ISSUE Manufacturing Industry: the backbone of Korean economy. But its SMEs are facing significant challenges.

The United Nations Industrial Development Organization (UNIDO) announces the countries’ ranking of manufacturing competitiveness every year. The Republic of Korea entered 17th in 1990 and made it to the Top 10 in 2003. In 2017, it ranked 4th. It took Korea just 28 years to jump from 17th to 4th — a truly remarkable leap forward. The products of the manufacturing industry make up 90 percent of total exports, and domestic jobs created by the industry add up to over 4.5 million. As of 2017, the GDP portion of the nation’s manufacturing industry stands at 30.4 percent — higher than that of China (29.3 percent). In this respect, it is evident that the manufacturing industry has played a significant role in the rapid growth of Korean economy.

However, Korea’s manufacturing industry is said to be facing huge challenges. The business in the manufacturing industry — including steel, shipbuilding, and automotive — have reached the maturity stage, and are struggling against fierce competition amid overcapacity in the global market. Besides, There has been an increasing number of issues regarding the ecosystem of the manufacturing industry in recent years, such as promoting balanced growth between large companies and SMEs. The industry is being flooded with new technologies of the Fourth Industrial Revolution — such as Big Data, the Internet of Things (IoT), and Artificial Intelligence. There are concerns that these technologies might widen the disparity between large companies and SMEs. Eventually, the gap in knowledge, information, and technology could lead to economic polarization.

According to OECD statistics, Korea is one of the countries with the largest productivity gap between large companies and SMEs. The labor productivity of SMEs relative to large companies recorded 53.8 percent in 1988 but fell to 32.5 percent in 2014. On the scale of R&D expenditures, the gap between the two gradually widened over time as well. These gaps led to a huge difference in business performance, which in turn resulted in the disparity of labor, resources, and R&D investment capacity. This kind of repeated cycle is fatal to the industrial ecosystem vulnerable to its instability.

POSCO has an important role here. The World Economic Forum announced POSCO as a ‘Lighthouse Factory’ for pioneering the manufacturing industry by applying core technologies of the Fourth Industrial Revolution. There are 44 lighthouse factories around the world and POSCO is the first and only Korean company on the list.

So, POSCO came up with a solution: establishing and pursuing shared growth programs that enable SMEs to become smart together. Since POSCO has the competitiveness that transforms the huge steelworks into a lighthouse factory, the company is stepping forward, more than willingly, to share its competitiveness with SMEs in a bid to strengthen the industrial ecosystem.

SOLUTION A POSCO-type Shared Growth

At POSCO, the term ‘Shared Growth’ isn’t a new concept. The company started its first Shared Growth activities in the late 1990s. In 2005, POSCO established an organization dedicated to the purpose and currently operates a total of 33 Shared Growth programs. The “Benefit Sharing” system, which is run by the government and participated by 472 companies nationwide, is known to be first launched by POSCO in 2004.

Among the many Shared Growth programs, POSCO focalizes on the POSCO-type Productivity Innovation as an effort to bridge the gap between large companies and SMEs.

The ‘POSCO-type Productivity Innovation’ program is an activity to transfer QSS (Quick Six Sigma), a POSCO’s own manufacturing innovation technique, and smart factory technology successfully built by POSCO. To facilitate it, POSCO is to contribute 20 billion KRW over five years and the government adds 10 billion KRW to run the program. So far, POSCO-type Productivity Innovation activities look similar to those of other companies.

However, delving into the details of the program, you might find something interesting — the program consists of two steps. The first step is ‘smartization consulting to enhance competence,’ and the second is ‘support service to build a smart factory’. Those two approaches might seem quite similar at first glance, but there is a reason why POSCO operates the program in this way. POSCO strives hard to teach how to fish rather than just give the fish itself.

Let’s say that building a smart factory is like making smart fishing spots and fishing gears. Good tools and fisheries are important, but before that, the fishers also need training. In the manufacturing industry, the importance of the workforce is paramount, so a smart factory can be completed only when the workforce becomes smart as well. For companies that need this fundamental change in structure, step 1 (smartization consulting) is implemented instead of building the smart factory straight away. POSCO carries out step 2 (support service to build a smart factory) for those companies that have already gone through innovation and are expected to create synergy with the build of a smart factory. The competitiveness and productivity innovation that POSCO would like to share lies here: a people-centered smart factory.

 SOLUTION STEP 1  Smartization Consulting to Enhance Competence

‘Smartization consulting to enhance competence’ is an improved version of POSCO’s QSS Innovation activities that had been carried on from 2013 to 2018. QSS Innovation is an industrial movement to improve the productivity of the manufacturing workplace. ‘Smartization consulting’ also uses the QSS as a consulting tool, but this activity concentrates on changing the SMEs’ fundamental structure and lay the foundation for smartization prior to build a smart factory. Thus, the project not only enables innovation in productivity but also help detect areas that require a smart factory. As of 2019, POSCO had carried out consulting projects in 108 companies and plans to expand to 110 companies in 2020.

 SOLUTION STEP 2  Support Service to Build a Smart Factory

In the second step of the program, POSCO Group specialists help build a smart system that is suitable for the company. At this point, the surrounding environment and the scale of the company are taken into consideration. The provided services include monitoring facilities, MES, and ERP, etc. A customized system — according to the SMEs’ smartization level — is proposed and built, with POSCO and the government each bearing 30% of total expenses. If the project cost is less than 20 million KRW, the total amount is borne by the POSCO and the government — without the burden of SMEs.

