated solid solution of alloy metal that has refined grains, which will allow for uniformity in texture.

Traditional metal component manufacturers, including GE, are now pursuing the 3D printing process as a transitioning path to digital manufacturing. They believe that 3D printing, a combination of precise mapping software, high-speed 3D printing devices and printing materials, will bring new solutions to their business.

Furthermore, enterprises are now being given the task to discover a multi-component special steel alloy that fits the manufacturing businesses’ demand. Various alloy powders are also expected to further develop so that 3D printing can be recognized as an optimized method for manufacturing components made of special steel in the future.

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.

POSCO has been the No.1 steelmaker in the world for seven consecutive years. This remarkable achievement has been possible because of QSS+, which has allowed continuous improvements to be made in workplace environments, along with increases in facility competitiveness. This is the result of both tangible and intangible efforts made by the employees who created QSS+, the unique innovation DNA of POSCO. QSS+ originally evolved from previous programs Six Sigma and QSS.

QSS+ can be attributed to POSCO being able to maintain its competitive edge, regardless of crises. Over the past decade, employees have managed to reduce the rate of fine dust generation as well as facility complications and unexpected glitches. They have also boosted the operation ratio to 95% by focusing on completing over 8,000 assignments dedicated to improvement under the slogan, “We will protect our facilities ourselves.” The continuous efforts to undertake these types of assignments have also contributed to nurturing suitable talents for each site, improving trust between employees and establishing a positive organizational culture.

QSS+ is a derivative of Six Sigma and QSS. Having been adopted by global companies such as GE and Sony, Six Sigma is a management strategy for innovation that has been considered quite effective. POSCO determined Six Sigma as being useful for realizing financial achievement. However, it was difficult to learn and apply into the daily work process, which led to the establishment of POSCO’s unique innovation program, QSS+, in 2005.

POSCO operated a trial plant for about a year to confirm the effectiveness of the program, and officially started using QSS in May 2006. As QSS was suitable to use at sites and easily accessible by all employees, it helped companies in POSCO foster a culture dedicated to maintain healthier facilities.

QSS was adopted not only by the two main steelworks, but also by overseas subsidiaries and outsourcing partners. It has also been significantly effective in improving the environment and surrounding facilities, as well as in eliminating waste and inefficiencies. Many outside companies have requested to evaluate QSS for their own facilities. Small and medium-sized companies in areas such as Pohang, Gwangyang and Kyeongin have actually received QSS consulting from POSCO, and are noticeably improving their performance in management areas ranging from reduction in operation time and costs to enhancements in quality and productivity.

Executives and department heads inspecting facilities during the My M&S initiative activity. (Right, in November 2014)

POSCO has been carrying out its QSS+ program, which is the upgraded version of QSS, since August 2014. QSS+ is an activity program described as having been “innovated from an innovation program,” which reflects the characteristics of the facility-intensive steelworks. Moving beyond creating a clean workplace and restoring facility performance, the program focuses on improving the performance of core facilities with functions that are tailored to each department. With its focus on the three elements of Quality, Stability and Safety, QSS+ is a goal-oriented and site-driven innovation program. In particular, the company has begun a “Smart M&S” program this year which has incorporated the IoT (the Internet of Things) into My M&S in order to establish smart manufacturing sites.

POSCO has built healthy manufacturing sites through continuous innovation activities over the past decade. It will enhance the intrinsic value of the QSS+ program by claiming it as part of its unique innovative brand, reflecting the characteristics of each location under the philosophy, “The answers are found on site.”

QSS+, One More Step to ‘POSCO the Great’

Spreading QSS innovation activities to strengthen competitiveness of small- and medium-sized companies

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G-JEDP is one of POSCO’s human resources (HR) programs that aims to foster essential manpower to lead the company’s overseas affiliates and to eliminate the need for expatriates in the future, according to POSCO’s manpower localization strategy. The training session was attended by 24 junior executives from 18 affiliates in nine countries.

The G-JEDP curriculum includes instruction on setting management strategy, improving leadership for building a team and fostering manpower, understanding POSCO’s values and culture and solving major management issues. Participatory programs such as discussions and case studies were introduced to increase trainee understanding and engagement.

Trainees are also given assignments chosen in advance by the president of their affiliate company. They then draw execution plans during the training in accordance with the assignment completion process. Later, when they return to their countries, trainees apply the execution plan to field work with the support of the affiliate.

