The government has begun supporting technology development for 10 urgent tasks that require automation and intelligence of labor-intensive and high-risk processes in manufacturing SMEs that frequently relocate overseas. In the future, 1 billion won will be provided for technology development costs for each task over two years.

The Ministry of SMEs and Startups (Minister Kwon Chil-seung) announced that it has selected 10 "2021 Process and Quality Technology Development" projects to improve manufacturing processes in order to promote the return of overseas factories to Korea and prevent the relocation of domestic factories overseas.

This project supports the development of technologies to convert labor-intensive and high-risk processes into automated and intelligent processes for small and medium-sized manufacturing plants that have already relocated overseas or are likely to do so due to high domestic production costs.

This year's project selection was made after a public announcement in April and an on-site evaluation by external experts, and comprehensively considering the following factors: △Demand for overseas relocation of domestic factories and return of overseas factories to Korea; △Need for process improvement such as labor intensity and industrial accident rate; △Need for government support such as production induction and employment effects.

The 10 projects selected this time are 4 in the automotive sector, 3 in the plastics sector, 2 in the core technology sector (welding and casting), and 1 in the coronavirus diagnostics sector. Each project will receive 1 billion won in technology development costs over 2 years.

Looking at the major selected tasks, first of all, Taem Digitech's wiring harness automation process technology development was selected.

Wiring harnesses are bundles of wires that electrically connect electronic components within a car. Because it is difficult to standardize the various types and lengths of wires, most processes rely on manual labor.

Accordingly, most wiring harness manufacturing plants have been relocated to low-wage countries overseas (China, Vietnam, Mexico), but Hyundai Motor Company's production has been halted due to import disruption caused by COVID-19.

In the future, KMDigtech, a manufacturer of wiring harness equipment, will develop a technology to automate the entire process into a single unit and then supply automation equipment to manufacturers (such as Kyungshin). It is expected to increase productivity (70% reduction in manpower and space) and encourage overseas factories to return to Korea.

Next, Jeonjin Heavy Industries' development of automation and intelligence process technology for large-scale welding structures for construction equipment was selected.

Construction equipment is becoming increasingly large-scale, high-strength structures, but automation is challenging and requires demanding joint and welding performance, leading to a reliance on manual labor and high risks (handling heavy materials and hazardous gases), making it difficult to recruit and retain specialized personnel.

Accordingly, Jeonjin Heavy Industries Co., Ltd., a manufacturer of construction equipment (concrete pump trucks, etc.), is considering outsourcing part of its manufacturing process to Turkey and exporting semi-assembled (CKD) units to India, and additionally relocating its domestic factories overseas (to China, India, etc.).

In the future, through the simplification of the manufacturing process, automation of the welding process, and the development of smart factory technologies for the welding and inspection processes, we plan to improve quality (60%) and reduce costs (30%), localize the entire process, and hire additional facility operation personnel (10 people) without relocating overseas factories.

The Ministry of SMEs and Startups plans to consistently support the development of process improvement technologies on a scale of 10 projects per year. More detailed information can be found on the Ministry of SMEs and Startups website and through the SME Technology Development Project Comprehensive Management System.

Park Jong-chan, head of the Smart Manufacturing Innovation Planning Division at the Ministry of SMEs and Startups, expressed his hope that “this project will contribute to preventing the outflow of manufacturing companies overseas by improving the productivity and cost of small and medium-sized enterprises that are struggling with labor costs and labor shortages.”