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After officially entering the market earlier this year, LG advances smart factory services business by integrating manufacturing data and assets with artificial intelligence and digital transformation
By
- Joe O’Halloran,Computer Weekly
Published: 19 Jul 2024 10:30
Boasting a 66-year history of manufacturing and production, LG is now taking its assets up a gear, advancing its smart factory services business by integrating its manufacturing and production expertise with artificial intelligence (AI) and digital transformation (DX) capabilities.
The electronics giant officially entered the smart factory services market earlier in 2024, and now plans to aggressively expand into industries with rapidly growing factory demand, such as semiconductors, pharmaceuticals, biotechnology, and food and drink. Its Production engineering Research Institute (PRI), which has been enhancing production and manufacturing competitiveness for LG Group affiliates, will now extend its expertise to external clients.
Even though this is the inaugural year in the sector, the smart factory business is said to have already achieved significant milestones. PRI anticipates securing orders worth approximately KRW 200bn (US$144.7bn) from external clients for its smart factory services. LG’s major clients in the area include secondary battery manufacturers, automotive parts manufacturers and logistics companies. Services offered include production consulting, development of equipment and operation systems, and training for technology personnel.
As part of its strategy in the sector, LG said it plans to expand aggressively into industries with rapidly growing factory demand. The goal is to develop the smart factory services business into a multi-trillion KRW enterprise by 2030, excluding revenue generated in the LG Group, and tap into a global smart factory market that, according to market research firmPrecedence Research, is projected to grow from $155.61bn at the end of 2024 to $268.46bn by 2030.
LG said its new smart factory proposition is the “ultimate fusion of AI and manufacturing capabilities”, taking advantage of 770 terabytes (TB) of manufacturing and production data that the company has amassed in the past decade. The company also sees a competitive edge through its core production technologies that it regards as essential for smart factory configuration, with PRI filing over 1,000 patents related to smart factory services.
The company aims to set its smart factory services apart by integrating its extensive manufacturing data and expertise with AI and DX, leveraging world-class production technologies. These smart factory services encompass production system design, monitoring and operation through digital twin technology; big data and generative AI-based management of quality; industrial safety and equipment; and the provision of various industrial robots.
The strategic approach that the company will take in the smart factory sector will not solely involve providing unit services for specific areas, but rather “comprehensive solutions” covering the entire journey for clients, from factory planning to design, construction and operation. After considering the client’s environment and industry characteristics, LG said it will diagnose existing factories and identify areas for improvement, establishing a step-by-step roadmap from automation, “informationisation” and intelligence perspectives to maximise investment effectiveness.
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Production system design and operation services leverage real-time simulations using digital twin technology. Before the factory is built, a virtual replica identical to the real one is created, allowing clients to preview the production and logistics flow. This, said LG, will enable optimal efficiency in factory design.
Aiming to show how its own operations have benefitted from smart factory services, in the LG Group, production facilities at over 60 locations in 40 regions worldwide are applying offerings from PRI. LG revealed that following the implementation of smart factory services, productivity at its Changwon plant increased by 17%, energy efficiency improved by 30% and quality costs due to defects were reduced by 70%.
Commenting on the strategy, Jeong Dae-hwa, head of LG PRI, said: “We will offer optimal smart factory solutions at every stage – from planning and design to construction and operation – becoming the ideal partner that supports our clients throughout their entire production journey.”
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