This kind of training method is called “action learning” and has been used by many local and global companies such as GE, IBM, DuPont and Samsung as a process that can both foster leadership and solve management issues.

In this year’s G-JEDP, various issues which have emerged in overseas affiliates, such as profit improvement, cost reduction, HR system improvement and manpower development were discussed. Employees were supported by Korea’s best learning coaches, an effort initiated to create excellent outcomes.

After the completion of the program, trainees expressed their thoughts, with one participant noting, “We could cultivate strategic thinking by discussing and solving concerns of junior executives  together with employees from different overseas affiliates. In particular, learning about different views and perspectives of other trainees and learning coaches was the biggest outcome of the training.”

The G-JEDP is slated to be held in the first and second halves of 2016. POSCO Group University plans to continuously foster superior talent from overseas affiliates based on the recommendation of POSCO’s HR department.

What is CLOV FPSO project?

The CLOV project, consisting of the oil fields at Cravo, Lirio, Orqudea and Violeta in Angloa’s offshore, involves the integrated development of a four-field cluster on the northwest sector of Angola’s offshore block 17, in water depths ranging from 1,100 to 1,400m. The FPSO (Floating Production, Storage and Offloading) facility to be utilized for the project is designed to receive, process, and store oil or natural gas, and can be maneuvered to serve different locations.

POSCO, the first steel manufacturer to provide the entire supply

Two years ago, Total, the project operator, awarded Daewoo Shipbuilding & Marine Engineering (DSME) a $1.8 billion engineering, procurement, installation and construction contract for the FPSO. With its 34-year relationship with DSME, POSCO became the first steel manufacturer to provide the entire supply of thick plate steel for a major offshore facility, from a single mill. This included some 88,000 tons of steel plate. The scale of the CLOV floating facility is huge, involving construction of what will be one of the world’s largest FPSOs. The vessel is 305m long, 61m wide, and weighs 110,000 tons. After the Pazflor FPSO, CLOV is reputed to be the second-largest FPSO in the world.

POSCO ‘Z Quality’ steels

Steel selection was a key component of the FPSO design and construction, and the need to procure high-strength, quality steel in turn underscored the importance of selecting the correct steel manufacturer. POSCO was already registered with Total as a supplier capable of meeting the strict requirements for offshore structures, one that could quickly respond to changes in plans and requirements, as needed.

POSCO was also able to meet technical requirements that only a few mills in the world are capable of meeting. Out of the total 88,000 tons of steel supplied, approximately 20,000 tons were Z quality (low-sulphur steel with tested level of ductility through the thickness direction) for the topsides and hull. These high-quality steels are often specified for critical applications, since they must endure high levels of stress. Besides, the POSCO facilities in Korea are one of the few steel mills capable of producing and supplying these Z quality steels.

POSCO completes the job in just 10 months

Another challenge was the short construction timeframe called for on the CLOV project. For most offshore facility construction projects, suppliers typically have one year to complete their order. Often, the extended time period is needed to allow for changes in design and specification that inevitably arise over the life of such projects. Here again, POSCO’s ability to respond quickly proved vital.

POSCO was able to develop and incorporate offshore structure steel production technology and lessons learned from its involvement in the Pazflor FPSO project, again with Total and DSME, As the first company in the steel industry to implement the Process Innovation business management software system since 1999, POSCO has been able to successfully manage the total process through this established IT system, receiving orders and delivering supplies quickly in response to client requests. Based upon this technical skill, POSCO was able to respond appropriately and in a timely manner during the CLOV FPSO construction process, when design changes and sudden requests were made. Even with design changes and sudden requests, the Korean steel supplier was able to provide its deliverables in approximately 10 months, from January to October 2011.

Once the final stage of work on the FPSO are completed this spring, the vessel will be prepared to sail away in May to its designated location in Angola’s offshore block 17. There, it will be moored and stationed in preparation for a mid-2014 commissioning.

POSCO will continue to sail on

In September 2011, POSCO agreed with Shell, a multinational oil company, to exclusively supply thick plates the firm needs for offshore plant projects by 2016. POSCO has also signed an MOU with GE to co-develop and supply rolled steels and related technology for energy plants.

In partnerships with POSCO E&C, Daewoo International Corporation, SungJin Geotec and other POSCO Families, POSCO is aiming to complete the developments of over 60 types of energy steel materials for obtaining energy plant contracts as well as supplying relevant steel materials. In doing so, POSCO targets to gain a 10% market share of the global energy thick plate industry by 2020.