In most ‘smart factory building support’ provided by large companies, the support ends with just installing the system. But POSCO’s support can be differentiated since it reshapes the mind-set of the workforce in step 1, and then builds the smart factory in step 2. It is an ideal program, not just for establishing smart facilities but also for nurturing an intelligent workforce as well. Though there are some cases where the first and second steps of the program are conducted independently, POSCO plans to maximize synergies by implementing both steps as an integrated program. POSCO provided supports for 110 companies last year, and 120 companies will be supported this year. Targets include POSCO suppliers, partner and client companies, POSCO Group suppliers, and also companies that have no business transactions with POSCO.

“Shouldn’t our company be of a certain scale to get consulting from POSCO?” The answer is no. For the smaller SMEs, POSCO plans to introduce “Mini QSS” initiating this year. POSCO is to carry out consulting for smaller companies as well so that these companies can easily start innovative activities that are essential for growth.

※ Solution Case Study

However, the Lighthouse Factory POSCO does not stop at simply leading the introduction of the Fourth Industrial Revolution technologies. What’s more? Here are the three factors that make POSCO stand out.

① Challenging the Impossible — POSCO’s Smart Blast Furnace

An unmanned storehouse or an automotive parts assembly factory run by robots could be the first thing that comes to mind when one hears the word ‘AI factory.’ Another might think that Artificial Intelligence could be applied only in specific areas, like the information technology industry. A blast furnace is a gigantic facility with a height equivalent to a 40-story building. On the inside, it is full of a mixture of solids and liquids, so turning it off or ‘looking’ inside seems impossible. Due to these many factors, applying AI to a blast furnace and making it ‘smart’ was considered nearly impossible.

POSCO stood up to this challenge. In 2016, the term ‘Fourth Industrial Revolution’ began to take its place in the industry. POSCO was one step ahead, but not in a hurry. It moved on to Step-by-step digitization and smartization with caution and care. At first, POSCO tried to do this with the technology of a global IT company but did not get satisfactory results. The new technology alone wasn’t enough. However, when POSCO’s unique expertise, intuition, and knowledge — along with its field experts — were combined with it, the advanced AI blast furnace could be born.

▲ The AI blast furnace is made with the combination of vast, sophisticated data, and the experience and intuition of POSCO experts. Deep learning enables optimal results and automates them to reduce human errors and increase productivity.

POSCO field experts — the technicians and engineers — standardized the main variables that determine the state of the blast furnace into Big Data. They enabled the blast furnace to conduct deep learning to extract optimal result value by imitating their know-hows accumulated for over 30 years. Facilities were also steadily improved so that the IoT could replace the manual work. As a result, POSCO boosted the daily production of molten iron by 240 tons. Additionally, workers could focus on advanced work for more creative performance. POSCO saved 250 billion KRW by carrying out 321 smart tasks — including the AI blast furnace — for the past four years.

Through the AI blast furnace, POSCO was able to break away from the old concepts of steel mills. POSCO’s “Technology for the automated control of blast furnace based on deep learning AI” is currently registered and protected as the National Core Technology of Korea (August 2019). POSCO is currently establishing smart factories not only in the blast furnace but also in the overall steelmaking, rolling, and surface treatment process and is creating high-quality smart steelworks.

② POSCO Smart Factory: A Collaboration Of Academia, SMEs, And Start-ups

There is another special feature behind the Lighthouse Factory POSCO — the collaboration of academia, SMEs, and startups in establishing the Smart Factory. As seen below, the World Economic Forum acknowledged POSCO’s effort in forming the collaboration model.

▲ A World Economic Forum article stating the reason POSCO was chosen as a Lighthouse Factory.

POSCO is actively cultivating AI experts in-house and is working with POSTECH for the cause. POSTECH has the best faculty of the artificial intelligence field in Korea. POSCO AI Expert Course, which began in 2017, is a program where selected outstanding POSCO personnel receive training from POSTECH professors. This course has resulted in more than 60 POSCO AI experts in three years. These AI experts are working to build smart factories in the work field.

The collaboration included SMEs and start-ups as well. POSCO developed the AI blast furnace with ‘ECMiner’ since 2016. ECMiner is an SME specializing in data mining*. It created a system that can automatically identify, analyze, and maintain the combustion condition of the blast furnace by combining its data mining technology with POSCO’s accumulated data. In the past, the combustion status was left to the manual labor of workers, checking through the wind hole, and judging by experience. However, with this system, the data can now be taken care of automatically. It also maintains the appropriate combustion level of the blast furnace, which reduces the amount of coal injected. This enables an overall cost reduction.
*Data mining: A technology that looks for hidden, valid, and potentially useful patterns in huge data sets, extracts feasible information, and makes decisions accordingly.

The collaboration resulted in a win-win for both POSCO and ECMiner. POSCO succeeded in creating an AI furnace with Korean technology, and ECMiner also benefited from the experience of processing huge amounts of data at POSCO. All academia, SMEs, and start-ups that participated in the building of POSCO Smart Factory, including ECMiner, can help construct a new one in another factory based on technology experienced at POSCO. This is expected to accelerate the proliferation of smart factories in Korea.

