Global automobile companies are actively improving their processes, such as upgrading equipment and introducing automation of processes and logistics, to enhance product competitiveness and reduce costs. In particular, China is focusing on smart manufacturing to improve the quality of its automobile industry, but the World Economic Forum (WEF) has determined that Korea has not yet had a company that has achieved process innovation.

In order to achieve process innovation in automobile factories, Yoon Ja-young, a senior researcher at the Policy Strategy Office of the Korea Automobile Research Institute (hereinafter referred to as Hanjae), analyzed that close collaboration between automobile companies and equipment companies is necessary to provide priority for equipment optimized for domestic labor conditions, work environments, and workers, and that joint research and development and organic networking between industries are necessary.

In Vol. 135 of the Industrial Analysis on the topic of “Trends in Automotive Manufacturing Process Innovation as Seen through the Lighthouse Factory,” Senior Researcher Yoon Ja-young emphasized that advanced automotive countries are focusing on building cutting-edge manufacturing facilities through digital transformation across the entire value chain, and that changes in production sites are an important competitive factor in order to take the lead in the automotive market transition toward electrification and autonomy.

The World Economic Forum, together with global consulting firm McKinsey, has selected Lighthouse Factories as advanced manufacturing sites twice a year since 2018 through evaluations of technological development measures, human resource composition, etc. As of December 2023, there are 153 Lighthouse Factories around the world.

※Lighthouse Factory: IoT, cloud computing, and big data, just like a lighthouse guides ships., AI, and other core technologies of the 4th industrial revolution, leading to innovation in the manufacturing industry.

Research Fellow Yoon Ja-young shared the results of identifying the types and outcomes of process innovation based on the main contents and outcomes promoted by automobile companies among the lighthouse factories announced at the World Economic Forum between 2019 and 2023.

Among all lighthouse factories, there were 17 companies in the automobile industry, including battery companies, accounting for 11.1% of the total, making it the third largest industry group after the electrical and electronics, bio, and medical device industries.

In the automobile sector, the introduction of various production methods is actively taking place by utilizing cutting-edge technologies to respond to diversification, such as meeting the demand for autonomous manufacturing and electrification, cost innovation through parts commonization (modular architecture), and customized products desired by individual consumers.

When looking at how to meet the demand for electrification, there was a trend of increasing the complexity and precision of battery manufacturing, which is the core of electrification, through smart manufacturing, implementing modularization of parts using AI and machine learning technologies, and utilizing big data analysis to manage quality and optimize production.

Looking at automobile lighthouse factories by country, China has the largest number (58.8%) with 10, followed by France and Turkey with 2, and India, Brazil, and Germany with 1 each.

In Korea, POSCO, LG Electronics, and LS Electric have been selected as lighthouse factories, but there are none in the automobile industry yet.

Since 2015, China has set and promoted specific plans and goals to expand smart manufacturing across all manufacturing industries at the national level based on “Made in China 2025,” and each local government has implemented specific action guidelines.

By building a model of smart manufacturing capability maturity, manufacturing plants of a certain size or larger will achieve 70% or more digitalization and networking, and will establish more than 500 smart manufacturing pilot plants. It was found that the proportion of lighthouse factories was high.

By manufacturing sector, it was analyzed as 3 Renault factories, 6 automakers including BMW and SAIC, 4 Bosch factories, 3 CATL factories, and 11 parts manufacturers including CITIC Dicastal and CEAT.

Companies are utilizing equipment predictive maintenance systems, digital twins, and machine learning functions to respond to industrial changes such as labor shortages, supply chain risks, cost pressures, and carbon neutrality, and to increase consumer satisfaction such as reducing defect rates, diversifying products, and improving manufacturing speed.

For example, China's CATL has utilized the following to address the rapidly increasing demand for secondary batteries, labor costs, and carbon neutrality in the manufacturing process: △quality simulation using big data, △reducing changeover time with additive manufacturing, △quality inspection at the micron (10-6 m) level using AI vision technology, and △deep learning (process control and energy management).

As a result, the company achieved results such as a 320% increase in production, a 33% decrease in manufacturing costs, a 47.4% decrease in carbon emissions, and a 99% decrease in quality defects.

▲Major performance cases of lighthouse factories in the automobile sector (Data source: Korea Automobile Research Institute Industry Analysis Vol. 135)

As a result of categorizing and classifying the process innovations promoted by each factory, the order was equipment advancement at 28.4%, data management at 25.7%, and process and logistics automation at 17.6%.

The automobile industry is an assembly industry that requires various materials, parts, and processes, and the efficiency of cooperation between processes is an important competitive advantage. As consumer demand becomes more volatile and diverse,As the need to shorten lead times until market release increases, companies continue to invest in equipment advancements and data management.

In addition, we are promoting logistics innovation by expanding automation of parts procurement and transportation and the use of unmanned vehicles such as AMR (Autonomous Mobile Robots), and through this, we are also seeing significant results in just-in-time parts procurement and inventory optimization.

Meanwhile, it was found that there are relatively few cases of full-scale introduction in the fields of data linkage and digital twins that link demand and production data or combine virtual and real data.

▲Types of process innovation in lighthouse factories in the automobile industry (Source: Korea Automobile Research Institute Industry Analysis Vol. 135)

Yoon Ja-young, a senior researcher, analyzed, “With the digital transformation of the entire value chain, advanced automobile countries are focusing on building cutting-edge manufacturing facilities, and in order to take the lead in the automobile transition to electrification and autonomous driving, changes in the production site are an important competitive factor.” She added, “It is necessary to secure price competitiveness in the market by increasing efficiency by utilizing massive data in the manufacturing process, and quickly perform material and component conversion, including downtime and redesign upgrades of manufacturing facilities.”

He continued, “To achieve this, close collaboration between automobile companies and equipment companies is necessary, as well as joint research and development and organic networking between industries, so that equipment optimized for domestic labor conditions, work environments, and workers can be supplied preferentially.”