LG Electronics, the flagship unit of South Korea’s fourth-largest conglomerate LG Group, launched the smart factory business with some 70 staff earlier this year to meet the growing demand for plants applied with artificial intelligence and digital transformation (DX) amid rising labor costs and shrinking populations.“We have won deals (from external customers) worth about 200 billion won ($144.6 million) in the first six months,” said Song Shi-yong, head of LG Electronics’ smart factory business division.“Demand for smart factories is flooding, especially from companies building new plants in North America.”LG Electronics aims to develop the smart factory division as one of its core B2B businesses as the global market is growing by 10% every year.
A 10-minute delay will interrupt the production of nearly 50 refrigerators, resulting in a loss of some 100 million won with the assumption that a fridge is sold at 2 million won.“The introduction of smart factory solutions at the Changwon plant raised its productivity by 17% and energy efficiency by 30%,” said an LG Electronics official, adding quality costs stemming from defects fell 70%.
The unit secured more than 1,000 patents based on the 770 terabytes of data accumulated on production from the group’s know-how on factory design, construction and operation in 66 years.“Except for LG, few domestic companies are providing total solutions for the entire manufacturing processes including factory planning, design, construction and operation,” Song said.
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