③ Sharing With The Industrial Ecosystem

The Lighthouse Factory POSCO shines brighter for the third factor. On January 9, Korean president Jae-in Moon visited POSCO Pohang works.  POSCO CEO Jeong-Woo Choi said:

“With the Smart Factory, POSCO has reduced production cost of 250 billion KRW for four years. And to relieve the wage gap with business partners, POSCO has extended an additional 270 billion KRW to outsourcing expenses for the last three years. Increased outsourcing expenses raises overall costs. However, POSCO is offsetting this through endless innovation. Through these measures, POSCO aims to foster the competitiveness of the whole industrial ecosystem, and then, in turn, enhance national competitiveness. POSCO’s management philosophy lies here.”

▲ Image source: KTV Youtube video

POSCO willingly shared the achievements of the smart factory project to solve the real problems many partner companies face. At first glance, this might simply seem like a ‘generous side’ of a large company, but in reality, this wasn’t an easy step. POSCO made this possible with its capacity earned through intense internal innovation. This is a good example showing how POSCO innovation isn’t just about POSCO.

POSCO went on to expand the benefits to SMEs who do not have direct business with POSCO. With the support service to build Smart Factory for shared growth, POSCO has provided the Smart Factory technology to 110 SMEs last year alone — 59 of which are companies with no direct business. The service will support 1,000 SMEs by 2023, with no limits to the subject. This is expected to increase the competitiveness of SMEs, which will, in turn, improve productivity and create new jobs.

▲ POSCO’s Smart Factory project not only increases POSCO’s competitiveness but also empowers the entire industrial ecosystem. It also helps in resolving current issues like narrowing the wage gap and creating new jobs.

This is what POSCO’s innovation is all about. The willingness to share with something that was earned hard. POSCO the lighthouse factory is indeed shining the light to a brighter future of the manufacturing powerhouse Korea.

POSCO is the first South Korean company to receive such recognition. Through its smart-factory platform, the company demonstrated its ability to leverage artificial intelligence to drive productivity and quality improvements in the steel industry.

How does POSCO drive impact by applying Fourth Industrial Revolution technologies? POSCO Newsroom reports.

l POSCO the Lighthouse Factory Shines Light on Manufacturing Industry

Lighthouse factories represent a range of industries that demonstrate leadership in applying Fourth Industrial Revolution technologies like IoT, cloud computing, Big Data, and AI, to drive financial and operational impact.
For the last five years, POSCO has laid the groundwork for the smart factory to boost its competitiveness in steelmaking. POSCO’s selection signifies global recognition of the company’s such effort.
From the submission of the application, due diligence, to documentation review by WEF consultant, the lighthouse factory selection is an arduous process. From the initial application submission, it took POSCO about one year until its final selection as the lighthouse factory.

One of POSCO’s esteemed contributions was its establishment of a sound ecosystem where SMEs and start-ups can thrive through active collaboration. Additionally, POSCO’s smart factory platform was customized to meet the needs of the steel industry. One of the WEF consultants at POSCO’s steelworks was especially impressed with the way in which years of human skills paired superbly with the new AI technology in monitor-controlling the massive furnace operations live, 24/7.

There are altogether 26 lighthouse factories around the world including POSCO, Siemens, BMW, Johnson & Jonson, and Haier. The lighthouse designation effectively gives the companies the Global Lighthouse Network membership among which the members share their knowledge and experiences enhancing their ability to better-adopt smart-factory platform. POSCO plans to utilize the benefits the Network offers to boost its ability to establish and advance smart factories that meet ever-changing industry demands.

l Sophisticated Steelmaking Goes ‘Smart’

Heavy pole and massive chimneys are some of the things that people associate with typical steelworks operation. What’s so complicated about steelmaking? — isn’t it all about stuffing everything in the blast furnace where molten iron comes out? Then molding the molten iron, baking it, pressing it, and cutting it up?

Maybe so, but in actuality, each process is extremely sophisticated especially when combined with varying customer requests. The smooth operation of POSCO’s 24/7 steelworks can be attributed to the company’s 51 years of experience as well as to the field engineers whose meticulous monitoring and management of the steelworks operation propel the steelworks operation forward.

Even with their expertise, however, each engineer’s experience varies. In the immense intricacy of steelworks operation, POSCO must deal with the inevitable at all times. What are some of the inevitable situations that can occur during the steelmaking process?

Production Planning: POSCO’s ‘Order Management Group’ is the brain of all steelworks operation — not only does it take orders, but it also manages production schedules, locations, and production methods. The Group is also in charge of figuring out precise production timing as per special customer requirements. Some customer requests involve a unique mixture of ingredients, so there are always many variables to consider. There are at least 10 ‘standard’ procedures the Order Processing Group must consider. Only after these minimum standards have been met, the steelworks operation of that specific order can receive greenlight.

Ironmaking: POSCO Newsroom previously covered the basic concept of managing ‘blast furnace condition’ in the ‘Blast Furnace Anatomy #1 — To the Heart of Steelworks Operation’ (LINK). There are countless tasks involved in 24/7 blast furnace operation — from maintaining temperature, placing in fuels and raw materials with precision, to predicting the amount of by-product gas generation.

