What’s more, manufacturing is no longer a rigid industry that produces uniform, one-sided goods. There is constant communication between customers and businesses for hyper-customization. Not only that, machines and products communicate within a smart factory, and factories exchange data with other factories. Manufacturing is no longer limited to production plants. Moreover, the data generated in the manufacturing process is combined with customer information, and a new service can be created. This combination of manufacturing and services is resulting in creation of added value. In the midst of such drastic change, how can companies stay competitive?

Staying Competitive Through Connection and Convergence

Global manufacturing companies are at the forefront of the 4th Industrial Revolution, as evident in their smart factories. A smart factory collects data generated from the production process using ICT technology, and the system controls all processes from material input to the final product. This has led to flexible production systems with the ability to make various products in one factory or to expand the range of products on the basis of connectivity. Typically, when a company builds a smart factory, it can improve productivity by 20 to 30 percent. A 20 percent improvement in efficiency in the manufacturing sector is a significant, outright increase in global competitiveness.

SEE ALSO: How Smart Factories are Changing the Manufacturing Industry

Siemens Electronics Manufacturing Plant incorporates robotics, AI and IoT to its production processes. (Source: Zawya)

If the productivity of a plant can be improved through smartization, it is important to also think about connectivity with the ecosystem that exists outside of the plant. Once a smart factory is built, all the data from customer orders to production and delivery are collected in a system via sensors. The customer, product and production data create meaningful connections with each other and provide extensive insight. Examples of added value creation through meaningful connections include hyper-customized goods, data-driven after-sales services to customers and collaboration among companies connected within the smart factory’s external ecosystem. Such advancements will lead greater product quality, production stability as well as shortened delivery times between value chain suppliers.

The Adidas Speed Factory and GE Brilliant Factory are examples of successful smart factories. Adidas customers choose the materials, colors and design of their sneakers, and have them manufactured and shipped within 24 hours in an automated factory.

GE has built a system that can produce all of their widely-diverse products in one factory. When the factory receives customer orders, it operates in a flexible production system which starts with the necessary raw materials, inputted by the automated scheduling system that controls the entire production process, including the final distribution system.

The Future of Manufacturing

Overall, the adoption of innovative changes in the manufacturing sector is likely to progress from lighter industries to the heavy industries, from B2C to B2B sectors. Small plants, quick manufacturing and B2C companies can more readily adapt to rapid technological and market changes. On the other hand, heavy industries like steel and B2B companies with continuous and heavy manufacturing, large production volume and numerous linked companies are likely to be slower to adapt to changes.

It is much more difficult for traditional, heavy industries to adapt to changes. (Source: Live Mint)

For example, adapting to the changes of the 4th Industrial Revolution in the steel industry may be slow, but it is inevitable. What’s more, the long-term adaptation process is more likely to be systematic and deliberate.

As a leading company in the global steel industry, POSCO is pursuing a long-term, systematic “Grand Design” to reinvent its systems to align with the changes of the 4th Industrial Revolution.

First, POSCO built a pilot smart factory in their steel mill, Gwangyang Steelworks, in 2015 that is currently in operation. The company used IoT to collect big data on site, analyze it in real time and build a smart factory that enables optimal control through AI and self-learning. As a result, the Gwangyang Steelworks is reaping the benefits of a smart factory not only in cost reduction but also in improved steel quality, minimized malfunctions and a safe and stable production environment. This year, POSCO plans to expand and apply smart factories to all of its production processes.

POSCO built a smart factory in Gwangyang Steel Mill.

Smart factory application throughout the entire steel mill will improve overall efficiency through a flexible production system. In addition, the factory will be able to respond directly to various customers in real time based on platform construction with customers within the connected ecosystem. The customized characteristics and design of the steel grade for each customer can be applied to production in real time.

SEE ALSO: How Factories Produce Steel – the Smart Way

Ultimately, a smart ecosystem that links manufacturing, processing and distribution with customer input will lead to a new, innovative ecosystem within the steel industry. In Europe, some companies are experimenting with material libraries and steel distribution platforms. The material library displays a variety of materials for customers to see, touch and test the workability and performance of the materials, and get information about the characteristics, design and delivery times through the order platform. Customers can designate the shipment date on the spot. This will be one of the new promising business models that steel and other material companies will strive towards in the coming future.

POSCO’s Grand Design includes a step-by-step approach to smart factories to expand the use of IoT, AI and Big Data in its production systems. To this end, POSCO ICT has developed PosFrame, a standard software platform that collects basic data of production processes and collectively manages, controls and analyzes the information.

POSCO uses its software platform, PosFrame, for data collection and analysis.

When the software becomes standardized and reliable enough to extend to other sectors, it will be applied to other business areas such as energy and construction, as well as to POSCO’s affiliates.

Manufacturers will have to take into account the heavy production environment, the slow industrial change cycle and the complexity of related industries and affiliates to implement the most effective, long-term, systematic upgrades to its production systems. This will result in a brand-new production and business model for manufacturing companies that will align with the new environment of the 4th Industrial Revolution.

