[The Fourth Industrial Revolution and the Future of Career] 7. Present and Future of Smart Factory

Clip IT’s 6th lecture (September 7th) was presented by Kwon Jin-mang on the subject of ‘Smart Factory’s present and future society’. Kwon Jin-man is the CEO of Cresprit Co., Ltd., which develops and operates the ALOOH IoT (Industrial IoT) platform, which provides monitoring and other services to improve the productivity of manufacturing facilities in factories.

Clip IT’s 7th lecture will be held on Oct. 5 (Fri) on the first floor of ‘Maru 180’ in Yeoksam-dong, Seoul on the subject of ‘Current and Future Society of Things Internet.’ Lee Jung-yong is currently working for KT IoT business division and has written books such as ‘Things Internet, Practice and Imagination’ and ‘Start-up Korea’.

Smart Factory Introduction Background

The share of manufacturing in the gross domestic product is close to 30%. It is the number one in OECD countries, and it is high compared to competing countries such as Japan (18%) and USA (12%). These domestic manufacturing industries are in crisis. Competition in the domestic manufacturing sector is expected to drop to 4th place in 2014, from 5th place in 2015 to 6th place in 2020. Therefore, we are promoting the introduction of smart factories as a way to improve manufacturing competitiveness at the national level, and are working on various aspects in combination with ICT.

What is Smart Factory?

The Smart Factory is an integrated factory that integrates various technologies such as artificial intelligence and IoT (Internet of Things) to improve the productivity of industrial sites. For example, the Internet of Things (IoT) is typically used to communicate between sensors and devices. After collecting various data from the sensor and transmitting it to the gateway or the server, the server analyzes the data, displays the analysis result, and sends it to the manager. At this time, the server with AI (Artificial Intelligence) and Machine Learning technology analyzes Bigdata, predicts equipment failure or abnormality, and suggests ways to improve productivity.

In the future, it is expected to evolve into a smart factory that has become more sophisticated by fusion of technologies in various ways. A typical example is a digital twin. It is a technique to predict the result by making a twin of a real-life thing on a computer and simulating the situation which can occur in the reality by a computer. It is easy to explain, simulate in virtual space on the basis of data. For simulation, artificial intelligence (AI) for collecting large data (IoT), analysis and prediction, AR (augmented reality) for simulation, Technologies such as virtual reality (VR) are needed. In particular, by simulating the work process through the digital twin at the industrial site, the loss can be reduced and the efficiency of the work can be improved.

<GE’s Predix with Digital Twin technology (source: ge.com)>

Another key technology in another smart factory is Edge Computing. Edge Computing Technology is one of the top 10 strategic technologies selected by Gartner in 2018. It does not upload vast amounts of data from the industrial site to the cloud at once, but selectively processes data after it is processed in the edge, And performs data analysis and real-time control. The advantage of edge computing is that it reduces the latency of data processing and allows immediate onsite response. As factory-generated data grows exponentially and server load is a concern, edge computing, which processes data quickly and efficiently, is expected to become more visible in the Smart Factory.

Edge computing, combined with AI and Machine Learning, is expected to generate greater synergies. Cressy, a leading edge computing company in Korea, also provides a smart factory platform that analyzes the vast amount of data and algorithms in the cloud to create a machine learning model and transmit it to the edge to process data in real time.


<CRESPRIT’s ALOOH Edge Computing Platform>

Future of smart factory and future society

The Smart Factory is expected to change the production method. Kutesmart, a custom-made suits manufacturer in China, has implemented a customer-to-manufacturing (C to M) production system through the introduction of smart factories, producing more than 4,000 customized suits a day. The bus goes to the customer’s house and scans the body dimensions in two seconds, and the customer picks the style color of the suit through the application. This information is stored in the card and transferred to each process, and in each process, the cutting process proceeds according to the card information. The company, which had previously only been able to produce between 200 and 300 units a day, has produced more than 4,000 units a day since the introduction of SmartFactory, with more than 80% of its sales coming from Europe.

The development of the Smart Factory is also changing the location of the factory. One of the major developments in the developed world in recent years is the acceleration of reshoring. Reshoring is a term that refers to the phenomenon of the return of foreign companies to their home countries due to various cost reductions such as personnel expenses. Until the early 2000s, it had been promoted through the remedy such as tax benefits at the national level. However, due to the appearance of Smart Factory, the manufacturing cost in the domestic Smart Factory and the export cost after manufacturing in the third countries such as China and Mexico The phenomenon of reshoring is accelerating.

Especially, in the environment where the production facilities and the consumer are close to each other, it is very advantageous for reshoring in the center of North America and the center of Europe. In Germany, the Adidas plant was established in southern Innsbah, and the multinational automakers Fiat Chrysler and Honda in Japan are moving to relocate their Mexican assembly plants.

Domestic smart factory level and manufacturing status

At present, except for some large companies, the stage of domestic smart factory is mostly at the basic level or middle level. According to UBS, the largest bank in Switzerland announced in 2016, Korea is ranked 25th out of 139 countries in the preparation for the fourth industrial revolution. It ranked 28th among the OECD countries in terms of labor productivity in 2015. 31.8, which is below the average of 46.7. Experts predict that labor shortages may result from a decline in the workforce due to low births. As a solution to this situation, the public works together to promote the Smart Factory, but it is not easy to promote due to the real problem.

<Domestic Smart Factory Level (Source: Smart Factory Promotion Homepage)>

Direction of Domestic Smart Factory

In Germany and Japan, the early CIM (computer-aided automation manufacturing) was unsuccessful due to opposition from field personnel. In developed countries, there are still many workers in the Smart Factory. Coordination of field personnel is also a priority in Korea. Workers should be aware that the introduction of smart factories will prevent accidents at factories, minimize losses, increase labor productivity, and improve facility efficiency. In addition, it is necessary for the company to make efforts to reduce the working hours and raise wages. It is expected that the Smart Factory will play a leading role in overcoming the manufacturing crisis, which is the main industry of the nation, while the fourth industrial revolution is anticipating many changes in society as a whole.

정리 / IT동아 김영우(pengo@itdonga.com)

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