Steelmaking & Continuous Casting: The steelmaking department removes impurities from the molten iron produced in the previous ironmaking stage, by way of converter — the molten iron becomes ‘steel’ in this process. During the casting process, the ‘steel’ is molded into intermediary materials like slab, bloom, and billet.

Molten iron can be made into countless different products to meet diverse customer needs, each requiring different portion and mixture of ingredients. To achieve this goal, the molten iron undergoes four different stages of ‘blowing process’ where oxygen is pressured through molten iron to lower the carbon content of the alloy, changing it into low-carbon steel.

At this point, the molten ‘steel’ goes through continuous casting, after of which is cooled down and cut. Temperature and ingredient management with precision is crucial for maximized use of limited resources.

Rolling: The next step is ‘tempering,’ a process of heat treating, which is used to increase the toughness of iron-based alloys. In ‘Game of Thrones’, blacksmiths constantly bang on the iron as a way of hardening the material. In steelworks, the process of rolling achieves the same goal.

In rolling, materials are passed through the rotating rolls to produce steel products that meet customer demands: in thickness, width, strength, durability, etc. Imagine baking bread, each with a different requirement for textures, tastes as well as shapes.

Surface Treatment: Automotive steel plates and home appliances are galvanized so that they become more corrosion-resistant, more suitable for various manufacturing purposes. Precise surface treatment suited to each purpose is the key to an advanced coating technology.

Notwithstanding the 100% effort aimed for perfection, complex steelmaking process overflows with information. Variation — be it human or mechanic — is inevitable in each and every step of the process. To address such variation, POSCO is opting for the smart factory, identifying it as the next-generation of its growth engine.

The establishment of smart factories must be preceded by the digitization of factories. Through Process Innovation Project (PI Project) in the 2000s, POSCO successfully achieved digitization of its factories. What set POSCO apart from the various similar endeavor is that the company has been working this digitization muscle for a while now. Smart factory, which is being built on the digital factory, is at the center of POSCO’s unique smart factory platform called PosFrame.

l PosFrame, the Foundation of POSCO’s Smart Factory

What is the origin of POSCO’s smart factory? It can be traced back to the year 2015 when the hype of smart industry hasn’t quite caught on the flame. Even back then, POSCO introduced new technologies like Big Data, specifically at the Plate Plant at Gwangyang Steelworks. At this point, Gwangyang became a testing ground for POSCO’s smart factory. During this process, the foundation for ‘PosFrame,’ POSCO’s unique smart platform, was created.

With PosFrame, POSCO could establish a system in which the company’s countless data and skills accumulated through the 51 years of its operation can be integrated and stored in one place.

How is this different from conventional digitization?

PosFrame is the world’s first smart factory platform specified for continuous manufacturing processes. The reason why ‘PosFrame’ is identified as a ‘platform’ is this: think of railway platforms. Railway platforms are where different types of trains pass through — be it bullet trains, express trains, or slower all-stop trains. A platform manages information about different types of trains — in this case, data — coming and going all the time. It’s a perfect system for 24/7 steelworks operation. The goal of PosFrame is to pinpoint the reason behind a product defect, if and when, by meticulously back-tracing the steelmaking process to figure out exactly where a variation might have occurred.

Furthermore, PosFrame goes beyond simple digitization. Whereas digitization simply stores information as data, PosFrame analyzes the data, enabling the development of automation models.
Here, a question might arise: isn’t automation something only reserved for experts? PosFrame’s ‘Workbench’ feature says no. Workbench is accessible to everyone. For example, field engineers can apply their expert knowledge and use the data to develop automation models so that the models can be utilized in various steelmaking processes. Thanks to the data collected and standardized by PosFrame, engineers can analyze information not only for the process they’re directly involved but also the processes that come before and after. PosFrame makes it easier for the engineers to tackle difficult issues that previously remained as random occurrences.

The incredibly accessible PosFrame accelerated POSCO’s advance into smart factories. Through PosFrame, all POSCO employees are turning into semi-AI experts.

To further its smartizaton process, POSCO has been providing smart tech training to all employees since 2017. The training is helping the employees take their skills to the next level towards establishing a more data-driven working environment.

Through the ‘POSCO the Lighthouse Factory #1,’ we introduced the core concepts behind POSCO’s smart factory. In the next episode, ‘POSCO the Lighthouse Factory #2: POSCO’s Smart Factory Transforms the Industry (The Cases),’ we will provide more concrete pictures on how POSCO’s smart factories operate. Stay tuned.

l POSCO’s ‘Deep Learning’ Blast Furnace

POSCO embarked on the journey of smart technology back in 2016, the year when a super AI AlphaGo beat Se-Dol Lee, human champion of the game Go.

As disheartening as it was, Lee’s defeat became an awakening moment for Korea and an opportunity for POSCO to start digging deep on the relatively new concept, artificial intelligence. From that moment on, POSCO accelerated its research into AI and deep learning collaborating with top university researchers across the country to develop smart blast furnace.

The core of smart blast furnace technology is, ‘Deep Learning.’ Deep learning discovers patterns amongst countless random data utilizing it to predict the possible outcome just as human intelligence categorizes random items.

Let’s say there are thousands of random pictures – pictures of cats and dogs. A computer reads, analyzes, and categorizes the data from each picture, so the next time it ‘sees’ similar photos, it will recognize, determine and predict the correct pattern, thus identifying the picture as either cat or dog. Lots of companies are already utilizing this technology to analyze massive volumes of audio-visual data.

l What Is a ‘Smart’ Blast Furnace?