Cover photo courtesy of Sputnik International.

Nam Tae-Gyu in his early days on site at a POSCO steel mill.

Nam’s Battle with the Sublance

Five years into his first job ever, Nam hit his first hurdle. The sublance used for detecting temperature and carbon levels of ingot iron in the converters kept breaking down. The brutal process for replacing the sublance probe took a physical toll on the workers and Nam remembers frequent nosebleeds and extreme fatigue vividly.

Nam explained, “Pure iron is converted into steel in a smelting process that requires 1700 °C of heat and oxygen incorporated into the ingot iron. When the process is 80 percent done, a sublance goes into the ingot iron inside the converter to take temperature and carbon measurements. Then, it sends the data to the operating room. With that data, the operator decides if the process should be continued or stopped. Afterwards, a sublance goes into the post-steelmaking converter again, measures the temperature and the amount of carbon, and then sends that data to the operator one last time. The data is used for the slab and bloom making processes as well. In a way, the sublance acts as an important key that decides the final quality of the steel. So if the sublance doesn’t work properly and sends the wrong data to the operator, there will be a tremendous loss.”

A sublance, which has to be inserted about 1 meter deep into the ingot iron, has a 2-meter probe with a sensor measuring the temperature and carbon and oxygen components. This disposable probe stays in the 1700 °C converter for 5 seconds and transmits the data to the monitor of the operating room through a cable inside the sublance pipe. The problem is that the travel distance of the sublance changes whenever a new probe is equipped. For that reason, facility managers must check the accurate position and adjust the length on every occasion. The sublance had to be adjusted at the top of a 7-story steel mill that is 20 meters higher than the top of the converter. To make it worse, technicians had to physically climb up and down dozens of times for 3 hours to alter the length manually if the lift didn’t work.

Liquid ingot iron in a steel mill during the smelting process

Nam’s First Masterpiece

Nam knew there had to be an easier way. After studying the sublance diagram and its instruction manual, he finally had an “aha moment.” He installed a digital location detector in an encoder form that could receive data to determine the travel distance of the sublance from a cambox instead of a touchbar that bred most of the errors in the previous system.

This allowed digital information on the travel distance of the sublance to be sent directly to the operator who in turn could locate the probe accordingly. This alone reduced errors in the data for every probe change. Furthermore, Nam even installed a detection system to eliminate all errors of the previous touch bar.

In the end, the improved sublance allowed 2 people to finish in 10 minutes what 3 people had to work on for 3 hours previously. The measurement success rate increased from 87 to 95 percent and lead to cost reductions and a shorter operation time overall for the smelting process.

Another Hurdle, Another Masterpiece

In 1997, Nam met his second and biggest challenge of his time at POSCO. A converter tilting device that could tilt and rotate a 1300-ton converter broke down. No one expected this machine to malfunction, as it was made with certified parts with advanced technology brought in from Japan. The Japanese supervisors kept the device’s technology a secret for copyright reasons, so the Korean technicians didn’t know the inner workings of the machine.

The complex device was composed of four motors, reducers, inverters and other parts. In order to run the motors, they had to use a magnetic contactor and high-voltage circuit breaker, both imported from Japan and extremely expensive since they had a short lifespan.

“One time, a large amount of electric current spilled on the converter tilting device. A severe arc was generated and melted the magnetic contactor, causing equipment failure and a KRW 200 million loss. I tried to replace the contactor with a domestic model to improve it, but in the process, the electric current flowed to the field motor, and the electric arc leaned causing molten steel to leak. We had to stop all operations for 14 hours and ended up with 15 tons of leaked steel.” Nam recalls.

A converter holding molten steel being tilted

It was a dark moment for Nam and POSCO, but it only prompted him to work harder towards a solution. After much research, trials and failures, he developed a vacuum magnetic contactor made of domestic parts and applied a vacuum breaker to the tilting device, thus localizing the core parts of the converter tilting device. Also with the new technology, temperatures could be monitored at the bend, cable crossing point and cable access point for a real-time monitoring system for accident prevention. Nam not only raised POSCO’s production quality to global standards, he helped reduce quality deviation and eliminate waste.

Working Philosophy/ Results

Looking over his achievements at POSCO, it is easy to see why Nam was named a 2017 POSCO Master. In the past 40 years, he accomplished 15 patents, 32 outstanding proposals, 1830 general proposals and 156 knowledge records. Nam received the highest award of job competence, the Steel Mill Proposal King award, this year’s Person of Pocheon award, Korea’s Quality Manager award and was named a POSCO Master in 2014.

Nam Tae-Gyu walks through the fire prevention system at POSCO’s Steel Mill 1 with executives and employees.

Nam’s working philosophy is simple. Achieving the best results in steelmaking and maintenance requires hard work and passion, much like how a good harvest requires the sweat and blood of the farmer. With this in mind, Nam’s curiosity is unending as he continues to look for improvements and leave behind a legacy of hard work and dedication.