A blast furnace is a gigantic structure of 110 meters in height, taller than an average 40-story building – it makes molten iron. Inside the blast furnace flows a mixture of solids and liquids whose temperature rises as high as 2300℃. Since blast furnaces operate 24/7 non-stop, it’s difficult to ‘look’ inside a furnace.

However, the No.2 blast furnace of Pohang Steelworks is changing the game of steelmaking business. The ‘smart’ Pohang No. 2 furnace utilizes deep learning with an automotive system that monitors and auto-controls the inside conditions of the furnace.

POSCO started by defining the five variables that affect the conditions of a furnace. Then, countless random data was digitized for standardization. All the major data which used to be controlled heuristically is now measured live and become digital data paving a new path so the furnace can start learning deeply.

After the digitization completed, POSCO took on smartization process to establish a system to predict and automate the condition of the blast furnace. The key distinction between digitization and smartization is that smartization allows prediction. Because the data is so massive – over 1,000 types – the smartization process assigns algorithm appropriate for each data and perform analysis-prediction-control. Based on the rendered result, the system determines whether the inside conditions are good or bad – or can cause problems.

To put it simply, a smart blast 1) learns countless live-collected cases and data; 2) self-assesses the conditions of inputs (i.e. raw materials and fuels) and the furnace condition; 3) predicts the result of furnace operation; 4) automatically pre-controls the operating conditions; 5) yields the best combination result with minimum error.

l AI Furnace, Smarter than Humans

Every day, the visual data generated from the smart blast furnace daily reach up to hundreds of gigabytes. The smart furnace learns this massive amount of data and is getting smarter every day. What are the potential implications of this vast learning?

Before the smartization, the field employees used to personally measure the blast temperature every two hours, but now the bottom sensor of the furnace live-records the molten iron temperature. Not only does it live-record the current temperature, it also predicts the temperatures inside the furnace an hour ahead auto-adjusting the temperature of hot metal accordingly.

Furthermore, highly consistent algorithm assesses the inside condition of the furnace utilizing the thousands of images collected from the cameras installed on the tuyere nozzles. Based on the assessment, the smart furnace auto-controls the charging actions of iron ores and coke.

What about the skull? It’s layers of adhesives that stick to the furnace wall. To a furnace, it’s a cancer-like lump. What the smart system does is to analyze the images collected through furnace thermometers, sketch the overall shape of the skull, subsequently auto-controlling the charging mode.

Image source: ‘Shipment standby’ – By Tae-Ha Woo (20th Korean National Steel Day photo contest)

Currently, the Pohang No.2 blast furnace is the testing ground for this cutting-edge technology – the smart furnace boosted the daily production of molten iron by 240 tons. Annually this amounts to 85,000 tons with which automakers can produce 85,000 more cars. It is also a huge energy saver reducing the energy per ton of molten iron production.

One of the biggest achievements of the smart blast furnace is having stabilized the furnace management process through AI auto-control.

For the last three years, POSCO completed developing the auto-control system for each component of the blast furnace. Now the company is focusing on comprehensive integration. Going forward, POSCO plans to expand the applications to the Pohang No.3 and No.4 furnaces – they both have bigger internal capacity (5,600 ㎥) than the current No.2 furnace (2,550 ㎥).

POSCO took a giant step by adopting the world’s first thinking blast furnace. With time, more data will be collected, which will improve the quality and efficiency of molten iron production. In the era of the Fourth Revolution, POSCO will continue leading the way towards the smartization of steelworks across the globe.

The smart safety helmets which POSCO developed in-house are essentially a ‘smart’ version of regular safety helmets where a ‘smart’ band is attached to the helmet. Jung-Hoon Lee from POSCO’s Smart Solution Task Force Team oversaw the production and explains how POSCO developed the device. POSCO Newsroom reports.

┃The Beginning

The idea for smart safety helmets was initially born out of POSCO ‘s Smart Safety Ideation Contest in 2016. Various ideas on smart technology application for worksite safety emerged, and smart safety helmets were considered a breakthrough.

“Based on the idea from the initial concept stage, we started building prototypes. Since safety helmets are mandatory at all production sites, we sought to promote extra efficiency in preventing worksite hazards by adding smart functions.

To create the current wearable version, the R & D team went through countless trial and error. During the prototype stage, there were only design concepts in which POSCO employees’ contribution was central. Designing –and building– various safety-related IoT sensors in short timespan proved to be challenging.

“Applying ‘All-In-One’ method on a single band added too much weight to the helmet. We also tried connecting a cable to a smartphone to operate sensors while communicating with the server. But the employees’ feedback was that the helmets were heavy and the wires impeded with their performance. It took a lot of time and effort until the current wireless version was produced.”

┃Smart Helmets, Smart Operation

The smart helmet comes with 15 components such as camera, lantern, gas detector, high-voltage detector, vibration motor, wireless in-ear microphone, smart tag, etc.

On the front side, a camera is attached to the smart band allowing full visibility from the control room for all corners of the production sites. The LED lantern attached around the camera enables image recording in darkness. The recorded images can be played back on smartphones, control rooms, and offices.

“Throughout the development process – from the initial ideation stage to the current wireless device via wired-version – we actively sought feedback from the employees in the field. We held evaluation sessions with mock-ups and discussed design and functions in detail. After months of relentless testing, we focused on making the helmet lightweight and wireless. During the process, we only left the most essential functions: the current features including emergency trigger, voice call, CO detectors, etc.”

The CO and O2 detector attached to the rear of the helmet measures harmful gas and oxygen concentration level – and SOS button can be activated in case of emergency.

┃A Helmet That Looks to the Future

With the support from Yangso Safety Disaster Prevention Group, 50 units of smart safety helmets had been deployed to Pohang Works and Gwangyang Works respectively. The current wireless headsets will be tested early next year from which point future development directions will be discussed.

The helmet detects harmful gas even in situations where a portable gas detector isn’t mandatory, and it can help evaluate on-site situations as it enables video calls between the field and the control room during the inspection. In this way, POSCO plans to regularly monitor the VoC (Voice of Customer) in order to constantly optimize the device by discovering actual cases from the field.

In the era of Fourth Industrial Revolution, POSCO is in the process of completing Smart Factory. For the past three years, the company has devoted more than 1 billion KRW (approx. $ 899.7 million) to safety, recruited safety and health experts, newly established departments dedicated to safety, and upgraded safety equipment to prevent major disasters. As a company that prioritizes corporate citizenship, safety is and always will be POSCO’s foundational principle as it steps forward into the Fourth Revolution and beyond.

This education initiative was planned in order to help better understanding of POSCO’s advanced smart factory, widening perspective by sharing case studies and improving data-based problem-solving capabilities by smart projects.

From April, POSCO is providing basic smart education to the employees of its overseas production subsidiaries.

Participants learn about the essential information of smart factory such as PosFrame, the basics of IoT, big data and AI technology, R programming (data analysis) exercises, case studies of big data and AI projects. Duration of the training session was 1.5 days long teaching the method of proposition and delivering smart projects.

Through the program, POSCO expects that the participants will acquire adequate opportunity to enhance fundamental understanding of smart technologies and improve the problem solving ability based on data.

Local employees are receiving basic smart education at POSCO Maharashtra in India.

This education program can bring general understanding of how to generate a big data project on a pilot basis. POSCO is also planning to four projects in 2018 where production subsidiaries can exchange technological ideas.

The smart factory task force is opened to hear wide range of recommendable proposal from trainees to even customers. POSCO will carefully evaluate the proposal and suggest appropriate projects to subsidiaries.

From July, smart factory task force will provide higher education for project leader in Korea to strengthen data analysis abilities and to establish the direction of problem-solving for each project. This program will be continuously provided to support the projects effectively from selection to finish the project.

Both companies hope to further “strengthen technical and business cooperation domestically and abroad to apply Smart Factory platforms.”

From the left, POSCO CEO Ohjoon Kwon, President of POSCO ICT, Doo-hwan Choi, Matthias L. Heilmann BHGE CDO, Wouter Van Wersch GE APAC CEO.

Therefore, POSCO and GE combined PosFrame, POSCO’s Smart Factory platform, and APM (Asset Performance Management)*, GE’s representative Smart Factory solution, to develop and commercialize PosFrame+, a hybrid Smart Factory platform optimized for steel facilities.

POSCO’s PosFrame is specialized for the steel industry, capable of collecting all information from the production process for analysis and visualization. GE’s APM can increase the operation speed and stability with early warnings and failure predictions based on collected data.

POSCO and GE will apply GE’s APM solution to POSCO’s power generator No. 5 at Pohang Steelworks to test APM’s compatibility with the existing PosFrame, and to develop modules and verify the system’s adaptability. Once the companies finish developing the hybrid platform, PosFrame+, which predicts failures in steel facilities by combining PosFrame and APM, it will be a groundbreaking turning point for smart factory platforms.

During the signing ceremony, CEO Kwon said, “The development of smart technology for steel facilities will give momentum to the commercialization of smart solutions in the global market.”

Chief Digital Officer of BHGE, Matthias L. Heilmann stated, “Both companies will create opportunities in all areas by sharing visions and cooperating closely for the acceleration of digital transition of the steel industry.”  

Both companies plan to develop PosFrame+ for steel facilities and related industries, and will also create cooperative models for the global commercialization of PosFrame+ by sharing research cases and primary technologies for smart factories.\

※GE APM

All information collected from the production process can be analyzed automatically to increase the operation rate and stability. Facilities with APM will be equipped with early warnings through malfunction predictions and will be able to minimize maintenance costs and failure risks. A classic example of a successful application case is the “Lazarus project” which revived a combined power plant in Chivasso, Italy. Its operations stopped in 2013 due to the facility’s inefficiency, but after applying APM, the facility was able to revive its efficiency and the restarted operations after two years.

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.

1. #Winning – competitiveness and sustainability

POSCO was recently named the world’s most competitive steelmaker for the eighth consecutive year by World Steel Dynamics (WSD). POSCO again took home the gold with the highest scores in five categories including innovative technology, cost reduction, skill level of labor, restructuring and investment environment.

POSCO is the world’s most competitive steelmaker.

Not only did POSCO come out on top for competitiveness, the company was ranked 35th among the “Global 100 Most Sustainable Corporations in the World in 2017,” by Toronto-based magazine and research firm Corporate Knights. The list was announced in early 2017 at the World Economic Forum in Davos, Switzerland. This is the third consecutive year POSCO made the list with outstanding scores in safety, environment and the salary levels of employees.

2. Joining the trillion club

POSCO entered the trillion club twice in 2017 as it recorded USD 1.283 billion (KRW 1.365 trillion) of operating profits in the first quarter, and USD 1.0581 billion (KRW 1.1257 trillion) in the third quarter based on its consolidated operating profit. Even in the midst of global oversupply and governments opting for protectionist policies, POSCO’s profits were unscathed. Much of the credit is owed to the company’s steel and non-steel affiliates overseas with strong sales performances. The consolidated debt-to-equity ratio was the lowest since 2010 and the non-consolidated debt-to-equity ratio was at its lowest ever.

POSCO recorded an operating profit over KRW 1 trillion in the first and third quarter of 2017.

To add, international credit rating agency S&P upgraded POSCO’s BBB-plus credit rating outlook to “stable” last February, and Moody’s also upgraded POSCO’s long-term corporate credit rating outlook to “positive” on October 26.

3. Everything’s bigger in…POSCO

Last June, after 102 days of repair, Pohang Blast Furnace No.3 became the world’s fifth-largest blast furnace. Its internal volume expanded from 4350㎥ to 5600㎥, allowing the super-sized blast furnace to put out 15,000 tons of molten metal daily. POSCO currently operates five super-sized blast furnaces, or blast furnaces sized 5500㎥ or larger.

Pohang Blast Furnace No. 3 under construction.

POSCO further upgraded Pohang Blast Furnace No.3 by adding in AI capabilities. It is now equipped with smart technology that can control the internal state of the blast furnace automatically, and smart sensors can now predict accidents before they happen, extending the lifespan of the furnace. Furthermore, POSCO plans to collect big data from the blast furnace and use it to develop fully smart blast furnaces in the future.

4. The smarter the better

Since his taking up the CEO position in 2014, POSCO CEO Ohjoon Kwon has repeatedly expressed his vision for securing future competitiveness through smart solutions. The company even started a smartization training course for employees and held the Smart POSCO Forum 2017 last July to share its insights and progress with clients and affiliates.

POSCO is gaining a competitive edge through smart solutions. (Source: Global Trade Magazine)

Moreover, POSCO also supported a smart talent training project customized for SMEs. The program included job training for AI and big data application technologies. Going forward, POSCO plans to build a “Smart Industry” to increase steel competitiveness and create new business opportunities with new, smart technologies.

SEE ALSO: How Factories Produce Steel- the Smart Way

5. Getting in on electric vehicles

The market for electric vehicles (EVs) is an exciting one with so many companies investing in new technologies. POSCO also hopes to extend its customized material and technology solutions to EV manufacturers. Last October, the company held the Global EV Materials Forum to showcase four of its core business areas: lightweight bodies, batteries, motors and charging infrastructure. More than 380 clients took part in the forum to learn about emerging trends and POSCO’s products and services including POSCO GIGA STEEL and commercially produced lithium batteries for EVs.

POSCO is a solutions provider for EV manufacturers. (Source: Bloomberg)

6. POSCO’s new marketing approach

For the first time ever, POSCO created and aired a TV commercial highlighting a specific product, instead of its corporate brand. This marks POSCO’s first B2C marketing effort and features the company’s innovative auto steel, POSCO GIGA STEEL. The commercial compares POSCO GIGA STEEL to aluminum, another widely-used lightweight material in a visual demonstration so that everyday drivers can better understand the benefits of a stronger yet lighter material.

7. Going for 10 million tons of automotive steel

On April 26, POSCO completed 7CGL, a new steel production facility in Gwangyang, Korea, designed exclusively for the production of POSCO GIGA STEEL. 7CGL has an annual capacity of 500,000 tons and is the world’s first plant capable of producing both 1.5 giga-level galva-annealed (GA) and galvanized (GI) steel sheets.

POSCO Completed 7CGL on April 26, 2017. (Source: Business Korea)

In addition, POSCO managed to reduce investment funds and secure cost competitiveness by designing and constructing 7CGL’s core facilities based on accumulated facility technologies and operating know-how. The 7CGL is POSCO’s 12th plant exclusively for automotive steel sheets, and POSCO aims to sell 10 million tons of automotive steel in 2018 globally.  

8. Setting new records with high manganese

POSCO became the first company in the world to commercialize the technology for producing high manganese using fusible ferroalloys. The technology took KRW 5.5 billion of research and development costs and four years to complete.

POSCO is the first company in the world to commercialize its high manganese production technology. (Source: Eramet)

The core part of POSCO’s high manganese production process is PosLM (POSCO Liquid Manganese), a special holding furnace that stores manganese ferroalloys in a fusible state. POSCO’s technology reduces the production time for high manganese steel by more than 50 percent as well as increases slab production efficiency. PosLM was jointly researched and developed by the Institute of Technology and POSCO M-tech.

9. Bringing home the lithium

On February 7, POSCO opened its PosLX (POSCO Lithium Extraction) plant with an annual capacity of 2,500 tons. The plant is the first plant in Korea capable of commercial lithium production. The technology took 7 years to perfect, but it was well worth it. The production process for high purity lithium now takes just 3 months, compared to the previous 12 to 18 months.

POSCO is making lithium extraction more efficient and sustainable. (Source: Mining)

In the past, Korean manufacturers imported the entire quantity of lithium they needed. With POSCO’s PosLX plant, partners now have access to a local supply of lithium. Moreover, POSCO plans to use lithium phosphate extracted from wasted secondary batteries as raw materials, in keeping with the company’s sustainability standards.

POSCO will continue building on a successful 2017 in the new year, by tackling new challenges and continuing to provide its partners with customized and optimal solutions in all business areas.

Cover photo courtesy of Hitech Building Solutions.

Smart factories are bringing AI, IoT and Big Data to the manufacturing industry.

#1 How Smart Factories are Changing the Manufacturing Industry

The Fourth Industrial Revolution is bringing AI, IoT and other automated technologies into people’s lives and changing the way they live and interact with one another. It is also bringing about change in the manufacturing industry as more companies embrace smart factories to further enhance efficiency, performance and safety. Take a deeper look at how smart factories are reinventing the manufacturing industry.

SEE ALSO: How Factories Produce Steel- the Smart Way

POSCO GIGA STEEL also offers electric vehicle manufacturers a lightweight material solution.

#2 POSCO GIGA STEEL Increases Strength, Improves Safety in Autos

This year, POSCO GIGA STEEL set a new, industry standard for strength and formability for auto steel. The advanced high-strength steel (AHSS) is an automaker’s dream come true as it falls into the strongest category of steel commercially available today. Plus, its lightweight property makes it the perfect solution for manufacturers trying to design safe, high-performing and sustainable vehicles.

SEE ALSO: Ask an Expert: Has Steel Achieved Its Peak in Lightweighting?

Lithium-ion batteries are found in some of the most popular devices available today. (Source: BGR)

#3 POSCO’s Innovation Shapes the Ever-Growing Lithium Market

POSCO is the world’s 5th largest steel producer, but it’s got more up its sleeves than just steel. This year, POSCO developed game-changing technology that extracts lithium from water in just 8 hours to one month. Traditionally the task takes anywhere from 12 to 18 months. To add, the new technology can achieve a purity rate of 99.9 percent and increases the lithium recovery rate to over 80 percent.

Lithium is a central component in rechargeable batteries for electronics such as smartphones, laptops and most importantly, electric vehicles (EVs). Heading into 2018, POSCO is well-positioned to be an industry leader in a rapidly-growing market for EV batteries.

SEE ALSO: The Fuel of Tomorrow: Mining Lithium for Tomorrow’s Cars

POSCO CEO Kwon Ohjoon fires up Pohang Blast Furnace No.3

#4 POSCO Gets “Smart” with Pohang Blast Furnace No.3

In June, one of POSCO’s oldest and the world’s 5th largest blast furnace got a makeover with some added AI. After undergoing 102 days of repairs, Pohang Blast Furnace No.3 came back much bigger with an expanded furnace volume of 5600㎥, compared to its original volume of 3795㎥ from its beginnings in 1978. Plus, Pohang Blast Furnace No.3 now has smart sensors to monitor operations and detect malfunctions or accidents before they happen.

SEE ALSO: How to Make Steel with an Old(ie but Goodie) Blast Furnace

Ajay Telrandhe in Quality Assurance and Manish Kochar & Chetan Waghchoure in Sales talk to the Steel Wire.

#5 Ask an Expert: POSCO Leads India’s Growing Automotive Steel Market

POSCO Maharashtra is POSCO’s leading subsidiary. Three of their employees gave the Steel Wire an insider’s look into the company’s success, despite a challenging market environment and government restrictions. The team in India implemented positive changes in the company’s steel quality, production processes and customer service to become a leading solution-provider for their automotive partners.

SEE ALSO: Revving Up for Growth: India’s Automotive Market is In Full Gear

EVs, autonomous vehicles and shared mobility will drastically change the auto industry. (Source: Electrek)

#6 Ask an Expert: Electric Vehicles and the Future of the Automotive Market

Stephen Zoepf, executive director at the Center for Automotive Research at Stanford University, was the first speaker at POSCO’s 2017 Global EV Materials Forum. Zoepf shared his vision of what the future automotive market will look like and its implications for car manufacturers, suppliers and drivers. According to research, 60 percent of the cars in the U.S. will be running on electric batteries by 2030, and those cars will mostly be part of a shared mobility service. Traditional ways of car production, distribution and consumption will undergo massive change and companies will have to find ways to stay competitive in the new market dynamics.

SEE ALSO: The Forgotten Fleet: Looking Back on Early Electric Vehicles for a Better Future

Steel dresses from Naim Josefi’s 2017 F/W GANGS collection. (Source: Naim Josefi)

#7 Ask an Expert: Fashion Forward with Steel

Fashion designer Naim Josefi opened new possibilities for steel application with his 2017 F/W GANGS collection which included dresses made of elaborate steel sequins and laser-printed jeans. He is also known for his 3D-printed high heels that provide the perfect fit. The artist has a passion for fusing technology into his work and finding more sustainable ways to create beautiful clothes and says he will continue to use steel as a high-tech, fashion material.

Heading into a new year in 2018, the Steel Wire promises to be the best source of steel industry news and continue to provide exclusive, insightful and interesting stories.